Speaker 1: Thank you so much for joining us on this special
Speaker 1: edition of Bloomberg Daybreak. US markets are closed for the
Speaker 1: Juneteenth Holiday. I'm Nathan Hager. Coming up this hour. We'll
Speaker 1: update you on the latest anti trust battles facing big tech.
Speaker 1: We'll speak with Bloomberg Intelligence senior litigation analyst Jennifer Reed.
Speaker 1: And if you're looking for a travel deal this summer,
Speaker 1: we'll look at some under the radar trip ideas with
Speaker 1: Nikki Eckstein and Chris Rouser of Bloomberg Pursuits. But first,
Speaker 1: one of the big goals of the Trump administration during
Speaker 1: the first six months of its second term has been
Speaker 1: to change diversity, equity and inclusion programs not just in government,
Speaker 1: but in business and at universities across the country. For
Speaker 1: an update, we bring in Simone Foxman, who covers race, equity,
Speaker 1: gender and class for Bloomberg News. And Simone really appreciates
Speaker 1: you coming on with us on this holiday edition because
Speaker 1: it really seemed like a good time to do this.
Speaker 1: Not only are we a few years out, you know,
Speaker 1: from the race reckoning that really seemed to kickstart DEI
Speaker 1: and arguably this official Juneteenth Holiday. Now it seems like
Speaker 1: we're in a much different moment in corporate America, don't
Speaker 1: you agree?
Speaker 2: Absolutely. I mean, we've really seen a whip saw in
Speaker 2: public opinion and internal corporate opinion in exactly the way
Speaker 2: that they kind of address issues of race, gender, identity,
Speaker 2: and beyond. And you know, a lot of that has
Speaker 2: been spearheaded by the Trump administration, but not all. And
Speaker 2: we can talk about, well, you know, what companies were
Speaker 2: doing already.
Speaker 1: Yeah, let's do that, because it would be important to
Speaker 1: you know, just get an idea of what companies were
Speaker 1: doing even before these executive orders aimed at dialing DEI
Speaker 1: back were taking place. What was the trajectory for DEI.
Speaker 2: Yeah, let's rewind even a little bit further than that.
Speaker 2: I mean, diversity, equity and inclusion policies are essentially only
Speaker 2: the product of, you know, diversity policies that were spearheaded
Speaker 2: in the nineteen eighties. So you've seen a lot of
Speaker 2: the programs, whether for small businesses, whether internally at companies,
Speaker 2: be around for a really long time. Part of this
Speaker 2: was actually set off by a kind of conservative think
Speaker 2: tank that had talked about how so much of the
Speaker 2: new population of younger workers would be diverse, you know,
Speaker 2: not white men, frankly, and it really you know, convinced
Speaker 2: executives that you know, you needed to kind of plan
Speaker 2: for workforces that were more diverse. So DEI policies or
Speaker 2: what ultimately you know, fell under that Moniker have been
Speaker 2: around a long time. Obviously, they were really ramped up
Speaker 2: after the murder of George Floyd in twenty twenty, and
Speaker 2: the language that corporate executives used around that time was
Speaker 2: frankly quite charged. You had, you know, uber we're talking
Speaker 2: about trying to be an anti racist company. You had
Speaker 2: you know, employees, employers really promising large transformative steps to
Speaker 2: change the makeup of their workforce, including things that looked
Speaker 2: like trying to increase the number of say black managers
Speaker 2: or women of a certain executives of a certain level
Speaker 2: by you know, fifty percent in the next three years.
Speaker 2: Really putting kind of specific numbers on things in a
Speaker 2: way that they hadn't done before. What really kind of
Speaker 2: marked I mean, there was obviously kind of you know
Speaker 2: pushback to some of this almost immediately. We saw Trump
Speaker 2: in his late in his first term try and pass
Speaker 2: an executive order against or try and institute in executive
Speaker 2: order against you know, unconscious bias trainings that ultimately went nowhere.
Speaker 2: But what really kind of fomented this reversal, especially within companies,
Speaker 2: was the student dents for Fair Admissions decision around Harvard
Speaker 2: and affirmative action, and it forced a lot of companies,
Speaker 2: even though they weren't the subject of that, to look
Speaker 2: again at their internal policies and make sure that they
Speaker 2: weren't going to be in the way of what Trump's
Speaker 2: executive orders were doing. So that kind of brings us
Speaker 2: up to where we were maybe last year, and then
Speaker 2: we can talk about kind of what's changed this year.
Speaker 1: Yeah, so let's talk about that. I mean, are these
Speaker 1: benchmarks still in effect now that we have executive orders
Speaker 1: that are you know, targeting DEI in the federal government, certainly,
Speaker 1: but you know, by a virtue of that on Corporate
Speaker 1: America as well, particularly a lot of these companies that
Speaker 1: do business with the federal government.
Speaker 2: Yeah, Corporate America was already looking at some of its
Speaker 2: policies and trying to make sure that the legal rationale
Speaker 2: that you know, led to the students for Fair Admission
Speaker 2: decision that overturned affirmative action wouldn't be applied to them
Speaker 2: in ways that we're damaging. So we saw a lot
Speaker 2: of you know, employee resource groups for exams, sample make
Speaker 2: sure that they were open to everyone. Scholarships you know,
Speaker 2: kind of welcome everyone, you know, even though they were intended,
Speaker 2: for example, to raise black students into you know, engineering
Speaker 2: or something like that. Now they had to be open
Speaker 2: at least to all races. What you've seen since January
Speaker 2: twentieth is frankly another reassessment, because what Trump's executive orders
Speaker 2: have said is not just that they want to eliminate
Speaker 2: ate what they call illegal DEI within the federal government,
Speaker 2: but they're also really encouraging federal contractors to eliminate and
Speaker 2: private companies beyond federal contractors to eliminate to DEI. Now,
Speaker 2: the problem for companies is they don't do a great
Speaker 2: job of defining exactly what that means and what is
Speaker 2: different this time around. We've had some inklings here and there.
