Mozilla countersues Yahoo Holdings and Oath

Mozilla has filed a cross-complaint against Yahoo Holdings and Oath, after the latter filed against the browser maker earlier this week for dumping it as the default search engine in Firefox Quantum in the United States.

In Yahoo Holdings' complaint, posted by Mozilla [PDF], Yahoo states that Mozilla sent a letter terminating the search agreement on November 10. Yahoo put Mozilla on breach notice, and demanded that Yahoo be restored as the default US search engine for Firefox.

"Yahoo has suffered and will continue to suffer competitive injury to its business and reputation, among other harm, and Mozilla's material breaches and bad-faith conduct are a substantial factor in causing such harm," the claim states.

In response, Mozilla said it exercised its contractual right to terminate the agreement, and cited providing quality search results, experience, and "what's best for our brand" as reasons for its action.

"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," Mozilla Chief Business and Legal Officer Denelle Dixon said. "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."

In its cross-complaint [PDF], Mozilla said it is seeking payments owed to it from the 2014 agreement. The browser maker said it took a risk going with Yahoo, and was assured that Yahoo search would receive significant investment, but that this failed to materialise.

"Mozilla's revenue from Yahoo never met expectations," the claim states.

"Had Yahoo not breached the strategic agreement, the search functionality in Firefox would have been used more and the Firefox product itself would have more users, Mozilla would have been able to enter into a deal with a higher price following the termination of the strategic agreement, and there would have been relevant search alternatives in the marketplace, including Yahoo."

Completed in June, Verizon purchased Yahoo's core operating business for almost $4.5 billion. The price tag was reduced by $350 million following an admission to a pair of hacks that exposed over 1 billion accounts.

The former Yahoo business, along with AOL, was rebranded as Oath.

Mozilla said that when it informed Verizon of the contract performance issues, it was told to "explore other search providers".

"Mozilla brings this action ... so that Mozilla will have access to the money needed to continue to develop and market the new major upgrade version of the Mozilla Firefox browser, and to fund the work that Mozilla is undertaking during this critical period of policy development to keep the Internet a global public resource, open and accessible to all," it said.

The switch from Google to Yahoo as the default search engine occurred with the release of Firefox Quantum in November, a faster browser arriving with an overhauled rendering engine, new multi-core support, and more efficient handling of tabs.

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