San Francisco - The US Justice Department is preparing an anti-trust case aimed at challenging an advertising pact between Google and Yahoo, according to reports Tuesday in the Wall Street Journal and other US media. Google and Yahoo announced the deal in June, but said they would delay implementation until October to allow regulators to review the agreement. The companies control an estimated 90 per cent of online search advertising in the United States, and the proposed pact sparked opposition from large advertisers and competitors like Microsoft.
The Association of National Advertisers petitioned the Justice Department last week and said the accord would drive up ad rates, decrease competition and give too much power to the internet companies.
According to the Wall Street Journal, the department hired top litigator Sandy Litvack to review the deal. Litvack is the former general counsel of Walt Disney Co and was the department's top anti- trust lawyer during the Carter administration.
The advertising pact would allow Yahoo to display Google ads on many of its pages. The deal would boost Yahoo revenues because Google ads command higher prices. Google and Yahoo contend that their pact would not harm competition because ad rates would be set by auction.
A Yahoo spokesman confirmed the appointment of Litvack, but said that the move's significance was uncertain.
"We have been informed that the Justice Department, as they sometimes do, is seeking advice from an outside consultant, but that we should read nothing into that fact," a spokesman said in an e- mailed statement. "We remain confident that the deal is lawful."
