WEBVTT - Daybreak Holiday: DEI, Antitrust, Summer Vacations 0:00:03.000 --> 0:00:05.200 Thank you so much for joining us on this special 0:00:05.360 --> 0:00:08.360 edition of Bloomberg Daybreak. US markets are closed for the 0:00:08.440 --> 0:00:12.080 Juneteenth Holiday. I'm Nathan Hager. Coming up this hour. We'll 0:00:12.160 --> 0:00:15.920 update you on the latest anti trust battles facing big tech. 0:00:16.040 --> 0:00:19.560 We'll speak with Bloomberg Intelligence senior litigation analyst Jennifer Reed. 0:00:20.000 --> 0:00:22.200 And if you're looking for a travel deal this summer, 0:00:22.280 --> 0:00:25.120 we'll look at some under the radar trip ideas with 0:00:25.280 --> 0:00:29.680 Nikki Eckstein and Chris Rouser of Bloomberg Pursuits. But first, 0:00:29.800 --> 0:00:32.640 one of the big goals of the Trump administration during 0:00:32.640 --> 0:00:35.479 the first six months of its second term has been 0:00:35.520 --> 0:00:40.040 to change diversity, equity and inclusion programs not just in government, 0:00:40.120 --> 0:00:43.879 but in business and at universities across the country. For 0:00:43.920 --> 0:00:47.640 an update, we bring in Simone Foxman, who covers race, equity, 0:00:47.680 --> 0:00:51.840 gender and class for Bloomberg News. And Simone really appreciates 0:00:51.840 --> 0:00:54.320 you coming on with us on this holiday edition because 0:00:54.320 --> 0:00:56.360 it really seemed like a good time to do this. 0:00:56.560 --> 0:00:58.680 Not only are we a few years out, you know, 0:00:58.680 --> 0:01:02.960 from the race reckoning that really seemed to kickstart DEI 0:01:03.120 --> 0:01:07.560 and arguably this official Juneteenth Holiday. Now it seems like 0:01:07.640 --> 0:01:11.240 we're in a much different moment in corporate America, don't 0:01:11.240 --> 0:01:11.720 you agree? 0:01:12.200 --> 0:01:15.520 Absolutely. I mean, we've really seen a whip saw in 0:01:15.840 --> 0:01:21.199 public opinion and internal corporate opinion in exactly the way 0:01:21.280 --> 0:01:26.679 that they kind of address issues of race, gender, identity, 0:01:27.319 --> 0:01:30.400 and beyond. And you know, a lot of that has 0:01:30.400 --> 0:01:33.960 been spearheaded by the Trump administration, but not all. And 0:01:34.000 --> 0:01:35.880 we can talk about, well, you know, what companies were 0:01:35.920 --> 0:01:36.600 doing already. 0:01:36.880 --> 0:01:40.160 Yeah, let's do that, because it would be important to 0:01:40.520 --> 0:01:43.960 you know, just get an idea of what companies were 0:01:44.040 --> 0:01:49.080 doing even before these executive orders aimed at dialing DEI 0:01:49.240 --> 0:01:52.720 back were taking place. What was the trajectory for DEI. 0:01:53.320 --> 0:01:55.720 Yeah, let's rewind even a little bit further than that. 0:01:55.960 --> 0:02:00.320 I mean, diversity, equity and inclusion policies are essentially only 0:02:00.360 --> 0:02:04.760 the product of, you know, diversity policies that were spearheaded 0:02:04.760 --> 0:02:06.920 in the nineteen eighties. So you've seen a lot of 0:02:06.960 --> 0:02:12.000 the programs, whether for small businesses, whether internally at companies, 0:02:12.360 --> 0:02:15.000 be around for a really long time. Part of this 0:02:15.160 --> 0:02:19.760 was actually set off by a kind of conservative think 0:02:19.840 --> 0:02:23.880 tank that had talked about how so much of the 0:02:24.040 --> 0:02:28.600 new population of younger workers would be diverse, you know, 0:02:28.720 --> 0:02:33.520 not white men, frankly, and it really you know, convinced 0:02:33.560 --> 0:02:36.080 executives that you know, you needed to kind of plan 0:02:36.200 --> 0:02:40.000 for workforces that were more diverse. So DEI policies or 0:02:40.639 --> 0:02:43.400 what ultimately you know, fell under that Moniker have been 0:02:43.440 --> 0:02:46.760 around a long time. Obviously, they were really ramped up 0:02:47.400 --> 0:02:51.560 after the murder of George Floyd in twenty twenty, and 0:02:52.400 --> 0:02:56.200 the language that corporate executives used around that time was 0:02:56.240 --> 0:03:00.640 frankly quite charged. You had, you know, uber we're talking 0:03:00.639 --> 0:03:03.959 about trying to be an anti racist company. You had 0:03:04.080 --> 0:03:09.520 you know, employees, employers really promising large transformative steps to 0:03:09.680 --> 0:03:14.240 change the makeup of their workforce, including things that looked 0:03:14.280 --> 0:03:19.480 like trying to increase the number of say black managers 0:03:19.760 --> 0:03:24.040 or women of a certain executives of a certain level 0:03:24.240 --> 0:03:27.880 by you know, fifty percent in the next three years. 