WEBVTT - Stormy Takes the Stand & Google Antitrust Trial 0:00:00.800 --> 0:00:03.920 The jurors in Donald Trump's hush money trial have heard 0:00:03.960 --> 0:00:08.119 the name Stormy Daniels countless times. Today they got to 0:00:08.160 --> 0:00:10.600 hear from her as she took the witness stand and 0:00:10.720 --> 0:00:14.640 offered a detailed and at times graphic account of a 0:00:14.720 --> 0:00:18.040 sexual encounter she says she had with Trump in two 0:00:18.079 --> 0:00:21.400 thousand and six that resulted in her being paid off 0:00:21.440 --> 0:00:25.360 to keep silent during the presidential race ten years later, 0:00:25.880 --> 0:00:29.640 and encounter Trump has denied. Joining me is former federal 0:00:29.680 --> 0:00:35.519 prosecutor Michael Zelden. Why is Stormy Daniels' testimony important to 0:00:35.560 --> 0:00:36.280 the prosecution. 0:00:37.200 --> 0:00:41.720 Stormy Daniels serves several purposes. One, Donald Trump has repeatedly 0:00:41.760 --> 0:00:45.400 said this never happened, and so to the extent that 0:00:45.440 --> 0:00:50.400 she can say this happened, then were Trump to testify, 0:00:50.760 --> 0:00:55.080 the jury has a basis to evaluate her testimony versus 0:00:55.080 --> 0:00:58.680 his testimony. She also, I think, plays the role of 0:00:58.720 --> 0:01:04.040 supporting the conversations that she had with Michael Cohen and 0:01:04.120 --> 0:01:08.880 her understanding that Donald Trump was the payre in this transaction, 0:01:08.959 --> 0:01:12.639 that Trump was intimately involved in it through her direct 0:01:12.680 --> 0:01:16.520 conversations with Cohen, which Cohen will then testify to. So 0:01:16.880 --> 0:01:20.520 I think she serves the purpose of helping the prosecution 0:01:20.680 --> 0:01:24.080 say this story happened, helping the prosecution say there was 0:01:24.120 --> 0:01:27.760 an imperative that Trump felt to get this story suppressed, 0:01:28.400 --> 0:01:31.280 and from her dealings with Michael Cohen, it was her 0:01:31.400 --> 0:01:35.479 complete understanding that Donald Trump was aware of this, involved 0:01:35.480 --> 0:01:39.760 in it, and was the ultimate payre of the hush money. 0:01:41.080 --> 0:01:45.440 So at different times she made Trump look almost ridiculous, 0:01:46.000 --> 0:01:48.720 saying he was rude, arrogant, didn't know how to have 0:01:48.760 --> 0:01:54.320 a conversation, and sleazy at many times. I mean, you know, 0:01:54.560 --> 0:01:58.640 his questions about her sex life, and she rolled up 0:01:58.640 --> 0:02:01.600 a magazine at one point and playfully spanked him. I mean, 0:02:01.840 --> 0:02:05.279 is this the prosecution's attempt to get this before the jury, 0:02:05.320 --> 0:02:07.120 to get in bad character. 0:02:06.760 --> 0:02:10.040 Evidence in a sense, And in fact, the defense attorney 0:02:10.400 --> 0:02:13.760 moved for a mistrial after lunch on the basis of 0:02:13.880 --> 0:02:17.240 this sort of evidence. Remember, she says she walks into 0:02:17.280 --> 0:02:20.320 his hotel suite, she thought that they were supposed to 0:02:20.360 --> 0:02:24.519 be having dinner downstairs, and he comes out in silk pajamas. 0:02:24.800 --> 0:02:27.079 Then later in the course of the evening, before they 0:02:27.280 --> 0:02:29.960 eat dinner, she's in the bathroom. She comes out and 0:02:30.000 --> 0:02:33.560 he's chained out of his clothes into boxer shorts and 0:02:33.600 --> 0:02:36.360 a T shirt. So yes, it does make him look 0:02:36.960 --> 0:02:41.079 like a predator. And remember he's sixty ish years old 0:02:41.120 --> 0:02:44.640 at the time. She's twenty seven years old at the time. 0:02:45.440 --> 0:02:48.880 It's on his turf. I think it really does make 0:02:48.960 --> 0:02:53.400 him look bad. And that's why the prosecution, I think, 0:02:53.440 --> 0:02:56.720 in part, wants it should he testify. They want to 0:02:56.760 --> 0:02:59.840 have a counterbalance against what he's going to say about himself. 0:03:00.040 --> 0:03:02.760 And that's also, of course why the defense move for 0:03:02.800 --> 0:03:07.000 a mistrial, because it is so damning as a character matter. 