Google and Yahoo are household names. But, Sandy Litvack? Not so much.
While Litvack may be obscure to the general public, he is well-known in antitrust circles as a sharp litigator--and one who Yahoo and Google may soon become acquainted with if the Department of Justice challenges the companies' controversial search advertising partnership.
Sandy Litvack in 2004. (Photo credit: Kevin Heslin/Getty Images)
For now, it's unclear whether the scope of the investigation will only focus on the Yahoo-Google deal. Some sources told CNET News that a federal investigation could broaden to examining Google's overall impact on the marketplace.
But theres little question that bringing in Litvack indicates just how serious federal trustbusters are in their pursuit of Google.
Litvack, a under the Democratic Carter administration, was pulled back into service from private practice litigation by the DOJ earlier this month, in order to serve as a consultant in the antitrust unit of its networks and technology department, according to a DOJ source. This marks Litvack's third pass through the antitrust department, with his first as a trial lawyer fresh out of Georgetown Law Center in 1959.
Given his reputation as a sharp litigator, some former DOJ attorneys say the antitrust staff has likely completed its analysis of the case, and is now seeking Litvack's assistance on whether he could build a case that could be won at trial.
"They're not using Sandy to analyze the facts of the case. They're not asking his opinion whether this is a good thing or a bad thing," said one former DOJ antitrust attorney, who requested anonymity. "They want to know if he thinks he can sell this case in court."
In order to make a complex case simple so that a judge hearing the antitrust case will understand it, the prosecutors will want to simplify it, latching onto issues such as market share that can be understood in a courtroom. That's where someone like Litvack would come in.
"Good litigators can take a complex subject and make it sound simple," the source said.
By most accounts, the Yahoo-Google transaction announced in June is complex. The non-exclusive agreement allows Google to have its ads appear on Yahoo's search pages. Although Yahoo notes it is free to decide where Google's ads will appear and to what extent they will appear, the Internet search pioneer is planning to use Google enough to yield hundreds of millions of dollars.
Yahoo, for example, expects to receive $800 million in revenue from the deal in its first year and another bit of operating cash flow to the tune of $250 million to $450 million in the same period.
It's clear the deal has rankled more than a few. A major advertising trade group on Sunday announced it had sent a letter to the DOJ to protest the proposed transaction.
The advertisers worry the deal would diminish competition, increase concentration of market power, limit choices currently available and, as a result, lead to a rise in advertising prices. Microsoft has also weighed in with its opposition to the search advertising deal, as well as .
"A bright, seasoned litigator"
While Litvack may lack the high profile of (who initially was hired as a DOJ consultant and later litigated in the ), few question Litvack's skills as a litigator. Before joining the DOJ in 1980, Litvack had worked in private practice as an antitrust litigator for nearly 20 years.
He caught the attention of John Shenefield, who was head of the DOJ's antitrust unit and was being promoted to associate attorney general.
"He was a bright, seasoned litigator with an enthusiastic personality. And at the DOJ, you have either litigators or academic types, and I felt we needed a litigator," Shenefield said in an interview with CNET News.
Litvack brought a nose-to-the-ground sensibility to a department that had historically been dominated by policy-setters and academics.
"During a Christmas party, there was a skit and the person playing Sandy said, 'fundamentally, I'm a litigator' and everyone in the room knew exactly what he meant," said a source who worked for Litvack. "He liked to litigate. He liked the rough and tumble, whereas some people who had served in that position liked to dot all the I's and cross all the T's."
The antitrust unit, while experienced with analyzing cases, is far weaker on preparing a case for litigation and presenting at trial, said former DOJ attorneys. It needed someone like Litvack--and it may still if it goes after Google.
"Just having someone on hand like a Sandy or David Boies shows there is a serious issue there and that the parties need to consider their other options," Shenefield added.
Some of those options can include restructuring an agreement to placate regulators, backing away from a transaction altogether, or bracing for a legal fight. It has yet to be seen whether the DOJ will force the issue and how the companies may respond.
During his time at the DOJ, Litvack inherited the . Litvack kept the pressure on the telecom giant and supported the trial staff, Shenefield said. A year after Litvack left the DOJ and in the early Reagan administration, a settlement was reached with AT&T that resulted in the break-up of Ma Bell.
Swimming against the tide
But what Litvack was most known for during his time at the DOJ, say former antitrust attorneys, is swimming against the tide in litigating resale price maintenance cases, even though his predecessors chose not to take up the pursuit and some economists considered such action to be "pro-competitive."
The resale price maintenance laws basically found it unlawful for a manufacturer to have an agreement with a reseller that prohibited them from reselling a product at a higher or lower price than expressly stated in the contract.
"Sandy had an attitude that if is it's the law, I'm a prosecutor, I'll go out and prosecute," said a former antitrust DOJ attorney. Ultimately, the U.S. Supreme Court ruled that such activity was considered legal.
"Sandy should have never pursued it. It was a waste of time," said another former DOJ attorney.
Other former DOJ attorneys, however, were less critical of Litvack's pursuit, characterizing his resale price maintenance fixation as an example of his doggedness.
One of the more significant roles Litvack played at the DOJ, which was not widely known, was his advisory role to U.S. Attorney General Ben Civiletti in the handling of President Carter's brother Billy, Shenefield said.
Civiletti was debating whether to take legal action against Billy Carter, who later admitted to receiving and eventually was forced to register as a foreign agent of the Libyan government, in a controversy dubbed "Billygate."
"Ben Civiletti wanted someone to advise him on whether the allegations, in a litigator's mind, made sense and how he would handle it as a matter of public record," Shenefield recalled. "Ben had been a litigator in private practice too and recognized Sandy's common sense."
After leaving the DOJ in 1981, Litvack returned to private practice until joining the Walt Disney Co. in 1991. While at Disney, where he spent eight years, Litvack first served as general counsel, then corporate operations chief, and finally vice chairman before leaving that post in 2000. After Disney, Litvack returned to private practice, before leaving earlier this month to rejoin the DOJ.
So why would a seasoned litigator who is 72 and on the tail-end of his career consider jumping aboard in what may prove to be a rigorous case should the DOJ ultimately pursue it and Yahoo and Google maintain their resolve and fight it?
"He loved his time at the division. It was fun for him," Shenefield said. "This is recess for him and a way to provide public service...other people raise horses."
(Litvack could not be reached for comment, and the DOJ declined to comment on his hiring.)