Speaker 1: Hello and welcome.
Speaker 2: I'm justinterreesy litigation and policy analysts focused on anti trust
Speaker 2: with Bloomberg Intelligence, and joining me today is my colleague
Speaker 2: Jenniferree are senior anti trust litigation analysts and for both
Speaker 2: of us, our coverage really runs across all sectors. Today's
Speaker 2: webinar is part of a series of conversations among the
Speaker 2: litigation and policy team at BI taking a closer look
Speaker 2: at this year's election now that it's in the rearview mirror,
Speaker 2: and the consequences we think the results will have across
Speaker 2: several areas of the law and politics in the years ahead. Tomorrow,
Speaker 2: Gener will participate in a similar webinar with our colleague
Speaker 2: Matthew Shettenhelm to discuss election impacts on the TMT sector specifically,
Speaker 2: Our colleague Holley from will take a look at impacts
Speaker 2: on areas such as electric vehicles and industry is regulated
Speaker 2: by the EPA. But first a quick word on who
Speaker 2: we are. Bloomberg Intelligence is the investment research platform on
Speaker 2: the Bloomberg terminal, consisting of over five hundred professionals covering
Speaker 2: over two thousand companies. We cover companies from the perspective
Speaker 2: of equities, credit ESG Litigation and policy. Bloomberg Terminal clients
Speaker 2: can always reach out to us with questions about our research,
Speaker 2: and with that, let's get started. How we structure to
Speaker 2: this Today is a conversation between Jen and myself. First
Speaker 2: focused on some macro thoughts by Jen about the Federal
Speaker 2: Trade Commission and Antitrust Division at the Department of Justice.
Speaker 2: I'll then weigh in on some policy considerations for the
Speaker 2: next Congress and provide a quick rundown of what we
Speaker 2: might see across the States. So, Jen, how you doing?
Speaker 2: Jumping right in here?
Speaker 3: Good? Good, justin How are you?
Speaker 2: I'm good, I'm good, glad the election is overfilling a
Speaker 2: little bit to me too, Thank everybody is. Oftentimes it's
Speaker 2: said that personnel is policy, and that was certainly true
Speaker 2: during the Biden administration with respect to antitrust enforcement initiatives
Speaker 2: of Biden's assisted Attorney General in Charge of Anti Trust
Speaker 2: Jonathan Canter and the Chair of the FTC Lena Khan,
Speaker 2: in particular, many in the business community who will be
Speaker 2: glad to see when they see Lena Khan leave the FTC.
Speaker 2: What do you think when do you think these folks
Speaker 2: will be replaced by President Trump, and what impact do
Speaker 2: you think that'll.
Speaker 3: Have, Thanks Justin, I mean, it is true. I think
Speaker 3: the business community is really happy about the likely exit
Speaker 3: of Lena con from the FTC and Jonathan Cantor from
Speaker 3: the DJ as well. You know, it's true that President
Speaker 3: Biden's anti trust enforcers have really been a thorn in
Speaker 3: the side of businesses, and that's because they just ramped
Speaker 3: up anti trust enforcement across the board, right you know,
Speaker 3: they made it a point to use what they called
Speaker 3: every tool available to them to slow consolidation of industries
Speaker 3: and to try to curb the conduct of dominant firms.
Speaker 3: So that means that they challenged way more proposed deals
Speaker 3: than previous enforcers. And they filed or at least continued
Speaker 3: lawsuits over monopoly stick conduct against Alphabet, Apple, Amazon Meta,
Speaker 3: and Live Nation, among others. I mean, those are just
Speaker 3: the cases I'm following. I know you are following even
Speaker 3: others in other cases many So let's talk about what
Speaker 3: will happen now that Donald Trump's been elected. So Donald
Speaker 3: Trump President Trump two point zero. As we head in,
Speaker 3: I think it's a certainty that both Cohn and Cantor
Speaker 3: will be replaced, though right now, it's not clear at
Speaker 3: all who the new you know, antitrust decision makers will
Speaker 3: be or when they'll be installed. I just kind of
Speaker 3: want to dispel one thing that I've seen out there,
Speaker 3: this speculation that Trump would keep lean to Khan at
Speaker 3: the FDC, because his Vice president JD. Vance has really
Speaker 3: been quite vocal about his support for Khan. You know, one, Yeah,
Speaker 3: you know, I mean.
Speaker 1: A lot of conversation around this.
Speaker 3: Yeah, right, I mean, how weird that at one point
Speaker 3: here at Bloomberg, when he made a speech maybe a
Speaker 3: year ago or a year and a half ago, he
Speaker 3: said he thought the only person in the Biden administration
Speaker 3: who was doing a good job was Cohn. I was
Speaker 3: really surprised when I heard that.
Speaker 1: Total.
