WEBVTT - Facebook’s Legal Troubles Multiplying

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcast. The Justice Department

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<v Speaker 1>is ratcheting up the ongoing federal investigations of Facebook's data

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<v Speaker 1>sharing practices with a criminal subpoena. A federal grand jury

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<v Speaker 1>in New York subpoena records from at least two other

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<v Speaker 1>tech companies that had data sharing agreements with Facebook. That's

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<v Speaker 1>according to The New York Times. Joining us as Garrett

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<v Speaker 1>de Vinc Bloomberg News technology reporter to talk about all

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<v Speaker 1>things Facebook. First of all, Garrett, what do you know

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<v Speaker 1>about the Justice Department's investigation. It's out of the Eastern District.

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<v Speaker 1>What they're looking at is, you know, there's been all

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<v Speaker 1>these stories written the past year or two about Facebook

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<v Speaker 1>and how it was using our data, right, and so

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<v Speaker 1>there has been some reporting that Facebook struck deals with

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<v Speaker 1>other companies, so these would be handset manufacturers in some case,

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<v Speaker 1>um certain banks. They had to deal with Spotify as well,

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<v Speaker 1>So that if you were using, you know, one of

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<v Speaker 1>these companies products, you could sort of integrate it with

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<v Speaker 1>Facebook Messenger and chat with your friends. Now, the question

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<v Speaker 1>that is being investigated is whether those things violated some

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<v Speaker 1>promises that Facebook had made to the U S Government

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<v Speaker 1>about how it would share user data, and also whether

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<v Speaker 1>they were telling users that there may be sometimes private messages,

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<v Speaker 1>private information would be seen by other companies that they

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<v Speaker 1>didn't know. We're going to be looking at that. Every

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<v Speaker 1>time this comes up, flashing through my mind is well,

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<v Speaker 1>there's aleven consent degree that Facebook has and it's based

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<v Speaker 1>on privacy. Are there other organizations that are investigating Facebook

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<v Speaker 1>in the US? Yeah, I mean, so that's the the

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<v Speaker 1>FTC consent degree, which is sort of what I what

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<v Speaker 1>I was referencing about that promise that they made about

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<v Speaker 1>how they were gonna use and share data. I think

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<v Speaker 1>a lot of people in the US, at the regular

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<v Speaker 1>a level, at the political level, are interested in going

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<v Speaker 1>after Facebook. It's a big news story. It's something that

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<v Speaker 1>is gaining some traction with consumers. Even at the end

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<v Speaker 1>of the day, most people still really you know, like

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<v Speaker 1>the products are at least use them. Maybe maybe we're

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<v Speaker 1>addicted to them. Some of us. But I think that

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<v Speaker 1>at the end of the day, you know this as

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<v Speaker 1>a political story, and it's something for regulators and politicians

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<v Speaker 1>who want to take a stand on something. It is

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<v Speaker 1>something that they will keep beating the drum on. And

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<v Speaker 1>it seems that every day they have something new to

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<v Speaker 1>beat the drum on. And Facebook again being criticized for

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<v Speaker 1>live streaming of that shooting in New Zealand. Tell us

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<v Speaker 1>about that. Yeah, so, I mean Facebook has allowed live

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<v Speaker 1>streaming for a couple of years now. Obviously they're not

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<v Speaker 1>the only platform. You can do it on Twitter, you

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<v Speaker 1>can do it on YouTube, you can do it on

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<v Speaker 1>on a host of different apps for it. And it's

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<v Speaker 1>a really tricky problem, right because Facebook and the other

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<v Speaker 1>technology companies they want to do live streaming for them.

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<v Speaker 1>It gets people more engaged. People are more likely to

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<v Speaker 1>comment on live videos than they are on static ones.

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<v Speaker 1>But at the same time, you will have incidence like

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<v Speaker 1>this where someone live streams a crime, where someone live

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<v Speaker 1>streams content that otherwise would not be allowed on the platform,

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<v Speaker 1>and because it's live, there's no way to monitor it

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<v Speaker 1>using the technology that is usually monitored to sort of

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<v Speaker 1>take down or block videos that otherwise would break the rules.

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<v Speaker 1>Let's talk a little bit about Mark Zuckerberg's recent thoughts,

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<v Speaker 1>very very long thoughts, about lengthy thoughts about pivoting to privacy.