Speaker 2: Largely this falls along the things that the companies already
Speaker 2: thought kind of fell into these gray areas, those targets
Speaker 2: I mentioned earlier. Some lawyers see them as too close
Speaker 2: to quotas, which are already illegal. You're not supposed to
Speaker 2: be able to hire anyone on the basis of protected
Speaker 2: characteristics like race or gender. So you've seen companies kind
Speaker 2: of even that we're the more aspirational goals with less
Speaker 2: firm targets, they've kind of rolled some of them back,
Speaker 2: just kind of avoid things. But frankly, the corporate world
Speaker 2: has been very scared not only that the federal the
Speaker 2: government is going to come after them, but also that
Speaker 2: they might end up on some lists somewhere of companies
Speaker 2: that are woke that follow this illegal DEI and therefore
Speaker 2: that that's going to prompt you know, consternation among their
Speaker 2: consumers and ultimately affect their business.
Speaker 1: We're speaking with Bloomberg News reporter Simone Foxman, who covers
Speaker 1: a quality for Bloomberg News. You mentioned illegal DEI as
Speaker 1: a phrase in these executive orders. Is there a chest
Speaker 1: in the corporate world about what illegal DEI actually means?
Speaker 1: Has that been defined clearly?
Speaker 2: No, And that's really the issue for them, you know,
Speaker 2: certain things Again, as I mentioned, you're not supposed to
Speaker 2: be able to hire people with a view towards their
Speaker 2: race or gender identity and beyond, uh, the you know,
Speaker 2: critics of DEI will say that that is essentially what
Speaker 2: was happening over the last couple of years, whether explicit
Speaker 2: or not. But many companies say, you know, a lot
Speaker 2: of these programs that we had that fell under this
Speaker 2: dei moniker whatever they fall under. Now you know, we're
Speaker 2: not you know, saying we should hire someone because of
Speaker 2: their race, but that we should do a better job
Speaker 2: of expanding the pot recruiting, drawing from, you know, communities
Speaker 2: that we haven't necessarily seen a lot of representation from,
Speaker 2: and assessing our internal policies to make sure that we
Speaker 2: are inclusive of everybody. So a lot of you know,
Speaker 2: whether it's sort of trainings about inclusivity, whether it's things
Speaker 2: like scholarship programs, whether it's turning up at large recruiting
Speaker 2: events that especially draw out people from underrepresented communities. There's
Speaker 2: a lot of those things that still frankly exist within
Speaker 2: companies that companies have decided, well, this is important enough
Speaker 2: to us that we it's important for us to maintain
Speaker 2: these programs. We don't think they violate the law. We
Speaker 2: think that, you know, whatever the administration is saying, you know,
Speaker 2: this is not illegal, and it's important to us, and
Speaker 2: therefore we're going to continue to do them. And I
Speaker 2: frankly found in my reporting that this is true even
Speaker 2: at companies that said publicly that they were dialing back
Speaker 2: on DEI to some extent, you know, whether that's Walmart
Speaker 2: or any number of companies really across the board that
Speaker 2: kind of made these enormous announcements that were treated with
Speaker 2: great fan for are frankly still talking about things. For example, Walmart,
Speaker 2: until my story came out in mid May, had you know, diversity,
Speaker 2: equity and inclusion and the importance of it on its
Speaker 2: job postings. So not all of this has frankly gone away.
Speaker 1: Well, Walmart certainly is one of the highest profile companies
Speaker 1: in the world, and if you know companies like that
Speaker 1: are keeping some of these programs on the books, how
Speaker 1: are they sort of striking that balance When you said
Speaker 1: earlier that a lot of these companies don't want to
Speaker 1: be on the administration's radar. They want to keep a
Speaker 1: lot of this stuff on the down low.
Speaker 2: So they've gone in tweaked programs anything that was in
Speaker 2: a illegal gray area, you know, put that potentially looked
Speaker 2: a little bit too much like quotas. They've they've kind
Speaker 2: of pulled pulled back anything that didn't and welcome everyone.
Speaker 2: They've pulled back anything that had that's not you know,
Speaker 2: very political. They kind of pulled back. But you know,
Speaker 2: the Walmart example is telling. Even though they made a
Speaker 2: change in the way in their supplier diversity program now
Speaker 2: called supplier Inclusion program. So the branding is part of
Speaker 2: this here, they still have the landing pages on the
Speaker 2: company website about lgbt QIA plus founded brands, about Hispanic
Speaker 2: black women owned brands, you know, really a nod to
Speaker 2: the fact that consumers, some consumers are interested in seeing
Speaker 2: who's behind the brands. You know, Lows, despite making an
Speaker 2: announcement and talking about how it was rolling back elements
Speaker 2: of its program, really sought to reassure investors that these
Speaker 2: changes were not sweeping. So you've seen really little tweaks
Speaker 2: around the edges and little little or Mendelssohn is a
Speaker 2: law firm that kind of asks corporate executives about their opinions.
