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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 1: Google is back on trial just one month after losing

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Speaker 1: a landmark ruling finding that it illegally monopolizes Internet search.

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Speaker 1: Now the Justice Department is alleging that Google monopolizes the

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Speaker 1: six hundred and seventy seven billion dollar advertising market. Joining

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Speaker 1: me is Bloomberg Anti Trust reporter Leah Nylan, who's covering

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Speaker 1: the trial and joins us from the courthouse tell us

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Speaker 1: about the government's case against Google.

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Speaker 2: So, the Justice Department alleges that Google has illegally monopolized

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Speaker 2: the ad tech tool market. This is a market that

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Speaker 2: most consumers are probably not familiar with at all, because

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Speaker 2: it is sort of the plumbing behind online advertising, and

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Speaker 2: so it's the way that websites put, you know, ads

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Speaker 2: up for sale and advertiseers buy them.

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Speaker 3: So it's a.

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Speaker 2: Lot of technically complicated stuff, but it is the way

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Speaker 2: that Google makes billions of dollars each year. And so

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Speaker 2: the government alleges that they have monopolized this market by

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Speaker 2: buying up some rival competitors who are going to offer

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Speaker 2: different products, controlling the way that their customers are able

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Speaker 2: to interact with rivals. And changing sort.

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Speaker 3: Of the rules of the game.

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Speaker 2: Midstream, because a lot of these ads are actually sold auctions,

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Speaker 2: and Google controls that auction and therefore can change some

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Speaker 2: of the rules behind how those auctions work.

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Speaker 1: In the opening statement, the Justice Department's attorney said, what

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Speaker 1: we have is a trifecta of monopolies here. What did

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Speaker 1: she mean.

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Speaker 2: Yeah, they're actually alleging that there are three separate monopolies

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Speaker 2: that Google has. One of them is on what they

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Speaker 2: call the publisher side. That means some of the tools

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Speaker 2: that are used by websites to help put their adspace

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Speaker 2: up for sale. Those are called the ad server market.

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Speaker 3: They have alleged that there is a.

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Speaker 2: Market for the advertising exchanges. These are just like a

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Speaker 2: stock exchange, is where the advertisements are bought and sold.

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Speaker 2: And the third one is the advertiser side tools.

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Speaker 3: This is the tools that.

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Speaker 2: The advertisers use to put their ads out there for sale.

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Speaker 1: Google's attorney what did they stress in their openings?

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Speaker 3: Yeah.

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Speaker 2: Google stressed a couple different things in their opening statement.

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Speaker 2: The first one was that, you know, the market, in

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Speaker 2: their view, is very competitive. They compete against a lot

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Speaker 2: of different companies in a lot of different types of advertising,

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Speaker 2: and they say that the Justice Department has sort of

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Speaker 2: gerrymandered a market here to sort of bring their case. So,

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Speaker 2: the Justice Department alleges that Google has monopolized the open

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Speaker 2: web display advertising. This is the display ads, the sort

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Speaker 2: of the things that you see on like blogs or

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Speaker 2: news websites, sports websites, things like that.

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Speaker 3: They often appear at the top of the page.

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Speaker 2: Or like beside the content that you're reading. And Google

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Speaker 2: argues that there are lots of other types of advertising.

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Speaker 2: You know, you can advertise on social media, you can

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Speaker 2: advertise in video, you can advertise all sorts of places,

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Speaker 2: and it's weird, in their opinion for the Justice Department

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Speaker 2: to be focused in on this one. They have two

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Speaker 2: other arguments legally.

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Speaker 3: One of them is.

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Speaker 2: That they don't actually have an obligation under the antitrust

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Speaker 2: law to do business with anyone. So if they decide

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Speaker 2: that they don't want to make the tools that they

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Speaker 2: use for advertising work with.

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Speaker 3: Other people's tools, that that's completely fine.

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Speaker 2: And then their third argument is that we should really

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Speaker 2: think about this not as open web display advertising, but

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Speaker 2: as a transaction, almost like a credit card.

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Speaker 3: And under the law the.

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Speaker 2: Supreme Court had made of rulings about how to think

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Speaker 2: about markets in what they call two side transaction platforms,

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Speaker 2: and so Google is arguing that that sort of legal

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Speaker 2: overlay should apply here.

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Speaker 1: I like this line by the Google attorney. There's no

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Speaker 1: such thing as open web display advertising. She accused the

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Speaker 1: government of trying to open a time capsule that would

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Speaker 1: reveal a BlackBerry iPod and a Blockbuster video card.

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Speaker 3: Yes, it was a pretty good line.

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Speaker 2: Essentially, what they are saying is like, maybe at one

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Speaker 2: point in time, the in networked this way, but lots

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Speaker 2: of things have moved on, and the government is still

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Speaker 2: very focused on what, in Google's view is a vision

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Speaker 2: of the market that no longer exists anymore.

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Speaker 1: And so Google also this echoed the argument that we

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Speaker 1: heard in the other Google anti trust case that it's

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Speaker 1: end to end integration makes the technology more efficient and

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Speaker 1: secure and reliable. On that marketers and publishers choose it

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Speaker 1: because they're superior, not because they don't have any other options.

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Speaker 1: And in the other antitrust trial that they lost, they

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Speaker 1: said that, you know, Google's just better, that's why people

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Speaker 1: come to Google.

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Speaker 2: Yeah, they're making a similar argument here. You know, they

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Speaker 2: have pointed out that there are a lot of other options,

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Speaker 2: both for where you can buy advertising and.

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Speaker 3: For how you can buy advertising.

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Speaker 2: So you can do it through Google's tools, but there

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Speaker 2: are certainly other companies that offer similar tools that you

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Speaker 2: can buy these same ads through. And so their argument is,

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Speaker 2: you know, people are using these tools because they're well

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Speaker 2: known and sort of trusted. The government's response is actually

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Speaker 2: pretty similar to the previous case. They argue that, you know,

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Speaker 2: in these kinds of markets, scale is really important, So

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Speaker 2: like the publishers want to go to where the advertisers are,

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Speaker 2: and the advertisers want to go to where the publishers are.

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Speaker 2: And because Google owns the ad server part on.

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Speaker 3: The publisher side, and they also own the other.

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Speaker 2: Tools for publishers, you know, they sort of have an

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Speaker 2: advantage here that a lot of other players.

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Speaker 3: Do not have.

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Speaker 2: And while now Google has this what they call an

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Speaker 2: integrated stack, for a long time that wasn't true. Nobody

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Speaker 2: had an integrated stack. These were all sort of separate products,

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Speaker 2: and the government argues that maybe they should be separated

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Speaker 2: because they keep going back to this thing that you've

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Speaker 2: seen in a lot of Google's documents, which there have

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Speaker 2: been some emails in which people have suggested it's a

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Speaker 2: little bit like Google is operating both like Goldman Sachs

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Speaker 2: a trader and the New York Stock Exchange the place

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Speaker 2: where they're making trade. And in the financial world, that

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Speaker 2: would never be allowed, like you would not allow somebody

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Speaker 2: who is transacting on the platform to also own the platform.

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Speaker 2: But here Google does own.

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Speaker 3: All of the pieces, the buy side, the cell side.

