A political controversy over deleted documents and conflicts of interest could, opponents of the deal hope, imperil Google's planned $3.1 billion acquisition of the DoubleClick advertising firm.
The most recent round started with my colleague Elinor Mills' article on Wednesday afternoon, which noted that two liberal groups opposed to the merger asked Federal Trade Commission Chairman Deborah Platt Majoras to recuse herself from a vote because her husband is a partner at the Jones Day law firm, which is representing DoubleClick. Majoras recused herself from a previous matter involving Procter & Gamble because Jones Day was involved.
That article quoted the FTC as saying Jones Day was only involved in the European aspects of the Google-DoubleClick merger and had not appeared before the FTC. But--the article noted--that "would seem to conflict" with what's on the Jones Day Web site. That site said:
Jones Day is advising DoubleClick Inc., the digital marketing technology provider, on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc. The proposed acquisition will combine DoubleClick's expertise in ad management technology with Google's Internet search and content platform. The transaction is currently under review by the U.S. Federal Trade Commission (FTC) and European Commission.
The antimerger groups, the Electronic Privacy Information Center and the Center for Digital Democracy, cited our article and the subsequent deletion in a letter to the FTC on Thursday saying the commission's representatives "who addressed yesterday the representation of Doubleclick by Jones Day before the Commission were either misinformed or willfully misled the public." They're filing a Freedom of Information Act request for any relevant documents.
The subtext here is that EPIC and CDD are trying to embarrass Majoras into recusing herself, which would remove a Republican vote likely to be more sympathetic to free market arguments. That would leave two Republicans and two Democrats left with a vote. (On the other hand, for all we know, all five commissioners could be enthusiastic about supporting the deal.)
So, what's really going on? It seems that there are two likely possibilities: one, Jones Day is in fact representing DoubleClick before the FTC, and is reluctant to acknowledge it. Two, the Jones Day Webmaster innocently used imprecise language and the law firm truly was focused on Europe alone.
For their part, DoubleClick and Jones Day say it's option No. 2. Joe Sims, a partner at Jones Day, sent me this e-mail message in response to my question to him:
The language in the posting apparently was confusing, since EPIC cites it as evidence JD is representing DC at the FTC, and we never have. So we took it down and will rewrite it to eliminate the confusion.
And DoubleClick sent us this statement this morning:
Simpson Thacher has been DoubleClick's outside counsel since July of 2005 and was retained to represent it in all aspects of its proposed acquisition by Google, including with respect to United States antitrust matters. From the outset, Simpson Thacher has represented DoubleClick before the Federal Trade Commission and continues in that capacity. Jones Day has been engaged primarily with respect to European and other non-U.S. jurisdictions. Jones Day was not engaged to represent, and has not represented DoubleClick before the Federal Trade Commission or appeared before the Commission on DoubleClick's behalf.
Majoras' husband, John Majoras, is an antitrust litigator at Jones Day. That by itself may not mean much: Jones Day is one of the largest law firms in the country with something like 2,300 attorneys.
The FTC deadline for its review was December 13, but it's since been extended. Meanwhile, the European Commission has until April 2 to review the deal.
Update 10 a.m. PST Friday: Jeff Chester of CDD called me after this article appeared and said he would have raised the ethics issue regardless of whether Majoras was likely to vote with him or against him. Political party affiliation, he said, was irrelevant, and his only goal was transparency in government. In an e-mail he added: "I would be doing this whether she was a vote for us." Also Majoras replied this morning, saying that she would not recuse herself and that she had run this matter by the FTC's ethics officer. Here's.
(Disclosure: Declan McCullagh is married to a Google employee.)