Speaker 2: In a survey they conducted in late February to mid March,
Speaker 2: they asked corporate executives, I think it was over three
Speaker 2: hundred to what extent is your organization considering new or
Speaker 2: further rollbacks of your inclusion equity and diversity programs. Forty
Speaker 2: five percent said not at all, thirty two percent said
Speaker 2: to a small extent, So seventy seven percent here not
Speaker 2: making any major changes despite some of the new guidance
Speaker 2: from the Trump administration.
Speaker 1: Do you think we would have seen changes around the
Speaker 1: margins for these programs even without President Trump's executive orders, because,
Speaker 1: as we mentioned, there had been some backlash from DEI
Speaker 1: even before President Trump returned for a second term.
Speaker 2: Yes, partly because the court seemed like it was moving
Speaker 2: in this direction, and partly because there has been a
Speaker 2: backlash to being overly politicized about many issues. You know,
Speaker 2: companies were willing to make somewhat political statements frankly a
Speaker 2: couple of years ago. They're not willing to do that
Speaker 2: in the same way anymore. They've tried to move away
Speaker 2: from that. There was already a push towards we're going
Speaker 2: to really emphasize inclusion. We're going to minimize things that
Speaker 2: you know, the first two letters of the acronym diversity
Speaker 2: and equity. You know, diversity. Sure, we still believe in
Speaker 2: that equity. Maybe people are confused. There was already that
Speaker 2: push that has not necessarily changed, and maybe that's why
Speaker 2: We're not seeing these massive moves on the part of
Speaker 2: company is to really, you know, further tweak from here.
Speaker 1: Really appreciate this. Simone, thanks again for coming on with
Speaker 1: us on this juneteenth edition of Bloomberg Daybreak. That is
Speaker 1: Bloomberg News reporter Simone Foxman covering equality for Bloomberg News.
Speaker 1: And up next on this special edition of Daybreak, we'll
Speaker 1: take a look at big tech still in the crosshairs
Speaker 1: of anti trust lawsuits. We'll get an update on that
Speaker 1: from Bloomberg Intelligence Senior litigation analyst Jennifer Ree. It's twenty
Speaker 1: minutes past the hour. I'm Nathan Hager, and this is Bloomberg.
Speaker 1: Welcome back to this special edition of Bloomberg Daybreak. I'm
Speaker 1: Nathan Hager. US markets are closed for the Juneteenth holiday. Now,
Speaker 1: the thinking among many on Wall Street is that antitrust
Speaker 1: cases against big tech might ease up with the change
Speaker 1: from the Biden to the Trump administration. Have they for
Speaker 1: some answers? Let's turn to Bloomberg Intelligence senior litigation analyst
Speaker 1: Jennifer Ree. Jen kind of looks like your litigation plate's
Speaker 1: still pretty full. Is that the case? Is that a surprise?
Speaker 3: It is very full? And I'll tell you, I don't
Speaker 3: think it's a surprise, oh you know. And the reason
Speaker 3: I don't think it's a surprise is because people forget
Speaker 3: that all of these investigations of the big tech platforms
Speaker 3: that culminated in lawsuits, and in fact, two of the
Speaker 3: lawsuits started during Trump's first administration, and they were pursued
Speaker 3: aggressively by the Biden administration, which picked up the mantle
Speaker 3: from Trump and kept going with them. And you know,
Speaker 3: these cases now several of them have proceeded to trial,
Speaker 3: but they were started under Trump. And there's just this feeling,
Speaker 3: I think by Trump and most of the people that
Speaker 3: he's put in place at the FTC and DJ that
Speaker 3: these companies like Meta and Google and Apple are left
Speaker 3: leaning companies that have you know, censored conservative content and
Speaker 3: made it difficult for Trump to win the second time
Speaker 3: he ran against Joe Biden. And really they're just not
Speaker 3: going to give them any breaks, despite the fact that
Speaker 3: executives from these companies have freely tried to curry favor
Speaker 3: with the president.
Speaker 1: So it's a different focus in the sense that it
Speaker 1: might be more around the content that these companies are
Speaker 1: putting out there as opposed to more of the anti
Speaker 1: competitive nature that we saw during the Biden administration.
Speaker 3: Well, yes and no, it's about the content. But I
Speaker 3: think what they're doing is putting content into the antitrust
Speaker 3: framework by saying that the lack of competition and the
Speaker 3: fact that the company's monopolized markets allow them then to
Speaker 3: control the message, that if there were more alternatives and
Speaker 3: more competition, they wouldn't have that ability to control the message.
Speaker 3: So they sort of put it all together right into
Speaker 3: one bucket.
Speaker 1: So does that mean that as some of these cases
Speaker 1: go forward against some of the biggest names in the
Speaker 1: mag seven, that we could see breakups of these companies.
Speaker 3: So I think it's unlikely. Now you have two cases
Speaker 3: where the dj is really aggressively seeking breakup. They're both
Speaker 3: against Google, by the way. One is about its monopoly
Speaker 3: maintenance of Search, and the other one is about monopoly
Speaker 3: maintenance of its ad tech products. And in those cases,
Speaker 3: what they're asking the judges to do is to force
Speaker 3: Google in the search case to divest Chrome and in
Speaker 3: the ad tech case, to divest a product they bought
Speaker 3: a long time ago called double Click. These are products
Speaker 3: we don't really know about as consumers. They're used by
Speaker 3: digital publishers and advertisers to get together and sell and
Speaker 3: buy advertising space online. And Google has all these products
Speaker 3: and of shuffles the publishers and advertisers through all their
Speaker 3: products to the exclusion of others so that they can
Speaker 3: take the fees all along the way. I'll tell you
Speaker 3: that in both cases, by the way, liability has already
Speaker 3: been found against Google, they have acted illegally to maintain
Speaker 3: monopolies in all of these markets. That has already been determined.
