Granting old media an antitrust exemption: does FTC Chairman Jon Leibowitz have a conflict of interest?

Instead of figuring out new ways to make money, the failing old media has spent a good chunk of the past year developing plans on how to develop monopoly control over the transmission of news online. When Steven Brill highlighted the addition of two high-powered antitrust lawyers to the board of his Journalism Online venture, I worried that old media was making a beeline for an antitrust law exemption as its bailout from the depredations of the public’s changing appetites for news. And when JOL gave a presentation to a group of publishers in a Chicago-area hotel in May on how it wanted to become a killjoy Ticketmaster for news, it was pretty clear who would be in the monopoly (old media companies in their last gasp), and who would be out (bloggers and new media publishers).

So it was with rapt interest that I saw Federal Trade Commission Chairman Jon Leibowitz’s interview in The Wrap:

One of the issues that you probably have seen floated is the notion of an antitrust exemption. We are strong believers in the antitrust laws and in opposing exemptions from the antitrust laws — but when you think about the First Amendment, this might be one of those rare areas where you must think about ways to ensure the vibrancy of news.

In a functioning democracy, people need to be informed and sources of news are enormously important. I think as we all know, they are incredibly embattled.

Can the FTC decide that?

No. No. What we are trying to do is look at this issue and quantify the nature of the problem and to help policymakers think through what if anything they may do going forward.

via FTC Chief Leibowitz and the News | The Wrap.

It’s nice and all that Mr. Leibowitz wants to ‘look at this issue,’ but I’m afraid that one of the things he can’t help but consider is the job security of his wife Ruth Marcus, a columnist for the Washington Post.

Leibowitz’s marriage to Marcus is not a secret – it’s right there for you to see in his bio at the FTC homepage. And Marcus has addressed the question of conflicts of interest in her work for the Post:

Editorial writer and columnist Ruth Marcus is married to Federal Trade Commission member Jon Leibowitz, a Democrat. They met when she was a reporter and he was a congressional staffer. “I have my own opinions, but I stay away from anything he’s working on,” she said.

I perused Marcus’s body of writing and it would appear that most of what she writes does not overlap with her husband’s portfolio at the FTC – she doesn’t even seem to have spent column inches arguing that those dirty bloggers steal her writing. But with the shoe on the other foot, it seems likely that Leibowitz’s judgments on the old media monopoly plan will be affected by his family’s financial considerations.

The FTC isn’t new to disputes over whether or not commissioners should recuse themselves from cases where their spouses do related work. They have some standards for this sort of thing that have been laid out since Leibowitz became a commissioner (prior to his elevation as chairman this year).

A number of groups objected to President Bush’s chair of the FTC, Deborah Platt Majoras, ruling on the Google-Doubleclick merger on the grounds that her husband worked for Jones Day, a firm that had done work for Doubleclick in other circumstances. Majoras explained why she believed her recusal was unnecessary in a statement:

As of January 1, 2006, John Majoras converted from an equity to a non-equity status and became a fixed participation partner in Jones Day. I understand that as a fixed participation partner, his compensation will not be increased or affected by changes in the firm’s income. Further, all benefits my husband receives from Jones Day are the same as those earned by other similarly situated non-equity partners in the firm. Therefore, my husband does not have a financial interest in the firm’s income, and thus I do not have an imputed financial interest.

I think you can say that the income of Marcus, and therefore Leibowitz by ‘imputed financial interest,’ would be affected in the event that the Washington Post was one of a group of publishers granted an exemption from antitrust laws to behave as a monopoly. Many newspapers have pared their editorial writing staffs because of the changing media economy, and if her paper’s revenues continue to decline, Marcus is exactly the type of employee who might find herself forced into accepting a buyout. So it’s difficult to believe that the findings Leibowitz helps shape will not be affected by the fact that his family’s current standard of living depends in part on his wife’s income working as a prominent columnist for one of America’s most storied newspapers.

As I noted, there may be no judgment here that Leibowitz needs to recuse himself from. But I hope he’ll address the appearance of a conflict of interest as old media does all it can to make the case that it deserves to be allowed to form a monopoly on the news.