Tech
Google stacks its legal team with former DOJ employees as it faces antitrust cases
Published
5 days agoon
By
ironity
John Smith | View Press | Getty Images
Former DOJ employees make up both its in-house team and members of outside counsel firms it employs. The company has hired three former DOJ officials into regulatory roles since May 2022, and one before that in 2021, according to public information including social media profiles. Google also uses four different outside counsel firms loaded with nearly 20 former DOJ officials, many of whom worked in the antitrust division at various times.
Such hiring for its internal regulatory team is a reflection of the intense scrutiny Google is facing from governments around the world. It can be a signal that a company anticipates dealing with regulatory challenges in years to come, even if it doesn’t know exactly what form it’ll take yet, according to two former government officials.
“When companies find themselves under intense scrutiny from regulatory authorities, antitrust law or otherwise, they make moves like this,” said Bill Kovacic, a former Federal Trade Commission chair who now teaches antitrust law at George Washington University.
Google now faces two antitrust challenges from the DOJ, both to its search and ad tech businesses, and additional challenges from a slew of state attorneys general. Regulators around the world, including in Europe and Australia, have also presented policy and enforcement hurdles.
Google’s hiring is not surprising for a company under such a microscope, according to Doug Melamed, a former acting assistant attorney general at the DOJ antitrust division who’s now a scholar-in-residence at Stanford Law School.
The company had already been fighting one complex antitrust case that would likely require a team of 10 to 15 lawyers alone, according to Melamed, when the department brought its second antitrust challenge against the company earlier this year.
“They don’t have the capacity to handle a case like that just sitting idle,” Melamed said. “They’ve got to now think about well, what outside lawyers are available that have to have the time and expertise to handle this case? And then, do I have the in-house capability to support it and supervise it?”
The added threat of new legislation targeting Google’s business, and that of other tech firms, looms. In the near term, it appears that a massive lobbying campaign by the industry has successfully delayed the most disruptive reforms. But the possibility of renewed energy around that legislation still hangs over the industry, and a company like Google “can take nothing for granted now,” Kovacic said, adding that’s likely a reason for the company to build out its regulatory forces.
“New entrants and new innovations are driving competition and delivering value for America’s consumers, publishers, and merchants,” a Google spokesperson said in a statement for this story. “We’re proud of our services and we look forward to making our case in court.”
Revolving-door hiring
Alphabet now has at least five former DOJ staffers on its legal team, including Google’s director of competition, Kevin Yingling, who’s been with the company for more than a decade and worked as a trial attorney at the Department of Justice from 2000 to 2005, according to his LinkedIn.
The company hired Kate Smith as counsel for Alphabet’s regulatory response, investigations and strategy unit in February 2021, according to LinkedIn. Smith was a trial attorney in the DOJ’s civil frauds division from September 2015 until January 2021.
In May 2022, according to LinkedIn, Alphabet hired Mike Kass, a former trial attorney in the DOJ’s civil fraud section, as its regulatory and litigation counsel for products.
A month later, the company hired Seema Mittal Roper as counsel on its regulatory response team. Mittal Roper worked as an assistant U.S. attorney for the DOJ in Maryland from 2013 to 2018, according to LinkedIn.
Most recently, the company hired Jack Mellyn as strategy counsel on its regulatory team. Mellyn was previously an attorney advisor and then acting assistant chief in the DOJ’s competition policy and advocacy section, according to a previously available social media profile.
It’s not clear which employees are working on the specific matters before the DOJ and Kass’ role appears focused outside of antitrust. It’s likely these employees never worked on Google-related matters they’re dealing with now during their time in government, given their dates and areas of previous employment, as well as federal ethics rules that bar certain conflicts.
But experts say this kind of hiring, which is common among businesses faced with regulatory scrutiny, can still be beneficial to a company because of the unique insight, touch or credibility that an ex-government attorney might hold when it comes to their former colleagues.
“There are lots of lawyers out there. But only alumni of an office really understand how that office works,” said Jeff Hauser, executive director of the Revolving Door Project, which tracks the business ties of executive branch officials. “That means its strengths and weaknesses, that means the tendencies of people in that office. And they can therefore give much more concrete intelligence and better-informed advice to their client.”