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Speaker 2: And the platform itself, and that represents sort of a

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Speaker 2: conflict of interest that the Justice Department says is very problematic.

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Speaker 1: Who has the Justice Department put on the stand?

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Speaker 3: So far, we've actually been gone really fast.

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Speaker 2: I think we're on like Witness eight or nine.

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Speaker 3: A really yes.

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Speaker 2: So the various parts. We've heard from two website publishers,

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Speaker 2: Gannett and News Corps, and they've talked a little bit

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Speaker 2: about how that kine in online advertising has significantly impacted

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Speaker 2: their business. They've had to, you know, shut our publications

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Speaker 2: and fire journalists because they're just not getting as much

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Speaker 2: advertising through these online tools as they used to. We've

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Speaker 2: also heard from a couple rivals who offer other ad

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Speaker 2: tech tools that are similar to what Google offers. So

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Speaker 2: we heard from another company that is an exchange called

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Speaker 2: index Exchange, and we heard from another company that offers

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Speaker 2: an ad server. It's a little bit different from Google,

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Speaker 2: and their argument was that they tried to initially get

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Speaker 2: in the same market as Google and they couldn't because

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Speaker 2: it was sort of the gorilla in the room. And

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Speaker 2: we've also heard from two former Google employees so far

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Speaker 2: who worked on the display ad business and sort of

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Speaker 2: had a hand in how some of these tools were developed.

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Speaker 1: Does the government intend to also call people who are

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Speaker 1: still at Google.

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Speaker 2: Yes, they do plan to call some folks who are

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Speaker 2: still at Google. I think they're trying to get through

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Speaker 2: some of what we might call like the victim witnesses first,

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Speaker 2: so they were trying to establish some of the harm

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Speaker 2: from Google's conduct. But they do have a number of

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Speaker 2: Google witnesses that they plan to call. The most senior

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Speaker 2: one is Neil Mohan. He is actually now the CEO

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Speaker 2: of YouTube, but for a long time he was very

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Speaker 2: involved in Google's display advertising business. And then after him,

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Speaker 2: the most sort of senior person is somebody by the

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Speaker 2: name of Don Harrison. He's a pretty senior executive at Google.

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Speaker 3: He didn't testify in the search trial.

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Speaker 2: That he did testify in the Epics trial that was

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Speaker 2: over Android.

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Speaker 1: Well, those are going to be very interesting witnesses to see,

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Speaker 1: you know, hostile witnesses. And who does Google plan to call?

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Speaker 2: Yeah, most of the people Google plans to call are

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Speaker 2: again its own employees, because they are hoping to sort

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Speaker 2: of show that, you know, Google has really innovated in

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Speaker 2: the market. Their argument is that they've made a lot

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Speaker 2: of changes to make this ecosystem better. In particular, they've

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Speaker 2: spent a lot of resources trying to focus on rooting

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Speaker 2: out like.

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Speaker 3: BAM and ad fraud.

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Speaker 2: So they plan to call a number of witnesses who

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Speaker 2: will talk about Google's efforts there and why some of

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Speaker 2: the specific things that the government alleges their anti competitive were,

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Speaker 2: in their views, sort of done for legitimate business purposes.

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Speaker 1: Is the government call for a breakup of Google's ad

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Speaker 1: tech business here?

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Speaker 2: Yes, they are specifically calling for a breakup of the business.

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Speaker 3: Here.

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Speaker 2: They argue that Google should not essentially be allowed to

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Speaker 2: operate on all sides of the market, you know, the

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Speaker 2: by side, the sell side, and the exchange, and that.

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Speaker 3: They should have to at least sell off one side

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Speaker 3: of that.

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Speaker 2: Google you know, maintains that that would really break the

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Speaker 2: sort of feamless experience that they've really created for marketers

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Speaker 2: and website publishers.

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Speaker 1: Yeah, because in the other trial, there's a possibility they

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Speaker 1: could ask for their breakup, but they didn't say that,

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Speaker 1: like right at the start.

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Speaker 2: Yeah, in this one they did, like right at the

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Speaker 2: very beginning, say that they thought a breakup was needed.

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Speaker 2: Here in part they have identified a couple of transactions

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Speaker 2: that Google has engaged in over the years, including in

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Speaker 2: particular the two thousand and eight acquisition of double Click,

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Speaker 2: and in that one they bought what has now become.

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Speaker 3: The exchange of Google's exchange.

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Speaker 2: And so they argue that that was in the complaint.

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Speaker 2: They have a nice phrase that that was the beginning

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Speaker 2: of marched to monopoly. But that transaction and then a

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Speaker 2: couple others that they outlined really gave Google the tools

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Speaker 2: to build this sort of ad empire, and that maybe

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Speaker 2: we should just unwind some of those transactions.

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Speaker 1: Google has lost the last two antitrust trials. A lot

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Speaker 1: seems to be riding on this for Google, and a

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Speaker 1: judge is going to decide this, right, there's no jury here, Yes.

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Speaker 2: There was no jury. It was initially going to be

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Speaker 2: a jury trial, but Google did a very interesting thing

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Speaker 2: in which it just agreed to pay the government's damages,

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Speaker 2: which were two point three million, and that obviated the

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Speaker 2: need for a jury, so it is now just a

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Speaker 2: judge trial. She is expected to rule sometime after the trial,

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Speaker 2: maybe even by the end of the year.

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Speaker 1: And how long is a trial expected to last?

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Speaker 2: So initially they were suggesting it might be four to

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Speaker 2: six weeks. They have, however, this week gone much much

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Speaker 2: faster than they had anticipated, in part because the judge

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Speaker 2: is really focused on moving things along very expeditiously, So

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Speaker 2: the current estimate is maybe.

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Speaker 1: Three to four Thanks so much, Lea. We'll catch up

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Speaker 1: with you when the trial ends. That's Bloomberg Anti trust

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Speaker 1: reporter Leah Niln coming up next on the Bloomberg Law Show.

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Speaker 1: It's a trial where lots of handbags are on display.

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Speaker 1: The Federal Trade Commission is suing to block Tapestry and

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Speaker 1: Capri from merging in an eight point five billion dollar deal.

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Speaker 1: This is Bloomberg. It's not often that a rack of

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Speaker 1: handbags is rolled into court as evidence. They range from

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Speaker 1: a green and white Kate Spade tote priced at two

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Speaker 1: hundred and seventy nine dollars to a one thousand, ninety

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Speaker 1: five dollars brown leather Coach Rogue handbag. There's the merch

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Speaker 1: and there's the money. In the anti trust trial that

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Speaker 1: will spell the fate of the eight point five billion

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Speaker 1: dollar deal to marry the Coach and Kate Spade brands

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Speaker 1: with Versace and Michael Core's joining me is Bloomberg Intelligence

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Speaker 1: senior litigation analyst Jennifer Ree, who's covering the trial. Jen

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Speaker 1: it's the FTC so in to stop this deal. Tell

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Speaker 1: us about the opening statements by its lawyer.

