The departure of one of America's leading antitrust attorneys from his law firm, and his subsequent hiring by the US Dept. of Justice, suggests very strongly that the DOJ may be preparing for its most serious antitrust offensive in years.
Sanford Litvack, who was antitrust chief during the Carter administration and former Vice Chairman of the Walt Disney Company, has reportedly been hired by the US Justice Dept., apparently to look over Google's ad deal with Yahoo. This follows weeks of depositions and subpoenas in the DOJ's investigation of the deal, which began last April and which recently became a formal inquiry.
As The Wall Street Journal first reported yesterday, without citing sources, Litvack's job will be to look over the evidence gathered so far and make a decision on how to proceed. BetaNews independently confirmed that Litvack is no longer an attorney with Hogan & Hartson.
Further reporting by The New York Times confirmed that Litvack was hired by the Justice Dept., though its source with the law firm did not state what his assignment would be. It then confirmed, through two of its own anonymous sources, that Litvack would be appointed to the Google/Yahoo case.
Google's increasing dominance in certain key sectors of online advertising has led competitors to associate it with "monopoly," which is legal under US law, though it requires strict regulation. Possible DOJ action may remind some of the government's long, drawn-out case against Microsoft, almost ten years ago to the day.
Competitors are worried that the Google/Yahoo deal has implicit exclusivity, which could be used to obstruct free competition. Some have already asked the DOJ and other government authorities to stop the deal.
One of two possible outcomes of the DOJ's inquiry is that it could compel the two companies to make changes in order to gain approval. Or, it could sue to block the deal altogether -- and it is this latter possibility that might necessitate the hiring of someone like Sanford Litvack.
The Justice Department is not commenting to the press on the move, and requests for comment by BetaNews went unanswered as of press time. Yahoo said that it knew of the hiring, but remained confident that the deal was lawful.
Google has also repeatedly argued that the deal does not run afoul of any antitrust law. It points out that the deal is non-exclusive, and Yahoo retains the rights as to when and where its ads are displayed.
The deal means about $800 million annually in extra revenue for Yahoo, according to estimates.