Mexican court fines Yahoo 2.7 billion US dollars

Fining a company is wounding to their reputation, but a Mexican court looks to be really eager to twist the knife in Yahoo. A court in the country has ordered the company to cough up an eye-watering $2.7 billion over a lawsuit involving a breach of contract and lost profits from a yellow pages listing service.

The yellow pages listing service was operated by Worldwide Directories and Ideas Interactivas. Yahoo's contribution to this yellow pages company dates all the way back to 2003 (according to an article from the year), with Paginas Utiles. As you can see from the site it's pretty dead. It's a real kicker for a company that Marissa Mayer, formerly of Google, has been fighting to turn around since mid-2012.

Yahoo is understandably horrified, and "believes the plaintiffs' claims are without merit and will vigorously pursue all appeals." $2.7 billion dollars is an astronomical amount to try to wring out of a company. It's more than Apple eventually got from Samsung. According to Wikipedia, Yahoo's revenue for 2011 was $4.98 billion, so the fine represents more than half that amount.

Business Insider turned up some useful information; Carlos Bazan-Canabal claims that Paginas Utiles turned Yahoo Mexico's financial status around on his LinkedIn profile. Bazan-Canabal was a Yahoo executive at one point, leaving to work for Worldwide Directories - the same company that seems to now be fighting Yahoo. One thing's for sure - "Yahoo" is not going to be shouted at the next stockholder meeting in any positive manner.

Sources: AllThingsD, Business Insider

 

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31 Comments

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im amazed of the "Racist way" of this thread, its ignorance and resentful, Mexico its really big and has more resources than europe and the US...thats why there is corruption, US control the politician in Mexico...but you need to read alot to understand that, then...even if its google or apple or yahoo any international company operating in mexico has to be controled by mexicos law...like any other country in the world. and the cartel drugs has nothing to do with this, the drug lords only have the ilegal drugs system, and they need to have ppl inside of the government to operate....then its more like the US.

the reality is that as a result of any lawsuit the winner part can charge what ever they want to a company8its bussines after all), it should be that way with all the products and companies but it cannot be done cuz the US ****ed allt he world with their pacts of trading

so this has to be more with the other company lawsuit than the goverment trying to get more more from yahoo....either way the evade taxes like apple and google

Contrary to the popular believe, Mexico is not an anarchy, it is too corrupt than USA. The only difference is that in Mexico, the normal citizen don't trust anymore in any politician party.

I dislike the automatic assumption EU/ other countries are doing this just for the money. The US gives a slap on the wrist where EU actually cares about consumer protection as one example.

I need a bit more information about this to make a judgement if this is excessive or Yahoo really messed up.

Jason Stillion said,
I dislike the automatic assumption EU/ other countries are doing this just for the money. The US gives a slap on the wrist where EU actually cares about consumer protection as one example.

What is it that really need to be protected in case of MS?
Windows Media Player?
Internet Explorer?
Do they cause harm to consumers???
And other products with much lower quality than MS products not causing harm to consumers?
Well, that's gonna be interesting...

mahara said,

What is it that really need to be protected in case of MS?
Windows Media Player?
Internet Explorer?
Do they cause harm to consumers???
And other products with much lower quality than MS products not causing harm to consumers?
Well, that's gonna be interesting...

Such ignorance... *sigh*


Whatever, go on with your blind hatred and bashing of the EU. Maybe someday you'll grow up and see the world for what it is.

rpsgc said,

Such ignorance... *sigh*


Whatever, go on with your blind hatred and bashing of the EU. Maybe someday you'll grow up and see the world for what it is.


We've found the EU's one fanboy.

rpsgc said,
Such ignorance... *sigh*

Whatever, go on with your blind hatred and bashing of the EU. Maybe someday you'll grow up and see the world for what it is.

Then be specific!

I want a full detailed analysis, not an emotional-based reaction.
Think in an engineering way.

So my question remains:

What or who are they trying to protect?
And those who needs that kind of protection should be able to speak for themselves first: Is that what they need?
I never heard any directly other than something that's covered up by EU directly or by companies that hates MS.

siah1214 said,

We've found the EU's one fanboy.

Oh so because I'm not a brainless troll that jumps into conclusions and blindly bashes an entity/corporation I must be a fanboy!

Neowin has become a cesspool of imbeciles.

rpsgc said,
Oh so because I'm not a brainless troll that jumps into conclusions and blindly bashes an entity/corporation I must be a fanboy!

Neowin has become a cesspool of imbeciles.

Are you an EU lawyer?
What facts can you present here?

Since it's from Mexico, maybe it's just a drug cartel doing one of their public beheadings in the form of a retarded fine to yahoo?

This practice of trying to rape companies from other countries has got to end. It's a trend I wish the EU had never started.

Whoa, Mexico? I wouldn't trust any court coming out of that country. The real owners of Mexico are the drug cartels. Who knows what judges they've paid off, manipulated, threatened, or control. Think about how large a 'catch' that would be to an organized crime association! 2 billion "with a B" dollars.