0:03:07.720 --> 0:03:10.880 So the judge said before her testimony, I agree that 0:03:10.919 --> 0:03:14.760 she's got credibility issues, so the people have to establish 0:03:14.760 --> 0:03:18.720 her credibility. Is he talking about the fact that she's 0:03:18.919 --> 0:03:22.799 a porn star, the fact that she denied this at 0:03:22.840 --> 0:03:23.760 one point. 0:03:24.000 --> 0:03:26.960 Yeah, I think all of those things. One, she is 0:03:27.000 --> 0:03:31.160 an adult actress, which is, you know, something that has 0:03:31.200 --> 0:03:34.880 some negative connotations to it too. She is selling a 0:03:34.920 --> 0:03:37.680 story which they're going to try to portray the defenses 0:03:37.720 --> 0:03:42.640 as extortion. She denies it, and then she admits it. 0:03:42.760 --> 0:03:45.280 Then she says she wants her story out, and then 0:03:45.320 --> 0:03:47.920 she says she wants her story suppressed as long as 0:03:47.920 --> 0:03:50.360 she gets paid for it. So there's a lot of 0:03:50.360 --> 0:03:55.040 stuff there that is damaging as a character matter, and 0:03:55.200 --> 0:03:58.760 the prosecutors want to say, look, there is stuff here 0:03:59.240 --> 0:04:03.680 that's not ideal. But at the very bottom line, what 0:04:03.800 --> 0:04:08.120 she's telling us is the truth, which can be corroborated 0:04:08.160 --> 0:04:12.360 by other witnesses. And again, if Trump were to testify, 0:04:12.760 --> 0:04:16.279 they have the counterweight against what he will say, presumably 0:04:16.320 --> 0:04:18.440 which is consistent with what he said in the public, 0:04:18.600 --> 0:04:20.200 which is this never happened. 0:04:20.680 --> 0:04:24.440 There was testimony about all these things that the judge 0:04:24.680 --> 0:04:27.599 at one point said that it wasn't necessary to go 0:04:27.680 --> 0:04:30.760 into detail here, and then she went into all this detail. 0:04:31.279 --> 0:04:33.400 Was she not prepped by the prosecution? 0:04:33.960 --> 0:04:36.520 Well, I think she was prepped by the prosecution. I 0:04:36.560 --> 0:04:40.520 think that she was probably nervous, and they're asking her 0:04:40.520 --> 0:04:43.360 to tell a story of what happened, and she, you know, 0:04:43.400 --> 0:04:47.240 in her mind's eye, is back in the moment reliving 0:04:47.640 --> 0:04:51.239 that story. And I don't think she purposefully tried to 0:04:51.480 --> 0:04:55.160 inject this so called salacious stuff in. But if you're 0:04:55.200 --> 0:04:57.599 telling a story to you of what happened, which was 0:04:57.600 --> 0:05:00.440 a traumatic story at age twenty seven, a sixty year 0:05:00.480 --> 0:05:03.960 old man engage in what was consensual, but with a 0:05:04.000 --> 0:05:08.880 really broad power dynamic between them. I think that, you know, 0:05:09.600 --> 0:05:12.800 her telling it as it happened actually makes it appear 0:05:13.800 --> 0:05:17.479 more believable than if it was very stylized in the 0:05:17.560 --> 0:05:20.279 telling of the story with look rehearsed, and I don't 0:05:20.320 --> 0:05:23.160 think that would have been helpful to her or the prosecution. 0:05:23.839 --> 0:05:29.120 Could the salacious details backfire with some of the jurors 0:05:29.160 --> 0:05:34.400 finding her account distasteful and that bleeds over into their 0:05:34.440 --> 0:05:36.400 opinion of her testimony. 0:05:36.240 --> 0:05:39.480 Well, they could, except I think she has basically come 0:05:39.640 --> 0:05:42.000 across as you read her testimony. You're not in the 0:05:42.000 --> 0:05:44.800 core rooms. I can't, you know, make eye contact with 0:05:44.839 --> 0:05:47.200 her and see her body language. But as you read it, 0:05:47.640 --> 0:05:49.800 she says, Look, I'm a seventeen year old kid. I 0:05:49.920 --> 0:05:51.880 leave home. I didn't have a great upbringing. I was 0:05:51.920 --> 0:05:54.760 sort of poor. I got involved in modeling and that 0:05:54.839 --> 0:05:59.600 led to adult filmmaking, and here I am. You know, 0:05:59.640 --> 0:06:02.279 this is who I am. You know I'm not apologizing 0:06:02.279 --> 0:06:04.719 for it. You might not like my profession, but this 0:06:04.760 --> 0:06:08.719 is who I am. That doesn't make me dishonest, that 0:06:09.120 --> 0:06:12.000 makes me just who I am. And if you're going 0:06:12.040 --> 0:06:14.440 to judge me for that, well you know, I can't 0:06:14.839 --> 0:06:15.320 help that. 0:06:16.160 --> 0:06:19.200 For about a year afterwards, he called her like once 0:06:19.279 --> 0:06:22.559 a week, and his pet name for her was honey bunch. 