Remember how Yahoo and Google carefully restricted their deal to the US and Canada so they could tiptoe past the persnickety European Commission?

Well, it turns out the slumbering giant woke up anyway and has been informally reviewing the controversial web search advertising axis since mid-July on the theory that the pact could violate European price-fixing rules (oooo!, heavy antitrust stuff) and regulations on sharing sensitive business information.

Then this morning the Paris-based World Association of Newspapers (WAN), which represents 18,000 papers, added its voice to the complaints registered by the Association of National Advertisers (ANA) among others and asked the Justice Department, the European Commission and the Competition Bureau of Canada to block the deal.

It said the combined Yahoogle will lower the ad revenues newspapers get from the two companies separately.

In a statement, WAN said, “Competition forces each company to offer the best possible terms and helps ensure that newspapers earn a fair market return for the right to display ads and search boxes on their sites. The proposed advertising deal between Google and Yahoo would seriously weaken that competition, resulting in less revenues and higher prices for our members.

“WAN is also concerned that this deal would give Google unwarranted market power over important segments of online advertising. Advertisers will increasingly migrate to Google since they will see diminishing price advantages to advertising through yahoo. Google has refused to allow Yahoo to show Google ads on the web sites of new publishing partners after the deal is finalized – in other words, Google has imposed a condition that impedes one of Yahoo’s last remaining opportunities to compete with Google. What this means for newspapers is that Yahoo’s bids for their ad business will almost certainly be lower than they are today.”

On this side of the pond, the Justice Department already appears to be moving toward litigation and the attorneys general in 11 states are also investigating the arrangement.

The Yahoogle deal is supposed to kick off next month regardless of regulatory opinion, which means the DOJ might have to seek an injunction if it decides to try to stop it.