Speaker 3: Yeah, so he's aligned with this really aggressive enforcement approach
Speaker 3: that she's taken. But let's just say, I highly doubt
Speaker 3: that's going to occur.
Speaker 1: Now.
Speaker 3: First, it's not I don't think it's usual that a
Speaker 3: president is going to follow the advice of his vice
Speaker 3: president about who to appoint. And I think it's a
Speaker 3: near one hundred percent likelihood that Trump's going to install
Speaker 3: his own people. I mean, this is just the right
Speaker 3: of a new president. That's what they do. He's going
Speaker 3: to want his own people that will shape his policy
Speaker 3: loyalty aside. That's the loyalty aside exactly Now timing, I mean,
Speaker 3: this could be any time in the one Q next year,
Speaker 3: or even into the second. I suspect what's going to
Speaker 3: happen is that both Conna and Cantor are going to
Speaker 3: leave on their own once Trump is inaugurated, and it
Speaker 3: could take months before he names new people and they
Speaker 3: get confirmed by the Senate as needed. Now that's not
Speaker 3: because Trump is going to have any trouble finding anyone
Speaker 3: or getting the needed votes, right, He's got the solid
Speaker 3: GOP majority in the Senate. But it's really because there's
Speaker 3: a lot for a new president to do and for
Speaker 3: Senate to do. With the beginning of new term, other
Speaker 3: appointments are going to be a higher priority. So I
Speaker 3: look back at similar changes in party after an election,
Speaker 3: and I saw that the fastest replacement of a chair
Speaker 3: at the FDC was about six months.
Speaker 1: Wow, Wow, I'm left then, yeah, right.
Speaker 3: But the process can take a year or more.
Speaker 1: So.
Speaker 3: The thing the question I have is is con going
Speaker 3: to leave on her own in January? Which I suspect
Speaker 3: the most likely outcome or is she going to stick
Speaker 3: around till she's replaced, because if she does, it means
Speaker 3: it's about another six months before we're going to see
Speaker 3: some change. But I do think she'll leave and what'll
Speaker 3: But one thing that will happen immediately justin is that
Speaker 3: Trump can name his acting chair one of the two
Speaker 3: current Republicans, So that would be either Melissa Holyoake or
Speaker 3: Andrew Ferguson right sow. So once new people are in
Speaker 3: and the agencies are kind of rolling along, a new
Speaker 3: Republican majority of the FTC, a new Assistant Attorney General
Speaker 3: in charge of anti trust who is a Republican at
Speaker 3: the Department of Justice, I do think there's going to
Speaker 3: be a pretty significant impact from the changes, and I
Speaker 3: think the first evident impact will be on M and A.
Speaker 3: And mostly that's because the current FTC and DJ are
Speaker 3: really generally unwilling to settle deals. What that means is
Speaker 3: before these two current and Biden enforcers, it used to
Speaker 3: be that most deals that raised antitrust issues could still close,
Speaker 3: but the companies would have to agree with the relevant
Speaker 3: agency either to sell off certain assets or make commitments
Speaker 3: as to their post merger behavior in the market are
Speaker 3: both right, but con and Kanter are the first that
Speaker 3: are of the view that problematic deals should just be
Speaker 3: prevented wholesale. So what that meant was that under their
Speaker 3: watch way more deals than before were either abandoned or
Speaker 3: had to go to court to defend the deal and
Speaker 3: had to win a court in order to be able
Speaker 3: to close the deal. And we have very very few settlements.
Speaker 3: So I think one main thing that the trump enforcers
Speaker 3: are going to bring us is back to a place
Speaker 3: where settlements are more commonplace, and so that means more
Speaker 3: deals closing than being abandoned or blocked in court. And
Speaker 3: I also think the new GOP majority of the FTC
Speaker 3: and the Republican AAG at the DOJ will make some
Speaker 3: changes we'll talk about later to internal guidance issued by
Speaker 3: Biden's FDC and DOJ. So just really quickly before we
Speaker 3: move on, before I go on too long about this. Also,
Speaker 3: there are ongoing lawsuits against dominant companies. I would say
Speaker 3: there's going to be no major impact on those litigations
Speaker 3: in the short run. They are ongoing, They're going to
Speaker 3: continue their courses in court. It's certainly possible that the
Speaker 3: new DOJ or FDC may be more amenable to a settlement,
Speaker 3: but I think that's going to be way down the road.
Speaker 2: All right, makes sense, makes sense, sounds like it might
Speaker 2: be a bit more of a collaborative relationship with participants
Speaker 2: in the FTC exactly what we've seen most recently.
Speaker 1: Exactly makes sense.
Speaker 2: So you've mentioned some certain initiatives there and activities at
Speaker 2: the FTC and DOJ that you think Trump personnel might
Speaker 2: alter or resin. Do you have some specific examples you're
Speaker 2: thinking of on that front.
