Last month Mozilla announced that it was changing the default search engine for its Firefox web browser from Yahoo to Google. Actually, the organization announced it was changing the search engine back to Google, because that’s what it had been until Mozilla signed a deal with Yahoo in 2014 to make Yahoo the default.
When Mozilla announced the move I was wondering how Yahoo would react. Not well, apparently. Yahoo and its new parent company Oath (a Verizion subsidiary) sued Mozilla for breach of contract a few days ago.
Now Mozilla has announced that it’s countersued.
If you’re wondering what’s going on, Mozilla has posted copies of both complaints online, but they’re heavily redacted since they refer to confidential information in the Yahoo/Mozilla agreement. But in a nutshell, here’s the heart of the matter:
- Mozilla and Yahoo signed a deal a few years ago to make Yahoo the default search engine for Firefox. Users could change the search engine, but searches on a fresh install of Firefox would be made through Yahoo. In exchange, Yahoo would pay Mozilla a lot of money.
- As reported last summer by Recode, the contract had language that allowed Mozilla to exit the deal and still receive $375 million per year through 2019 if Yahoo underwent some major changes… like getting bought by Verizon, for example.
- Mozilla now says that using Yahoo as the default search provider is no longer “what’s best for our brand, our effort to provide quality web search, and the broader content experience for our users,” so it walked away from the deal and opted to switch to Google.
- Yahoo says it “meta all, or substantially all material obligations” of its agreement with Mozilla, and therefore Mozilla is in breach of contract. The company is asking for an unspecified amount of damages to be paid, as well as the costs of the suit and interest payments.
- In its countersuit, Mozilla’s asking a court to order Yahoo to keep making payments, as well damages and costs associated with the lawsuit and “all such further relief as the Court deems just and proper.”
Honestly, without seeing the original agreement, it’s tough to say whether it’s been breached and this’ll obviously be something that has to be worked out in court. But if Mozilla wins, the organization does stand to make quite a bit of money: it would presumably continue collecting money from Yahoo for the next two years and get any revenue that comes in from the new deal with Google.
A very large portion of Mozilla’s revenue has long come from these sorts of search deals. Prior to the Yahoo deal, Google had reportedly been paying Mozilla $300 million per year.