0:03:28.200 --> 0:03:32.320 Really putting kind of specific numbers on things in a 0:03:32.360 --> 0:03:35.480 way that they hadn't done before. What really kind of 0:03:36.080 --> 0:03:39.200 marked I mean, there was obviously kind of you know 0:03:39.560 --> 0:03:43.160 pushback to some of this almost immediately. We saw Trump 0:03:43.160 --> 0:03:45.680 in his late in his first term try and pass 0:03:45.720 --> 0:03:49.320 an executive order against or try and institute in executive 0:03:49.400 --> 0:03:53.440 order against you know, unconscious bias trainings that ultimately went nowhere. 0:03:54.520 --> 0:03:59.040 But what really kind of fomented this reversal, especially within companies, 0:03:59.280 --> 0:04:03.520 was the student dents for Fair Admissions decision around Harvard 0:04:03.600 --> 0:04:06.800 and affirmative action, and it forced a lot of companies, 0:04:06.880 --> 0:04:09.600 even though they weren't the subject of that, to look 0:04:09.640 --> 0:04:12.800 again at their internal policies and make sure that they 0:04:12.840 --> 0:04:15.920 weren't going to be in the way of what Trump's 0:04:15.920 --> 0:04:18.280 executive orders were doing. So that kind of brings us 0:04:18.360 --> 0:04:21.720 up to where we were maybe last year, and then 0:04:21.760 --> 0:04:23.560 we can talk about kind of what's changed this year. 0:04:23.720 --> 0:04:25.920 Yeah, so let's talk about that. I mean, are these 0:04:25.960 --> 0:04:29.800 benchmarks still in effect now that we have executive orders 0:04:29.920 --> 0:04:33.040 that are you know, targeting DEI in the federal government, certainly, 0:04:33.160 --> 0:04:37.120 but you know, by a virtue of that on Corporate 0:04:37.160 --> 0:04:40.080 America as well, particularly a lot of these companies that 0:04:40.160 --> 0:04:41.640 do business with the federal government. 0:04:42.080 --> 0:04:44.640 Yeah, Corporate America was already looking at some of its 0:04:44.760 --> 0:04:48.080 policies and trying to make sure that the legal rationale 0:04:48.120 --> 0:04:51.440 that you know, led to the students for Fair Admission 0:04:51.480 --> 0:04:54.680 decision that overturned affirmative action wouldn't be applied to them 0:04:54.720 --> 0:04:57.440 in ways that we're damaging. So we saw a lot 0:04:57.440 --> 0:05:00.680 of you know, employee resource groups for exams, sample make 0:05:00.720 --> 0:05:04.080 sure that they were open to everyone. Scholarships you know, 0:05:04.160 --> 0:05:08.200 kind of welcome everyone, you know, even though they were intended, 0:05:08.200 --> 0:05:13.080 for example, to raise black students into you know, engineering 0:05:13.200 --> 0:05:14.880 or something like that. Now they had to be open 0:05:14.920 --> 0:05:20.360 at least to all races. What you've seen since January 0:05:20.440 --> 0:05:25.120 twentieth is frankly another reassessment, because what Trump's executive orders 0:05:25.560 --> 0:05:28.000 have said is not just that they want to eliminate 0:05:28.320 --> 0:05:31.719 ate what they call illegal DEI within the federal government, 0:05:32.120 --> 0:05:38.359 but they're also really encouraging federal contractors to eliminate and 0:05:38.440 --> 0:05:43.840 private companies beyond federal contractors to eliminate to DEI. Now, 0:05:43.839 --> 0:05:46.599 the problem for companies is they don't do a great 0:05:46.720 --> 0:05:50.880 job of defining exactly what that means and what is 0:05:50.960 --> 0:05:54.760 different this time around. We've had some inklings here and there. 