The search company further claims that Mozilla's actions significantly damaged its reputation and business. But when Mozilla last month launched the Firefox Quantum, a major update to the browser with Google as the default search provider, both the companies ended their partnership. However, Mozilla has pulled the plug on the deal ahead of schedule, claiming that it was not getting paid. Yahoo first filed a lawsuit against the developers of Firefox on December 1st, after what it considers as sufficient period for Mozilla to reverse its breach of contract.
Mozilla wants Yahoo to continue making its annual payments even though it's no longer Firefox's default search browser, as the original contract stipulates, while Yahoo says it shouldn't have to because Mozilla isn't playing fair and besides, the problematic deal was made by Yahoo's former CEO and isn't necessarily indicative of the company's present-day vision.
"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". However, it seems that there were some terms in the deal that gave Mozilla the right to walk away.
"The payments owed by Yahoo are significant to Mozilla for a number of reasons", the counter-claim stated at paragraph five.
The terms of that contract revealed that the company that would purchase Yahoo would pay Mozilla $375 million per year up to 2019.
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KitGuru Says: From the sounds of it, Yahoo agreed to a pretty bad deal with some unfavorable clauses when it comes to new ownership.
Mozilla announced that it was dropping Yahoo in favor of Google just as it unveiled the Firefox Quantum, a lightning-fast browser that ironically looks to challenge Google Chrome.
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 determined in January 2015 that the user experience Yahoo Search provided was sub-par".
"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. It has also said that it had to take the decision to remove Yahoo as the default browser because continuing to use Yahoo as the default browser would have had a negative impact. It also blames Yahoo for dragging down Firefox usage, by failing to improve the company's search engine. No relationship should end this way - litigation doesn't further any goals for the ecosystem.