Speaker 3: Yeah, very much.
Speaker 2: So.
Speaker 3: What I'm specifically thinking about are the FTCs and DOJ's
Speaker 3: joint Merger Guidelines. So these guidelines have been around for
Speaker 3: years and they're meant to outline how the agencies are
Speaker 3: going to assess proposed deals, and the guidelines also set
Speaker 3: thresholds for when a deal may be presumed to be
Speaker 3: anti competitive. Now, they're not binding the judges, but they
Speaker 3: have historically been adopted by judges that preside over merger
Speaker 3: challenges in court, so they are useful. And in late
Speaker 3: twenty twenty three, the DOJ and FDC revised the guidelines,
Speaker 3: making several changes that collectively all made it such that
Speaker 3: a larger number of deals ended up sort of falling
Speaker 3: into the trap. They were considered at the outset to
Speaker 3: be anti competitive, which set them up for this agency
Speaker 3: for a challenge, right because they weren't going to settle,
Speaker 3: And it just means more deals fell fell under those
Speaker 3: thresholds and got challenged. And I think one of the
Speaker 3: first things that a new Republican DOJ and FTC will
Speaker 3: do is change these and probably scale them back. Both
Speaker 3: of the current Republican commissioners at the FTC have said
Speaker 3: they would revise the guidelines, so they haven't really elaborated
Speaker 3: on how or how much, but there's no doubt to
Speaker 3: me that if they revise them, it's going to be
Speaker 3: to pull back on some of the more novel or
Speaker 3: radical new aspects that were instituted in twenty twenty three,
Speaker 3: and that it will probably result in fewer deals being
Speaker 3: concer it or anti competitive at the outset.
Speaker 2: Got it, Got it so turning a little bit here too.
Speaker 2: And I know I've heard so much from clients and
Speaker 2: other folks about this too, But I know you've focused
Speaker 2: for years now on the investigations and now lawsuits by
Speaker 2: government plaintiffs in the big tech space. So there's a
Speaker 2: number of these going ongoing right now. Do you see
Speaker 2: changes at the FTC and c OJ having any impact
Speaker 2: on those suits? And if you do, what do you
Speaker 2: think might happen?
Speaker 3: You know, it's a funny thing. I've seen a lot
Speaker 3: of elation by companies and oh, everything's going to be
Speaker 3: so much EASi. Yeah, I've been you know everything, So
Speaker 3: all these problems are going to go away. You know
Speaker 3: that's not the case. I think that we need to
Speaker 3: remember that now. Specifically, the big tech cases I follow
Speaker 3: are our Department of Justice has two monopolization suits against Google,
Speaker 3: one against Apple, one against Live Nation, and then the
Speaker 3: FTC has two one against Meta and Amazon. There are
Speaker 3: others that you're going to talk about, but these are
Speaker 3: the ones I'm following, sort of focused in the TMT space,
Speaker 3: And I think what people have to remember is that
Speaker 3: two of these suits were started by Trump's enforcers, and
Speaker 3: all of these investigations were launched by Trump's enforcers. So
Speaker 3: it doesn't necessarily mean that new Trump enforcers are suddenly
Speaker 3: going to go easy on these companies. I don't think
Speaker 3: that's going to happen. No, there's a lot of history
Speaker 3: there absolutely a lot, you know, and I don't really
Speaker 3: know why there'd be such an a doubt about face.
Speaker 3: I mean, we've heard that Trump is no big fan
Speaker 3: of Meta and no big fan of Google. Now, certainly
Speaker 3: you might have the possibility that they'd be more amenable
Speaker 3: to settlements down the road for some of these cases.
Speaker 3: If we look at the Google cases first, they're just
Speaker 3: too far along. I mean, in Google Search, we already
Speaker 3: have had a trial, we have a liability decision against Google,
Speaker 3: and now what the judge is trying to figure out
Speaker 3: are the appropriate remedies. And in this case, the DJ
Speaker 3: has said maybe not for sure, but maybe they would
Speaker 3: ask the judge for a structural remedy, in other words,
Speaker 3: a breakup of Google. We have said, and we have
Speaker 3: said now for a couple of years that we highly
Speaker 3: doubt that would be the case here. Right, just because
Speaker 3: the DOJ asked for it doesn't mean the judge is
Speaker 3: going to order it. I think there's a very low
Speaker 3: chance below ten percent that the judge would order this.
Speaker 3: And everybody I'm seeing in the news people saying, well,
Speaker 3: now that it's going to be Trump's people, it definitely
Speaker 3: won't be broken up. But you know, at the end
Speaker 3: of the day, it's got a little meaningless because maybe
Speaker 3: it drops the chance from ten percent to eight percent.
Speaker 1: It's all numbers.