Speaker 3: What the judge is now they're two different judges are
Speaker 3: trying to do is determine what the remedies should be
Speaker 3: to fix this problem. It's not really punishment in the
Speaker 3: anti trust world, but more let's open up the markets
Speaker 3: to other competitors and stop this illegal conduct. I don't
Speaker 3: think in either case the company is going to be
Speaker 3: forced to sell off a company sell off a piece
Speaker 3: of itself. So starting with Google Search, that's the one
Speaker 3: where the DJ is asking them to be forced to
Speaker 3: sell Chrome. In my mind, if you look at the
Speaker 3: liability decision, that punishment i'll call it punishment, even though
Speaker 3: it's not really punishment, doesn't really fit the crime, right.
Speaker 3: I think it's overkill, because what they've been found to
Speaker 3: do that's illegal is enter these agreements with companies like Apple, Verizon,
Speaker 3: T Mobilemsung that makes their Android phones to place Google
Speaker 3: Search as the default search engine at Internet access points,
Speaker 3: or to place it, let's say, on a phone to
Speaker 3: front and center to the exclusion of other search engines,
Speaker 3: and that harmed other engines like Bing and like Duck
Speaker 3: Duck Go because they simply weren't able to get exposure.
Speaker 3: They weren't able to get the search volume they needed
Speaker 3: to improve. And I think you can fix that without
Speaker 3: having to sell Chrome. You know, there are other ways
Speaker 3: that can be fixed. So my guess is these remedies,
Speaker 3: which are going to come out in August, by the way,
Speaker 3: are going to be a mixture of telling them, hey,
Speaker 3: you can't have these agreements anymore. You can't pay Apple
Speaker 3: to put Google Search behind Safari, which, by the way, Nathan,
Speaker 3: they were paying twenty billion a year for that. Yeah, yeah,
Speaker 3: a lot of money. So it's going to hurt Apple too,
Speaker 3: and maybe sharing some of the search data you've collected
Speaker 3: over the years with all of these searches, and also
Speaker 3: possibly choice screens and Chrome. A person buys a new
Speaker 3: phone they open Chrome the first time, they have a
Speaker 3: choice of what they want to use as their default
Speaker 3: search engine, and possibly some data sharing, because the data
Speaker 3: sharing would fix this deprivation of scale and data that
Speaker 3: allegedly these other search engines needed to get better, share
Speaker 3: some of that data, give them a chance to try
Speaker 3: to get better and to compete more vigorously against Google Search.
Speaker 1: So even some of those smaller remedies could be a
Speaker 1: pretty big hit to Google's not just bottom line but
Speaker 1: their overall business practices, couldn't.
Speaker 3: They absolutely, absolutely, they have fought hard against some of
Speaker 3: these data remedies, and even the default remedies now they
Speaker 3: modeled internally. This came out and trial that if they
Speaker 3: lost the default search position it could be up to
Speaker 3: thirty two billion in revenue lost a year, which, I'll
Speaker 3: be honest really surprised me because I thought that was
Speaker 3: awfully high, given that most people really like Google Search,
Speaker 3: and you might be inclined to put it back as
Speaker 3: the default if it isn't the default to start. But
Speaker 3: nonetheless this could really hurt, and the data sharing could
Speaker 3: hurt too. But the whole point is to reduce their
Speaker 3: market share a little bit and give more market share
Speaker 3: or allow some of these other competitors to try to
Speaker 3: gain market share.
Speaker 1: Well. On top of the Google multiple antitrust cases, we've had,
Speaker 1: this case against meta platforms wrap up in just the
Speaker 1: last couple of weeks as well. This is a big
Speaker 1: one where they're talking potentially about spinning off Instagram and WhatsApp.
Speaker 1: Could it go that far?
Speaker 3: You know, I really don't think so. You know, as
Speaker 3: I said, Google lost on liability on those two trials,
Speaker 3: I don't even think med is going to lose on
Speaker 3: liability on this one.
Speaker 1: Wow.
Speaker 3: You know, And I'll tell you it's really because it's very,
Speaker 3: very hard to prove that there was consumer harm. You know,
Speaker 3: they may have had a bad intent when they bought
Speaker 3: Instagram and WhatsApp. The intent may have been, let's buy
Speaker 3: these companies rather than competing with them, which is technically illegal.
Speaker 3: But they put a lot of money in. Both of
Speaker 3: the companies were sort of struggling at the time that
Speaker 3: they were acquired by Facebook. They put a lot of
Speaker 3: innovation in. They built the products into something that was
Speaker 3: really desirable to consumers, which may not have happened if
Speaker 3: they hadn't done that. And it's hard to prove that
Speaker 3: had they not bought these we call it a butt
Speaker 3: four world, that they would be the products they are
Speaker 3: today and that consumers would be better off. And really
Speaker 3: that's what had to be proven here by the FTC,
Speaker 3: and I'm not so sure that they were able to
Speaker 3: do that. So I think at the end of the day,
Speaker 3: they're just going to lose on liability and then this
Speaker 3: will be done because if they lose, FTC loses on liability,
Speaker 3: there will be no remedy.
Speaker 1: Hearing interesting, So is this a case where the FTC
Speaker 1: might have gotten itself boxed in with meta platforms just
Speaker 1: from approving the acquisitions of Instagram and WhatsApp all those
Speaker 1: years ago.
Speaker 3: Absolutely, I think it was regret buyers for remorse there.