0:05:55.560 --> 0:05:58.800 Largely this falls along the things that the companies already 0:05:58.800 --> 0:06:01.920 thought kind of fell into these gray areas, those targets 0:06:01.960 --> 0:06:05.919 I mentioned earlier. Some lawyers see them as too close 0:06:06.080 --> 0:06:09.320 to quotas, which are already illegal. You're not supposed to 0:06:09.360 --> 0:06:12.560 be able to hire anyone on the basis of protected 0:06:12.640 --> 0:06:17.200 characteristics like race or gender. So you've seen companies kind 0:06:17.200 --> 0:06:21.000 of even that we're the more aspirational goals with less 0:06:21.040 --> 0:06:23.440 firm targets, they've kind of rolled some of them back, 0:06:23.520 --> 0:06:26.920 just kind of avoid things. But frankly, the corporate world 0:06:27.000 --> 0:06:31.200 has been very scared not only that the federal the 0:06:31.440 --> 0:06:34.880 government is going to come after them, but also that 0:06:34.960 --> 0:06:38.640 they might end up on some lists somewhere of companies 0:06:38.680 --> 0:06:42.960 that are woke that follow this illegal DEI and therefore 0:06:43.040 --> 0:06:47.440 that that's going to prompt you know, consternation among their 0:06:47.560 --> 0:06:49.760 consumers and ultimately affect their business. 0:06:49.920 --> 0:06:53.240 We're speaking with Bloomberg News reporter Simone Foxman, who covers 0:06:53.240 --> 0:06:57.000 a quality for Bloomberg News. You mentioned illegal DEI as 0:06:57.040 --> 0:07:00.200 a phrase in these executive orders. Is there a chest 0:07:00.720 --> 0:07:04.560 in the corporate world about what illegal DEI actually means? 0:07:04.600 --> 0:07:06.200 Has that been defined clearly? 0:07:06.920 --> 0:07:10.280 No, And that's really the issue for them, you know, 0:07:10.440 --> 0:07:13.680 certain things Again, as I mentioned, you're not supposed to 0:07:13.680 --> 0:07:18.520 be able to hire people with a view towards their 0:07:18.640 --> 0:07:24.000 race or gender identity and beyond, uh, the you know, 0:07:24.080 --> 0:07:26.960 critics of DEI will say that that is essentially what 0:07:27.000 --> 0:07:31.480 was happening over the last couple of years, whether explicit 0:07:31.680 --> 0:07:35.520 or not. But many companies say, you know, a lot 0:07:35.560 --> 0:07:38.120 of these programs that we had that fell under this 0:07:38.240 --> 0:07:41.960 dei moniker whatever they fall under. Now you know, we're 0:07:41.960 --> 0:07:46.400 not you know, saying we should hire someone because of 0:07:46.440 --> 0:07:50.520 their race, but that we should do a better job 0:07:50.680 --> 0:07:54.880 of expanding the pot recruiting, drawing from, you know, communities 0:07:54.920 --> 0:07:59.360 that we haven't necessarily seen a lot of representation from, 0:07:59.760 --> 0:08:02.680 and assessing our internal policies to make sure that we 0:08:02.720 --> 0:08:07.400 are inclusive of everybody. So a lot of you know, 0:08:08.520 --> 0:08:14.360 whether it's sort of trainings about inclusivity, whether it's things 0:08:14.520 --> 0:08:19.320 like scholarship programs, whether it's turning up at large recruiting 0:08:19.320 --> 0:08:26.040 events that especially draw out people from underrepresented communities. There's 0:08:26.080 --> 0:08:29.320 a lot of those things that still frankly exist within 0:08:29.440 --> 0:08:33.360 companies that companies have decided, well, this is important enough 0:08:33.559 --> 0:08:36.240 to us that we it's important for us to maintain 0:08:36.280 --> 0:08:41.120 these programs. We don't think they violate the law. We 0:08:41.240 --> 0:08:45.240 think that, you know, whatever the administration is saying, you know, 0:08:45.280 --> 0:08:48.240 this is not illegal, and it's important to us, and 0:08:48.240 --> 0:08:50.360 therefore we're going to continue to do them. And I 0:08:50.440 --> 0:08:53.360 frankly found in my reporting that this is true even 0:08:53.400 --> 0:08:56.839 at companies that said publicly that they were dialing back 0:08:57.679 --> 0:09:02.400 on DEI to some extent, you know, whether that's Walmart 0:09:03.160 --> 0:09:07.280 or any number of companies really across the board that 0:09:07.360 --> 0:09:10.760 kind of made these enormous announcements that were treated with 0:09:10.800 --> 0:09:15.640 great fan for are frankly still talking