Speaker 3: Yeah, yeah, I don't think it was going to happen
Speaker 3: to begin with now ad Tech suit, which of course
Speaker 3: that was a trial you attended.
Speaker 1: Yeah, yeah, And you've been.
Speaker 3: Thinking about that and writing about that, And what you've
Speaker 3: told me is that you think there could be a
Speaker 3: liability decision there also against Google and I just from
Speaker 3: the complaint and having looked at the case myself, I
Speaker 3: would agree, But you also think it's unlikely that there'd
Speaker 3: be any breakup, right I do.
Speaker 2: I do base on what happened a trial. That seems
Speaker 2: to be the outcome we're looking at already pre trub relection.
Speaker 3: Yeah, yeah, so the Trump election doesn't really have that
Speaker 3: much impact on that. To me, where there might be
Speaker 3: some impact is the FTC suit against Amazon and the
Speaker 3: DOJ suit against Apple. I think of all of these suits,
Speaker 3: to me, at least those may be two of the weakest,
Speaker 3: and I do think especially the actually both of those
Speaker 3: really lend themselves to settlements. You know, it's kind of
Speaker 3: based on the allegations, it's kind of easy fixes, and
Speaker 3: the FTC has settled suits against it or allegations against
Speaker 3: it in the UK and EU with respect to Amazon,
Speaker 3: and that we're very similar to the lawsuit that's ongoing here.
Speaker 3: They offered up some of these behavioral changes to this
Speaker 3: FTC and those offers were rejected. And it's perhaps the
Speaker 3: current FTC, as this litigation goes on, may be more
Speaker 3: willing to open up the door again to settlement talks.
Speaker 1: There makes sense, makes sense, got in on it all.
Speaker 3: Right, So justin before I go on too long, I
Speaker 3: talk too much.
Speaker 1: Last You're too great, Not too long at all.
Speaker 2: That's a lot of good stuff there, and that's what's
Speaker 2: we've been chatting.
Speaker 3: I guess, I guess. Before I move on to some
Speaker 3: questions for you, the one thing I do want to
Speaker 3: say is that there's been so much jubilation in the
Speaker 3: market about deals and the deal floodgates opening up, and
Speaker 3: I do think deals will get signed. In terms of
Speaker 3: deals getting signed and deals ramping up again, I do
Speaker 3: think the floodgates are going to open a little. But
Speaker 3: I don't necessarily think every single deal is going to
Speaker 3: get green lighted, you know, just because these are Republicans
Speaker 3: and maybe might tend to be more business friendly. It
Speaker 3: doesn't mean that they don't challenge deals that are problematic
Speaker 3: and don't have an appropriate remedy, right, I think that's right, Yeah,
Speaker 3: exactly right. So I don't think people should think every big,
Speaker 3: huge deals can get signed now that are super problematic
Speaker 3: and that they're going to go through. There will still
Speaker 3: be deal challenges. The difference is there will be more settlements.
Speaker 3: But let's move on to some other industries and which
Speaker 3: agencies have lawsuits or investigations that I know you're following,
Speaker 3: justin so tell us about the cases you're tracking and
Speaker 3: how you think they could be impacted by the election results.
Speaker 1: Yeah.
Speaker 2: Sure, So I here really looking at more of those
Speaker 2: enforcement actions brought up by the FTC and TOOJ versus
Speaker 2: those kind of merger reviews. Right, And I think kind
Speaker 2: of part of parcels to what you were saying, Jen,
Speaker 2: You know, I think the big themes here that we're
Speaker 2: watching are a whether there'll be a greater appetite for
Speaker 2: settlement with the well, there's a greater appetite for settlement
Speaker 2: with the FTC and DJ under the Trump administration, or
Speaker 2: you know, perhaps maybe there's a more restrictive approach to
Speaker 2: to how these cases are brought if there's not a
Speaker 2: straight reduction in the number of suits in and of itself.
Speaker 1: Right.
Speaker 2: So the first one that really comes to mind here
Speaker 2: is the case that the FTC brought in September against
Speaker 2: pharmacy benefit managers. And who do I mean there, I'm
Speaker 2: talking about United Health Optimum talking about CVS care Mark
Speaker 2: express Scripts, right. And when they brought that case, you know,
Speaker 2: they brought chose to bring that as a Section five
Speaker 2: proceeding under the FTC Act. And this followed an interim
Speaker 2: report by the FTC that they put out in July.
