On Monday, European Union antitrust regulators announced that they are looking into the proposed advertising deal between Google and Yahoo!.  Plans to launch a "preliminary investigation" were announced in mid-July.

Under the ad revenue-sharing deal, Google will provide Yahoo with ads that will run on Yahoo's search site for a share of the profits.  The deal is limited to Yahoo's US and Canadian sites.  However, this does not mean that the probe into the proposed agreement will be limited to the US and Canada because the deal will inevitably affect European competition.

According to Reuters, companies ruled to be in breach of the EU's competition rules can face fines of up to 10 percent of their global revenues.

Critics claim that the deal will force newspapers to become even more dependent on Google by handing over control of 90 percent of paid search and content advertising.  

In a statement released yesterday by WAN, "Perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press."

Newspaper Association of America, which is a member of WAN, has issued a statement confirming that its board has taken no position on the proposed partnership between Yahoo and Google.

Sources: Brand Republic, CNet News, New York Times, Reuters