FTC head won't recuse herself from Google-DoubleClick deal review

Privacy groups say Deborah Platt Majoras' husband is advising DoubleClick

Deborah Platt Majoras, the chairman of the U.S. Federal Trade Commission (FTC), won't remove herself from the agency's pending review of Google Inc.'s proposed $3.1 billion acquisition of online advertising company DoubleClick Inc.

In a statement today, Majoras said that after reviewing concerns about the case and consulting with the agency's ethics attorney, she has "determined not to recuse myself from this matter because the relevant laws and rules, as detailed below, neither require nor support recusal."

Yesterday, the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD), both in Washington, have asked the FTC to block the deal or impose conditions on it that would safeguard privacy because they believe neither Google nor DoubleClick would be legally required to protect the privacy and security of the information they collect. They also filed a complaint with the FTC asking Majoras to remove herself from any review of the deal, noting, in part, that her husband John is a partner at Jones Day, the Cleveland-based law firm advising DoubleClick on the deal's antitrust issues.

But Majoras said that while Jones Day represents DoubleClick in the review of the deal before the European Commission (EC), it does not represent the company before the FTC and has never appeared before the FTC -- or even been mentioned in dozens of meetings and submissions to the agency. She said the law firm of Simpson, Thacher & Bartlett LLP represents DoubleClick before the FTC.

"I understand that no one at the FTC was aware that Jones Day was involved in the EC review of this transaction until the afternoon of Tuesday, Dec. 11, 2007, at which time staff learned and contacted me," she said in the statement. "Following my customary practice when I learn that Jones Day is or may be involved in a matter, I immediately contacted the FTC's Ethics Official, and asked him to undertake a conflict-of-interest analysis."

In addition, Majoras said her husband has no financial interest in the acquisition because he is no longer an equity partner in the law firm. He doesn't represent any party in the Google-DoubleClick matter and is in no way connected to it, and he does not represent anyone connected to the deal. Because he has no financial interest in the deal, there is no financial conflict of interest on her part.

According to Majoras, the FTC's Ethics Official determined that there is no conflict of interest and determined that any concern about her role in the Google-DoubleClick matter is outweighed by the agency's interest in her participation. "Critical to that analysis was the fact that the decision-making authority of an FTC Commissioner cannot be transferred to any other person," she said. "Because my participation in this matter is consistent with federal ethics laws and regulations, I intend to fulfill the duties entrusted to me when I was appointed and confirmed."

EPIC and the CDD, however, remain skeptical. After reviewing her statement, the groups said they are more convinced than ever that Majoras should remove herself from the review.

"First, the chairman states that, 'Jones Day does not represent DoubleClick before the FTC. ...' As we made clear in our original filing and attached as Appendix 1, Jones Day said they are representing DoubleClick in the merger review at the FTC. Moreover, once we called attention to the Jones Day statement on this matter, the firm promptly removed the relevant page from their Web site. Even now, a quick search for the term 'DoubleClick' at the Jones Day Web site produces 'no matches found,'" according to a statement from EPIC and the CDD e-mailed to Computerworld.

The groups said the logical conclusion is that Jones Day represents DoubleClick in this matter and when the firm became aware of the conflict of interest, it sought to destroy the relevant evidence. "Jones Day's admission makes clear the case for recusal and it is nowhere addressed in the [chairman's] statement," according to the group's statement.

Jones Day officials could not be reached to comment on the allegation.

EPIC and the CDD also said Majoras' argument that she has no financial conflict of interest because her husband is no longer an equity partner in the Jones Day law firm doesn't hold water. "This argument would be more persuasive if Mr. Majoras worked in the firm in an unrelated field or did not have the specific responsibility for business development. But, in fact, Mr. Majoras is both an antitrust expert for the firm -- the central question now before the commission in the DoubleClick review -- and his key responsibility for his firm is business development in Washington," EPIC and the CDD said in their statement. "The [chairman's] statement indicates that this latter factor alone would not be sufficient to establish a conflict of interest, but that factor combined with the others cited in our petition clearly does."

The privacy groups renewed their call for Majoras to recuse herself because she has not provided any relevant facts that make her presence necessary, except to say that the FTC's interests in her participation outweigh any potential conflict.

EPIC and the CDD have also asked her to post the conflict-of-interest analysis regarding the matter on the FTC Web site.

Asked for comment on the issue, a Google spokesman said: "This acquisition is good for consumers, advertisers and Web site publishers, and we continue to be confident that it will be approved."

Copyright © 2007 IDG Communications, Inc.

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