about things. For example, Walmart, 0:09:15.720 --> 0:09:20.120 until my story came out in mid May, had you know, diversity, 0:09:20.160 --> 0:09:22.520 equity and inclusion and the importance of it on its 0:09:22.600 --> 0:09:26.319 job postings. So not all of this has frankly gone away. 0:09:26.520 --> 0:09:29.480 Well, Walmart certainly is one of the highest profile companies 0:09:29.559 --> 0:09:32.360 in the world, and if you know companies like that 0:09:32.559 --> 0:09:35.679 are keeping some of these programs on the books, how 0:09:35.720 --> 0:09:38.400 are they sort of striking that balance When you said 0:09:38.440 --> 0:09:41.440 earlier that a lot of these companies don't want to 0:09:41.600 --> 0:09:44.319 be on the administration's radar. They want to keep a 0:09:44.320 --> 0:09:45.760 lot of this stuff on the down low. 0:09:46.480 --> 0:09:49.960 So they've gone in tweaked programs anything that was in 0:09:50.000 --> 0:09:54.240 a illegal gray area, you know, put that potentially looked 0:09:54.280 --> 0:09:57.160 a little bit too much like quotas. They've they've kind 0:09:57.160 --> 0:10:01.360 of pulled pulled back anything that didn't and welcome everyone. 0:10:01.400 --> 0:10:04.000 They've pulled back anything that had that's not you know, 0:10:04.240 --> 0:10:07.320 very political. They kind of pulled back. But you know, 0:10:07.520 --> 0:10:11.320 the Walmart example is telling. Even though they made a 0:10:11.440 --> 0:10:14.959 change in the way in their supplier diversity program now 0:10:15.120 --> 0:10:19.160 called supplier Inclusion program. So the branding is part of 0:10:19.200 --> 0:10:23.240 this here, they still have the landing pages on the 0:10:23.240 --> 0:10:29.400 company website about lgbt QIA plus founded brands, about Hispanic 0:10:29.440 --> 0:10:33.320 black women owned brands, you know, really a nod to 0:10:33.440 --> 0:10:38.920 the fact that consumers, some consumers are interested in seeing 0:10:39.000 --> 0:10:43.320 who's behind the brands. You know, Lows, despite making an 0:10:43.320 --> 0:10:46.320 announcement and talking about how it was rolling back elements 0:10:46.320 --> 0:10:50.280 of its program, really sought to reassure investors that these 0:10:50.679 --> 0:10:55.079 changes were not sweeping. So you've seen really little tweaks 0:10:55.120 --> 0:10:58.400 around the edges and little little or Mendelssohn is a 0:10:58.480 --> 0:11:02.840 law firm that kind of asks corporate executives about their opinions. 0:11:03.840 --> 0:11:08.120 In a survey they conducted in late February to mid March, 0:11:08.800 --> 0:11:11.320 they asked corporate executives, I think it was over three 0:11:11.440 --> 0:11:15.679 hundred to what extent is your organization considering new or 0:11:15.720 --> 0:11:20.880 further rollbacks of your inclusion equity and diversity programs. Forty 0:11:20.880 --> 0:11:24.280 five percent said not at all, thirty two percent said 0:11:24.320 --> 0:11:27.800 to a small extent, So seventy seven percent here not 0:11:28.040 --> 0:11:31.480 making any major changes despite some of the new guidance 0:11:31.559 --> 0:11:32.720 from the Trump administration. 0:11:33.400 --> 0:11:35.719 Do you think we would have seen changes around the 0:11:35.760 --> 0:11:41.800 margins for these programs even without President Trump's executive orders, because, 0:11:42.040 --> 0:11:45.720 as we mentioned, there had been some backlash from DEI 0:11:45.920 --> 0:11:49.200 even before President Trump returned for a second term. 0:11:49.679 --> 0:11:53.720 Yes, partly because the court seemed like it was moving 0:11:53.760 --> 0:11:56.840 in this direction, and partly because there has been a 0:11:56.840 --> 0:12:02.720 backlash to being overly politicized about many issues. You know, 0:12:02.800 --> 0:12:08.640 companies were willing to make somewhat political statements frankly a 0:12:08.640 --> 0:12:10.760 couple of years ago. They're not willing to do that 0:12:10.800 --> 0:12:14.760 in the same way anymore. They've tried to move away 0:12:14.800 --> 0:12:17.520 from that. There was already a push towards we're going 0:12:17.600 --> 0:12:22.240 to really emphasize