Hauser said this may mean the lawyers could advise a client or employer to flood the agency with information rather than comply with a certain document request, knowing that the enforcers don’t have the capacity to deal with it. Or, they might suggest strategies to approach a deposition, knowing the government staffer conducting it.
“A lawyer who’s had experience in the government doesn’t bring information about the specific matters of the companies involved, but rather brings a general perspective about how the agency is approaching these kinds of problems,” Melamed said.
Enforcement agencies also often have to trust whether they believe the target of an investigation has complied with its requests. Hauser said the agencies may be more inclined to take the word of their former colleagues, compared with a more removed attorney.
A recent event shows what can happen when that trust is broken. The DOJ last month accused Google of destroying chat messages it should have kept under a litigation hold related to the investigation. The DOJ made the accusation in a legal filing after Epic Games raised the concern in its own antitrust litigation against Google.
A Google spokesperson said in a statement at the time of the DOJ’s filing that they “strongly refute the DOJ’s claims.”
Google also works with outside counsel firms on its antitrust cases, including Axinn, Freshfields, Ropes & Gray and Wilson Sonsini, based on reports, statements and legal filings. Those firms collectively have around 20 former DOJ employees on their staff, many of them working in antitrust. Though these attorneys may not all work on Google matters, the firms themselves often tout the benefit of former government officials in bringing a helpful perspective to clients.
For example, Freshfields says on its website that its “deep bench of former DOJ and FTC trial attorneys gives us unique insight into how the enforcement agencies approach enforcement in general and litigation in particular.”
Kovacic said agency experience is something companies look for in hiring outside firms.
“In deciding who to retain, what law firm to retain or what economic consultancy to retain, they would place a lot of weight on how many former government officials are in those firms,” Kovacic said.
Freshfields attorneys Julie Elmer and Eric Mahr have led Google’s defense against an advertising technology monopolization case brought by a group of states led by Texas, The New York Times reported in 2021. And Bloomberg Law reported this year that Mahr will also lead its defense in the ad tech case brought by the DOJ.
Mahr was director of litigation for the DOJ antitrust division from 2015 to 2017, according to the Freshfields site, and Elmer worked as a trial attorney in the antitrust division from 2015 to 2020, according to her LinkedIn profile.
Revolving-door hiring goes both ways between the public and private sectors, with government officials often working for previous employers or clients who become relevant in their work. For example, DOJ antitrust chief Jonathan Kanter previously worked for clients including Microsoft and Yelp which have complained of Google’s allegedly anticompetitive behavior.
Ultimately, however, Kanter was cleared to work on cases and investigations involving Google, despite the company’s suggestion that his past work should cast doubt on his ability to be fair in such matters.
The DOJ and Wilson Sonsini declined to comment. The three other firms mentioned did not immediately provide a comment for this story.
Limits for former government employees
There are limits on what former government officials can work on under federal ethics and Bar rules.
For example, the DOJ’s website says that former employees can’t represent someone before the government on an issue involving parties they “personally and substantially” worked on during their time in government. For two years after leaving the department, a former employee also cannot represent anyone before the government in a matter involving parties they know “was pending under his official responsibility for the last year of government service and in which the U.S. is a party or has a substantial interest.”
And for one year after leaving the agency, former senior employees cannot represent someone before the agency “with the intent to influence” the DOJ on a pending matter or one in which it has an interest.
Personal and substantial work on a matter within government doesn’t depend on the length of time devoted to it, but the role a person played in potentially influencing the outcome or direction, according to Virginia Canter, the chief ethics counsel at Citizens for Responsibility and Ethics in Washington (CREW) who previously advised government officials on ethics at agencies including the Securities and Exchange Commission and the Treasury Department.
But even if a former government official can’t work on a specific matter they were privy to during their earlier employment, their insight might still be useful to a company.
“You can read about it, but when you’re actually part of dealing with these cases, you know that there are certain factors that are going to either act as mitigating or … that are going to more favorably incline you to bring a case,” Canter said. “It’s just your general knowledge and experience.”
