This led Yahoo's parent company, Oath to file a complaint in which it alleged that the software company had hurt the search engine's business by terminating the agreement early. The case was filed by Verizon in the Court of California on 1st of December.
Deals between the software companies that develop web browsers and search engine providers can be quite lucrative and these agreements have earned Mozilla as much as $300 million a year or 90 per cent of its income. And Google became pretty desperate to get people to switch their default search engine back by placing messages at the top of search results.
Yahoo said that it asked Mozilla to take immediate steps to fix its violations and revoke its termination notice.
"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". It claims that switching to Yahoo was done with the understanding that the search engine would receive significant investment to make it more competitive with the likes of Google and that other one you sometimes use by accident. As the news of takeover emerged into the market, the agreement between Yahoo and Mozilla explicitly stated that the acquiring company would pay Mozilla $375 million per year through 2019 if Mozilla wasn't satisfied with the new owners of Yahoo.
On Tuesday, Mozilla detailed the decision in a blog post, saying it spent months studying how the new Verizon-owned Yahoo might affect Firefox's web search, the user experience, and the brand.
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. Yahoo reportedly agreed to pay Mozilla $375 million a year for that status. "The terms of our contract are clear and our post-termination rights under our contract with Yahoo should continue to be enforced", Mozilla legal head Denelle Dixon said in a statement. The buyer must do this even if they did not want to work with Mozilla.
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.
"Rather than focus on improving the quality of its search product, as Yahoo assured Mozilla it would prior to entering into the deal, Yahoo continually focused on short-term monetization and special events such as the Olympics and the election, at the expense of product quality", Mozilla alleges. No relationship should end this way - litigation doesn't further any goals for the ecosystem.
Mozilla adds that the partnership was placing its privacy-friendly reputation at risk, given that Yahoo was recently acquired by Verizon. 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.