inclusion. We're going to minimize things that 0:12:22.280 --> 0:12:25.120 you know, the first two letters of the acronym diversity 0:12:25.160 --> 0:12:27.640 and equity. You know, diversity. Sure, we still believe in 0:12:27.679 --> 0:12:31.400 that equity. Maybe people are confused. There was already that 0:12:31.480 --> 0:12:35.240 push that has not necessarily changed, and maybe that's why 0:12:35.240 --> 0:12:38.160 We're not seeing these massive moves on the part of 0:12:38.200 --> 0:12:41.440 company is to really, you know, further tweak from here. 0:12:42.040 --> 0:12:44.960 Really appreciate this. Simone, thanks again for coming on with 0:12:45.040 --> 0:12:48.560 us on this juneteenth edition of Bloomberg Daybreak. That is 0:12:48.679 --> 0:12:53.800 Bloomberg News reporter Simone Foxman covering equality for Bloomberg News. 0:12:54.040 --> 0:12:56.679 And up next on this special edition of Daybreak, we'll 0:12:56.679 --> 0:12:59.199 take a look at big tech still in the crosshairs 0:12:59.240 --> 0:13:01.720 of anti trust lawsuits. We'll get an update on that 0:13:02.120 --> 0:13:06.480 from Bloomberg Intelligence Senior litigation analyst Jennifer Ree. It's twenty 0:13:06.520 --> 0:13:10.680 minutes past the hour. I'm Nathan Hager, and this is Bloomberg. 0:13:15.360 --> 0:13:18.600 Welcome back to this special edition of Bloomberg Daybreak. I'm 0:13:18.640 --> 0:13:23.000 Nathan Hager. US markets are closed for the Juneteenth holiday. Now, 0:13:23.040 --> 0:13:25.959 the thinking among many on Wall Street is that antitrust 0:13:26.040 --> 0:13:29.400 cases against big tech might ease up with the change 0:13:29.440 --> 0:13:33.120 from the Biden to the Trump administration. Have they for 0:13:33.240 --> 0:13:36.880 some answers? Let's turn to Bloomberg Intelligence senior litigation analyst 0:13:37.440 --> 0:13:41.400 Jennifer Ree. Jen kind of looks like your litigation plate's 0:13:41.400 --> 0:13:44.440 still pretty full. Is that the case? Is that a surprise? 0:13:44.800 --> 0:13:46.840 It is very full? And I'll tell you, I don't 0:13:46.880 --> 0:13:49.640 think it's a surprise, oh you know. And the reason 0:13:49.679 --> 0:13:52.040 I don't think it's a surprise is because people forget 0:13:52.120 --> 0:13:55.000 that all of these investigations of the big tech platforms 0:13:55.000 --> 0:13:57.720 that culminated in lawsuits, and in fact, two of the 0:13:57.760 --> 0:14:03.840 lawsuits started during Trump's first administration, and they were pursued 0:14:03.880 --> 0:14:06.760 aggressively by the Biden administration, which picked up the mantle 0:14:06.760 --> 0:14:09.000 from Trump and kept going with them. And you know, 0:14:09.080 --> 0:14:11.760 these cases now several of them have proceeded to trial, 0:14:12.040 --> 0:14:14.959 but they were started under Trump. And there's just this feeling, 0:14:15.040 --> 0:14:16.800 I think by Trump and most of the people that 0:14:16.880 --> 0:14:19.800 he's put in place at the FTC and DJ that 0:14:19.960 --> 0:14:23.480 these companies like Meta and Google and Apple are left 0:14:23.560 --> 0:14:28.560 leaning companies that have you know, censored conservative content and 0:14:28.600 --> 0:14:31.240 made it difficult for Trump to win the second time 0:14:31.240 --> 0:14:34.920 he ran against Joe Biden. And really they're just not 0:14:34.960 --> 0:14:37.080 going to give them any breaks, despite the fact that 0:14:37.280 --> 0:14:39.880 executives from these companies have freely tried to curry favor 0:14:39.920 --> 0:14:40.520 with the president. 0:14:40.920 --> 0:14:43.520 So it's a different focus in the sense that it 0:14:43.600 --> 0:14:46.480 might be more around the content that these companies are 0:14:46.520 --> 0:14:49.440 putting out there as opposed to more of the anti 0:14:49.440 --> 0:14:51.880 competitive nature that we saw during the Biden administration. 0:14:52.160 --> 0:14:54.880 Well, yes and no, it's about the content. But I 0:14:54.920 --> 0:14:57.840 think what they're doing is putting content into the antitrust 0:14:57.920 --> 0:15:00.760 framework by saying that the lack of competition and the 0:15:00.760 --> 0:15:03.720 fact that the company's monopolized markets allow them then to 0:15:03.760 --> 0:15:06.680 control the message, that if there were more alternatives and 0:15:06.720 --> 0:15:09.600 more competition, they wouldn't have that ability to control the message. 