Speaker 3: You know, they approved both of those acquisitions. WhatsApp. I
Speaker 3: think they didn't even investigate the Instagram one. They did
Speaker 3: investigate for six months or so, they allowed both of them,
Speaker 3: They cleared both of them, as did by the way,
Speaker 3: the UK and EU, which looked thoroughly also at these acquisitions.
Speaker 3: And I do think that they regret having done that
Speaker 3: and they're trying to fix that now.
Speaker 1: Well, so could meta platforms be sort of watching its back?
Speaker 2: Though?
Speaker 1: When it comes to future acquisitions, given that it has
Speaker 1: had to go through this process over the last couple
Speaker 1: of months.
Speaker 3: You know, absolutely, And that's one of the issues that
Speaker 3: they raise with respect to a suit like this. They say, look,
Speaker 3: you approved these deals years ago in twenty twelve and fourteen.
Speaker 3: How is a company supposed to buy any company and
Speaker 3: have assurance going forward that ten years later or five
Speaker 3: years later, the FDC or DOJ won't come back and say, hey,
Speaker 3: those we're illegal acquisitions even though we clear them back
Speaker 3: when you know you gave us notice. And I think
Speaker 3: it does put companies in a difficult position. And I
Speaker 3: suspect that Facebook is probably sitting back still watching what's
Speaker 3: going to happen in merger enforcement with the Trump administration
Speaker 3: to understand whether they could get a big deal through
Speaker 3: or not.
Speaker 1: Now, outside the Federal Trade Commissions purview, the Justice Department
Speaker 1: is joining with states in going after Apple. What set
Speaker 1: issue there?
Speaker 3: This is an unusual case because this is about Apple
Speaker 3: sort of blocking or refusing interoperability or refusing certain apps
Speaker 3: to be on the mobile iOS that would allow people
Speaker 3: to get out of the iOS system, in other words,
Speaker 3: to keep them dependent on the iPhone or their other hardware,
Speaker 3: such as the Apple Watch. So the idea is that
Speaker 3: it reduces the competition or the ability for somebody to
Speaker 3: switch and to buy an Android, because let's say you
Speaker 3: get the Apple Watch, now you're dependent on the iOS
Speaker 3: because it works with the iOS and doesn't really work
Speaker 3: that well with Android, or the texting doesn't really work
Speaker 3: very well, or for instance, they don't allow game streaming
Speaker 3: apps to be sold through their app store because it
Speaker 3: could allow less sophisticated technology. Somebody who streams a game
Speaker 3: can buy less sophisticated technology than an Apple iPhone to
Speaker 3: play that game. And so it's about all of this
Speaker 3: action to try to keep people within iOS, buying all
Speaker 3: of their hardware, and keeping them in their system. And
Speaker 3: this one's really slow. There's no trial date set yet.
Speaker 3: We're waiting on a motion to dismiss that Apple filed.
Speaker 3: I don't think they'll win that, Nathan, But that's not
Speaker 3: a big deal. They're very hard to win. It's just
Speaker 3: sort of a first chance to dismiss the complaint and
Speaker 3: rather than getting into discovery. So I think this is
Speaker 3: going to be a really slow case. And you know,
Speaker 3: my feeling about it is that I don't think it's
Speaker 3: necessarily a slam dunk in anyway for the DOJ. We're
Speaker 3: going to have to wait to see how the evidence
Speaker 3: shakes out here. But I think Apple has a lot
Speaker 3: of good defenses about safety and security and protecting its users,
Speaker 3: providing its users with the best products, seamless activity, you know,
Speaker 3: with whatever they're doing on the phone, and these can
Speaker 3: be good defenses in an anti trust suit.
Speaker 1: And we know that we're in a pretty long wait
Speaker 1: and see mode as well when it comes to the
Speaker 1: FTC's case against Amazon. Remind us what's going on there,
Speaker 1: what's an issue that.
Speaker 3: Has been so slow? And they just push back the
Speaker 3: trial date yet again into twenty twenty seven from twenty
Speaker 3: twenty six. So this is about Amazon requiring sellers on
Speaker 3: its platform to provide the lowest prices they provide anywhere
Speaker 3: on Amazon. Now that sounds good, that should be good
Speaker 3: for cons But the allegation there is that it's more
Speaker 3: expensive for these sellers to sell an Amazon than their
Speaker 3: own platform or maybe atsy or some other platform or
Speaker 3: they could sell their products, and it causes those prices
Speaker 3: to go up rather than all of the prices to
Speaker 3: come down. So it has this price inflating effect, kind
Speaker 3: of like a most favored nation clause. They think that
Speaker 3: this is illegal. They also say that if sellers want
Speaker 3: to have really nice positioning when somebody's searching for a product,
Speaker 3: or they want to be in what they call the
Speaker 3: prime box, that they have to use Amazon's fulfillment services
Speaker 3: as well. That also causes a price increase because they're expensive.
Speaker 3: You know, this is another one where I think we
Speaker 3: have to see where the evidence shakes out. On the
Speaker 3: fulfillment side. I think Amazon can make again a decent
Speaker 3: pro competitive argument that you know, we want to make
Speaker 3: sure when we promise our buyers that they're going to
Speaker 3: get a product within two days or one day or today,
Speaker 3: that they actually do. So we want control over the
Speaker 3: fulfillment services because we want to make sure that we're
Speaker 3: good to our word. You know, they might have a
Speaker 3: good defense there on the most favored nation issue. I
Speaker 3: think it looks like so far that this could actually
Speaker 3: cause some price raising effects outside of the platform, but
Speaker 3: I kind of see it as well not really a
Speaker 3: big deal because the answer to that if they're found
Speaker 3: libel is you just have to stop doing this, And
Speaker 3: what that could mean is that you might be able
Speaker 3: to find a product lower priced outside of Amazon, and
Speaker 3: I think that would be fine. And I'm not even sure, Nathan,
Speaker 3: that that would really hurt Amazon's revenue or bottom line
Speaker 3: in any kind of substantial way.