When companies hire former government officials, they may also have the idea that those employees will be viewed more favorably by the current regime.
“Maybe there’s just this general impression that they’re trying to surround themselves with what will be perceived by their former colleagues as the good guys,” Canter hypothesized.
Some might argue that experience could be beneficial to the government in some cases, Canter noted. A former government employee might have a deeper understanding of the importance of compliance or providing certain information to officials, for example, having seen up close what could be at stake if they don’t.
Hauser said it’s unlikely DOJ leadership, especially Kanter, who has made a point to bring more aggressive cases in the tech space and overall, would be overly swayed to view things Google’s way in ongoing matters. But, he said, the impact of former DOJ staff employed by Google could be more influential in an emerging issue, where there’s an opportunity to leave a first impression on senior leadership about it.
The degree of this kind of influence may be relatively small on the level of an individual case, Hauser said, but for a company under such a high degree of regulatory scrutiny, it could add up.
“You’re talking about billions and billions of dollars of potential implications for Google’s net worth,” Hauser said. “Relatively small changes in the scope of the investigation, the timeframe of the investigation, can be very big, even if they don’t go to the overall question of will there be any lawsuits by the Justice Department against Google.”
WATCH: How US antitrust law works, and what it means for Big Tech

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Tech
Give us your nominations: CNBC is ranking the world’s top fintech companies
Published
5 hours agoon
March 22, 2023By
ironity
Oscar Wong | Moment | Getty Images
The research will identify fintechs disrupting the giants of finance with services that are faster, cheaper and more accessible — from established firms in payments and digital banking, to rising stars in emerging fields like cryptocurrency.
In 2022, the fintech world took a beating. Some of the world’s most richly valued companies saw their valuations slashed as investors reexamined the sector against a backdrop of climbing interest rates, higher living costs, and the prospect of stricter regulation.
But innovation is still happening — with a vengeance. The rising cost of living has opened opportunities for firms to develop tools that can help people navigate economic uncertainty — whether through better budgeting and financial planning, or education on how to manage money.
That has made the need for a transparent overview of the top fintech companies more important than ever.
As part of the research, we are inviting entries from eligible fintech companies to register their interest in being considered for the list. To qualify, a fintech — defined as a company that provides innovative, technology-based and finance-related products and services — must have successfully completed at least one Series A funding round.
Firms will be required to submit information on their business model and certain key performance indicators.
If you would like your company to be considered for this research, please click on this link, which will take you to the short application form hosted by Statista. Further information about the project can be found here.
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Tech
‘Inundated with requests’: Digital currency firms look to Swiss banks after crypto-friendly lenders fail
Published
6 hours agoon
March 22, 2023By
ironity
Nurphoto | Nurphoto | Getty Images
Some of these companies have turned to crypto-friendly Swiss banks, flooding them with requests for banking services, according to multiple industry insiders who spoke to CNBC.
Typically, the crypto industry has found it difficult to access banking services from traditional lenders, who don’t want to touch anything that does not have a clear regulatory framework. This has included blockchain and crypto firms, who have instead had to turn to specialist banks.
But with two of the biggest lenders, along with SVB, now out of the picture, cryptocurrency firms have turned to Switzerland, which has sought to market itself as a crypto hub with solid regulation.
“We have been inundated with requests,” said an advisor at a private Swiss bank, who preferred to remain anonymous due to the sensitive nature of the matter.
The advisor said on the Monday after Silvergate and Signature Bank’s winddown this month, the private lender had more requests in a single day than ever before.
“It is just nuts,” the advisor said.

U.S., non-Europe firms look to Switzerland
Dominic Castley, chief marketing officer at Sygnum, one of Switzerland’s biggest banks that is focused on servicing digital asset companies, said it is seeing an influx of enquiries.
“Over the past weeks as the current banking industry events have unfolded, we have seen a significant increase in onboarding enquiries from various international locations,” Castley said, adding that Sygnum’s location in both Switzerland and Singapore is attractive to companies.
Sygnum has a Swiss banking license and a capital markets services license in Singapore, bringing it under the purview of regulators.