0:06:23.120 --> 0:06:24.520 How do you think the jury will see. 0:06:24.320 --> 0:06:32.080 That their encounter, which started out as a consensual adult relationship, 0:06:32.120 --> 0:06:35.440 a one night's stand, although I say the power differential 0:06:35.480 --> 0:06:39.719 between them is profound, But she said immediately afterwards she 0:06:39.800 --> 0:06:43.640 was completely embarrassed, embarrassed enough to not tell but her 0:06:43.680 --> 0:06:47.320 closest friends to not tell her boyfriend. She was embarrassed. 0:06:47.839 --> 0:06:50.000 He on the other hand, thought, well, this was good. 0:06:50.240 --> 0:06:52.719 Let's keep it up, you know, honey bunch. Let's get 0:06:52.720 --> 0:06:56.480 together when you're next in town. So I think he 0:06:56.560 --> 0:07:00.960 was seeing this as an ongoing opportunity, irrespective of the 0:07:01.000 --> 0:07:03.200 fact that he's married to Melania, and he didn't seem, 0:07:03.200 --> 0:07:05.920 according to her testimony, to be plussed at all by 0:07:06.320 --> 0:07:08.120 the fact that he was cheating on his wife. So 0:07:08.440 --> 0:07:11.520 I don't know that it's inconsistent with who many people 0:07:11.520 --> 0:07:15.280 believe Donald Trump is, as portrayed, perhaps best, on the 0:07:15.280 --> 0:07:16.600 Access Hollywood tape. 0:07:16.680 --> 0:07:20.360 How will the prosecution deal with the fact that she 0:07:20.560 --> 0:07:22.000 was paid off for this story? 0:07:22.440 --> 0:07:26.240 Well, they're gonna say that there's an arm length business 0:07:26.320 --> 0:07:32.120 deal that this occurs and that it may be unseemly, 0:07:32.320 --> 0:07:35.760 but as we heard from David Pecker, it occurs all 0:07:35.800 --> 0:07:39.400 the time with famous stars Hulk Hogan and the likes 0:07:39.800 --> 0:07:43.640 Karen McDougall. And she was just another person who was 0:07:43.760 --> 0:07:48.160 capitalizing on a story to sell. You might not like that, 0:07:48.680 --> 0:07:53.000 but look, people sell kiss and tell books all the time. 0:07:53.080 --> 0:07:55.480 People make a fortune, you know, coming out of government 0:07:55.560 --> 0:07:58.520 saying let me tell you the behind the scenes story, 0:07:58.560 --> 0:08:01.000 what I did to save the union sort of stuff. 0:08:01.120 --> 0:08:04.680 So how does she fit in differently than that? 0:08:05.360 --> 0:08:08.600 I was surprised that the defense didn't object that much 0:08:08.800 --> 0:08:11.920 while she was giving this testimony. Yet when it came 0:08:12.040 --> 0:08:14.840 time to make the motion for a mistrial, part of 0:08:14.880 --> 0:08:17.720 what they were objecting to were the salacious details in 0:08:17.760 --> 0:08:18.560 her testimony. 0:08:19.440 --> 0:08:23.640 Well, you can argue that they waved it, or that 0:08:24.160 --> 0:08:28.080 they made a strategic choice, and whether they've waived or 0:08:28.120 --> 0:08:32.880 made a strategic choice to allow this in somehow limits 0:08:32.920 --> 0:08:36.080 there after the fact argument that we were prejudiced by it, 0:08:36.120 --> 0:08:40.080 and we saw the judge denied it. So I think 0:08:40.120 --> 0:08:45.520 though that on this questions of missionary position and pajamas 0:08:45.559 --> 0:08:49.040 and boxer shorts and honeybunch and all that sort of stuff. 