Speaker 1: No, we just went through four of the mag seven
Speaker 1: when it comes to anti trust scrutiny, it sounds as
Speaker 1: though big tech is still a big priority for this government.
Speaker 1: Thank you for this, Jen really appreciate it. That is
Speaker 1: Bloomberg Intelligence Senior litigation analyst Jennifer Ree and 'p. Next,
Speaker 1: we'll look at some under the radar travel bargains this
Speaker 1: summer with Nikki Eckstein and Chris Rouser of Bloomberg Pursuits.
Speaker 1: It's thirty seven minutes past the hour. I'm Nathan Hager,
Speaker 1: and this is Bloomberg. Thank you so much for joining
Speaker 1: us on this special edition of Bloomberg Daybreak. US markets
Speaker 1: are closed for the Juneteenth holiday. I'm Nathan Hager, and
Speaker 1: we're just about a day away from the official start
Speaker 1: of summer, so we thought now might be a decent
Speaker 1: time to look at how travels looking, with many of
Speaker 1: us maybe thinking about getting ready for those summer vacations.
Speaker 1: And who better to check in with on that than
Speaker 1: our friends at Bloomberg Pursuits, Nikki Eckstein and Chris Rouser
Speaker 1: here to guide us through summer travel. Thanks so much
Speaker 1: to both of you for being with us, and I
Speaker 1: think we're coming off a pretty strong start to unofficial
Speaker 1: travel season right with the Memorial Day weekend behind us.
Speaker 1: Is that a good indicator of whether things could be
Speaker 1: crowded as we embark? Who'd like to tackle that question?
Speaker 2: You know?
Speaker 4: Demand is that an all time high? I think going
Speaker 4: into twenty twenty five, people have been very bullish on travel.
Speaker 4: People want to get away, People are movedtionally exhausted, mentally
Speaker 4: exhausted from the news cycle. This is a time where
Speaker 4: people are still kind of lingering over that pandemic induced
Speaker 4: desire to get out and explore the world and not
Speaker 4: let a single PTO DA go wasted. So all that
Speaker 4: energy is still riding super high and we're seeing super
Speaker 4: sized demand. What we are seeing a little bit is
Speaker 4: people being more value conscious, people looking at the global
Speaker 4: economic uncertainty and saying, maybe I should splurge just a
Speaker 4: smidge less, find a couple of ways to go closer
Speaker 4: to home, more vacations but smaller radius. Shall we say,
Speaker 4: from whatever your origin point is, maybe more long weekend
Speaker 4: trips rather than two week forays somewhere very far away.
Speaker 4: So definitely high demand.
Speaker 1: Yeah, absolutely so, Chris, Where are you seeing that people
Speaker 1: could get some of that bang for their buck in
Speaker 1: terms of certain destinations they might be thinking about.
Speaker 5: Well, one of the things that we've noticed for this
Speaker 5: year in the past couple of years actually is that
Speaker 5: the Caribbean is no longer a place where travel softens
Speaker 5: in the summer. People are going for a hot Caribbean
Speaker 5: summer because prices are a little bit more on the
Speaker 5: reasonable side, and resorts are great to be at. The
Speaker 5: weather actually because of climate change, the weather actually there
Speaker 5: is actually kind of more temperate than it is in
Speaker 5: a lot of other places that you might want to go,
Speaker 5: especially southern Europe. So we're seeing a lot of people
Speaker 5: going there, and especially Canadians.
Speaker 4: Canadians don't want to go to the US this year.
Speaker 4: They're really tired of the fifty first state rhetoric that's
Speaker 4: come from our administration lately, and they're really turning to
Speaker 4: the Caribbean as an alternative. There's a lot of airlines
Speaker 4: are meeting that demand with direct routes to places like
Speaker 4: Bermuda is particularly popular with Canadians this year. But even
Speaker 4: Americans who are saying, like, I don't know if I
Speaker 4: shian splurge on that trip to Paris or to whatever,
Speaker 4: are looking at options a little bit again closer to home,
Speaker 4: and they're saying, I don't need to spend five thousand
Speaker 4: dollars a night for the last remaining hotel room on
Speaker 4: the Amalfi coast, which is this is like a real thing.
Speaker 4: The prices are that intense in some of these very
Speaker 4: tony established destinations, and they're saying, I can spend a
Speaker 4: tenth as much and stay at a great resort in Jamaica.
Speaker 1: Why not do that? Now that's interesting because you know,
Speaker 1: when you think about the idea of staying close to home,
Speaker 1: you're talking about the climate out there, not just in
Speaker 1: terms of the weather, but in terms of the politics.
Speaker 1: Does that mean that, you know, some of those out
Speaker 1: of the way destinations that maybe some Americans might have
Speaker 1: thought about maybe one or two years ago, are starting
Speaker 1: to look a little less welcoming now.
Speaker 4: When you say out of the way destinations are you
Speaker 4: thinking about in Europe?
Speaker 2: Yeah?
Speaker 4: But yeah, well, you know, I think that it's less,
Speaker 4: the destinations in Europe are not extending their open arms.