Speaker 2: In that report, there was a lot there, right. They're
Speaker 2: talking about whether these these pharmacy benefit managers or PBMs
Speaker 2: are taking drug rebates from drug manufacturers, essentially pocketing those
Speaker 2: rebates or or you know, downstream the customers paying more
Speaker 2: money as a result of those rebates. That's a central
Speaker 2: allegation in these kinds of cases, right. And there's a
Speaker 2: whole lot of vertical consolidation that's happened in the healthcare
Speaker 2: space outside of just PBMs too. But in July when
Speaker 2: this report came out, you know, they really the FTC
Speaker 2: focused on all of these things that were both anti
Speaker 2: trust issues and consumer protection issues. There were there was
Speaker 2: a discussion of how that practice might be affecting groups
Speaker 2: like local or independent pharmacies down at the consumer level,
Speaker 2: and you know that that really raised some anti trust concerns.
Speaker 2: But when they brought this student September again, it was
Speaker 2: really crafted as this section five proceeding under the FTC Act,
Speaker 2: and really rang more like a consumer protection action than
Speaker 2: it did an anti trust case.
Speaker 1: So that in and of.
Speaker 2: Itself begs the question would a new FTC have brought
Speaker 2: that case that way? And we know that Commissioners Holyoake
Speaker 2: and Fergus and the Republican Commissioners commissioners there now refuse
Speaker 2: themselves from the vote to authorize that lawsuit. So that
Speaker 2: makes us scratcher heads a little bit here, and you know,
Speaker 2: it makes us wonder is that suit a mended perhaps
Speaker 2: in some way?
Speaker 1: Is it settled in some way? You know that that that.
Speaker 2: Is different than the course that's been plotted by Chair
Speaker 2: con and those voted in favor of the suit in September.
Speaker 2: It seems to be that could be the case. But
Speaker 2: you know, we know that that Commissioner Hollyoaks was supportive
Speaker 2: of action against PBMs when she was a solicitor general
Speaker 2: in Utah. That's not a not an issue that that
Speaker 2: that she's basically always a lot of support over FORPBM.
Speaker 2: She absolutely hasn't done that. So, you know, I think
Speaker 2: the question becomes, what does this suit look like as
Speaker 2: time goes on?
Speaker 1: Here?
Speaker 2: Is it something that maybe takes a new form at
Speaker 2: the FTC? Is it something that might be punted to Congress?
Speaker 2: You know, because there has been this bipartisan kind of
Speaker 2: feeling that PBMs aren't operating in a way that's good
Speaker 2: for consumers.
Speaker 1: So those are big questions.
Speaker 2: And we know DJ you know, they're they're looking at
Speaker 2: United Health, or had been for some time. News reports indicate,
Speaker 2: you know, so is that perhaps a reframing of things
Speaker 2: as an issue about vertical consolidation versus kind of this
Speaker 2: consumer protection guys that the suit was brought under in September,
Speaker 2: So that that's one instance, Jen, And you know, another
Speaker 2: you know, I'm coming to mind is the dog's recent
Speaker 2: action against v set too, where there's a ledge monopolization
Speaker 2: in the debit card space.
Speaker 3: So for years now, for years, for years, right, I was.
Speaker 2: Gonna say that Visa has been in and out of
Speaker 2: anti trust issues for at least two decades.
Speaker 1: At this point.
Speaker 3: When I started practicing, I was working on a credit card.
Speaker 2: Absolutely, and it's still going on in terms of damages.
Speaker 2: So you know that that to me, you know, really
Speaker 2: says that, you know, action in this space from an
Speaker 2: anti trust perspective. It's not a democratic or a Republican issue.
Speaker 2: It has happened under both sides of the aisle here,
Speaker 2: if you will. So you know whether again, whether or
Speaker 2: not there's an appetite to perhaps settle that case a
Speaker 2: little bit faster on the Trump administration, that's.
Speaker 1: A question mark.
Speaker 2: But we can't also forget that, you know, a move
Speaker 2: to block the proposed merger of Visa and Platt in
Speaker 2: twenty twenty that came from the Trump administration. So really,
Speaker 2: Visa is not on this favorites list there either, if
Speaker 2: you will, under a Trump two oh two point zero,
Speaker 2: we think. So that's just a couple of examples there
Speaker 2: that I think we're looking at.
Speaker 3: Yeah, now, I'll tell you it's so fun need to me,
Speaker 3: because they're both such complicated industries, meaning the way they
Speaker 3: operate credit cards aren't necessarily complicated to a consumer. But
Speaker 3: actually the way it all works, right is complicated.
Speaker 1: So many players. You don't see, so many.
Speaker 3: Players, and what PBMs do. Who knows what PBMs do?
Speaker 1: I still don't completely.
Speaker 2: I wish I could explain it all to you clearly right now,
Speaker 2: but I'm still working on it.
Speaker 3: When when it's so complicated, it seems to me is
Speaker 3: so susceptible to sort of bad practices, you know.
Speaker 2: Yes, Yes, it's intentionally opaque, is what I like to say, intentionally.
Speaker 1: Yeah, exactly.
