When Google abruptly abandoned its Search and Advertising Deal with Yahoo Google’s counsel David Drummond said that “[A]fter four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.”
However what he forgot to mention was that the DOJ was just three hours away from from suing Google for violating the Sherman Act. According to AmLaw:
We were going to file the complaint at a certain time during the day," says Litvack, who rejoins Hogan & Hartson today. "We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement."
The agreement, announced in April, would have given Yahoo the ability to use Google to sell advertising along the side of Yahoo pages. (Google’s ads would have replaced ads previously sold by Yahoo’s own platform.) The proposal came amid Microsoft Corporation’s $44.6 billion hostile takeover bid for Yahoo. Microsoft abandoned that deal a month after the proposed Google-Yahoo deal became public, and as the Department of Justice and state regulators began looking into the Google pact for possible antitrust violations.
The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade.
"It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly," Litvack says.
Storm evaded, atleast for now.