Speaker 4: They places in Europe want the American dollar more than
Speaker 4: anything else. We are famously the highest spending travelers in
Speaker 4: the world, So hotels and restaurants and businesses in Europe
Speaker 4: want nothing more than Americans to come spend those, you know,
Speaker 4: higher sums than anyone else. What Americans are a little
Speaker 4: bit worried about, anecdotally from what we've heard, is not
Speaker 4: receiving as warm of a welcome in terms of how
Speaker 4: our political standing looks abroad. And so while our dollars
Speaker 4: might be welcome, there might be some you know, some
Speaker 4: emotional stuff almost that gets in the way.
Speaker 5: Also when it comes to a warm welcome. We should
Speaker 5: say some of the things we've been writing about for
Speaker 5: this summer are cool cations, literally going places where it
Speaker 5: is noted as hot.
Speaker 3: Yeah.
Speaker 5: So one of the places we recommend going is Greenland.
Speaker 5: It's such an amazing place to visit, and there's so
Speaker 5: many things to do, and there's increasing air access it's
Speaker 5: actually easier to get there, and there's more hotels and
Speaker 5: more sort of glamping resorts. So that's a place to
Speaker 5: be great to explore. Sweden also is one of our
Speaker 5: places that we find a lot of people are going to.
Speaker 5: Rotterdam has a great new museum, the Phenix Museum about migration.
Speaker 5: So we have a lot of recommendations that pursuits about
Speaker 5: places to go where it's less explored and it's also
Speaker 5: less hot.
Speaker 1: Does less explored also mean less excessive?
Speaker 2: It sure does.
Speaker 4: I'm sure you've never I'm assuming here. I'm sure you've
Speaker 4: never heard of a place called Skane, Sweden.
Speaker 1: Kids.
Speaker 4: Yeah, well, imagine imagine that you could go to a
Speaker 4: beautiful countryside destination in Sweden. Incidentally, it's about like thirty
Speaker 4: minutes outside of Copenhagen, or ninety minutes i should say,
Speaker 4: but very close to a major city. And yet you've
Speaker 4: got these rambling estates almost like what you would find
Speaker 4: in the British countryside, except it's a little bit more
Speaker 4: hig you know that cozy word that they use hig
Speaker 4: and and you've got these beautiful palacial estates that have
Speaker 4: been turned into five star hotels. You have some of
Speaker 4: the best chefs in Scandinavia are setting up restaurants in
Speaker 4: this region. And it's it's easy to access, you know,
Speaker 4: major commercial flights in and out of Copenhagen, no problem.
Speaker 4: And what you're paying for a night at an estate
Speaker 4: like that two hundred and twenty five dollars at a
Speaker 4: polace called mary Hill Estate. Just to throw out one
Speaker 4: great example.
Speaker 1: That's fantastic. And you know, another piece of writing that
Speaker 1: is really interesting that your team has come up with
Speaker 1: is it's not just getting a bang out of your
Speaker 1: book or a new experience. That might be a good
Speaker 1: reason to do one of these less predictable vacations. Perhaps
Speaker 1: it could actually be good for your brain. Chris.
Speaker 5: Yes, taking an unpredictable or even scary vacation is actually
Speaker 5: really good for your brain, and it releases more dopamine
Speaker 5: than a normal good vacation. Something that someone told when
Speaker 5: Expert Tolds, which I thought was really interesting, is that
Speaker 5: what really releases dopamine on a vacation, which is the
Speaker 5: neurochemical that makes you happy and feel relaxed and having fun,
Speaker 5: is not when a vacation is good. It's that it's
Speaker 5: when it's better than expected, you know, which is a
Speaker 5: different thing. So we have a great essay by one
Speaker 5: of our travel writers, Jen Murphy and Bloomberg Weekend about
Speaker 5: how if you go to a place that feels like
Speaker 5: a little bit on edge for you. Maybe you're hiking
Speaker 5: in the wilderness and it's like a challenge, or you're
Speaker 5: going to a new area you've never been, or you
Speaker 5: don't know a lot about. Those vacations are actually extremely
Speaker 5: valuable to waking up your brain and waking up your senses.
Speaker 1: We're speaking with Niki Eckstein and Chris Rouser of Bloomberg
Speaker 1: Pursuits getting ready for summer travel. Now, if money is
Speaker 1: no object, Chris, what's your favorite destination that you're thinking
Speaker 1: about right now if you've just got money to burn.
Speaker 5: That's a great question. I have a lot of things
Speaker 5: on my list because I have a small child, and
Speaker 5: there's a lot of places I feel like I can't go.
Speaker 5: But a place I've never been and I'm dying to
Speaker 5: go is Japan. And we have an incredible writer, Brandon Presser,
Speaker 5: who does all of our city guides, very very in
Speaker 5: depth city guides called two Night Minimum, and he recently
Speaker 5: wrote a story for us because he just did a
Speaker 5: city guide to Kyoto that was like, you know what
Speaker 5: you're doing Japan wrong. If you're going to Kyoto, you
Speaker 5: might you worried about crowds, but Actually, there's a lot
Speaker 5: of really great places in Kyoto to explore. If you're
Speaker 5: just sort of going between Kyoto and Tokyo. There, it's
Speaker 5: all these other places that you can go to, and
Speaker 5: you know, these cities are not that easy to penetrate.
Speaker 5: So if you're not hiring a guide that has local
Speaker 5: connections and people who can kind of get you into
Speaker 5: restaurants that seem like there are no reservation or get
Speaker 5: you into back alleyways that have interesting shops, you kind
Speaker 5: of need to go with somebody who knows what they're
Speaker 5: doing and who knows people.