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Speaker 4: They actually say they have two theories of harm by

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Speaker 4: which they could block this deal. And it's sort of

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Speaker 4: what we think of as a typical horizontal deal, meaning

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Speaker 4: there are two companies that want to merge that have

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Speaker 4: products that compete against each other, So pretty straightforward, the

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Speaker 4: traditional kind of merger that has been challenged by the

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Speaker 4: FTC or Department of Justice in the past. And in

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Speaker 4: this case, what they're really looking at is handbags and

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Speaker 4: a market for what they call accessible luxury handbags and

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Speaker 4: what that really means. They're sort of the handbags in

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Speaker 4: the middle market. They say, it's not the ultra premium,

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Speaker 4: ultra luxury usually European handbags made by companies like Louis

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Speaker 4: Vuitan and Prada and Gucci, and it's not really these

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Speaker 4: mass market bags that are often not leather and usually sold,

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Speaker 4: you know, for under one hundred dollars. But it's kind

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Speaker 4: of what's in between. And if you look at that

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Speaker 4: piece of the market, Tapestry has Coach and Kate's Bade brands,

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Speaker 4: and Capri has the Michael Core's brand, And what the

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Speaker 4: FTCT says is, look, these are each other's primary competitors.

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Speaker 4: Coach and Kate Spade primarily see themselves as competing in

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Speaker 4: the US at least against Michael Core's, and Michael Corres

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Speaker 4: primarily sees itself as competing against Coach and Kate Spade.

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Speaker 4: And if you look at the other bags that are

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Speaker 4: within what they call the successible luxury market, the market

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Speaker 4: shares combined would be, according to the FTC, fifty eight percent,

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Speaker 4: and this would be a market that is unduly concentrated

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Speaker 4: and would be presumed harmful. So that's kind of one argument,

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Speaker 4: which is a fairly typical argument. They define a market,

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Speaker 4: they look at what the market shairs are in the market.

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Speaker 4: They look at what the concentration in the market would

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Speaker 4: be before and after the deal. Their second theory is

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Speaker 4: a somewhat novel one, and it comes out of new

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Speaker 4: guidelines that the Federal Trade Commission and Department of Justice

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Speaker 4: issued at the end of last year. Now, they've had

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Speaker 4: guidelines for many, many years that lay out how they

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Speaker 4: assess the deal and whether the deal violates the antitrust

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Speaker 4: laws or not. They're not binding on judges, but most

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Speaker 4: judges find them to be persuasive and have followed them.

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Speaker 4: This FTC updated the guidelines that happens periodically, as I said,

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Speaker 4: at the end of twenty twenty three, and they added

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Speaker 4: a new provision. And what that provision says is they

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Speaker 4: don't really have to define a market or lay out

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Speaker 4: what the combined market shares would be if they can

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Speaker 4: prove that the merging parties are each other's primary head

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Speaker 4: to head competitors, they constrain each other's pricing essentially in

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Speaker 4: the market, and that if they come together, that constraint

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Speaker 4: on pricing will be eliminated and they'll have the incentive

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Speaker 4: in the ability to increase price.

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Speaker 3: So they're also.

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Speaker 4: Relying on this new guideline in case the judge doesn't

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Speaker 4: buy this concept of an accessible luxury handbag market.

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Speaker 1: The FTC lawyer said in the opening statement that the

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Speaker 1: case is about working and middle class women who will

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Speaker 1: suffer harm if the acquisition goes through, harm because they

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Speaker 1: can't buy a semi luxury.

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Speaker 4: Harm because what they claim is that that sector of

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Speaker 4: the population or the primary buyers of these handbags, and

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Speaker 4: that there will be three hundred and sixty five million

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Speaker 4: dollars annually in increased prices across the three brands. That

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Speaker 4: is what the FTC's economist has calculated out through his modeling,

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Speaker 4: and that the primary buyers are a certain segment of

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Speaker 4: the population that tend to make under eighty thousand dollars

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Speaker 4: or up to about eighty thousand dollars a year, and

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Speaker 4: that these are the people that will be harmed.

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Speaker 1: Okay, it always seems odd to me because you don't

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Speaker 1: have to buy right a cold handbag.

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Speaker 4: Yeah, that's the thing that's so odd about this case.

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Speaker 4: It's a highly discretionary purchase. And as some of the

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Speaker 4: witnesses for the companies have said, understand, look, you know,

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Speaker 4: we compete for share of dollars spend. A person goes

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Speaker 4: into a store to buy something, they may decide to

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Speaker 4: buy that handbag, or they might decide to buy those

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Speaker 4: boots instead. And it's a very discretionary purchase. If the

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Speaker 4: price is too high, the buyer can walk away. And

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Speaker 4: that is what makes this case quite unusual. It's not

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Speaker 4: like FDC versus Kroger and Albertson. People must buy food, right,

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Speaker 4: but they don't have to necessarily buy a coach or

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Speaker 4: a Kate's bad or Michael Core's handbag.

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Speaker 1: So now tell us about the opening by Tapestry's lawyer.

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Speaker 4: Well, Tapestries lawyers I think have done a very very

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Speaker 4: good job. I mean what they said is they've portrayed

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Speaker 4: the market is being much more competitive, far more dynamic,

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Speaker 4: fast moving, competitive and changing and fragmented than what the

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Speaker 4: FTC is portrayed. Now, first they've said, look, there isn't

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Speaker 4: this successible luxury market. There's just this span of prices

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Speaker 4: that go from what you think of as a less

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Speaker 4: expensive mass market bag all the way up to the

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Speaker 4: thousands of dollars for these luxury bags. And that many

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Speaker 4: of consumers they survey have a lot of different bags

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Speaker 4: that widely varied price points within their closet, and that

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Speaker 4: the market's changed radically, including in the last few years

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Speaker 4: kind of the birth of or the growth of the

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Speaker 4: purchase of previously used handbags, which has become a big

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Speaker 4: thing both online and in some department stores. And that

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Speaker 4: the FTC is sort of not looking at the commercial

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Speaker 4: realities of the market as it is today, and that

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Speaker 4: a lot of the data that the economists use to

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Speaker 4: look at the market and to come up with this

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Speaker 4: theoretical three hundred and sixty five million annual harm to

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Speaker 4: consumers is based on data from twenty twenty one in

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Speaker 4: twenty two, and it's just not relevant anymore. And they

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Speaker 4: did a pretty good job, I think, at making that argument.

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Speaker 1: He said that Lawrence Butterman, anyone who took the subway

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Speaker 1: to court today, or walked on Broadway or Fifth or

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Speaker 1: has access to an iPhone or Android phone can see

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Speaker 1: that the FDC's claims about market competition are completely divorced

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Speaker 1: from reality.

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Speaker 4: Yeah. And the funny thing is that the company's lawyers

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Speaker 4: rolled into court the very first day with a big

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Speaker 4: rack full of all sorts of different handbags.

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Speaker 1: I was going to ask you that, And on that

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Speaker 1: cart there was one thousand dollars coach handbag yeah, so,

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Speaker 1: I mean, how does that fit their market definition?

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Speaker 4: Let's see you And that's the difficulty I think in

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Speaker 4: this market definition they sort of tentatively said that there

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Speaker 4: aren't really precise boundaries or parameters, but generally these accessible

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Speaker 4: luxury handbags range between one hundred dollars and one thousand dollars.

