Roughly three years ago, Yahoo and Mozilla announced that Yahoo would be the default search engine on Firefox in the US. That relationship ended early when Mozilla released the much-improved Firefox Quantum browser last month, with Google as the default search provider.
Now, Yahoo’s parent company, Oath (Verizon), is suing Mozilla for breach of contract. Oath says that Mozilla “terminated a long-term strategic agreement with Yahoo” on November 10. Yahoo adds that prior to filing suit, it “demanded that Mozilla take immediate steps to cure its breaches and rescind its termination notice.”
The lawsuit seeks unspecified money damages and interest from Mozilla. We haven’t seen the contract, but Mozilla’s rationale for termination is pretty clearly laid out in a cross-complaint against Yahoo/Oath, claiming that it had a right to terminate the relationship under the contract:
Mozilla’s response and counterclaim indicate there was a clause that gave the company an out if certain conditions existed or didn’t continue to exist. The dispute in court will likely boil down to a factual determination of whether Mozilla’s concerns were legitimate and supported by evidence.
Mozilla basically says that Yahoo failed to uphold search quality standards that it promised to maintain at the time of the initial agreement in 2014. Below is an excerpt from some of the interesting factual allegations in the redacted Mozilla filing:
Mozilla cites third-party data that asserts that during the term of the agreement, Firefox lost market share to Chrome. It attributes this (at least in part) to Yahoo search. Yahoo/Oath will likely argue that issues with the browser experience (e.g., speed and performance) were to blame instead. The truth probably lies somewhere in between.
Firefox’s market share is about 13 percent to Chrome’s nearly 59 percent. Yahoo search market share is roughly 12 percent to Google’s 63 percent.
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