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. 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 wasnt pleased with its new partner. It also allowed Mozilla to walk away from the deal completely. Verizon isnt renowned for its commitment to search, and it doesnt 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 Mozillas 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 whats best for our brand, our effort to provide quality web search, and the broader content experience for our users. Yahoos acquisition by Verizon wasnt 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 — Verizons digital content subsidiary — to cough up the money it thinks its 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 Mozillas 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 whats best for our brand, our effort to provide quality web search, and the broader content experience for our users. Immediately following Yahoos 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 doesnt 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.
Firefoxs default search engine has become the subject of a hotly contested legal battle, a few weeks after Mozilla announced it would be moving from Yahoo to Google. Yahoos new parent Oath filed a complaint against Mozilla in a California court on December 1, alleging a breach of contract. Now Mozilla has filed a counter complaint, stating that the switch back was in line with a deal struck between the two companies. Sounds like a small thing, sure, but were talking hundreds of millions of dollars here. Back in 2014, Yahoo struck a deal that would make its search engine the default for Mozillas popular, if struggling, browser, to the tune of $375 million a year. Details of the deal were only made public last year, as CEO Marissa Mayers time at the company came under the microscope while it prepared to sell itself to Verizon. For its many faults, the Verizon deal went through, of course, forming Oath in the process (the Yahoo/AOL hybrid under which TechCrunch resides). Along with it, Verizon inherited an annual payment of $375 million through 2019. Not a bad deal for Mozilla, especially when one considers this little gem: Yahoo (or whoever owns Yahoo) is obligated to continue payments, even if Mozilla were to, say, drop the search engine as its default. Mozilla was given a contractual right to terminate the agreement, if Yahoo was found unacceptable for some reason. That precise thing occurred just a few weeks back, as the company launched its new Quantum browser, switching back to Google in the process. The latest version of Firefox has been warmly regarded by many as a return to form for a company that had previously been lost in the woods, rapidly losing marketshare to Chrome in the process. Naturally, Oath/Yahoo want a piece of that action. In yesterdays counter-complaint, Mozilla explains that it took another long look at the deal post-Verizon acquisition and was no longer in love with its choice of Yahoo as the default engine. Immediately following Yahoos acquisition, we undertook a lengthy, multi-month process to seek assurances from Yahoo and its acquirers with respect to those factors, the company explained in a blog post yesterday. 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. Oath has not yet issued an official response to Mozillas official response.