This could be corruption on a supremely global level, surely.

Jahooba said,
Whoa, Mexico? I wouldn't trust any court coming out of that country. The real owners of Mexico are the drug cartels. Who knows what judges they've paid off, manipulated, threatened, or control. Think about how large a 'catch' that would be to an organized crime association! 2 billion "with a B" dollars.

This could be corruption on a supremely global level, surely.

Sounds like the government cartels in the USA.

Are you sure it's us dollars? Maybe it's pesos. 2 billion pesos = 15,4423,400 USD. Not that big a fine for a company like yahoo, but yikes... 2 billion USD? That's gotta be a mistake. Like the guy above me said, who's really gonna force yahoo to pay up xD

Izlude said,
Are you sure it's us dollars? Maybe it's pesos. 2 billion pesos = 15,4423,400 USD. Not that big a fine for a company like yahoo, but yikes... 2 billion USD? That's gotta be a mistake. Like the guy above me said, who's really gonna force yahoo to pay up xD

The Cartels

Izlude said,
Are you sure it's us dollars? Maybe it's pesos. 2 billion pesos = 15,4423,400 USD. Not that big a fine for a company like yahoo, but yikes... 2 billion USD? That's gotta be a mistake. Like the guy above me said, who's really gonna force yahoo to pay up xD

And it does seem odd that Mexico would fine ANYBODY in USD...

I'm confused as to how a country can sue a company that operates in another country. Yahoo has no legal responsibilities outside of its home country.

Also, I'm not really sure what the lawsuit is about. Is Mexico mad that the yellow page service died, and that somehow directly related to lost profits for them? I can't imagine there is any evidence that can unequivocally point to Yahoo as liable for any supposed damages.

spacer said,
I'm confused as to how a country can sue a company that operates in another country. Yahoo has no legal responsibilities outside of its home country.

Also, I'm not really sure what the lawsuit is about. Is Mexico mad that the yellow page service died, and that somehow directly related to lost profits for them? I can't imagine there is any evidence that can unequivocally point to Yahoo as liable for any supposed damages.


This. Stupid Mexicans but really... Whose going to force Yahoo to pay Mexico? Good luck

spacer said,
I'm confused as to how a country can sue a company that operates in another country. Yahoo has no legal responsibilities outside of its home country.

Also, I'm not really sure what the lawsuit is about. Is Mexico mad that the yellow page service died, and that somehow directly related to lost profits for them? I can't imagine there is any evidence that can unequivocally point to Yahoo as liable for any supposed damages.


Exactly. Just another company trying to extort from companies outside their borders...

spacer said,
I'm confused as to how a country can sue a company that operates in another country. Yahoo has no legal responsibilities outside of its home country.

Also, I'm not really sure what the lawsuit is about. Is Mexico mad that the yellow page service died, and that somehow directly related to lost profits for them? I can't imagine there is any evidence that can unequivocally point to Yahoo as liable for any supposed damages.

The problem is apparently yahoo established a subsidiary as a Mexican company in Mexico names 'yahoo de Mexico s.a. De c.v.' so in that manner they can sue them

Wow, talk about ignorant people. Are you aware that most multinational companies do establish local subsidiaries, that are bound to the laws of the countries they operate in? Yahoo de Mexico is liable for this and they have to comply with the Mexican law, just like any other company in Mexico.

Guess that the Mexicans aren't the stupid ones.


Cask1 said,
Wow, talk about ignorant people. Are you aware that most multinational companies do establish local subsidiaries, that are bound to the laws of the countries they operate in? Yahoo de Mexico is liable for this and they have to comply with the Mexican law, just like any other company in Mexico.

Guess that the Mexicans aren't the stupid ones.



The problem is not that people don't understand that (And you're understanding is far from superior to anyone else's...). It's that, in a time of poor economies all over the world, governments are resorting to extorting what the can from companies that do not call that country "Home"...

M_Lyons10 said,

The problem is not that people don't understand that (And you're understanding is far from superior to anyone else's...). It's that, in a time of poor economies all over the world, governments are resorting to extorting what the can from companies that do not call that country "Home"...

Not only ignorant, but plain stupid! I'll try to explain it to you... Yahoo's Mexican subsidiary was sued by a former partner -- not Mexico, the country, but another company -- in a lawsuit related to a breach of contract. A court in Mexico, the place where this lawsuit was filed, ruled Yahoo was indeed found in a breach of contract, and ordered Yahoo to pay the plaintiff the sum mentioned in this article. The reason is because thanks to the help of this other company, Yahoo Mexico was able to break even financially, but, apparently, Yahoo did not pay their part of the deal.

The Mexican economy is doing great, by the way. Not that it is relevant to this article. How is the fiscal crisis coming, back "Home"?

Well, why yahoo would accept to pay such astronomical amount for that little country called Mexico. They rather remain illegal.

Mexican body trying to soak someone for tons of money and possible corruption/conflict-of-interest? :-\