0:15:09.600 --> 0:15:12.200 So they sort of put it all together right into 0:15:12.240 --> 0:15:12.800 one bucket. 0:15:13.640 --> 0:15:15.920 So does that mean that as some of these cases 0:15:16.000 --> 0:15:18.440 go forward against some of the biggest names in the 0:15:18.480 --> 0:15:22.640 mag seven, that we could see breakups of these companies. 0:15:23.160 --> 0:15:26.360 So I think it's unlikely. Now you have two cases 0:15:26.640 --> 0:15:30.400 where the dj is really aggressively seeking breakup. They're both 0:15:30.400 --> 0:15:33.760 against Google, by the way. One is about its monopoly 0:15:33.800 --> 0:15:36.720 maintenance of Search, and the other one is about monopoly 0:15:36.760 --> 0:15:39.840 maintenance of its ad tech products. And in those cases, 0:15:39.880 --> 0:15:42.560 what they're asking the judges to do is to force 0:15:42.560 --> 0:15:45.200 Google in the search case to divest Chrome and in 0:15:45.240 --> 0:15:47.440 the ad tech case, to divest a product they bought 0:15:47.440 --> 0:15:50.440 a long time ago called double Click. These are products 0:15:50.520 --> 0:15:52.840 we don't really know about as consumers. They're used by 0:15:52.880 --> 0:15:56.040 digital publishers and advertisers to get together and sell and 0:15:56.080 --> 0:15:59.680 buy advertising space online. And Google has all these products 0:15:59.720 --> 0:16:02.560 and of shuffles the publishers and advertisers through all their 0:16:02.600 --> 0:16:05.160 products to the exclusion of others so that they can 0:16:05.160 --> 0:16:07.880 take the fees all along the way. I'll tell you 0:16:07.920 --> 0:16:11.080 that in both cases, by the way, liability has already 0:16:11.120 --> 0:16:14.480 been found against Google, they have acted illegally to maintain 0:16:14.520 --> 0:16:17.920 monopolies in all of these markets. That has already been determined. 0:16:18.000 --> 0:16:20.040 What the judge is now they're two different judges are 0:16:20.040 --> 0:16:22.760 trying to do is determine what the remedies should be 0:16:22.800 --> 0:16:25.520 to fix this problem. It's not really punishment in the 0:16:25.560 --> 0:16:28.480 anti trust world, but more let's open up the markets 0:16:28.520 --> 0:16:32.520 to other competitors and stop this illegal conduct. I don't 0:16:32.520 --> 0:16:34.720 think in either case the company is going to be 0:16:34.760 --> 0:16:37.160 forced to sell off a company sell off a piece 0:16:37.160 --> 0:16:40.040 of itself. So starting with Google Search, that's the one 0:16:40.040 --> 0:16:42.200 where the DJ is asking them to be forced to 0:16:42.240 --> 0:16:45.080 sell Chrome. In my mind, if you look at the 0:16:45.120 --> 0:16:48.640 liability decision, that punishment i'll call it punishment, even though 0:16:48.640 --> 0:16:52.400 it's not really punishment, doesn't really fit the crime, right. 0:16:52.440 --> 0:16:55.080 I think it's overkill, because what they've been found to 0:16:55.120 --> 0:16:58.880 do that's illegal is enter these agreements with companies like Apple, Verizon, 0:16:58.960 --> 0:17:03.240 T Mobilemsung that makes their Android phones to place Google 0:17:03.280 --> 0:17:06.760 Search as the default search engine at Internet access points, 0:17:06.880 --> 0:17:08.960 or to place it, let's say, on a phone to 0:17:09.440 --> 0:17:11.840 front and center to the exclusion of other search engines, 0:17:11.840 --> 0:17:14.880 and that harmed other engines like Bing and like Duck 0:17:14.960 --> 0:17:17.359 Duck Go because they simply weren't able to get exposure. 