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Google Was Almost Charged with Web Monopoly?

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Google Was Almost Charged with Web Monopoly?

For those who still remember the sudden decision of Google to back away from their paid search ad deal with Yahoo and still wondering the real reason behind it, we finally got our answer.  Prosecutor Sandy Litvack who was assigned to the case told the AM Law Daily that, the Department of Justice was three hours aways from charging Google with antitrusts lawsuit, and was close to being branded as a monopolist had Google not announced that the deal was cancelled.

David Drummond, Google’s chief legal counsel who made the cancellation of the deal last month somehow gave a hint when when he said that Google is cancelling the deal to avoid any protracted legal battle but did not categorically say that the DOJ is about to file a lawsuite against Google.

Here’s what Google posted on its official blog when the cancellation of the search ad deal was announced:

However, after 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.

And here’s what the prosecutor told the AM Law Daily:

We were going to file the complaint at a certain time during the day. 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.

. . . It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly.

Now that the coast has been cleared. And with the new government, would Google go back to the negotiating table and appeal for a reconsideration with the DOJ to let them proceed with the deal? Would the DOJ have a change of heart especially since Google’s Schmidt was very vocal with Google’s support for president-elect Obama?

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Arnold Zafra

Arnold Zafra writes daily on the announcements by Google, Ask.com, Yahoo & MSN along with how these announcements effect web ... [Read full bio]

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