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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple podcast, SoundCloud

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Speaker 1: and on Bloomberg dot com slash podcasts. The tech giants

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Speaker 1: have become the favorite punching bags for politicians and especially

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Speaker 1: Democratic presidential candidates, with some vowing to break them up

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Speaker 1: and others promising at least to keep them in line.

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Speaker 1: As Senator Corey Booker said on ABC's This Week, If

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Speaker 1: I'm President nine states, I love a Justice Department that

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Speaker 1: uses antitrust legislation to do the proper investigations in the

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Speaker 1: whole industries accountable for corporate consolidation. Google and Amazon maybe

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Speaker 1: the first two in for some antitrust scrutiny. The federal

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Speaker 1: agencies that handle antitrust matters, the FTC and the Justice Department,

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Speaker 1: are divvying up oversight of the two companies, with the

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Speaker 1: Justice Department taking Google and the Federal Trade Committe taking Amazon.

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Speaker 1: Joining me is Jennifer Reid, Bloomberg Intelligence Senior litigation analyst

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Speaker 1: jen have the FTC and Justice departments split up oversight

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Speaker 1: in this way before. Oh yes, Now the thing is

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Speaker 1: the FTC and d J share ant trust enforcement. So

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Speaker 1: no matter what it is, whether it's an investigation into

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Speaker 1: conduct of a company like this or whether it's reviewing

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Speaker 1: a potentially anti competitive merger, they always clear these matters

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Speaker 1: with each other. They talk to each other and say, Okay,

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Speaker 1: which one has the expertise in this area, which one

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Speaker 1: has the interest in taking this on, and they decide

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Speaker 1: which will review the merger, which will investigate the conduct,

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Speaker 1: et cetera. Do we know what in particular they're looking

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Speaker 1: at here? You know, we don't, and it's way too

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Speaker 1: early to say, and it actually could be that they're

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Speaker 1: looking at a number of things. Oftentimes, the way an

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Speaker 1: anti drust investigation starts is that consumers or competitors or

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Speaker 1: third parties in an industry come in and they wage

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Speaker 1: complaints about conduct of some business. And I imagine that

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Speaker 1: there have been a lot of complaints over the years

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Speaker 1: against some of these big tech companies, and then the

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Speaker 1: Fed Trade Commission or Department of Justice we'll look at

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Speaker 1: that and think, well, the kind of conduct this entity

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Speaker 1: is talking about isn't really antitrust conduct. We won't investigate this.

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Speaker 1: But if enough complaints come in talking about conduct that

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Speaker 1: sounds like maybe it could violate the antitrust laws, cross

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Speaker 1: the line into anti competitive behavior rather than just aggressive competition,

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Speaker 1: then they may decide, Okay, it's time to open up

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Speaker 1: an investigation. And sometimes they may be looking at that

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Speaker 1: exact conduct, they might be looking at a variety of conducts.

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Speaker 1: You know, we just don't know, and it's not something

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Speaker 1: that we're going to know actually probably for quite a

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Speaker 1: long time. So U s antitrust theory revolves around this

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Speaker 1: harm chick consumers. And in this case, Amazon says prices

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Speaker 1: are lower for consumers, and Google says we're not even

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Speaker 1: charging consumers anything. So does the US have real antitrust

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Speaker 1: concerns here? You know, it's possible. What they'll do is

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Speaker 1: they'll get economists involved in this investigation. They will gather

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Speaker 1: a lot of documents, a lot of data from these

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Speaker 1: companies as well as data from competitors and other third parties,

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Speaker 1: and they'll start to look at that data and they'll

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Speaker 1: determine whether whatever the conduct is that they're looking at,

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Speaker 1: whether that conduct is excluding rivals and hampering competitions such

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Speaker 1: that it could ultimately cause consumers harm. Now, it is difficult,

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Speaker 1: right because these companies do offer free products, they offer

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Speaker 1: uh free services or low priced products such as Amazon.

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Speaker 1: So it's going to be difficult for these enforcers to

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Speaker 1: go to court and established that the antitrust laws have

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Speaker 1: been violated. But if you start to look at these

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Speaker 1: things creatively, as courts and enforcers may, such as thinking

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Speaker 1: about the concept of consumer data that is being collected,

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Speaker 1: let's say by an entity like Facebook, as being the

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Speaker 1: price we pay and rather than thinking about in dollars,

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Speaker 1: which some suggest, then maybe you do find a consumer

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Speaker 1: harm in the amount of data that consumers have to

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Speaker 1: give up for these free services. European regulators have been

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Speaker 1: after the tech giants, and Google has been fined several times.