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Speaker 4: And that's the real difficulty of their market because it's

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Speaker 4: very hard to argue that one hundred dollars bag doesn't

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Speaker 4: compete with a ninety dollars bag, or that a thousand

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Speaker 4: dollars bag doesn't compete with let's say, one thousand and

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Speaker 4: fifty dollars bag. You know, the difficulty of defining a

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Speaker 4: market and putting the boundaries around where competition lies when

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Speaker 4: you have such a wide range of pricing and a

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Speaker 4: wide range of different consumers that have a different idea

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Speaker 4: about what they want or what they're willing to spend,

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Speaker 4: makes it difficult to come up with these market shairs.

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Speaker 4: And that's why the Federal Trade Commission is also relying

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Speaker 4: on that second theory coming from their new guidelines, that

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Speaker 4: they don't really have to do that that if they

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Speaker 4: can just prove that these two companies view each other

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Speaker 4: as their primary competitor and compete head to head.

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Speaker 3: That to us.

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Speaker 4: And the thing is, there are a lot of documents

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Speaker 4: that actually support company documents that support this assertion by

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Speaker 4: the FTC. It's the difficulty here, It's going to kind

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Speaker 4: of be what do the documents look like versus how

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Speaker 4: credible is the testimony of the witnesses, Because there are

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Speaker 4: plenty of documents where these companies call each other their

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Speaker 4: primary competitor or where they tend to compare their pricing

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Speaker 4: to just a small group that generally consists of Michael Core's,

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Speaker 4: Kate Spade, Coach, Mark Jacobs, and Toribirch. There seem to

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Speaker 4: be a lot of documents like that, and that does

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Speaker 4: suggest a smaller sphere of competition than what the witnesses

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Speaker 4: from the companies are portraying.

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Speaker 1: Yeah, because I mean a coach bag is going to

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Speaker 1: be more expensive than a Michael Core's bag, yes, right, generally,

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Speaker 1: and as is a Kate Spade bag. And you're talking about,

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Speaker 1: you know, a pretty wide difference there, right.

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Speaker 4: So the economists for the FTC basically said from his modeling,

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Speaker 4: coach bags sell at an average of one hundred and

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Speaker 4: forty seven dollars more than a Cores bag. And what

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Speaker 4: he calculated out via his modeling, which is quite complicated,

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Speaker 4: is that once tapped Street owns Capri and has the

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Speaker 4: Cores bag, they have the ability incentive to raise prices

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Speaker 4: because to the extent that they raise the price of

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Speaker 4: a Corps bag and lose sales, they're gaining enough of

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Speaker 4: those sales the substitute buy by. That buyer is going

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Speaker 4: to be a Coach or at kate'spadebag, and so they're

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Speaker 4: gaining backs enough to make it profitable to raise prices.

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Speaker 1: Can tell us about the first witnesses.

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Speaker 4: So the first witnesses were called by the SEC, but

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Speaker 4: they are company representatives. We had, you know, the CEO

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Speaker 4: of Capri, the CEO of Tapestry, you had the president

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Speaker 4: of Coach, you had a senior vice president from Tapestry,

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Speaker 4: and you know, I think that all of them across

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Speaker 4: the board have done a good job of basically saying

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Speaker 4: that they don't view Michael Core's bags as their primary competitor,

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Speaker 4: that they view competition as broad and dynamic and ever changing,

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Speaker 4: and that part of the reason that these documents only

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Speaker 4: reference this smaller set of competitors is because a lot

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Speaker 4: of their competitors aren't publicly traded. It's hard to get

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Speaker 4: the data, and these are the companies where there's an

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Speaker 4: ease of data. So it's just they can get the data,

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Speaker 4: they can get financial information, and they can easily compare

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Speaker 4: themselves to them. And they also say that they compare

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Speaker 4: themselves Tapestry to Capri and Capri to Tapestry. They compare

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Speaker 4: themselves quite a lot in earnings calls with investors because

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Speaker 4: they are similar companies in the eyes of investors, in

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Speaker 4: that they are two publicly traded American fashion houses, and

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Speaker 4: that's why they come up a lot as competitors in

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Speaker 4: these investor calls. So they did a good job of

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Speaker 4: sort of explaining away what I would call bad documents.

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Speaker 4: And that's why I kind of see this as you know,

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Speaker 4: which way is the judge going to go. Is she

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Speaker 4: going to say, no, the documents really tell me the story,

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Speaker 4: or are the witnesses really telling me the story? You know,

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Speaker 4: which is more credible in her eyes in terms of

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Speaker 4: making some decision here.

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Speaker 1: Has Michael core said it needs an infusion of capital.

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Speaker 1: They're not doing as well as they used to.

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Speaker 4: Their sales have been declining and they've lost what all

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Speaker 4: of the witness is called brand heat. I've never heard that,

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Speaker 4: but now I know.

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Speaker 1: I can feel it.

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Speaker 4: You can feel it that when a bag is hot,

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Speaker 4: a bag is hot, maybe Taylor Swift warret on a

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Speaker 4: picture on Instagram and that bag is now going to

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Speaker 4: be hot. And so they said Michael Cores at one

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Speaker 4: time had brand heat and seems to have lost the

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Speaker 4: brand heat and not been able to regain it, and

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Speaker 4: as the result, has had declining sales and in order

441
00:22:23,080 --> 00:22:27,040
Speaker 4: to move bags, has had to discount heavily. Now Tapestry says,

442
00:22:27,119 --> 00:22:29,840
Speaker 4: we can take that brand and we just have better

443
00:22:29,880 --> 00:22:33,960
Speaker 4: resources to revitalize it bring back the brand heat. Michael Cores, though,

444
00:22:34,040 --> 00:22:37,080
Speaker 4: seems to also within their ordinary course documents, have a

445
00:22:37,119 --> 00:22:40,000
Speaker 4: plan that they're implementing and plan to implement in the

446
00:22:40,000 --> 00:22:43,160
Speaker 4: future to try to again gain traction and gain momentum

447
00:22:43,200 --> 00:22:46,480
Speaker 4: and bring back that brand heat. So even though you know,

448
00:22:46,520 --> 00:22:48,960
Speaker 4: the argument here is that Tapestry can help them, they

449
00:22:49,000 --> 00:22:52,280
Speaker 4: seem to also have their own internal plan to revitalize.

450
00:22:52,280 --> 00:22:54,719
Speaker 4: So it's not so much about whether they need an

451
00:22:54,720 --> 00:22:57,920
Speaker 4: infusion of capital. It's more about, you know, can they

452
00:22:57,920 --> 00:23:00,000
Speaker 4: bring that brand back so that it's popular again.

453
00:23:00,600 --> 00:23:05,440
Speaker 1: So Wall Street's merger arbitrageres are currently giving Tapestry and

454
00:23:05,520 --> 00:23:08,679
Speaker 1: Capri a better than even chance of closing the transaction.

455
00:23:09,040 --> 00:23:10,560
Speaker 1: What does Jennifer Ree give it?

456
00:23:11,240 --> 00:23:12,120
Speaker 2: Well, I tell you.

