Tech News Coverage Conflict of Interest? It's Not So Uncommon

Last Updated Oct 13, 2010 4:57 PM EDT

Last Friday, Joe Nocera of the New York Times published a piece slamming Hewlett-Packard (HP) for hiring a former SAP CEO Léo Apotheker as chief executive. Why? HP had "chosen as its new C.E.O. someone involved -- however tangentially -- with the most serious business crime you can commit." That is, stealing intellectual property, as Oracle charged SAP did via its acquisition of TomorrowNow, a PeopleSoft consultancy.

The most serious business crime? I'd think that would have been bribery or falsifying financial records to dupe investors. Nevertheless, the was an important observation and I wondered whether HP had made another bone-headed CEO choice. But now it turns out that Nocera has his own problem in this mess: his fiancé is director of communications for the law firm representing Oracle in its law suit against SAP. Unfortunately, this is not as uncommon as it should be.

Yesterday, the Times tacked a note at the end of Nocera's piece:

In the Talking Business column in Business Day on Saturday, Joe Nocera wrote about a lawsuit by Oracle against a division of SAP, claiming theft of intellectual property. Mr. Nocera learned after the column was published that Oracle was represented by the law firm of Boies, Schiller & Flexner, where his fiancée works as director of communications. To avoid the appearance of a conflict of interest, Mr. Nocera would not have written about the case if he had known of the law firm's involvement.
Given the line, "According to the Oracle complaint, between September 2006 and February 2007, Oracle discovered 'at least 10,000 illegal downloads by SAP,'" it would seem that he saw Oracle's complaint. That might leave you wondering how he couldn't have known, as such a document lists the filing law firm. As it turns out, it mentions Bingham McCutchen, not Boies Schiller.

Perhaps he was totally unaware of the connection and just happened to remember the suit after Apotheker's hire. Maybe his fiancé did mention it but forgot to say that her firm was one representing Oracle. Or maybe someone from Oracle called to drop a dime and get an indirect slap at HP into the press.

The important thing to remember is that conflicts of interest of various sorts happen quite often in tech coverage, and it's important to keep the possibility in mind when trying to distill information into a guide to business decisions. When explicitly addressed, as All Things Digital's Kara Swisher does in detail, it can be fine.

Sometimes a media outlet claims to offer disclosure but doesn't always follow through. For example, last year TechCrunch founder Michael Arrington has said that he always discloses conflicts, but the site had at least some coverage of e-reader devices when Arrington was funding development of a tablet computer that could have been considered a potential competitor.

Sometimes the occurrences seem to border on the naïve, even to someone as jaded as I. Even while working on this story today, I received an email from a company called Pre-Employ.com that wanted to hire "a published investigative reporter to work in a freelance capacity" on a story in which it potentially had a financial interest. When I challenged the company, a representative seemed surprised that this would be considered unethical and said that Pre-Employ.com would rather find a writer to handle independently the topic in question "so as not to bring any sense of impropriety to this issue." The potential problem clearly is that a writer might take money and then approach an editor without disclosing the business relationship.

However, that's not to say inexperienced companies alone are at issue. Years ago, I wrote an article for a magazine, now long out of business, that will remain nameless. I was covering online access and slammed a particular technology as too expensive without enough payback in performance. The magazine killed my version and went through multiple other writers to cobble something together because, as an editor said to me, the publication was trying to get advertising from the associated vendors.

Always question what people are telling you and what their motives might be.

Image: Flickr user Mike Licht, NotionsCapital.com, CC 2.0.

  • Erik Sherman On Twitter» On Facebook»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.