0:08:49.440 --> 0:08:53.320 Her testilony is going to boil down to the fact 0:08:53.360 --> 0:08:56.720 that it is credible that she had an affair with 0:08:56.800 --> 0:09:01.600 Donald Trump, and it is credible that Mike Cohen and 0:09:01.640 --> 0:09:05.520 she on behalf of Trump entered into a contract to 0:09:05.600 --> 0:09:08.480 suppress her story. That's the heart of what the prosecution 0:09:08.640 --> 0:09:11.440 needs to have the jury believe. All the other stuff 0:09:11.960 --> 0:09:15.160 is essentially collateral to the main argument that they will make. 0:09:15.480 --> 0:09:18.800 So the prosecution says they have about two more weeks 0:09:18.920 --> 0:09:21.520 of trial, which was surprising, I think to a lot 0:09:21.520 --> 0:09:24.880 of people. What do you think about the placement of 0:09:24.920 --> 0:09:27.160 her as a witness? Does it say that Michael Cohen 0:09:27.240 --> 0:09:29.760 is coming up next? Or can you see what they're 0:09:29.760 --> 0:09:31.120 doing with their witnesses. 0:09:31.760 --> 0:09:34.640 Yeah, they seem to be running a pattern of big 0:09:34.720 --> 0:09:40.960 name then document evidence, big name than document evidence, and 0:09:41.000 --> 0:09:44.040 so I'm not sure what the document evidence is that 0:09:44.120 --> 0:09:46.679 will follow Stormy Daniels, but I expect that there will 0:09:46.720 --> 0:09:50.800 be some additional low key people so that the jury 0:09:50.840 --> 0:09:54.560 can catch its breath before they bring on Cohen. My 0:09:54.679 --> 0:09:58.120 big question to myself is is Coen going to be 0:09:58.200 --> 0:10:01.520 their cleanup hitter? Is he the last Hurrah? Or are 0:10:01.559 --> 0:10:04.240 they going to put him on and then try to 0:10:04.280 --> 0:10:09.040 introduce additional financial documents to support what he has to say. 0:10:09.120 --> 0:10:11.679 That's I think a tricky decision for the prosecutors. 0:10:12.000 --> 0:10:14.080 Yeah, I mean, would you want to end with Michael 0:10:14.160 --> 0:10:16.160 Cohen because the defense is going to have a field 0:10:16.240 --> 0:10:16.760 day with him? 0:10:17.240 --> 0:10:20.080 Exactly. I wouldn't want to end with him. I would 0:10:20.200 --> 0:10:23.880 want him to be somewhere in like the seventh inning, 0:10:23.960 --> 0:10:27.360 if you will, and we can bring in Mariano Rivera. 0:10:27.840 --> 0:10:32.280 If Michael Cohen is a seventh inning witness, who is 0:10:32.320 --> 0:10:36.000 the Mariano Rivera? Who is their closer to make the 0:10:36.080 --> 0:10:39.160 case to the jury that before closing arguments that they've 0:10:39.240 --> 0:10:41.240 proved it beyond a reasonable doubt. And I just don't 0:10:41.240 --> 0:10:42.120 know who that is yet. 0:10:42.480 --> 0:10:44.520 It will be a while before that witness takes the 0:10:44.600 --> 0:10:48.360 stand though, Thanks so much, Michael. That's former federal prosecutor 0:10:48.440 --> 0:10:51.840 Michael Zelden. Coming up next on the Bloomberg Law Show. 0:10:52.120 --> 0:10:58.800 The government's landmark anti trust case against Google. It's the 0:10:58.840 --> 0:11:02.679 biggest anti trust challenge in more than two decades. The 0:11:02.720 --> 0:11:07.719 federal government's antitrust case against Google. The government claims that 0:11:07.800 --> 0:11:12.080 Google has illegally maintained a monopoly over online search and 0:11:12.160 --> 0:11:16.400 related advertising. Judge Ammett Meta heard from more than fifty 0:11:16.440 --> 0:11:19.360 witnesses in a ten week trial that wrapped up on 0:11:19.520 --> 0:11:24.520 May third. However, closing arguments didn't take place until last week. 0:11:25.040 --> 0:11:28.920 Joining me is Jennifer Reed, Bloomberg Intelligence Senior litigation analyst. 0:11:29.760 --> 0:11:33.080 Jen Why are the closing arguments taking place so long 0:11:33.160 --> 0:11:34.559 after the testimony? 0:11:35.120 --> 0:11:37.000 You know, I think in this case, there was a 0:11:37.040 --> 0:11:40.920 lot of evidence and complicated evidence, and I really think 0:11:40.960 --> 0:11:42.800 he wanted to be able to go through it all, 0:11:42.880 --> 0:11:45.320 to walk back through all the documents from the trial, 0:11:45.679 --> 0:11:48.760 maybe go back through transcripts from the experts, to really 0:11:48.880 --> 0:11:51.559 understand the case and understand the facts of the case 0:11:51.840 --> 0:11:55.680 and understand what both sides were alleging before the closing arguments. 