Speaker 3: Well, let's talk about AI, because that's another area we
Speaker 3: hear about a lot these days. And I know you're
Speaker 3: looking at how we anti trust enforcers are thinking about AI,
Speaker 3: because I think they're trying to get ahead of it,
Speaker 3: you know, instead of always being behind, which they often
Speaker 3: are in technology. So can you briefly explain what's going
Speaker 3: on in that space? And do you think the interest
Speaker 3: approach there might change?
Speaker 1: Yeah?
Speaker 2: So I think this one, this one really is a
Speaker 2: big question mark. I think moving into into Trump two
Speaker 2: point zero if you will, And to.
Speaker 1: Your point in the question there too, that's exactly right.
Speaker 2: A lot of folks, more progressive folks in the antitrust camp,
Speaker 2: if you will, are saying, look, this is an opportunity
Speaker 2: here to really step in and address anti trust issues
Speaker 2: in AI from the inception of AI, to kind of
Speaker 2: avoid a situation like we saw in the nineties with
Speaker 2: Microsoft's dominance of operating systems or Google's dominance of search
Speaker 2: that erupted because there purportedly weren't enough actions by the
Speaker 2: government to rein that in before it got out of control.
Speaker 2: But you know, there are some complicating factors too. You know,
Speaker 2: there was talk in October about some kind of a
Speaker 2: comprehensive AI legislative package happening in a lame duck session
Speaker 2: this fall. But now that we're looking at this maybe
Speaker 2: republican trifact, I think we're you know, inching closer to
Speaker 2: that just looking at the headlines. We're recording this on
Speaker 2: November thirteenth right now. But you know, knowing that, it
Speaker 2: seems like a lot of those issues probably get punted.
Speaker 1: To next year.
Speaker 2: And you know, with Republican control, if that's what ultimately
Speaker 2: happens of both Chambers and the White House, they probably
Speaker 2: navigate that course they see fit to do it, rather
Speaker 2: than reaching some kind of a compromise, right now let's
Speaker 2: send a Democrat. So that's a big question mark for
Speaker 2: AI think, and the big elephant in the room here
Speaker 2: really is China too, right, And the issue of competing
Speaker 2: against China is reigning in the dominance of these companies
Speaker 2: from an American American anti trust perspective, a problem for
Speaker 2: America competing abroad in the world of AI. And that's
Speaker 2: that's really where the conversation of rhetoric, at least politically
Speaker 2: seems to be headed right now. But you know, just
Speaker 2: looking at some specific players here too. You know, we
Speaker 2: saw over the summer news reports that at the FTC
Speaker 2: was looking into Microsoft's twelve and a half billion dollar
Speaker 2: investment into open Ai and whether that raised any anti
Speaker 2: trust flags there, and DJ was looking at Nvidia and
Speaker 2: whether or not their acquisition of some smaller AI startups
Speaker 2: Run AI in Israel is one of them that they
Speaker 2: said reportedly we're concerned with and you know, they're perhaps
Speaker 2: bundling of products, whether those things kind of raise I
Speaker 2: trust flags. So those investigations, if they are in fact ongoing,
Speaker 2: it really is a question mark do they continue and
Speaker 2: to what extent did they continue under a new a
Speaker 2: new Trump FTC And DJ big question mark there.
Speaker 3: Yeah, And you have such differing perspectives about innovation and
Speaker 3: tech innovation. You know, there are those that think like
Speaker 3: the innovation has to be taken on by those with
Speaker 3: a lot of money, right offers that can do the
Speaker 3: R and D and have giant teams of engineers and
Speaker 3: and and then there's another other group that thinks, no,
Speaker 3: you know, these gatekeepers squelch innovation because they you know,
Speaker 3: new startups just can't compete and so they just don't occur,
Speaker 3: right right. So it's just it's just interesting. And even
Speaker 3: though you know, being able to better compete with China
Speaker 3: is not really supposed to be a defense to anti competitive.
Speaker 1: Content, right market right right now?
Speaker 3: I know you hear people talk that way.
Speaker 1: Yeah. Absolutely.
Speaker 2: I think that political rhetoric, a lot of it really
Speaker 2: probably shouldn't find its way into anti trust considerations, but
Speaker 2: as you know, it does, right right there, you have it.
Speaker 3: Yeah, So you know something that's been really quiet lately,
Speaker 3: leve activity. I mean, you're really keyed into sort of
Speaker 3: the way things work on Capitol Hill, and I know
Speaker 3: that it's been quiet with respect to antitrust legislation for
Speaker 3: a while, but it wasn't It wasn't quiet in twenty
Speaker 3: twenty two, in twenty twenty one that there are there
Speaker 3: were a lot of bills on the table. There are
Speaker 3: a lot of bills on the table now. I think
Speaker 3: more will be reintroduced with the new Congress. So why
Speaker 3: don't you talk to us a little bit about that
Speaker 3: and thoughts on what can happen there.
