Commentary

Just An Online Minute... Misguided Stand In GoogleClick Case

FTC head Deborah Platt Majoras' decision last week that she would continue to review Google's pending $3.1 billion merger with DoubleClick isn't sitting well with privacy advocates who requested her removal.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said this morning that his organization and the Center for Digital Democracy will seek judicial review of her refusal to recuse herself. Last week, they filed a motion asking her to step down from reviewing the merger because her husband is a partner in Jones Day, which counts DoubleClick among its clients.

Rotenberg told reporters this morning that the groups are still mulling whether to go into court immediately or wait until the FTC announces its decision on the merger. The commission hasn't said when it plans to issue a ruling, but it's widely expected to happen quickly.

DoubleClick says that Jones Day only represents the company in Europe, but the law firm's Web site previously said it was advising DoubleClick on "international and U.S. antitrust and competition law aspects" of the deal. All references to DoubleClick were removed from Jones Day's Web site after the groups filed the recusal motion last week.

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Majoras maintains that she doesn't have a conflict of interest because Jones Day had not represented DoubleClick at the FTC and also because her husband, John Majoras, recently changed his status at the firm to non-equity partner, meaning he's paid a fixed salary as opposed to sharing in the profits. Previously, he had been an equity partner.

In the past, Majoras recused herself from several cases where Jones Day was representing one of the parties. Last Friday she said her husband had still been an equity partner when she withdrew from those matters.

But that distinction between equity and non-equity partner sounds like a technicality in this context, especially since salaries and bonuses can still depend on a firm's overall profits. Also, her husband can presumably choose to return to equity status at any time -- as opposed to lawyers who become non-equity partners because the firm hasn't voted them into the full partnership.

Given the circumstances, Majoras' written decision refusing to recuse herself reads more like a lawyer relying on a loophole than a reasoned ethical opinion. It makes sense that the privacy groups are going to challenge that decision in court. And, while it remains to be seen how a judge will rule, it seems likely that a judge will want to know a lot more about both John Majoras' status in the law firm and Jones Day's representation of DoubleClick than has been made public to date.

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