457
00:23:12,080 --> 00:23:14,919
Speaker 4: I think I agree. You know, coming into the trial,

458
00:23:15,080 --> 00:23:17,960
Speaker 4: I was really very fifty to fifty on it. And

459
00:23:18,000 --> 00:23:20,080
Speaker 4: part of the problem here, June is that an enormous

460
00:23:20,240 --> 00:23:22,520
Speaker 4: amount of the documents are sealed, so we don't know

461
00:23:22,520 --> 00:23:24,560
Speaker 4: what they say. So I don't know how bad those

462
00:23:24,600 --> 00:23:27,480
Speaker 4: documents are that the judge will see. But I think

463
00:23:27,520 --> 00:23:30,360
Speaker 4: the company witnesses have seemed very credible to me. They

464
00:23:30,400 --> 00:23:32,320
Speaker 4: seem to be earnest. It doesn't seem to be a

465
00:23:32,359 --> 00:23:35,879
Speaker 4: lawyer argument that they're making, and what they're saying seems

466
00:23:35,920 --> 00:23:38,159
Speaker 4: to be common sense. And the market that just I,

467
00:23:38,280 --> 00:23:41,399
Speaker 4: as a consumer observed seems to align with what they're saying,

468
00:23:41,440 --> 00:23:44,000
Speaker 4: that it is dynamic, it is rapidly changing, and there

469
00:23:44,000 --> 00:23:46,040
Speaker 4: are a lot of options. And then the second thing

470
00:23:46,119 --> 00:23:49,679
Speaker 4: is that the FTC's economic expert testified yesterday morning, and

471
00:23:49,760 --> 00:23:53,200
Speaker 4: I felt like his conclusions were backed by data that

472
00:23:53,359 --> 00:23:56,040
Speaker 4: was just a little bit weak. I think that data

473
00:23:56,240 --> 00:24:00,760
Speaker 4: is difficult and the judge may not credit his conclusions

474
00:24:00,840 --> 00:24:04,520
Speaker 4: because the inputs are sketchy. You know, it is older data.

475
00:24:04,600 --> 00:24:07,840
Speaker 4: It's data from twenty twenty one. In twenty twenty and

476
00:24:07,960 --> 00:24:10,000
Speaker 4: some of the sales data he used came from a

477
00:24:10,040 --> 00:24:15,080
Speaker 4: database called NPD that tracks sales by brand, by wholesalers

478
00:24:15,080 --> 00:24:19,240
Speaker 4: that means just department stores that's at Dillard's, Macy's, Nordstrom.

479
00:24:19,280 --> 00:24:22,720
Speaker 4: And he was able to calculate chares essentially using that data.

480
00:24:22,760 --> 00:24:25,760
Speaker 4: But that data doesn't track all sales and handbags, I

481
00:24:25,760 --> 00:24:29,720
Speaker 4: mean people buy them online. It excludes the previously owned bags,

482
00:24:29,720 --> 00:24:32,520
Speaker 4: that excludes the e commerce direct to consumer, So it's

483
00:24:32,560 --> 00:24:34,440
Speaker 4: a little bit hard to rely on the market share

484
00:24:34,520 --> 00:24:36,840
Speaker 4: coming out of that data. And the second thing he

485
00:24:36,880 --> 00:24:39,160
Speaker 4: did caused me to shake my head a little bit

486
00:24:39,640 --> 00:24:43,520
Speaker 4: was that this NPD data categorized bags in many different

487
00:24:43,560 --> 00:24:49,960
Speaker 4: categories names like better, Premium, Active, Leisure, Moderate, Bridge, contemporary,

488
00:24:50,280 --> 00:24:54,000
Speaker 4: and he took two of those categories only Bridge and contemporary.

489
00:24:54,400 --> 00:24:56,879
Speaker 4: And you ask yourself, well, what if bags in the

490
00:24:56,880 --> 00:25:00,240
Speaker 4: other categories also compete, You're leaving them out. And he

491
00:25:00,280 --> 00:25:03,159
Speaker 4: didn't talk to the company that collects this data to

492
00:25:03,280 --> 00:25:06,240
Speaker 4: understand why they put different bags in different categories and

493
00:25:06,320 --> 00:25:08,640
Speaker 4: whether that was sort of the right category for accessible

494
00:25:08,720 --> 00:25:12,080
Speaker 4: luxury market that they're claiming, you know, is the appropriate market.

495
00:25:12,320 --> 00:25:14,800
Speaker 4: And in his opening statement, what the lawyer for the

496
00:25:14,800 --> 00:25:17,199
Speaker 4: company said was that if you do include one of

497
00:25:17,240 --> 00:25:21,400
Speaker 4: these other categories like better or active leisure, that their

498
00:25:21,400 --> 00:25:23,639
Speaker 4: combined market share has come down to below thirty percent,

499
00:25:23,800 --> 00:25:27,119
Speaker 4: and that's below the problematic level rather than fifty eight percent.

500
00:25:27,320 --> 00:25:31,199
Speaker 4: So it's hard to rely on what the FTC's expert

501
00:25:31,200 --> 00:25:34,000
Speaker 4: has done here. I don't think listening to that that

502
00:25:34,160 --> 00:25:36,080
Speaker 4: if I were the judge, that I could and I

503
00:25:36,119 --> 00:25:38,800
Speaker 4: think in reaction to that and in reaction to the

504
00:25:38,840 --> 00:25:41,360
Speaker 4: witnesses this week, the merger arts are feeling more positive

505
00:25:41,359 --> 00:25:41,920
Speaker 4: about the deal.

506
00:25:42,359 --> 00:25:44,600
Speaker 1: Well, we have a ways to go yet. We'll check

507
00:25:44,680 --> 00:25:48,399
Speaker 1: back with you, Jen, Thanks so much. That's Bloomberg Intelligence

508
00:25:48,440 --> 00:25:54,200
Speaker 1: Senior litigation analyst Jenniferree coming up next. Why Justice Samuel

509
00:25:54,240 --> 00:26:02,480
Speaker 1: Alito's stock portfolio stands out you're listening to Bloomberg. Samuel

510
00:26:02,480 --> 00:26:05,800
Speaker 1: Alito is the only justice with a stake in more

511
00:26:05,840 --> 00:26:10,240
Speaker 1: than two dozen individual companies, a distinction that threatens to

512
00:26:10,359 --> 00:26:14,520
Speaker 1: sideline him from major business cases. Since twenty twenty one,

513
00:26:14,720 --> 00:26:19,800
Speaker 1: Alito has recused himself from sixty four cases involving corporations

514
00:26:19,840 --> 00:26:23,159
Speaker 1: he owned shares of. This as scrutiny of the Court's

515
00:26:23,240 --> 00:26:28,760
Speaker 1: judicial ethics has intensified after revelations that Justice Clarence Thomas

516
00:26:28,800 --> 00:26:33,520
Speaker 1: and Alito, to a lesser degree, accepted undisclosed gifts and

517
00:26:33,640 --> 00:26:38,520
Speaker 1: travel from billionaire benefactors. Joining me is Emily Burnbaum Bloomberg

518
00:26:38,600 --> 00:26:43,400
Speaker 1: Lobbying and legal affairs reporter Emily tell us how Alito's

519
00:26:43,400 --> 00:26:47,760
Speaker 1: stock portfolio distinguishes him from the other justices.