0:11:55.720 --> 0:11:58.280 And I think that was really evident because he was 0:11:58.320 --> 0:12:00.640 so active. I mean, some closing are arguments are just 0:12:00.679 --> 0:12:03.280 the lawyers standing up making their case. There might be 0:12:03.320 --> 0:12:06.200 a few questions, but he was questioning all of the 0:12:06.280 --> 0:12:08.760 lawyers the entire way through, and it was very clear 0:12:09.120 --> 0:12:11.679 that he was very well acquainted with the evidence and 0:12:11.800 --> 0:12:15.679 very well acquainted with the precedent that both sides had cited. 0:12:15.840 --> 0:12:18.480 In their various papers or that just you know, he 0:12:18.600 --> 0:12:21.680 understood was relevant to the case, and I think that's 0:12:21.679 --> 0:12:23.120 why he took so much time. 0:12:23.960 --> 0:12:27.920 So he said, Judge Meta, the importance and significance of 0:12:27.960 --> 0:12:30.400 this case is not lost on me, not only for 0:12:30.559 --> 0:12:34.440 Google but for the public. Well, how important is this case? 0:12:35.400 --> 0:12:38.080 Well, I think that has a lot of importance. First, 0:12:38.160 --> 0:12:42.880 because it's actually the very first monopolization lawsuit the Department 0:12:42.920 --> 0:12:46.040 of Justice has brought against a tech company since the 0:12:46.120 --> 0:12:48.520 nineteen nineties. I mean, that's a long time. 0:12:48.679 --> 0:12:48.880 Now. 0:12:48.920 --> 0:12:51.000 I limit that to the Department of Justice because the 0:12:51.040 --> 0:12:54.760 Federal Trade Commission did sue Qualcomm for monopolization back in 0:12:54.760 --> 0:12:57.760 twenty seventeen, so we had that suit, But there was 0:12:57.960 --> 0:13:00.680 just this long period of time where we had very 0:13:00.720 --> 0:13:05.440 few government enforcement monopolization suits period, and nothing against the 0:13:05.480 --> 0:13:08.600 tech companies. And this is the very first one. So 0:13:08.920 --> 0:13:11.880 in some ways it kind of sets the tone. I 0:13:11.920 --> 0:13:13.560 don't want to say it sets any kind of a 0:13:13.600 --> 0:13:16.080 groundwork for the others to come, the trials to come 0:13:16.120 --> 0:13:20.560 against Amazon, Meta, Google for other conduct, and Apple, because 0:13:20.600 --> 0:13:24.400 we're talking about different markets, different companies, different kinds of conduct. 0:13:24.440 --> 0:13:27.280 Really each case is quite different, but it kind of 0:13:27.320 --> 0:13:30.439 sets the tone for going forward. And I think it's 0:13:30.440 --> 0:13:34.280 also important because it's likely we don't know yet, but 0:13:34.360 --> 0:13:36.839 it's likely that if the Department of Justice does win 0:13:36.880 --> 0:13:41.120 on liability, that they'll seek some sort of a structural remedy, 0:13:41.200 --> 0:13:44.200 some sort of a breakup of the company. And that 0:13:44.400 --> 0:13:46.680 is also something that hasn't happened in a long time 0:13:47.040 --> 0:13:51.160 and something that's very rarely tested out. And this judge 0:13:51.200 --> 0:13:52.960 is going to be put to the test and we'll 0:13:52.960 --> 0:13:55.560 have to see what happens with that. But it's important 0:13:55.600 --> 0:14:00.160 for presidential reasons, for historical reasons, and I think it's 0:14:00.200 --> 0:14:02.760 just the very first effort we're seeing in the US 0:14:03.160 --> 0:14:06.440 to try to contain the power and the dominance of 0:14:06.480 --> 0:14:07.600 a big tech platform. 0:14:08.440 --> 0:14:12.640 So is the first question defying the market? Yes, just 0:14:12.679 --> 0:14:14.640 to remind us why that's important. 