Mozilla and Oath are heading to court after the companies filed lawsuits against each other related to the decision to switch the Firefox default search engine from Yahoo to Google. However, Mozilla has pulled the plug on the deal ahead of schedule, claiming that it was not getting paid.
Now, Yahoo and Mozilla have each filed complaints alleging that the other company violated the 2014 contract.
While Mozilla emphasizes that the decision to replace Yahoo with Google was exclusively taken to improve the customer experience with the new version of the web browser, Yahoo has knocked the court's door with the hope of saving its limited customer base through the web browser.
Yahoo's complaint centers on "breach of contract" and "breach of covenant of good faith and fair dealing". However, it seems that there were some terms in the deal that gave Mozilla the right to walk away.
Oath, a Verizon subsidiary which controls Yahoo, has not yet commented on Mozilla's counter-claim.
Given that Yahoo had been awarded a 5-year contract until 2019 you might expect that Mozilla would now have to pay compensation to Yahoo's new owner, Oath, which is part of Verizon.
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Mozilla's countersuit refers to unpaid fees from the agreement. For Mozilla, agreements with search engines have brought in as much as US$300 million a year, which accounts for 90 percent of its income.
KitGuru Says: From the sounds of it, Yahoo agreed to a pretty bad deal with some unfavorable clauses when it comes to new ownership.
"The payments owed by Yahoo are key to financing Mozilla's efforts to launch the new version of its flagship product, Firefox", the complaint says. In the midst of the negotiations, some fine print in the Mozilla / Yahoo contract surfaced.
Mozilla announced that it was dropping Yahoo in favor of Google just as it unveiled the Firefox Quantum, a lightning-fast browser that ironically looks to challenge Google Chrome.
Mozilla also voiced concerns over Verizon's ability to protect user privacy, citing the company's $7.4 million settlement with the FCC in 2014 for using customers' personal data for marketing purposes without their consent.
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". 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. 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.