Google Three Hours From Antitrust Case

Sanford Litvack, the hired gun for DOJ, was just three hours from filing the formal antitrust compliant against Google (GOOG) and Yahoo (YHOO). In an interview with The AM Law Daily, Litvack says, “We were going to file the complaint at a certain time during the day. We told them and three hours before, they told us they were abandoning the agreement.”

The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act. Litvack went on to say, “It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly.” Litvack clearly wanted this to happen, “Of course I was looking forward to it,” he says. “We felt pretty good about it, we felt pretty confident.” 

Google certainly avoided a near disaster but it was foolish from the very beginning to even pursue the deal. When you have over 70% market share in the search business, you already have monopolistic network effects that will make it nearly impossible for anyone to compete with you. Why bother locking up an extra 20% and awaking the sleeping giant, the DOJ.