Google-Yahoo Deal to Be Probed by Former DOJ Lawyer
The U.S. Department of Justice has hired one of its former antitrust chiefs to help determine whether to file an antitrust challenge to the proposed search advertising deal between Google Inc. and Yahoo Inc., according to a story in Tuesday's Wall Street Journal.
The DOJ hired Sanford Litvack, former vice chairman of the Walt Disney Co. and antitrust chair at the DOJ under President Jimmy Carter, to examine evidence gathered by DOJ attorneys in recent weeks, the paper said. The agreement would have Yahoo running advertising from Google alongside its search results, the paper said.
The article noted that government lawyers have been interviewing witnesses and issuing subpoenas for documents that could support a potential challenge to the deal. Litvack has been charged with examining the evidence and building a case if its decided to mount an antitrust challenge, the WSJ said.
Litvack resigned last week from Hogan & Hartson LLP, where he was a partner in the Los Angeles and New York offices, according to the story.
In a statement sent to Computerworld today, Yahoo said that the DOJ has notified the company that it is seeking advice from an outside consultant, "but that we should read nothing into that fact."
Throughout the 100-day review period that Google and Yahoo voluntarily offered to U.S. regulators to review the deal. Yahoo has had "constant and productive dialogue" with DOJ, Yahoo said.
"We remain confident that the deal is lawful and that when the federal and state regulators with whom we have been working see it in action, they will find it to be pro-competitive and good for the marketplace," Yahoo said. "It would be premature to suggest anything as this deal has yet to be implemented."
Adam Kovacevich, Google's senior manager of global communications and public affairs, noted in a statement sent to Computerworld that the company is confident that the arrangement will boost competition in the online advertising business, but added that Google would not comment on the regulatory process.
"We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them," he added. "While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact."
This news comes just days after the Association of National Advertisers, a national trade group that represents large national advertisers like Ford, Sara Lee, Wal-Mart and Pepsi, sent a letter to the DOJ stating its objections to the Google-Yahoo deal. The association, whose members spend $100 billion in advertising, said the deal would diminish competition and increase prices to advertisers.