According to Wall Street Journal, the U.S. Department of Justice has quietly hired one of the nation’s best-known litigators and former antitrust chief Sanford “Sandy” M. Litvack, “for a possible court challenge” to Google’s (NASDAQ:GOOG) growing advertising power.”
Mr. Litvack, is the former vice chairman of the Walt Disney Co. (NYSE:DIS), and was the assistant attorney general in charge of the Antitrust Division of the U.S. Department of Justice during the Carter administration. He has been asked to examine the evidence gathered so far during the review of Google’s search-advertising pending deal with Yahoo Inc. (NASDAQ:YHOO), and build a case if the decision is made to proceed, lawyers close to the review told the Journal.
Mr. Litvack’s hiring sends a strong signal to the parties involved that perhaps, the U.S. Dept. Of Justice [DOJ] is preparing to take court actions against them. If there is a suit, it’s unclear whether the DOJ would target the Google-Yahoo deal alone or expand to include other Google online-advertising activities.
Google pretends the Yahoo deal doesn’t violate antitrust laws and that the deal is pro-competitive. In a statement today, the search giant said:
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. 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.
It will be interesting to see how this development will evolve from here. One thing is for sure - it is relatively rare for the DOJ to hire a special counsel from outside the department.