520
00:26:48,640 --> 00:26:52,000
Speaker 5: Alito's stock portfolio is very different from any of the

521
00:26:52,040 --> 00:26:55,960
Speaker 5: other sitting justices right now. So he owns stock in

522
00:26:56,600 --> 00:27:00,080
Speaker 5: more than two dozen individual companies, about twenty eight companies,

523
00:27:00,359 --> 00:27:04,439
Speaker 5: And that was a practice that was more commonplace in

524
00:27:04,560 --> 00:27:08,120
Speaker 5: years past, and now he's pretty much the last justice

525
00:27:08,160 --> 00:27:11,000
Speaker 5: left standing with stock and individual companies. So the most part,

526
00:27:11,040 --> 00:27:13,960
Speaker 5: the other justices are invested in index funds. You know,

527
00:27:14,080 --> 00:27:16,879
Speaker 5: they invest in ways that ensure that they are not

528
00:27:17,280 --> 00:27:19,800
Speaker 5: conflicted when it comes to individual companies.

529
00:27:20,200 --> 00:27:25,600
Speaker 1: There's nothing unethical about owning stock. What are the ethics

530
00:27:25,720 --> 00:27:26,800
Speaker 1: rules about stock?

531
00:27:27,560 --> 00:27:30,919
Speaker 5: The rule is if you have a financial stake in

532
00:27:30,960 --> 00:27:36,080
Speaker 5: a company, that you should refuse yourself from cases involving

533
00:27:36,119 --> 00:27:39,600
Speaker 5: that company. So that means in Alito's case, that he

534
00:27:40,160 --> 00:27:46,080
Speaker 5: has recused from dozens and dozens of cases involving companies

535
00:27:46,080 --> 00:27:48,480
Speaker 5: in which he owns stock. So he owns stock in

536
00:27:48,520 --> 00:27:53,440
Speaker 5: some of our biggest companies. So that's racy on Kinoko, Phillips,

537
00:27:53,480 --> 00:27:57,840
Speaker 5: big oil companies, big transportation companies, and companies that are

538
00:27:57,840 --> 00:27:59,520
Speaker 5: in high litigation areas.

539
00:27:59,600 --> 00:28:00,879
Speaker 2: So he has.

540
00:28:01,160 --> 00:28:05,800
Speaker 5: Recused himself from sixty four cases involving corporations he owned

541
00:28:05,800 --> 00:28:09,080
Speaker 5: shares of since twenty twenty one, and last term alone,

542
00:28:09,080 --> 00:28:12,080
Speaker 5: he recused from fifteen cases due to stock ownership. So

543
00:28:12,119 --> 00:28:16,880
Speaker 5: that's a lot more recusals in general than his fellow justices.

544
00:28:17,000 --> 00:28:20,439
Speaker 5: Often they'll recuse because they've seen the case four in

545
00:28:20,520 --> 00:28:24,159
Speaker 5: lower courts, or maybe one of their parents was involved

546
00:28:24,359 --> 00:28:28,280
Speaker 5: in the case in some way. But Alito is distinct

547
00:28:28,320 --> 00:28:31,320
Speaker 5: in that he has to keep refusing himself over and

548
00:28:31,359 --> 00:28:33,320
Speaker 5: over because of his stock portfolio.

549
00:28:33,840 --> 00:28:39,040
Speaker 1: Justices aren't required to say why they're recusing themselves. Recently,

550
00:28:39,160 --> 00:28:43,560
Speaker 1: the liberal justices have been giving reasons, but the conservative

551
00:28:43,760 --> 00:28:47,880
Speaker 1: justices have not explain how we know that he's recused

552
00:28:47,960 --> 00:28:49,800
Speaker 1: himself because of stock ownership.

553
00:28:50,600 --> 00:28:54,240
Speaker 5: Yeah, so he doesn't say himself. This is because this stock.

554
00:28:54,320 --> 00:28:57,160
Speaker 5: It's essentially just a matter of looking at the publicly

555
00:28:57,280 --> 00:28:58,560
Speaker 5: available information.

556
00:28:58,840 --> 00:28:59,520
Speaker 3: You know, he.

557
00:28:59,520 --> 00:29:04,000
Speaker 5: Refused is from cases where one of the companies from

558
00:29:04,000 --> 00:29:07,760
Speaker 5: which he owns stock is a party or has filed

559
00:29:07,800 --> 00:29:12,120
Speaker 5: a brief, so you know, Johnson and Johnson. He doesn't

560
00:29:12,120 --> 00:29:15,560
Speaker 5: participate in those cases, and actually neither does Brett Kavanaugh

561
00:29:15,680 --> 00:29:19,640
Speaker 5: because his father was a lobbyist for the talk industry,

562
00:29:20,040 --> 00:29:23,880
Speaker 5: and so you basically just look at you know, Okay,

563
00:29:23,880 --> 00:29:27,720
Speaker 5: this case involves Boeing. Alito owns stock and Boeing he's

564
00:29:27,760 --> 00:29:30,280
Speaker 5: refused himself from the case. So as I was talking

565
00:29:30,320 --> 00:29:35,040
Speaker 5: to experts about this article, they say Alito is very

566
00:29:35,120 --> 00:29:38,680
Speaker 5: good most of the time at anticipating when he needs

567
00:29:38,720 --> 00:29:41,320
Speaker 5: to recuse. There have been a couple instances where maybe

568
00:29:41,360 --> 00:29:44,440
Speaker 5: a company's subsidiary was involved it was a little more gray,

569
00:29:45,000 --> 00:29:47,120
Speaker 5: or there was a stock he wasn't aware of owned

570
00:29:47,200 --> 00:29:49,600
Speaker 5: by one of his sons. That was one case. But

571
00:29:49,640 --> 00:29:52,520
Speaker 5: for the most part, he looks ahead of time and refuses.

572
00:29:52,680 --> 00:29:55,800
Speaker 5: But yes, you're right. The latest code of ethics that

573
00:29:56,360 --> 00:29:59,760
Speaker 5: the Supreme Court put out does say that you can

574
00:30:00,080 --> 00:30:04,160
Speaker 5: disclose why you're accusing, and that's something that Justice Kagan

575
00:30:04,160 --> 00:30:07,080
Speaker 5: has done, but Alito still has not chosen to do that.

576
00:30:07,320 --> 00:30:10,160
Speaker 1: And so often he'll sell off the stock so that

577
00:30:10,240 --> 00:30:11,600
Speaker 1: he can sit on the case.

578
00:30:12,240 --> 00:30:14,880
Speaker 5: Yes, there have been instances of that. So there is

579
00:30:14,960 --> 00:30:19,640
Speaker 5: an instance related to Exxon. In twenty sixteen, he sold

580
00:30:19,800 --> 00:30:23,320
Speaker 5: his stake after years of accusals related to the company.