0:17:17.440 --> 0:17:19.600 They weren't able to get the search volume they needed 0:17:19.600 --> 0:17:23.119 to improve. And I think you can fix that without 0:17:23.160 --> 0:17:25.240 having to sell Chrome. You know, there are other ways 0:17:25.280 --> 0:17:28.440 that can be fixed. So my guess is these remedies, 0:17:28.440 --> 0:17:30.440 which are going to come out in August, by the way, 0:17:30.800 --> 0:17:32.480 are going to be a mixture of telling them, hey, 0:17:32.520 --> 0:17:35.080 you can't have these agreements anymore. You can't pay Apple 0:17:35.520 --> 0:17:38.560 to put Google Search behind Safari, which, by the way, Nathan, 0:17:38.600 --> 0:17:41.320 they were paying twenty billion a year for that. Yeah, yeah, 0:17:41.359 --> 0:17:43.160 a lot of money. So it's going to hurt Apple too, 0:17:45.040 --> 0:17:47.320 and maybe sharing some of the search data you've collected 0:17:47.520 --> 0:17:50.000 over the years with all of these searches, and also 0:17:50.119 --> 0:17:53.120 possibly choice screens and Chrome. A person buys a new 0:17:53.160 --> 0:17:55.399 phone they open Chrome the first time, they have a 0:17:55.480 --> 0:17:57.439 choice of what they want to use as their default 0:17:57.480 --> 0:18:01.080 search engine, and possibly some data sharing, because the data 0:18:01.119 --> 0:18:05.480 sharing would fix this deprivation of scale and data that 0:18:05.600 --> 0:18:09.399 allegedly these other search engines needed to get better, share 0:18:09.440 --> 0:18:11.400 some of that data, give them a chance to try 0:18:11.400 --> 0:18:16.000 to get better and to compete more vigorously against Google Search. 0:18:16.080 --> 0:18:19.000 So even some of those smaller remedies could be a 0:18:19.000 --> 0:18:21.919 pretty big hit to Google's not just bottom line but 0:18:22.000 --> 0:18:24.240 their overall business practices, couldn't. 0:18:23.920 --> 0:18:27.159 They absolutely, absolutely, they have fought hard against some of 0:18:27.200 --> 0:18:30.200 these data remedies, and even the default remedies now they 0:18:30.320 --> 0:18:32.760 modeled internally. This came out and trial that if they 0:18:32.800 --> 0:18:35.080 lost the default search position it could be up to 0:18:35.160 --> 0:18:38.360 thirty two billion in revenue lost a year, which, I'll 0:18:38.359 --> 0:18:40.480 be honest really surprised me because I thought that was 0:18:40.520 --> 0:18:43.960 awfully high, given that most people really like Google Search, 0:18:44.119 --> 0:18:46.239 and you might be inclined to put it back as 0:18:46.280 --> 0:18:48.760 the default if it isn't the default to start. But 0:18:48.880 --> 0:18:51.680 nonetheless this could really hurt, and the data sharing could 0:18:51.760 --> 0:18:54.760 hurt too. But the whole point is to reduce their 0:18:54.800 --> 0:18:56.960 market share a little bit and give more market share 0:18:57.080 --> 0:18:59.119 or allow some of these other competitors to try to 0:18:59.160 --> 0:18:59.920 gain market share. 0:19:00.119 --> 0:19:04.200 Well. On top of the Google multiple antitrust cases, we've had, 0:19:04.240 --> 0:19:07.480 this case against meta platforms wrap up in just the 0:19:07.520 --> 0:19:09.440 last couple of weeks as well. This is a big 0:19:09.480 --> 0:19:14.600 one where they're talking potentially about spinning off Instagram and WhatsApp. 0:19:14.680 --> 0:19:15.840 Could it go that far? 0:19:16.560 --> 0:19:18.560 You know, I really don't think so. You know, as 0:19:18.600 --> 0:19:21.400 I said, Google lost on liability on those two trials, 0:19:21.480 --> 0:19:23.280 I don't even think med is going to lose on 0:19:23.359 --> 0:19:24.560 liability on this one. 0:19:24.720 --> 0:19:25.000 Wow. 0:19:25.240 --> 0:19:27.560 You know, And I'll tell you it's really because it's very, 0:19:27.680 --> 0:19:31.000 very hard to prove that there was consumer harm. You know, 0:19:31.040 --> 0:19:33.320 they may have had a bad intent when they bought 0:19:33.400 --> 0:19:36.560 Instagram and WhatsApp. The intent may have been, let's buy 0:19:36.560 --> 0:19:40.080 these companies rather than competing with them, which is technically illegal. 