Newsflash: The feds think Google has a monopoly over search advertising. (Ya' think?)
So it's a good thing Google ditched its controversial ad partnership with Yahoo, because the search juggernaut was just three hours away from being sued by the Justice Department, according to the ace antitrust litigator brought on by the feds to investigate the deal.
"We were going to file the complaint at a certain time during the day," Sandy Litvack told AmLawDaily, a legal blog produced by the American Lawyer
magazine. "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."
Google had little appetite for a legal battle with the Justice Department, so the company bailed on the plan, leaving Yahoo out to dry.
"We're of course disappointed that this deal won't be moving ahead," Google's top lawyer David Drummond wrote. "But we're not going to let the prospect of a lengthy legal battle distract us from our core mission.
That would be like trying to drive down the road of innovation with the parking brake on."
And what a distraction it would have been.
Litvack revealed that the feds were poised to charge Google with violations of the Sherman Antitrust Act, which prohibits deals that restrain or try to monopolize trade.
"It would have ended up also alleging that Google had a monopoly and that [the Yahoo deal] would have furthered their monopoly," Litvack said.
Litvack played coy when asked whether the Justice Department's willingness to sue Google signals that the company might find itself in the feds' antitrust crosshairs again.
No matter. He didn't really need to come out and say it. It seems clear that if Google continues to grow its search ad market share, it's facing a date with antitrust destiny.
Google may feel lucky to have have dodged a bullet this time. Next time, the company might not so fortunate.
From Portfolio.com: Tech Observer by Sam Gustin
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