BUSINESS
07/09/2008 05:12 am ET | Updated May 25, 2011

GOOGLE, YAHOO DEAL SUBJECT OF ANTITRUST INVESTIGATION

The Justice Department has opened a formal antitrust investigation into a deal struck last month that would allow the Internet titan Google to provide some search advertising for Yahoo, according to sources familiar with the inquiry.

Investigators are planning to demand documents not only from Google and Yahoo, but also from other large companies in the Internet and media industries, said the sources, who spoke on condition of anonymity because the investigation is ongoing.

Google and Yahoo officials have said since the deal's announcement that they would delay its implementation for a voluntary Justice Department review. But a formal investigation signals that the department may have found some cause for concern.

Lawyers familiar with similar investigations said that the kind of legal requests being issued by the Justice Department in this case -- "civil investigative demands" -- are not used for routine matters.

"They don't do it without having identified significant issues," said M.J. Moltenbrey, a Freshfields Bruckhaus Deringer lawyer who was director of civil non-merger enforcement in the Justice Department's antitrust division in the 1990s. "It involves approval at higher levels within the antitrust division."

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