0:14:15.200 --> 0:14:18.880 Right, So, for any monopolization suit, there are a series 0:14:18.880 --> 0:14:21.680 of steps that the plaintiff has to go through and 0:14:21.760 --> 0:14:24.160 if they fail at any of one of those steps, 0:14:24.320 --> 0:14:27.360 they lose the case. Right, So they have the burden 0:14:27.440 --> 0:14:30.760 of proving what the relevant antitrust market is and what 0:14:30.800 --> 0:14:34.800 that means is what is the sphere of competition? This 0:14:34.840 --> 0:14:38.400 is about Google Search, the search engine. So what other 0:14:38.680 --> 0:14:43.640 search services out there does Google compete with? And why 0:14:43.720 --> 0:14:46.040 is that important, June is because the next step they 0:14:46.080 --> 0:14:48.480 have to prove that Google has a monopoly in that market, 0:14:48.680 --> 0:14:50.480 and you have to know who else is in the 0:14:50.480 --> 0:14:53.880 market to determine the market shares and whether Google has monopoly. 0:14:54.080 --> 0:14:57.120 So you start there and on that one, obviously, you 0:14:57.160 --> 0:15:01.760 know the lawyers will disagree across everything contended by the plaintiffs, 0:15:01.880 --> 0:15:04.800 but at least on this one, the Department of Justice 0:15:04.840 --> 0:15:07.800 alleges that the market is general search services, and you 0:15:07.880 --> 0:15:11.760 see very few competitors there. That's Google, it's being it's Duck, 0:15:11.840 --> 0:15:14.880 duc Go. There was another entrant called Neba that has 0:15:14.920 --> 0:15:18.040 exited the market. And these are the search engines where 0:15:18.080 --> 0:15:20.160 you can go and ask them anything, Right, They're going 0:15:20.240 --> 0:15:22.440 to scan the entire Internet, so you can go in 0:15:22.480 --> 0:15:25.480 and look for anything. And what Google's argue here is 0:15:25.480 --> 0:15:27.600 that no, no, no, no, no, the market's a lot broader 0:15:27.760 --> 0:15:29.880 because some of the searches you can do on Google 0:15:29.960 --> 0:15:33.000 you can also do elsewhere. You can search for items 0:15:33.040 --> 0:15:35.280 you might want to shop or on Amazon. You can 0:15:35.320 --> 0:15:38.240 search for travel deals on Kayak or any other number 0:15:38.240 --> 0:15:41.320 of travel websites. So you have to consider those companies 0:15:41.320 --> 0:15:44.520 our competitors too. So there's this argument about how broad 0:15:44.560 --> 0:15:47.520 the market is, and that's important because the broader it is, 0:15:47.560 --> 0:15:51.520 the lower Google's market share is, and DOJ has to 0:15:51.600 --> 0:15:54.960 prove that that market share is somewhere up over sixty 0:15:55.040 --> 0:15:57.840 or seventy percent in order to establish that it has 0:15:57.880 --> 0:15:58.560 a monopoly. 0:16:00.160 --> 0:16:03.440 Said, certainly, I don't think the average person would say, yeah, 0:16:03.680 --> 0:16:07.160 Google and Amazon are the same. Is that a signal 0:16:07.280 --> 0:16:11.800 that he's accepting the Justice Department's definition of the market? 0:16:12.000 --> 0:16:15.200 I think for everything, for anything that they discussed at 0:16:15.240 --> 0:16:17.040 this trial, this is the one area where I think 0:16:17.120 --> 0:16:19.560 it's pretty clear where the judge is going to come out. 0:16:19.960 --> 0:16:22.320 I think that you just highlighted I think one of 0:16:22.360 --> 0:16:24.960 the most important statements that he made with respect to 0:16:25.000 --> 0:16:27.760 the relevant market that suggests he's going to align with 0:16:27.800 --> 0:16:30.920 the DOJ on this. He also ruled in a merger 0:16:31.040 --> 0:16:34.680 trial when US Food Srancisco tried to merge that had 0:16:34.720 --> 0:16:37.960 some similar concepts that were being discussed with respect to 0:16:38.000 --> 0:16:40.840 the relevant market, whether some of the niche players that 0:16:40.920 --> 0:16:43.880 could substitute were part of what the companies did, whether 0:16:43.920 --> 0:16:45.600 they were in the market, and in that case, he 0:16:45.680 --> 0:16:48.320 decided they were not, and so that would be aligned 0:16:48.360 --> 0:16:50.800 with the judge siding with the DOJ on market here. 0:16:50.840 --> 0:16:52.960 And I think, look, you and I can think about 0:16:52.960 --> 0:16:57.160 this as consumers, and in my opinion, really Google doesn't 0:16:57.200 --> 0:17:00.240 compete with Amazon for search. You know, even if I'm 0:17:00.240 --> 0:17:03.720 searching to buy some item of clothing, I probably would 0:17:03.720 --> 0:17:05.840 actually start on Google, even though I think some would 0:17:05.840 --> 0:17:07.960 start on Amazon. But the fact of the matter is 0:17:08.000 --> 0:17:10.919 you can't do on Amazon everything you can do on Google. 