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A possible recusal can’t stop Jonathan Kanter

A possible recusal can’t stop Jonathan Kanter

Good morning! This Monday, the word on everybody's lips is "recusal," a former Blizzard exec apologizes, GM sues Ford, and it's a big week for earnings.

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The Big Story

The next recusal fight in antitrust

Jonathan Kanter, President Joe Biden's nominee to run the Justice Department's antitrust division, has been a favorite of progressives, Big Tech competitors and even some Republicans for his longtime criticism of companies like Google. But his prior work could mean he has to recuse himself from marquee DOJ issues, like the case against Google and the Apple investigation.

Requests for recusal have emerged as a Big Tech weapon as it fights rising antitrust scrutiny.

  • Facebook and Amazon have pushed for FTC chair Lina Khan to remove herself from matters involving them.
  • The companies cite her prior work, which they say shows she's prejudged their issues — or that she just has the experience for the job.

Kanter may have done even more than Khan to bring antitrust scrutiny on Big Tech, and the rules he faces at the DOJ may be tighter.

  • As a lawyer for Yelp, News Corp. and other companies, Kanter eagerly pushed government enforcers to file a range of competition lawsuits, especially against Google. He often argued that the company privileged its own properties over those of competitors like Yelp in search results.
  • That issue made it into a multistate complaint that was filed in December, and courts are now consolidating that case with the federal one filed in October.

Why might that be a problem? On his first day in office, Biden issued an ethics order requiring appointees to agree to keep themselves out of "any particular matter involving specific parties" for two years after they, or their former employers, worked on it outside of government.

  • That could potentially knock Kanter out of working on the U.S. antitrust case against Google, and because his old law firm is representing Apple (and he once had Spotify as a client), he might have to recuse from that probe, too.
  • There's also the question of appearances of conflicts. "If he was representing Yelp in the same or a substantially related complaint, then you wouldn't want it to appear that he was carrying water for any particular former client," said Virginia Canter, a longtime ethics lawyer and former White House counsel.

The companies have shown themselves quite willing to seek recusal as a strategy, too. To be clear, it's not definite that Kanter has to recuse himself from Google and Apple. Some in the White House reportedly worried about this before Kanter was picked, but it's standing behind him as the right choice now.

  • Biden's ethics order also allows for waivers, and like everything in government, what constitutes a "particular matter" and "specific parties" is dependent on the details.
  • His defenders have also argued that, as with Khan at the FTC, his experience is a plus. They say that the regulations shouldn't treat someone who went from trying to help law enforcers to holding an actual law enforcement post the same as someone who switched from thwarting the government to being a public servant.

Even if Kanter is recused, the antitrust cases will go on. The U.S. case against Google has already launched, and the two-year ban could expire before a trial, which is scheduled for late 2023.

  • The whole Justice Department is supposed to follow the vision of the president and the division chief in favor of expanded competition enforcement, unlike the FTC, which is an independent agency where partisan commissioners vote.
  • Even if Kanter didn't participate in litigation strategy or potential settlement negotiations, he could still point the antitrust section toward a harder line on concessions, merger challenges, theories of harm and more.

— Ben Brody (email | twitter)

A MESSAGE FROM ALIBABA

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People Are Talking

Former Blizzard exec Chris Metzen apologized following allegations of sexual harassment at the company:

  • "There is no excuse. We failed too many people when they needed us because we had the privilege of not noticing, not engaging, not creating necessary space for the colleagues who needed us as leaders."

WhatsApp head Will Cathcart thinks Apple could do more to prevent cyberattacks:

  • "Be loud, join in. It's not enough to say, most of our users don't need to worry about this. It's not enough to say 'oh this is only thousands or tens of thousands of victims.'"

On Protocol | Workplace: Apple's not the only company pushing its back-to-work plans, Pure Storage general counsel Niki Armstrong said:

  • "I know a couple companies that have just indefinitely put plans on hold. We really just don't know what the future's going to hold here in the next few months."

Coming this week

ACT-W begins today. The weeklong networking event includes tech speaking sessions and workshops for women, nonbinary people and allies.

It's a big week for earnings: Microsoft, Apple, Amazon, Alphabet, Facebook, Tesla, Shopify, PayPal, Samsung, Qualcomm, ServiceNow, Twilio, Atlassian, Spotify, Pinterest and Zendesk all report this week.

Zoom Academy starts Wednesday. It's a daylong professional development event for IT professionals and educators.

Black Hat USA kicks off Saturday with a series of virtual training sessions on cybersecurity. The main portion of the conference starts next week in a hybrid format.

In Other News

  • Is Amazon getting into crypto? Bitcoin spiked overnight, seemingly linked to an Amazon job listing for a digital currency and blockchain specialist. The company is reportedly planning to accept bitcoin payments later this year, and launch its own token next year. But so far, the evidence for all of it is pretty thin.
  • Google contractors reached a union agreement with HCL America. The agreement is a big win for Google contractors who've pushed for collective bargaining rights for a couple of years.
  • During the pandemic, tech took all. The valuation of tech giants like Apple and Google soared, many more companies went public, and teleconferencing boomed in 2020. Now, the only thing getting in their way is the government, according to The New York Times.
  • China's tech crackdown is spreading. In the crosshairs this time are the ed tech, online food delivery and music streaming sectors, sparking stock selloffs as investors wonder what might be next.
  • General Motors is suing Ford. GM alleges that Ford violated its trademarked hands-free driving technology, Cruise, by naming its autonomous driving feature BlueCruise.
  • AWS is looking into discrimination claims. Amazon tapped an outside law firm to investigate the unit's culture after employees alleged Amazon's reporting system for discrimination complaints is unfair.
  • Companies hit with cyberattacks don't just pay ransom. As the number of ransomware attacks rise, so does the potential for lawsuits from customers and workers, according to The Washington Post, costing them millions more to try to move on.
  • Alphabet is focused on robots. The company introduced a division called Intrinsic, which is trying to build software for industrial robots that allows them to make adjustments on their own.

One More Thing

Summer skims

There's still a few weeks left in the summer, which means you still have plenty of time to get all the way through even a tome like Walter Isaacson's "The Code Breaker," but maybe that also gets in the way of your beach time! We get it.

For some bite-sized tech and science nonfiction, try "True Stories, Well Told," a compilation of short stories about topics ranging from health care to monarch butterflies. Take it one story at a time ... maybe between margaritas.

A MESSAGE FROM ALIBABA

Think of Alibaba as a massive digital mall. When a U.S. business opens a digital storefront on Alibaba's platform in China, they gain access to our 900 million active Chinese consumers. Alibaba provides all the tools to help U.S. businesses build their brands in China to serve local Chinese consumers.

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