0:19:40.840 --> 0:19:43.280 But they put a lot of money in. Both of 0:19:43.320 --> 0:19:45.480 the companies were sort of struggling at the time that 0:19:45.520 --> 0:19:47.840 they were acquired by Facebook. They put a lot of 0:19:47.840 --> 0:19:50.399 innovation in. They built the products into something that was 0:19:50.440 --> 0:19:53.879 really desirable to consumers, which may not have happened if 0:19:53.880 --> 0:19:56.679 they hadn't done that. And it's hard to prove that 0:19:56.800 --> 0:19:59.000 had they not bought these we call it a butt 0:19:59.040 --> 0:20:01.920 four world, that they would be the products they are 0:20:01.920 --> 0:20:04.720 today and that consumers would be better off. And really 0:20:04.760 --> 0:20:07.000 that's what had to be proven here by the FTC, 0:20:07.160 --> 0:20:09.119 and I'm not so sure that they were able to 0:20:09.160 --> 0:20:10.720 do that. So I think at the end of the day, 0:20:10.720 --> 0:20:13.040 they're just going to lose on liability and then this 0:20:13.080 --> 0:20:16.280 will be done because if they lose, FTC loses on liability, 0:20:16.359 --> 0:20:17.440 there will be no remedy. 0:20:17.440 --> 0:20:19.960 Hearing interesting, So is this a case where the FTC 0:20:20.080 --> 0:20:22.639 might have gotten itself boxed in with meta platforms just 0:20:22.720 --> 0:20:26.560 from approving the acquisitions of Instagram and WhatsApp all those 0:20:26.640 --> 0:20:27.080 years ago. 0:20:27.320 --> 0:20:31.160 Absolutely, I think it was regret buyers for remorse there. 0:20:31.520 --> 0:20:34.000 You know, they approved both of those acquisitions. WhatsApp. I 0:20:34.040 --> 0:20:36.600 think they didn't even investigate the Instagram one. They did 0:20:36.640 --> 0:20:39.720 investigate for six months or so, they allowed both of them, 0:20:39.840 --> 0:20:42.080 They cleared both of them, as did by the way, 0:20:42.080 --> 0:20:45.680 the UK and EU, which looked thoroughly also at these acquisitions. 0:20:46.040 --> 0:20:48.159 And I do think that they regret having done that 0:20:48.240 --> 0:20:49.440 and they're trying to fix that now. 0:20:50.320 --> 0:20:53.840 Well, so could meta platforms be sort of watching its back? 0:20:53.880 --> 0:20:54.040 Though? 0:20:54.040 --> 0:20:56.760 When it comes to future acquisitions, given that it has 0:20:56.840 --> 0:20:59.080 had to go through this process over the last couple 0:20:59.119 --> 0:20:59.520 of months. 0:21:00.760 --> 0:21:03.119 You know, absolutely, And that's one of the issues that 0:21:03.160 --> 0:21:05.840 they raise with respect to a suit like this. They say, look, 0:21:05.920 --> 0:21:09.240 you approved these deals years ago in twenty twelve and fourteen. 0:21:09.520 --> 0:21:12.280 How is a company supposed to buy any company and 0:21:12.320 --> 0:21:15.480 have assurance going forward that ten years later or five 0:21:15.520 --> 0:21:18.280 years later, the FDC or DOJ won't come back and say, hey, 0:21:18.280 --> 0:21:21.400 those we're illegal acquisitions even though we clear them back 0:21:21.440 --> 0:21:24.280 when you know you gave us notice. And I think 0:21:24.280 --> 0:21:26.520 it does put companies in a difficult position. And I 0:21:26.600 --> 0:21:31.600 suspect that Facebook is probably sitting back still watching what's 0:21:31.640 --> 0:21:34.320 going to happen in merger enforcement with the Trump administration 0:21:34.400 --> 0:21:36.840 to understand whether they could get a big deal through 0:21:36.960 --> 0:21:37.119 or not. 0:21:38.119 --> 0:21:42.400 Now, outside the Federal Trade Commissions purview, the Justice Department 0:21:42.520 --> 0:21:46.680 is joining with states in going after Apple. What set 0:21:46.720 --> 0:21:47.399 issue there? 0:21:48.320 --> 0:21:51.800 This is an unusual case because this is about Apple 0:21:52.720 --> 0:21:57.240 sort of blocking or refusing interoperability or refusing certain apps 0:21:57.280 --> 0:22:02.280 to be on the mobile iOS that would allow people 0:22:02.320 --> 0:22:05.000 to get out of the iOS system, in other words, 0:22:05.040 --> 0:22:08.080 to keep them dependent on the iPhone or their other hardware, 0:22:08.160 --> 0:22:12.280 such as the Apple Watch. So the idea is that 0:22:14.240 --> 0:22:17.680 it reduces the competition or the ability for somebody to 0:22:17.760 --> 0:22:19.960 switch and to buy an Android, because let's say you 0:22:20.000 --> 0:22:22.800 get the Apple Watch, now you're dependent on the iOS 0:22:22.840 --> 0:22:25.359 because it works with the iOS and doesn't really work 0:22:25.359 --> 0:22:28.320