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It looks like Mozilla is heading to court for a showdown with Yahoo Holdings and Oath over an alleged breach of contract.
Yahoo Holdings and Oath, the company that runs the Yahoo search engine and which is owned by Verizon, filed a complaint against Mozilla with the Superior Court of California on Dec 1, after Mozilla revealed it was changing its default search engine. Today, Mozilla announced it was fighting back by filing a counter complaint.
The story so far
Mozilla unveiled its new lightning-fast Firefox Quantum browser three weeks ago, and the reception has been one of widespread adulation. Firefox, it seemed, was back with a bang. But alongside the launch, the company announced that it was ditching Yahoo as its default search engine in favor for the infinitely more popular Google. Mozilla, you see, had inked a deal with Yahoo in 2014 to make it the default search engine in the U.S for a full five-year period.
Though users can switch their default search engine manually, having a search engine featured by default on a major browser like Firefox has a sizeable impact — five months after the Mozilla / Yahoo deal was inked, Yahoo said that its search volume reached a five-year high. And Google became pretty desperate to get people to switch their default search engine back — even placing messages at the top of search results.
Last year, as Yahoo was preparing to sell to Verizon, a notable clause in the contract between Mozilla and Yahoo emerged. It effectively committed the acquiring company to pay Mozilla $375 million per year through 2019 if Mozilla wasn’t pleased with its new partner. It also allowed Mozilla to walk away from the deal completely. Verizon isn’t renowned for its commitment to search, and it doesn’t seem like the most natural bed partner for Firefox, which may be why Mozilla pulled the plug on its Yahoo search deal.
Many of the specific details of the counter complaints are redacted in the court filings, but Mozilla’s Denelle Dixon, chief business and legal officer, said that all the company had done was exercise its contractual rights, “based on a number of factors, including doing what’s best for our brand, our effort to provide quality web search, and the broader content experience for our users.”
Yahoo’s acquisition by Verizon wasn’t in the best interests of Firefox users, according to Dixon, in terms of the search experience they would be presented with. And to rub salt in the wound, Mozzilla is pushing Oath — Verizon’s digital content subsidiary — to cough up the money it thinks it’s owed until 2019. That could work out to around $750 million, plus however much Mozilla is earning from Google as its new search partner.
Here is Mozilla’s official statement in full:
On December 1, Yahoo Holdings and Oath filed a legal complaint against Mozilla in Santa Clara County court claiming that we improperly terminated our agreement. On December 5, Mozilla filed a cross-complaint seeking to ensure that our rights under our contract with Yahoo are enforced.
We recently exercised our contractual right to terminate our agreement with Yahoo based on a number of factors including doing what’s best for our brand, our effort to provide quality web search, and the broader content experience for our users.
Immediately following Yahoo’s acquisition, we undertook a lengthy, multi-month process to seek assurances from Yahoo and its acquirers with respect to those factors. When it became clear that continuing to use Yahoo as our default search provider would have a negative impact on all of the above, we exercised our contractual right to terminate the agreement and entered into an agreement with another provider.
The terms of our contract are clear and our post-termination rights under our contract with Yahoo should continue to be enforced. We enter into all of our relationships with a shared goal to deliver a great user experience and further the web as an open platform. No relationship should end this way – litigation doesn’t further any goals for the ecosystem. Still, we are proud of how we conducted our business and product work throughout the relationship, how we handled the termination of the agreement, and we are confident in our legal positions.
We remain focused on the recent launch of Firefox Quantum and our commitment to protecting the internet as a global public resource, especially at a time when user rights like net neutrality and privacy are under attack.
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