AOL said that Freuds was pitching against three firms for the account, which is worth up to £500,000. The other shortlisted firms are Blue Rubicon, Ketchum and Shine Communications.
AOL UK director of communications Jonathan Lambeth said that the PR review was part of a new policy that the company had introduced.
"We have introduced a business proposal to review all external accounts and now it is the turn of our public relations account," he said.
But Lambeth was unable to say how often the account would now be reviewed beyond saying that AOL would look again at its PR advisers after "a regular period of time".
Freuds was appointed without a pitch last year to handle AOL's UK consumer PR and some US consultancy work.
It had sealed the contract after meetings in New York between eponymous chairman Matthew Freud and AOL chief executive Jonathan Miller. The two have known each other since the early 1990s.
The firm was, at that stage, given a one-year contract to promote AOL's narrowband and broadband offer positioning AOL as a "media brand" in both broadband internet and music, which is one of the main focuses of the company's communications this year. The account also involves some corporate work.
Freud Communications declined to comment.
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