581
00:30:23,640 --> 00:30:25,960
Speaker 5: He sold his stock in Oracle ahead of a really

582
00:30:26,040 --> 00:30:30,760
Speaker 5: important copyright case that was Oracle versus Google. So yeah,

583
00:30:30,840 --> 00:30:34,400
Speaker 5: throughout his time on the Court, he's chosen to sell

584
00:30:34,480 --> 00:30:38,960
Speaker 5: stock strategically. He actually late last year sold his Johnson

585
00:30:39,000 --> 00:30:42,560
Speaker 5: and Johnson's stock. He traded it in for a subsidiary

586
00:30:42,680 --> 00:30:45,760
Speaker 5: of Johnson and Johnson. So it's so far a little

587
00:30:45,840 --> 00:30:49,920
Speaker 5: unclear if that will impact whether he can weigh in

588
00:30:49,960 --> 00:30:53,640
Speaker 5: on Johnson Johnson related cases or not. We still yet

589
00:30:53,680 --> 00:30:54,120
Speaker 5: to see.

590
00:30:54,640 --> 00:30:59,240
Speaker 1: You mentioned the Supreme Court's Voluntary Code of Ethics, which

591
00:30:59,280 --> 00:31:05,960
Speaker 1: it adopted in November. Explain how that code encourages justices

592
00:31:06,560 --> 00:31:08,200
Speaker 1: to try to not refuse.

593
00:31:08,920 --> 00:31:12,920
Speaker 5: So the code has a really long section about refusal.

594
00:31:13,240 --> 00:31:16,719
Speaker 5: It says Supreme Court justices should try to avoid refusal

595
00:31:17,040 --> 00:31:20,040
Speaker 5: whenever they can. Because they're only nine members, and this

596
00:31:20,120 --> 00:31:22,800
Speaker 5: is a direct quote. It says much can be lost

597
00:31:22,840 --> 00:31:26,360
Speaker 5: when even one justice does not participate in a particular case.

598
00:31:26,560 --> 00:31:29,680
Speaker 5: They say it's particularly important when it comes to the

599
00:31:29,760 --> 00:31:33,000
Speaker 5: court deciding which cases to take, because it just makes

600
00:31:33,000 --> 00:31:36,600
Speaker 5: it that much harder for parties to have their cases

601
00:31:36,640 --> 00:31:39,680
Speaker 5: accepted when a bunch of the justices aren't even allowed

602
00:31:39,720 --> 00:31:42,520
Speaker 5: to participate in the decision making. So the Code of

603
00:31:42,520 --> 00:31:45,160
Speaker 5: Ethics says that that can have a distorting effect. So

604
00:31:45,560 --> 00:31:48,640
Speaker 5: while it's not an ethics issue for Aldo to own

605
00:31:48,760 --> 00:31:51,960
Speaker 5: stock in that you know, he's fully allowed to, there

606
00:31:52,000 --> 00:31:56,600
Speaker 5: are concerns about how well the court functions when one

607
00:31:56,600 --> 00:31:59,600
Speaker 5: of the justices is conflicted out from dozes of cases.

608
00:32:00,600 --> 00:32:04,680
Speaker 1: You spoke to Northwestern professor Stephen Lubad who said it's

609
00:32:05,040 --> 00:32:08,800
Speaker 1: a question not of ethics, but of judgment. Not everything

610
00:32:08,800 --> 00:32:10,520
Speaker 1: that's legal is a good idea.

611
00:32:11,200 --> 00:32:14,960
Speaker 5: Yeah, So he's pointing out, you know, there's no allegation

612
00:32:15,160 --> 00:32:20,600
Speaker 5: that Alito is violating rules. There's not a clause that

613
00:32:20,760 --> 00:32:24,400
Speaker 5: says don't own stock in individual companies. It's more that this

614
00:32:24,480 --> 00:32:28,000
Speaker 5: has really folid out of fashion, especially as scrutiny has

615
00:32:28,080 --> 00:32:33,160
Speaker 5: increased on the Supreme Court. Amid all of the ethics concerns,

616
00:32:33,560 --> 00:32:36,600
Speaker 5: a lot of justice has chosen no longer to invest

617
00:32:36,640 --> 00:32:42,120
Speaker 5: in individual companies. There's obviously more ethical scrutiny of the

618
00:32:42,160 --> 00:32:45,720
Speaker 5: Supreme Court and of our federal judiciary than ever. So

619
00:32:45,840 --> 00:32:47,920
Speaker 5: then it becomes a question of why does he still

620
00:32:47,920 --> 00:32:52,200
Speaker 5: own these stocks? You know, there's not that much evidence.

621
00:32:52,280 --> 00:32:56,280
Speaker 5: You know, it's much better for your accumulation of wealth

622
00:32:56,320 --> 00:32:58,920
Speaker 5: to own stock in individual companies, probably just as good

623
00:32:58,960 --> 00:33:01,560
Speaker 5: to own index funds. So then it becomes a question

624
00:33:01,600 --> 00:33:05,240
Speaker 5: of why, you know, when this hampers the Court's functioning,

625
00:33:05,560 --> 00:33:09,040
Speaker 5: When this means Alito will sit out of pretty important cases,

626
00:33:09,680 --> 00:33:11,520
Speaker 5: I think it just comes down to the question of

627
00:33:12,040 --> 00:33:12,680
Speaker 5: what's the point.

628
00:33:12,880 --> 00:33:14,920
Speaker 1: I can't figure it out, and I'm sure he will

629
00:33:14,960 --> 00:33:18,360
Speaker 1: not tell us. And also, as you're right, he is

630
00:33:18,600 --> 00:33:22,080
Speaker 1: a very reliable pro business vote. Can you agree with

631
00:33:22,160 --> 00:33:25,160
Speaker 1: the Chamber of Commerce in seventy three percent of cases

632
00:33:25,480 --> 00:33:26,400
Speaker 1: last term.

633
00:33:26,680 --> 00:33:30,680
Speaker 5: Yes, So he's been a long time critic of federal

634
00:33:30,800 --> 00:33:36,640
Speaker 5: environmental regulations. He often sides with business. One really important

635
00:33:36,840 --> 00:33:40,040
Speaker 5: case that is pending before the Court right now is

636
00:33:40,480 --> 00:33:45,560
Speaker 5: essentially whether states and cities can sue oil companies for

637
00:33:45,680 --> 00:33:49,880
Speaker 5: damages over how oil companies have contributed to climate change.

638
00:33:49,920 --> 00:33:52,600
Speaker 5: But this is a really big issue there's tons of

639
00:33:52,640 --> 00:33:57,600
Speaker 5: similar lawsuits climbing up across the country, and Alito is

640
00:33:57,720 --> 00:33:59,720
Speaker 5: not going to be able to weigh in. He's already

641
00:33:59,720 --> 00:34:02,320
Speaker 5: re use himself from the petition pending before the court

642
00:34:02,360 --> 00:34:06,640
Speaker 5: in this case because he owns stock in several oil companies.

643
00:34:06,680 --> 00:34:09,120
Speaker 5: So if I were an oil company, that would be

644
00:34:09,239 --> 00:34:13,920
Speaker 5: pretty disappointing. Because he's reliably pro business, so it's going

645
00:34:13,960 --> 00:34:16,600
Speaker 5: to have an impact on lots of similar big business cases.

646
00:34:17,000 --> 00:34:20,799
Speaker 1: So he might still sell his stock before the briefings

647
00:34:20,800 --> 00:34:22,000
Speaker 1: in oral arguments.

648
00:34:22,239 --> 00:34:25,480
Speaker 5: He could do that in this case, he's already refused

649
00:34:25,520 --> 00:34:28,879
Speaker 5: himself from considering whether the court should take it up.