0:17:11.560 --> 0:17:14.600 I agree, right, So I think the DJA wins on that. 0:17:14.840 --> 0:17:17.600 The advertising part of this is that part of the 0:17:17.640 --> 0:17:19.080 marketers at a different question. 0:17:19.480 --> 0:17:22.200 So that's the second market. They've argued that Google's causing 0:17:22.200 --> 0:17:24.840 harm in two different markets. So the first market is 0:17:24.880 --> 0:17:28.080 this general search engine services market, and that was the 0:17:28.080 --> 0:17:30.760 first day they talked about that. And the second market 0:17:30.880 --> 0:17:34.880 is search advertising. Now, search advertising is different from other 0:17:34.920 --> 0:17:37.239 advertising on the Internet. These are the ads that come 0:17:37.320 --> 0:17:39.840 up when I do a search on Google, right, So 0:17:40.280 --> 0:17:44.240 that's a specific kind of advertising because the advertiser has 0:17:44.240 --> 0:17:47.120 an indication of what that user is interested in. I'm 0:17:47.119 --> 0:17:50.040 doing a search, and let's say I'm searching for pickleball clothes, 0:17:50.200 --> 0:17:52.480 you know, and I don't even know why. I hope 0:17:52.600 --> 0:17:55.359 not because I don't play pickleball, so I don't even 0:17:55.400 --> 0:17:57.600 know why I said that, but all my friends do. 0:17:58.440 --> 0:18:02.280 But anyway, then the advertiser understands the user has this 0:18:02.359 --> 0:18:05.000 interest in pickleball, right, so they can send this targeted 0:18:05.000 --> 0:18:08.000 ad because there's this search, that kind of search. And 0:18:08.160 --> 0:18:12.040 there was some evidence that advertisers view these general search 0:18:12.119 --> 0:18:15.639 ads as different from putting ads elsewhere. Let's say I 0:18:15.640 --> 0:18:18.560 OPENCNN dot com to read some news. There would be 0:18:18.600 --> 0:18:21.240 different ads there. They view that as a different kind 0:18:21.280 --> 0:18:24.840 of a target, right, and not substitutable. So what the 0:18:24.920 --> 0:18:28.439 DJ's arguing is that general search ads are also that 0:18:28.640 --> 0:18:29.679 is a relevant market. 0:18:30.680 --> 0:18:33.800 So explain this comment to me. The judge said, unlike 0:18:33.880 --> 0:18:37.119 wrapping a sandwich in newspaper instead of sell a faith, 0:18:37.640 --> 0:18:40.240 if you move your ad money from Google to Amazon, 0:18:40.320 --> 0:18:43.800 you're not wrapping your ad in newspaper, right. 0:18:43.960 --> 0:18:47.200 So, in other words, when the Department of Justice is 0:18:47.240 --> 0:18:49.600 trying to argue that no, no, no, no, no, you know, 0:18:49.960 --> 0:18:53.000 advertisers can't substitute. They don't get the return on investment, 0:18:53.080 --> 0:18:56.760 they can't substitute to some other website, he's saying, oh no, no, No, 0:18:56.800 --> 0:19:01.600 Amazon is a great website, you know, Yelp a great website, Facebook, 0:19:02.160 --> 0:19:06.280 you know, huge dominant social networking company that's hugely valuable 0:19:06.280 --> 0:19:09.240 to the advertisers to advertise there. So what he's saying 0:19:09.320 --> 0:19:13.080 is that it's not jump change as compared to advertising 0:19:13.119 --> 0:19:15.919 on a Google search page. That it's very good and 0:19:15.960 --> 0:19:19.639 it's almost equivalent. So it's less clear for that market 0:19:19.720 --> 0:19:21.879 June whether or not the judge is going to accept 0:19:21.920 --> 0:19:23.280 the DJ's market definition. 0:19:23.760 --> 0:19:27.480 In twenty seventeen, Google ran an experiment over several weeks 0:19:27.480 --> 0:19:31.040 and found it could increase prices five to fifteen percent 0:19:31.160 --> 0:19:34.560 while still growing revenue. And he said that's something that 0:19:34.600 --> 0:19:36.120 only a monopolist could. 