The US Department of Justice has hired a top Washington lawyer to lead a possible anti-cartel investigation into the activities of the Internet firm Google.
Sanford Litvack, the well-known litigator, will be advising the government as it prepares a case challenging a recent advertising deal between Google and its Silicon Valley rival, Yahoo.
The arrangement, which was made in June and lets Google sell advertising on Yahoo’s site in return for a share of profits, has been widely criticized for handing even more power to the dominant force in Internet advertising. One analysis suggests that it could result in Google having control of more than 80 percent of the US online advertising market.
Google said the impact would be much less drastic than predicted and hoped government officials would not kill the deal.
“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 said.
Meanwhile, Yahoo responded by saying that it was monitoring the news but that “we remain confident that the deal is lawful.”
Litvack, 72, a former vice-chairman of Disney, has many connections inside the technology industry. He was previously a board member of the computer manufacturers Hewlett-Packard and Compaq, and was also an assistant attorney general in the justice department’s antitrust division during the late 1970s.
It remains unclear what the scope of any possible antitrust investigation will be, with speculation that the government could widen its remit to examine Google’s increasingly powerful reach across the Internet industry.
News of the advertising deal in June was primarily seen as an attempt to disrupt Microsoft’s US$44 billion attempt to buy Yahoo. That gambit proved ultimately successful, as the takeover was rejected soon afterwards. But the nature of the Google-Yahoo deal left a bitter taste in the mouths of many industry insiders. Complaints about the pact were widespread, including from the Association of National Advertisers, which represents more than 400 companies.
Microsoft, too, protested over the implications of the deal.
“Never before in the history of advertising has one company been in a position to control prices on up to 90 percent of advertising in a single medium,” Brad Smith, Microsoft’s lawyer, told a US congressional committee in July. “Not in television, not in radio, not in publishing. It should not happen on the Internet.”
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