650
00:34:29,280 --> 00:34:32,920
Speaker 5: If he sold all of his oil company stocks tomorrow,

651
00:34:33,000 --> 00:34:34,959
Speaker 5: then he potentially could take part.

652
00:34:35,200 --> 00:34:36,680
Speaker 2: But his annual.

653
00:34:36,360 --> 00:34:39,440
Speaker 5: Financial disclosure just came out the other day. He hasn't

654
00:34:39,680 --> 00:34:43,040
Speaker 5: sold any new stocks, so he could, but right now

655
00:34:43,080 --> 00:34:46,200
Speaker 5: it doesn't seem like he's planning to, and we don't.

656
00:34:46,040 --> 00:34:48,920
Speaker 1: Really know the exact stock value. It's a range.

657
00:34:49,360 --> 00:34:53,040
Speaker 5: Yeah, They're all reported in ranges. So he has stocks

658
00:34:53,080 --> 00:34:57,200
Speaker 5: that are between one and fifteen thousand. He has a

659
00:34:57,200 --> 00:35:00,040
Speaker 5: bunch of stocks that are between fifteen and fifty. I

660
00:35:00,040 --> 00:35:01,600
Speaker 5: don't think right now he has any stocks that are

661
00:35:01,600 --> 00:35:04,800
Speaker 5: worth more than that, so it's hard to say exactly

662
00:35:04,840 --> 00:35:07,680
Speaker 5: how much all of them are worth altogether. One disclaimer,

663
00:35:07,840 --> 00:35:12,640
Speaker 5: financial disclosures don't differentiate between the stocks owned by Alito

664
00:35:13,200 --> 00:35:16,800
Speaker 5: or owned by his wife, So some of these stocks

665
00:35:17,239 --> 00:35:21,440
Speaker 5: could belong to his wife, but just the court considers

666
00:35:21,480 --> 00:35:23,920
Speaker 5: them to be the same because they are married.

667
00:35:24,440 --> 00:35:28,040
Speaker 1: And we should mention that most of these recusals are

668
00:35:28,160 --> 00:35:32,440
Speaker 1: coming while the court is considering cases, not after the

669
00:35:32,440 --> 00:35:33,680
Speaker 1: court has taken the case.

670
00:35:34,680 --> 00:35:35,640
Speaker 5: Yeah, for the most part.

671
00:35:35,719 --> 00:35:40,840
Speaker 1: Yes, there have been a few reported instances where Alito

672
00:35:40,960 --> 00:35:44,480
Speaker 1: failed to accuse himself in cases where he should have

673
00:35:44,640 --> 00:35:46,239
Speaker 1: because of stock ownership.

674
00:35:46,520 --> 00:35:50,320
Speaker 5: So in twenty seventeen, there was a case involving Merk,

675
00:35:50,680 --> 00:35:55,040
Speaker 5: so he initially failed to recuse despite owning stock in

676
00:35:55,080 --> 00:35:58,440
Speaker 5: the company. He ultimately sold his shares and participated in

677
00:35:58,480 --> 00:36:02,319
Speaker 5: that case. And then in there was another instance in

678
00:36:02,360 --> 00:36:05,240
Speaker 5: which he says there was an unintentional conflict of interests,

679
00:36:05,640 --> 00:36:08,439
Speaker 5: so he blamed it on staff oversight. He took part

680
00:36:08,480 --> 00:36:11,800
Speaker 5: in a two thousand and nine ruling that involved ABC

681
00:36:11,920 --> 00:36:16,040
Speaker 5: News even though his children held stock in Disney, so

682
00:36:16,080 --> 00:36:19,520
Speaker 5: he in that case voted against ABC. He joined a

683
00:36:19,640 --> 00:36:23,360
Speaker 5: five to four majority, So you know, his vote was

684
00:36:23,360 --> 00:36:25,880
Speaker 5: pretty consequential in that case. He owed a lot of

685
00:36:25,880 --> 00:36:27,640
Speaker 5: stock and so he said it kind of flipped under

686
00:36:27,640 --> 00:36:27,959
Speaker 5: the radar.

687
00:36:28,360 --> 00:36:30,879
Speaker 1: That's some slip. There would have been a tie if

688
00:36:30,880 --> 00:36:33,920
Speaker 1: he hadn't participated, and then the decision of the lower

689
00:36:33,960 --> 00:36:37,640
Speaker 1: court would have stood. Instead, the Supreme Court reversed the

690
00:36:37,719 --> 00:36:40,719
Speaker 1: decision that was favorable to the networks in that five

691
00:36:40,760 --> 00:36:43,399
Speaker 1: to four vote that he took part in. Now I'm

692
00:36:43,400 --> 00:36:47,880
Speaker 1: not sure there's anything unethical about this, but one of

693
00:36:47,880 --> 00:36:50,239
Speaker 1: his trades appeared to be political.

694
00:36:51,080 --> 00:36:54,840
Speaker 5: Yeah, so he still hasn't said anything about this publicly,

695
00:36:55,080 --> 00:36:58,480
Speaker 5: but you might remember last year there was a big

696
00:36:58,520 --> 00:37:03,719
Speaker 5: conservative boycott of Anheuser Busch that's the maker of bud Light.

697
00:37:03,960 --> 00:37:07,160
Speaker 5: Basically they got a lot of hot water with conservatives

698
00:37:07,200 --> 00:37:12,440
Speaker 5: because they partnered with a transgender influencer to promote some beer.

699
00:37:12,760 --> 00:37:15,719
Speaker 5: So around the time of that boycott, Alito sold his

700
00:37:15,800 --> 00:37:19,880
Speaker 5: shares of Anheuser Busch and he bought shares of Arrival

701
00:37:20,000 --> 00:37:22,920
Speaker 5: beer maker, which is molten Core's. So a lot of

702
00:37:22,960 --> 00:37:27,360
Speaker 5: people noticed that speculated about whether he was participating in

703
00:37:27,360 --> 00:37:31,040
Speaker 5: the conservative boycott, and he hasn't said anything, but the

704
00:37:31,120 --> 00:37:33,320
Speaker 5: timing did align with the boycott.

705
00:37:33,600 --> 00:37:37,399
Speaker 1: Sort of reminds me about the flag flying incident. Thanks

706
00:37:37,440 --> 00:37:41,600
Speaker 1: so much, Emily, it's a really revealing story. That's Emily Burnbaum,

707
00:37:41,640 --> 00:37:46,040
Speaker 1: Bloomberg Lobbying and legal affairs reporter. And that's it for

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00:37:46,080 --> 00:37:49,120
Speaker 1: this edition of the Bloomberg Law Podcast. Remember you can

709
00:37:49,160 --> 00:37:52,080
Speaker 1: always get the latest legal news by subscribing and listening

710
00:37:52,120 --> 00:37:55,840
Speaker 1: to the show on Apple Podcasts, Spotify, and at Bloomberg

711
00:37:55,880 --> 00:37:59,920
Speaker 1: dot com, slash podcast, slash Law. I'm June Grosso and

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00:38:00,120 --> 00:38:01,319
Speaker 1: this is Bloomberg