China is saying “not so fast” in the bid for Microsoft to take over Yahoo. According to the New York Times, the Chinese will be asserting new anti-trust and anti-monopoly legislation starting August 1, 2008 that could set a Great Wall hurdle in front of the merger.

China is vying to become a superpower in regard to anti-trust laws worldwide, along side of the United States and European Union. One of the issues at stake is that Yahoo owns a 40-percent stake in Chinese ecommerce site Alibaba.com in which Yahoo paid $1 billion.

The merger could give China the right to buy back the stake from Microsoft. Also at issue is the benefits (or deficits) of the worldwide shrinkage of dominant search engines from three to just Microsoft and Google.

If this were to happen, some may see the “don’t be evil” motto up for grabs as lack of competition may not be in the best interests of a democratic Web. Neither Yahoo nor Microsoft are talking right now, which could symbolize a “quiet period of negotiation”.

No matter what, though, China will need to be at the table at some point as the country represents a huge player in the worldwide online marketplace.

Filed under: Microsoft