Risk Update

Big Tech, Big Stakes, Big Conflicts? — Antitrust Actions, Revolving Doors and Conflicts Complexities

Hat tip to diligent reader Simon Chester (Counsel, Head – Client and Matter Acceptance Team at Gowling WLG) for sending in: “Boom Times for Lawyers as Washington Pursues Big Tech” —

  • “The mounting legal and regulatory scrutiny facing Big Tech has led to a wave of lawsuits, investigations and proposed legislation aimed at ending the dominance of Amazon, Apple, Facebook and Google. Whether those efforts succeed may take years to sort out, but there is already one clear winner: the nation’s legal industry.”
  • “The cost is minimal for the giant tech companies. But it has widened the divide in resources between regulators and the companies they police, making it harder for the government to recruit and keep talent to take on the industry. It has also raised fresh concerns about Washington’s revolving door, since many of the lawyers used by the tech companies recently worked for the government.”
  • “In 2019, when the Justice Department searched for a lead investigator into Google and other tech giants, officials came up with a list of candidates from about 10 law firms, according to two people with knowledge of the search. But one by one, they said, potential candidates had to be crossed off the list because they already worked for Big Tech clients, leaving few options.”
  • “More recently, conflicts of interest have complicated the Biden administration’s search for the head of the Justice Department’s antitrust division. Several times, critics of the industry have criticized a potential candidate because of the person’s ties to Big Tech.”
  • “‘What’s striking is the number of people going to work directly for tech companies from the agencies,’ said William Kovacic, a former chairman of the F.T.C. ‘That reflects a real change.'”
  • “Jonathan Kanter, a longtime antitrust lawyer who has been rumored as a possible nominee to lead the Justice Department’s antitrust division, built his career largely around working for the rivals of Google, Facebook, Amazon and Apple. His client list included both big companies like Microsoft and News Corporation and smaller firms like Yelp and Spotify.”
  • “In 2016, he moved to Paul, Weiss, Rifkind, Wharton & Garrison, a prominent corporate litigation firm. But last year, Mr. Kanter’s work criticizing Big Tech started to present conflicts with other parts of the firm’s sprawling portfolio, said two people with knowledge of the matter. Specifically, his practice was at odds with work being done by Bill Isaacson and Karen Dunn, two lawyers the firm had just hired who are known to represent Apple and Amazon, said another person with knowledge of the situation.”
  • “Mr. Kanter faced a choice: Drop some of his clients or leave the firm. He left. ‘Jonathan made this decision due to a complicated legal conflict that would have required him to discontinue important and longstanding client representations and relationships,’ the firm said in a note circulated at the time.”