One Switzerland-based advisor to financial technology companies, who also preferred to remain anonymous due to the sensitivity of the situation, said that has been “a lot more inflow from U.S. customers” to Swiss banks.
An executive at a European trading firm, meanwhile, said their company had been seeing “non-Europe based entities” making enquiries for new banking relationships. The executive, who wished to remain anonymous due to the sensitive nature of the topic, said these firms include crypto-focused hedge funds and venture capital firms.

Castley said interest is “mainly coming from investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank.”
Switzerland’s other major lender that deals with the digital assets industry — SEBA Bank — did not respond to a request for comment when contacted by CNBC.
Switzerland’s crypto-friendly stance
Part of why companies are seeking out Swiss banks is the country’s regulation which is welcoming to cryptocurrency firms in need of a stable operating environment.
The country has created what locals dub “Crypto Valley” in the region of Zug, just outside the Swiss capital Zurich, where start-ups and more established digital currency firms have set up shop.
In 2021, the government introduced a regulation on companies using so-called “distributed electronic register technology” or blockchain, which originated with the cryptocurrency bitcoin but has since evolved.
Thierry Arys Ruiz, CEO of Swiss-based blockchain firm AgAu.io, said Switzerland is “more stable” and there is “more certainty to what the rules are.”
The anonymous advisor at the private Swiss bank said that companies are coming to Switzerland to be in a “safer jurisdiction” for crypto regulation.

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Tech
Silicon Valley Bank collapse was ‘Lehman moment for technology,’ top Goldman Sachs deal-maker says
Published
8 hours agoon
March 22, 2023By
ironity

Cliff Marriott, co-head of technology, media and telecoms in Europe for the investment banking division of Goldman Sachs, said that the March 10 shutdown of SVB was “pretty stressful,” as the lender’s clientele scrambled to figure out how they would make payroll.
“That first weekend was a little bit like the Lehman moment for technology and it was really more operational for those companies,” Marriott told CNBC’s Arjun Kharpal in an interview at a Goldman Sachs tech symposium that aired Tuesday on “Squawk Box Europe.”
“They needed access to capital. A lot of their balances were on SVB. And, secondly, SVB was propelling and making a lot of their payments for payroll to pay their employees.”
Founded in 1983, SVB was considered a reliable source of funding for tech startups and venture capital firms. A subsidiary of SVB Financial Group, the California-based commercial lender was, at one point, the 16th-biggest bank in the U.S. and the largest in Silicon Valley by deposits.
SVB was taken over by the U.S. government after its clientele of venture capitalists and tech startups withdrew billions from their accounts. Many VCs had advised portfolio companies to pull funds on the back of fears that the lender may crumble.
SVB Financial Group’s holdings — assets such as U.S. Treasury bills and government-backed mortgage securities that were viewed as safe — were hit by the Fed’s aggressive interest rate hikes, and their value dropped dramatically.

The future of SVB remains uncertain, even though deposits were ultimately backstopped by the government and SVB’s government-appointed CEO attempted to reassure clients the bank remained open for business.
Marriott said there is “still a big question mark regarding what bank or firm or set of firms is going to replace SVB in terms of providing those utility-like services for technology, giving them bank accounts, allowing them to make payroll, holding their cash balances.”
Read more about tech and crypto from CNBC Pro
The SVB collapse has also raised questions over the potential consequences for other banks, with SVB being far from the only lender that has come under strain. Swiss investment banking titan Credit Suisse was rescued by its main rival UBS in a government-backed, cut-price deal last week.
Marriott also addressed tech IPOs and their outlook for 2023. Europe’s tech initial public offering market has been largely closed due to a confluence of market pressures, including higher interest rates, which make the future cashflows of high-growth tech companies less attractive.
Marriott said he would have been more optimistic about a recovery in tech IPO activity two weeks ago.
“I’m still hopeful that we’ll see tech IPO activity in 2023. And if we don’t, I think 2024 will be a big year for tech IPOs,” Marriott said.
“I think what we’ll see is the more established profitable companies come first, so the easier-to-understand business models, profitable companies, before we see the really highly valued profit or negative profit companies that we saw in 2021.”
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