Microsoft and Google executives sparred in public Monday over the proposed online advertising partnership between Google and Yahoo.

"Basically, it's a price fix," said Greg Sivinski, a Microsoft senior antitrust attorney.

"Price fixing is a complete red herring," retorted Google chief economist Hal Varian. He added that advertising revenue generated by Internet search engines is determined largely through a competitive auction.

The sharp exchange occurred during a panel discussion of online advertising at the Aspen Summit hosted by the Progress & Freedom Foundation, a Washington, D.C., think tank.

The annual conference, which explores issues in the digital economy, brings together executives from the communications, entertainment and technology industries. This year's conference focuses on constraints on innovation.

The battle of words between Google and Microsoft comes after a rough few months for Microsoft in its attempt to get a bigger foothold in the multibillion-dollar online search advertising business. Microsoft has been trying to buy Yahoo, but has been rebuffed, while Google was able to strike the long-term advertising deal. In the meantime, Microsoft's market share in the search-engine business has been declining.

Google, by far the most dominant Internet search engine, earlier this month disclosed a heavily redacted copy of its proposed 10-year advertising partnership deal with Yahoo.

The agreement calls for Google to provide Yahoo with ads and advertising services that would augment Yahoo's own online advertising platform.

Microsoft and others have complained that Google and Yahoo haven't disclosed exactly how revenue would be shared, and haven't made public other business ties between the companies.

The Justice Department is reviewing the deal, and some federal lawmakers also have taken an interest in the issue.

Sivinski said there would be a "serious problem with competition if Google and Yahoo are allowed to proceed" with the deal. In other words, consumers would have fewer choices.

He maintained that Google already controls 70 percent of paid online search advertisements, and Yahoo another 20 percent. He characterized Google as "pervasive on the Internet."

Sivinski predicted the revenue-sharing deal would result in Yahoo increasingly using Google and that Yahoo's own online advertising platform would diminish over time.

Some analysts agree that the deal benefits Google more than Yahoo.

Varian's general argument is that the online search industry is intensely competitive, and that consumers tend to use multiple search engines.

He said Yahoo, under the ad partnership, wouldn't make as much when it uses Google.

Varian added the arrangement is nonexclusive.

The deal is "perfectly consistent with all antitrust law," Varian said.