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<v Speaker 1>Do you see anything substantial coming out of that. Yeah,

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<v Speaker 1>I think anything that Mark Zuckerberg says you have to

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<v Speaker 1>take substantially. I mean it's sort of, you know, interesting

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<v Speaker 1>to kind of watch all his comments and see what

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<v Speaker 1>they actually mean and then look back a year later

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<v Speaker 1>and see whether things have changed or not. I'm pretty

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<v Speaker 1>skeptical of that word pivot, which I think has been

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<v Speaker 1>thrown around a lot when it comes to his recent announcement.

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<v Speaker 1>Facebook is not going to get rid of its public platforms.

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<v Speaker 1>It's not going to get rid of the core apps

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<v Speaker 1>where you know, I post a photo of my children

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<v Speaker 1>or whatnot and can share it publicly or share it

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<v Speaker 1>with my friends. But they do realize that, you know,

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<v Speaker 1>a huge part of communication and social networking is becoming

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<v Speaker 1>private and is becoming encrypted, and with their What's App application,

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<v Speaker 1>which is, if not the most popular messaging tool in

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<v Speaker 1>the world, definitely one of the top couple is um

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<v Speaker 1>you know, already encrypted, and so they're really leaning into

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<v Speaker 1>that side of the business as an area future growth.

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<v Speaker 1>They've lost one of their top executives. Yeah, so Chris

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<v Speaker 1>Cox resigned, And the way that Facebook was talking about

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<v Speaker 1>it is that, you know, he was someone who kind

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<v Speaker 1>of a couple of years ago, was already looking at

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<v Speaker 1>other alternatives. He'd been at Facebook pretty much since the

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<v Speaker 1>very beginning, and then because of all these these complications

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<v Speaker 1>they've had with privacy, with regulation and having to deal

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<v Speaker 1>with that, he stayed on. You know, you can kind

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<v Speaker 1>of probably take that with a grain of salt. Some

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<v Speaker 1>people could say that he's leaving because of the last

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<v Speaker 1>couple of years of complications, And at the end of

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<v Speaker 1>the day, I think that's probably why the stock is down,

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<v Speaker 1>you know, cynically, it's probably not because of the live

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<v Speaker 1>streaming and because of the New Zealand shooting. It's probably

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<v Speaker 1>because someone who is very close within Mark Zuckerberg's inner circle.

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<v Speaker 1>I think, after Zuckerberg and Charles Soundberg, he would be

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<v Speaker 1>one of the top people has now left the company.

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<v Speaker 1>You cover tech. So is there any real fear on

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<v Speaker 1>the part of Facebook, Google, or Apple about Elizabeth Warren's

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<v Speaker 1>calls to break them up if she becomes president, and frankly,

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<v Speaker 1>the calls of other people who see them as just

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<v Speaker 1>too big. It's a really interesting story that that we've

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<v Speaker 1>been tracking very closely. We will continue to track. I

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<v Speaker 1>have no idea where this is going to go. How

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<v Speaker 1>serious in the United States, These calls for very very

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<v Speaker 1>strict antitrust regulations, just changes in how we think about

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<v Speaker 1>anti trust in the United States are actually gonna happen.

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<v Speaker 1>But this is a movement I would say that has

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<v Speaker 1>been brewing for a couple of years, and it started,

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<v Speaker 1>you know, with some progressive policy think tank kind of

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<v Speaker 1>people saying, you know, we really need to rethink how

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<v Speaker 1>this is going, and it has filtered into the political mainstream,

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<v Speaker 1>you know, most strikingly now with Elizabeth Warren very clearly

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<v Speaker 1>stating I will break up the company's I will do

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<v Speaker 1>it this way. I will separate Instagram from Facebook. And

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<v Speaker 1>she's sort of stating this in a way that you know,

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<v Speaker 1>although other politicians have talked about the need for stricter

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<v Speaker 1>antitrust rules, they haven't gone as far as to say

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<v Speaker 1>explicitly what they want to do. And so, you know,

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<v Speaker 1>she is a long way off from the presidency. She

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<v Speaker 1>has a grueling primary to get through, and then of

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<v Speaker 1>course to you know, whoever does win that that democratic

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<v Speaker 1>promimly has to defeat Donald Trump. But I'm sure it

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<v Speaker 1>will be a topic of debate during Democratic primary pleasure. Garrett,

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<v Speaker 1>that's so nice to have you. That's Garrett Davinky is

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<v Speaker 1>the Bloomberg News technology reporter. Thanks for listening to the

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<v Speaker 1>Bloomberg Law Podcast. You can subscribe and listen to the

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<v Speaker 1>show on Apple Podcasts, SoundCloud, and on bloomberg dot com

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<v Speaker 1>slash podcast. I'm June Brasso. This is Bloomberg