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Speaker 1: What makes US antitrust law different or the way it's

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Speaker 1: enforced different that we haven't seen those huge finds here.

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Speaker 1: You know, there are a couple of really big differences. First,

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Speaker 1: the US antitrust enforcers are law enforcers. That means they

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Speaker 1: can't do anything. They can't penalize these companies. If they

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Speaker 1: find wrongdoing, they have to take their proof to court.

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Speaker 1: They have to prove it in court, and it's up

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Speaker 1: to a judge to decide whether there's been a violation

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Speaker 1: and what that remedy should be. On the other hand,

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Speaker 1: in the EU, the European competition enforcer can institute remedies.

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Speaker 1: They don't have to necessarily go to a court in

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Speaker 1: the first instance. They can come in and they can

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Speaker 1: penalize the company, as the European regulators have with Google.

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Speaker 1: So that that's one thing that's very important. Our law

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Speaker 1: has been court made. It's basically common law, very short statutes,

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Speaker 1: the antitrust laws back in eighteen ninety that have been

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Speaker 1: interpreted by the courts. The laws developed based on the courts,

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Speaker 1: and the courts have to decide whether companies are violating

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Speaker 1: the anti trust laws. In Europe, there's a lot more flexibility,

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Speaker 1: not only within the way their statutes are craft it,

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Speaker 1: but just within what the competition regulator can do. So

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Speaker 1: does this seem as it it's just a shot across

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Speaker 1: the bow, or are we heading toward what Microsoft faced

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Speaker 1: in the nineties a trial. We very well could be

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Speaker 1: heading toward a trial that could happen. I think if

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Speaker 1: it does, it's a way down the road. So it's

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Speaker 1: really early now to say, it takes a long investigation

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Speaker 1: and then it takes a determination by the enforcement agency

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Speaker 1: reviewing that there's been a violation and we're going to

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Speaker 1: go to court. Also, these things get settled often so

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Speaker 1: before they go to court. If the agency is going

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Speaker 1: in that direction, it may be that the company comes

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Speaker 1: up and says, hey, let's settle this, and there's something

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Speaker 1: that they come up with it resolves the matter. The

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Speaker 1: FTC started an investigation to Google in and then dropped

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Speaker 1: it in So how likely is it that it's going

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Speaker 1: to be any more aggressive or maybe there are political

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Speaker 1: pressures now there weren't then. Yes, I think they're political

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Speaker 1: pressures now that there weren't. We have an entirely different

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Speaker 1: FTC commissioner staff now than we did, five different commissioners

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Speaker 1: than made those decisions in two thousand thirteen, and maybe

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Speaker 1: different markets, maybe different conduct. You know that that's the question,

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Speaker 1: what is the conduct? Google was investigated by the FTC

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Speaker 1: and certain behaviors were investigated, But there may be different

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Speaker 1: behaviors now having a different kind of an impact. So

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Speaker 1: it's hard to say. Now. As far as the Justice Department,

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Speaker 1: we have making del Raheem in charge of the Antitrust Division.

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Speaker 1: Do you know his inclinations whether that might affect what

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Speaker 1: goes on. Well, the Department of Justice, according to the

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Speaker 1: news reports, has taken charge of investigating Google, whereas the

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Speaker 1: FTC looks like it's going to be or might be

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Speaker 1: investigating Amazon and Facebook. So the big difference there is

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Speaker 1: that making del Rahem as Assistant Attorney General in charge

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Speaker 1: of Anti trust is basically the decision maker with the

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Speaker 1: Attorney General as to what to do, whether to actually

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Speaker 1: try to go to court to sue the company in

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Speaker 1: conducting the investigation, whether to settle down the road at

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Speaker 1: some point, etcetera. At the FTC, it's five commissioners and

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Speaker 1: they need a majority vote in order to take any action.

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Speaker 1: So if they do make a finding there's a violation,

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Speaker 1: it would take a vote. If they try to settle it,

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Speaker 1: it would take a majority vote to actually go to court.

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Speaker 1: Thank you so much. Thank you. That's Jennifer Ree. She's

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Speaker 1: a Bloomberg Intelligence Senior litigation analyst. For more of her analysis,

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Speaker 1: you can go to b I go on the Bloomberg Terminal.

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Speaker 1: Thanks for listening to the Bloomberg Law podcast. You can

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Speaker 1: subscribe and listen to the show on Apple podcast, SoundCloud,

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Speaker 1: and on bloomberg dot com slash podcast. I'm June Brasso.

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Speaker 1: This is Bloomberg