Speaker 2: Yeah, so I think kind of piggybacking on well, you
Speaker 2: know what we were just discussing with AI, you know again,
Speaker 2: kind of looking at this this world here where we
Speaker 2: think there's going to be Republican control of both chambers
Speaker 2: in the White House. Again, Well, you know, it's November thirteenth.
Speaker 2: We'll see how that, how that ultimately shakes out. You know,
Speaker 2: we think it's unlikely that we're going to see this broad,
Speaker 2: sweeping kind of progressive legislation that you know, things things
Speaker 2: like like bills on broad on self preferencing across all industries, right,
Speaker 2: or are banning the use of you know, AI pricing
Speaker 2: algorithm them across all industries because they are, you know,
Speaker 2: purportedly are a price fixing mechanism.
Speaker 1: I think those things.
Speaker 2: Probably don't take off the way they might have if
Speaker 2: there were a blue control of at least one House
Speaker 2: in Congress right now. But that's not to say we
Speaker 2: couldn't see some of this industry specific legislation where there
Speaker 2: has been some bipartisan support over the years. And what
Speaker 2: I'm talking about with that is things like Live Nation,
Speaker 2: where there's been consensus that there's a real problem with
Speaker 2: how tickets are sold. You know, everyone seems to agree
Speaker 2: that that that there is an inherent antitrust problem there,
Speaker 2: but not just that. You know, you've got Senator Mike
Speaker 2: Lee's America Act, which would essentially try to force a
Speaker 2: divestiture at Google, the very same that's being chased through
Speaker 2: litigation right now, albeit through legislative means. So I think
Speaker 2: maybe we still see some activity around industry specific spaces
Speaker 2: where there is that bipartisan support, and again PBMs are
Speaker 2: a big part of that too, I think with the
Speaker 2: consolidation that's happened in that in the healthcare space.
Speaker 1: But in terms of like these these.
Speaker 2: Broad, you know, wide ranging rewrites of the Sherman Act,
Speaker 2: I don't know that we're going to see that though,
Speaker 2: at least for the next two years in Congress. I
Speaker 2: think that's probably something that moves a little bit further
Speaker 2: to the back of the consideration.
Speaker 3: Of course, the Department of Justice has an existing lawsuit
Speaker 3: against Live Nation, and I think the CEO or at
Speaker 3: least some executive that company said something yesterday about how
Speaker 3: they think, oh, they're going to have a much easier
Speaker 3: time with respect to this with the Trump enforcers. That
Speaker 3: suggests to me maybe they think they'll be able to settle.
Speaker 3: I'm actually not so sure why they think. You know,
Speaker 3: it's a very politically attractive case. I think that there
Speaker 3: were hearings. If you went back and listened to the
Speaker 3: hearings in the Senate over I think maybe have been
Speaker 3: after the Taylor Swift concert tickets, nephew, I don't remember.
Speaker 3: It might have been some time after that, but there
Speaker 3: was really bipartisan anger at this company.
Speaker 1: Yeah, absolutely, And everybody.
Speaker 3: Buys tickets to something concert, sports, something, right, and everybody's
Speaker 3: upset about those fees. So what you know, I kind
Speaker 3: of think even if the Live Nation thinks there's some
Speaker 3: easier chance that they're going to be able to settle,
Speaker 3: if they do, Congress might step in into something.
Speaker 1: Yeah, I think you're right. I think you're right.
Speaker 2: I mean for a company that makes a business in
Speaker 2: selling two fans, it seems like they're are too many
Speaker 2: fans of the company.
Speaker 1: But yeah, I think that's true. That's true.
Speaker 3: Okay, let's just talk one last thing then, something that's
Speaker 3: kind of quiet. But in the anti trust world, it's important.
Speaker 3: It's important. In the anti trust world. I think people
Speaker 3: don't really realize how important the states are because they
Speaker 3: can enforce federal anti trust laws. So let's talk about
Speaker 3: the states. What do you think about them acting on
Speaker 3: anti trust policy in the coming years.
Speaker 2: Yeah, you know, I think this is kind of a
Speaker 2: sleeper issue, if you will, in terms of what we
Speaker 2: might see under the next Trump administration. Let me just
Speaker 2: paint a little bit of a picture here too. You know,
Speaker 2: so if you think about the last time around, with
Speaker 2: the election of President Trump in twenty sixteen, and even
Speaker 2: you know, traditionally redder states, if you will, with the
Speaker 2: election of President Biden in twenty twenty, you know, what
Speaker 2: you really saw was a lot of pushback from states
Speaker 2: around social issues. Right, So in twenty sixteen, we saw
Speaker 2: things like the establishment of sanctuary cities and sanctuary states,
Speaker 2: and you know, the enshrinement of things like reproductive rights
Speaker 2: and state constituo. But you know, those things are kind
Speaker 2: of done. And since that time, you know, the antitrust
Speaker 2: movement has really gained in popularity, yes for sure through
Speaker 2: twenty twenty, and I think for that reason alone, it
Speaker 2: really could end up being a key piece of the
Speaker 2: pushback that you're seeing from more traditionally liberal states around
Speaker 2: what might be coming out of Washington or not coming
Speaker 2: out of Washington from their perspective. So what I mean
Speaker 2: there is, you know, states really can and do bring
Speaker 2: their own enforcement proceedings. And you know a prime example
Speaker 2: of that is is the Texas case against Google on
Speaker 2: advertising technology.