0:19:35.880 --> 0:19:40.000 Do, right, right, because in the precedent, the definition of 0:19:40.040 --> 0:19:43.600 a monopolist is a company that has the power to 0:19:44.280 --> 0:19:49.040 basically control price or reduce output without losing any profitability. 0:19:49.600 --> 0:19:53.159 So this is evidence that Google can's the sort of 0:19:53.200 --> 0:19:56.120 price anyway they want to for these search ads and 0:19:56.480 --> 0:19:59.560 not lose profit by doing it, not have advertisers flee 0:20:00.080 --> 0:20:03.000 go place their ads somewhere else. And that suggests that 0:20:03.080 --> 0:20:05.159 they do have monopoly power and that that is a 0:20:05.200 --> 0:20:08.280 relevant market because it suggests that the advertisers say, well, 0:20:08.560 --> 0:20:11.280 I'm just going to accept that price increase because I 0:20:11.400 --> 0:20:14.800 have to advertise here. There isn't some other substitute where 0:20:14.880 --> 0:20:16.879 I'm going to get, you know, the return for my 0:20:16.920 --> 0:20:18.280 investment that I will hear. 0:20:18.600 --> 0:20:21.359 So what were some of the other questions that went 0:20:21.440 --> 0:20:24.040 to whether Google is a monopolist? 0:20:24.280 --> 0:20:26.560 So two different markets, so we're sort of talking about 0:20:26.600 --> 0:20:28.919 two different things. But let's if we start with the 0:20:29.000 --> 0:20:32.080 search engine market. You know, basically they just said, hey, 0:20:32.200 --> 0:20:34.280 you know, if this is the market, they had evidence 0:20:34.320 --> 0:20:37.840 that Google shares anywhere, you know, over eighty percent, And 0:20:37.880 --> 0:20:40.080 I think, to us, that's not a big surprise, right 0:20:40.119 --> 0:20:42.800 because your other options in the US are being inductucco 0:20:43.000 --> 0:20:45.280 And I think I use Google all the time. Most 0:20:45.320 --> 0:20:47.160 of the people I know use Google all the time, 0:20:47.440 --> 0:20:49.880 so that's not a surprise. So I think they get 0:20:49.920 --> 0:20:53.520 there there, you know, on the search advertising. If he 0:20:53.600 --> 0:20:56.760 accepts that market and doesn't broaden the market out to 0:20:56.960 --> 0:21:00.280 advertising elsewhere digitally and not just through a firstal that 0:21:00.320 --> 0:21:04.360 cut the results page for search, then I think the 0:21:04.400 --> 0:21:07.840 evidence that the DOJ presented that they have monopoly power 0:21:07.880 --> 0:21:10.480 there was about this ability to kind of willing nearly 0:21:10.560 --> 0:21:14.040 raise the price anytime they wanted, and any percentage that 0:21:14.080 --> 0:21:16.919 they wanted without losing business or at least without losing 0:21:17.320 --> 0:21:21.680 the profitability. So these are their ways of showing that 0:21:21.800 --> 0:21:24.600 in these relevant markets, Google has monopoly power. Those are 0:21:24.600 --> 0:21:26.720 the first two steps. That's not the end of the inquiry, 0:21:26.760 --> 0:21:28.840 but those are the first two steps the dj has 0:21:28.880 --> 0:21:30.520 to get through to get to the next step. 0:21:30.960 --> 0:21:32.920 And the next step is have. 0:21:32.960 --> 0:21:36.720 They engaged in an anti competitive conduct? Because June, it's 0:21:36.760 --> 0:21:39.000 not illegal to have a monopoly, you know, it's not 0:21:39.160 --> 0:21:42.800 illegal to have a monopoly positioned. So just proving that 0:21:42.840 --> 0:21:46.199 Google has a monopoly position in these two markets is 0:21:46.280 --> 0:21:50.840 not enough. There has to be exclusionary anti competitive conduct 0:21:50.920 --> 0:21:54.240 intended to hold on to that monopoly. So it really 0:21:54.320 --> 0:21:59.679 means conduct that has no other reason. There's no justification 0:21:59.720 --> 0:22:02.640 for the conduct, but for to hold back my rivals 0:22:02.680 --> 0:22:05.639 and hold on to my position. That's really what that is. 0:22:05.880 --> 0:22:08.199