What Doolittle and Bapteste are saying is that lateral gene trasfer was common early in life before animals came along
Indeed this still occurs today. Much of the antibiotic resistance that bacterial pathogens are evolving is actually do to the swapping of plasmids (circular pieces of DNA that are separate from the bacterial genome and are not necessary for the function of the bacterium) that carry the various genes that confer resistance. So while this makes the "trunk" of the tree more complicated, once species evolved that no longer had the ability to swap horizontally, the tree metaphor still holds.
Additionally horizontal gene transfer does not refute the theory of evolution by natural selection, it only makes it more complex.
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