Speaker 1: That case was filed before the federal case.
Speaker 2: Even though the federal case has already gone through trial
Speaker 2: and is about to reach a liability verdict at some
Speaker 2: point soon, you know, Texas initiated that case. Their trial
Speaker 2: is still on the horizon here coming up in March.
Speaker 2: So you know, it's a big issue. You know, even
Speaker 2: though we're not seeing a breakup there for Google, you know,
Speaker 2: those things are still on the table in a state
Speaker 2: brought action the same way they would be in a
Speaker 2: federal case. So that's something to keep in mind from
Speaker 2: the states there, and same with Merger clearent. I mean
Speaker 2: in Kroger, you saw the Kroger Albertson seal. You've seen
Speaker 2: state's attorney general Attorney's General bring actions to try to
Speaker 2: stop it, at least within their boundaries too. So there
Speaker 2: is that real kind of threat from enforcement perspective from states.
Speaker 2: But I also point to kind of legislative developments we
Speaker 2: might see here too, And you know, one to come
Speaker 2: to mind is no New New York has a bill
Speaker 2: on file the moment to update update the state's anti
Speaker 2: trist statute to include enforcement in a class action even
Speaker 2: against monopsonies. And what do I mean by monoptany know,
Speaker 2: it's a firm with dominant buying power in a market.
Speaker 2: And Amazon comes to mind right away there as a
Speaker 2: resaler of so many goods, right so so really, you know,
Speaker 2: that's that's a real issue. You know, if that's a
Speaker 2: problem in New York, you know, obviously it's a problem
Speaker 2: for the company, so so many sales coming into this
Speaker 2: particular state, you know, in California as another example, last
Speaker 2: week we saw already Gavin Newsom is calling for a
Speaker 2: special session of the legislature there to kind of evaluate
Speaker 2: what they can do to push back against Washington the
Speaker 2: next you know, four years or so. And in California
Speaker 2: know already there's an Anti Trust Laws Review Commission that's
Speaker 2: already been meeting and churning out recommendations as so what
Speaker 2: California's own state antitrust law should look like moving forward
Speaker 2: and Monopsony issue, and several aers including AI are also
Speaker 2: on the table there with what they're looking at. So
Speaker 2: there really is both this legislative and kind of enforcement threat,
Speaker 2: if you will, that that comes from the States and
Speaker 2: could really I think heightened the next four years too.
Speaker 3: Yeah, And I think one thing that's really important that
Speaker 3: we should mention also that's kind of under the radar
Speaker 3: about this is that it used to be that if
Speaker 3: a state filed a lawsuit under the federal antitrust laws, right,
Speaker 3: and the DOJ r FTC did too, those suits got consolidated,
Speaker 3: yes right, yeah, right, or yeah, or the states got
Speaker 3: consolidated with a private suit, which is actually quite different
Speaker 3: because private suits are usually class actions, and that's just
Speaker 3: a whole different thing than a government you know, in ag.
Speaker 2: Suer motivations might be a little more motivations are quite different,
Speaker 2: right for those kinds of plaintiffs and their lawyers.
Speaker 3: But you know, we have the state. Then you act
Speaker 3: that passed with you know, with then omnibus funding bill
Speaker 3: last year, and what that meant was that the states
Speaker 3: no longer are subject to that consolidation.
Speaker 2: Right.
Speaker 3: That's why we've got that separate Texas suit. It's super weird,
Speaker 3: but Google's basically fighting three separate suits, yes, three separate
Speaker 3: courts that are almost the identical suits.
Speaker 2: Right, and again, I just don't know that we see
Speaker 2: any signs of easing with that. All right, time goes on,
Speaker 2: so all right, well, I think that brings us to
Speaker 2: the end of our prepared marks here. But thanks so
Speaker 2: much for joining us, and you know, it's really been
Speaker 2: a pleasure today, and please feel free to reach out
Speaker 2: anytime to other gender. Myself on the terminal, I will
Speaker 2: be here as you navigate all of this for the
Speaker 2: years I had.
Speaker 1: Thanks.
Speaker 3: Thanks Justin. Bye,