Speaker 1: Yeah, you would think so. I mean, you just got
Speaker 1: to think about, you know, the difficulties of the language
Speaker 1: in a place like Japan. And you've also been writing
Speaker 1: about why this maybe could be the year that if
Speaker 1: you're thinking about that excursion to the Egyptian Pyramids, that
Speaker 1: this really could be the year to do it. Nikki.
Speaker 4: Oh, yeah, So we actually put Egypt on our where
Speaker 4: to Go in twenty twenty five list if you haven't
Speaker 4: seen that, that's kind of a master list that we
Speaker 4: publish every single year at the beginning of the year,
Speaker 4: offering up vacation ideas that are going to feel particularly
Speaker 4: timely in the year to come, and Egypt was really
Speaker 4: at at the top of our priority list well before
Speaker 4: the year started. And now we have the fortuitous timing
Speaker 4: that the Pyramids of Giza are basically reopening after a
Speaker 4: thirty million dollar renovation to all the infrastructure around the sites.
Speaker 5: Not the pyramids.
Speaker 3: Yes, as we say, the pyramids.
Speaker 1: Themselves cannot.
Speaker 4: They haven't been turned into shiny glass skyscrapers. Not to worry,
Speaker 4: but the experience of visiting the Pyramids was previously a
Speaker 4: challenging one in many ways. There were hawkers and sometimes
Speaker 4: scam artists that would set up around the Pyramids. The
Speaker 4: infrastructure was lacking compared to the grandeur of the site itself,
Speaker 4: and Egypt has partnered with a local billionaire to infuse
Speaker 4: a lot of capital, a lot of more kind of
Speaker 4: organizational and logistical prowess into making it a site that's
Speaker 4: worthy of its history and its role in world history.
Speaker 4: So it is definitely a very very good time to
Speaker 4: consider putting that on your list. Plus, the reopening of
Speaker 4: the Pyramids coincides with the opening of the Grand Egyptian Museum,
Speaker 4: which is a very long awaited institution filled with I
Speaker 4: mean tens of thousands of objects spanning you know, the
Speaker 4: entirety of time.
Speaker 1: Wow.
Speaker 5: So Egypt is it's the best trip I've ever taken
Speaker 5: in my life. If it's possibly on your list to anyone,
Speaker 5: I really recommend going. It's totally unbelievable and these improvements
Speaker 5: will be very, very cool. The old Grand Egyptian Museum
Speaker 5: was like from the mixed up files of Missus Basil E.
Speaker 5: Frank Weiler, like it was very disorganized and dusty and
Speaker 5: incredible because it had like has King Tut's tomb in there.
Speaker 5: And now it's in this incredible new, gleaming, giant, new
Speaker 5: facility that's well organized and just really wild.
Speaker 4: And I have to say, like Cairo has always been
Speaker 4: a jumping off point for the rest of Egypt, and
Speaker 4: Cairo itself has never been kind of the highlight of
Speaker 4: the trip, so this really does change a lot of that.
Speaker 4: But you should still buy yourself as much time as
Speaker 4: possible to be in Egypt because taking one of those
Speaker 4: phenomenal masted ships down the Nile, and now they can
Speaker 4: actually set port in like all of these beautiful ancient
Speaker 4: cities where there are five star hotels that have popped
Speaker 4: up in recent years. I mean, the facilities are just
Speaker 4: absolutely somptuous. This is truly living like a king.
Speaker 5: It's not crazy expensive.
Speaker 1: Yeah, it's a great idea, even not even for just
Speaker 1: this summer, for maybe summers to come as well. But finally,
Speaker 1: if people are still thinking about staying a little bit
Speaker 1: close to home, this could be the year for the
Speaker 1: great American resort.
Speaker 4: Okay, this is a particular passion of mine, of us.
Speaker 5: We've been talking about this for years.
Speaker 4: I've been watching, I've been wondering for a long time.
Speaker 4: You know why when we think about resorts, we think
Speaker 4: about traveling abroad as Americans oftentimes when really in the
Speaker 4: US we have this incredibly rich history of resorts. And
Speaker 4: as we kind of notice that more and more of
Speaker 4: these old American five star properties are getting these incredible
Speaker 4: glow ups, I mean, investments of nearly half a billion
Speaker 4: dollars in some cases, it really put pushed us down
Speaker 4: a path of exploring the legacy of the American resort.
Speaker 4: And we've learned in the process that the concept of
Speaker 4: the resort, the concept of the luxury resort, is an
Speaker 4: American creation, which I had no idea.
Speaker 5: This was a surprise. You think of like European Grand
Speaker 5: resorts on the Grand Tour as like, kind of who
Speaker 5: invented that tradition of a giant hotel in a beautiful
Speaker 5: place where everything is at your fingertips at that resort?
Speaker 1: Yeah, quite a far cry from the route sixty six
Speaker 1: motels the night. Yes, thank you for this. Really great
Speaker 1: to have this conversation thinking about the kickoff of summer
Speaker 1: travel our thanks to Nikki Eckstein and Chris Rouser of
Speaker 1: Bloomberg Pursuits. We'd also like to thank Bloomberg Intelligences Jennifer
Speaker 1: Ree and Bloomberg News reporter Simone Foxman. Of course, thank
Speaker 1: you to you as well for joining us on this
Speaker 1: Juneteenth holiday. I'm Nathan Hager. Stay with us. Top stories
Speaker 1: in global business headlines are coming up right now.