WEBVTT - TikTok Countdown After Supreme Court Showdown 0:00:15.360 --> 0:00:19.040 Hello, and welcome to the Votes and Verdicts podcast, hosted 0:00:19.120 --> 0:00:23.639 by Bloomberg Intelligence, part of Bloomberg's investment research department. With 0:00:23.720 --> 0:00:28.320 five hundred analysts and strategists working across all major world markets. 0:00:28.960 --> 0:00:32.440 Our coverage includes over two thousand equities and credits, as 0:00:32.440 --> 0:00:35.279 well as outlooks on more than ninety industries and one 0:00:35.360 --> 0:00:40.400 hundred market indices, currencies, and commodities. In this podcast series, 0:00:40.440 --> 0:00:43.840 we talk about the intersection of business policy and law. 0:00:44.880 --> 0:00:49.800 The forthcoming Conversation features a Bloomberg Intelligence Spotlight webinar from 0:00:49.920 --> 0:00:54.320 January tenth titled the TikTok Band Will It Happen? In 0:00:54.360 --> 0:00:58.560 the webinar, Elliott Stein joined me Matt Shettenhelm to discuss 0:00:58.680 --> 0:01:02.280 TikTok's January tenth and oral argument at the US Supreme 0:01:02.320 --> 0:01:05.559 Court and whether the company can dodge a US band 0:01:05.800 --> 0:01:10.959 that's set to take effect on January nineteen. Please enjoy Okay, 0:01:11.440 --> 0:01:16.440 Good afternoon, everyone, and welcome to this Bloomberg Intelligence Spotlight webinar, 0:01:16.800 --> 0:01:20.440 The TikTok Ban Will It Happen? My name is Matt Schuttenhelm. 0:01:20.600 --> 0:01:24.920 I'm a litigation and policy analyst with Bloomberg Intelligence focused 0:01:25.000 --> 0:01:28.600 on the TMT sector, and I'm joined today by our 0:01:28.640 --> 0:01:32.560 litigation and policy team leader, Elliott Stein. Elliott, thanks for 0:01:32.600 --> 0:01:33.959 doing this with me today. 0:01:33.959 --> 0:01:35.640 My pleasure. Thanks for having me, Mett. 0:01:35.840 --> 0:01:39.360 Yeah, absolutely so a couple housekeeping notes before we begin. 0:01:40.160 --> 0:01:44.319 Today's presentation will be recorded and will be available for playback. 0:01:45.040 --> 0:01:48.280 You can ask us a question by submitting one in 0:01:48.320 --> 0:01:52.600 the Q and a box on your screen. After the webinar, 0:01:52.760 --> 0:01:56.600 we're available for further questions. You can reach us through 0:01:56.600 --> 0:01:57.960 the Bloomberg terminal. 0:01:57.880 --> 0:02:00.680 And let me just add a brief note about Bloomberg Intelligence. 0:02:00.720 --> 0:02:05.080 BI offers independent research, analytics and interactive data on the 0:02:05.120 --> 0:02:09.040 Bloomberg Terminal. Our team of over five hundred professionals works 0:02:09.040 --> 0:02:14.360 to help our clients make informed investment decisions. We cover companies, industries, 0:02:14.600 --> 0:02:18.960 and markets from the perspective of strategy, equity, credit, ESG, government, 0:02:19.080 --> 0:02:24.400 and litigation. So when we turn to today's topic, we 0:02:24.600 --> 0:02:27.480 thought we'd structure it as a Q and A session 0:02:27.520 --> 0:02:30.799 to walk through Matt's analysis of the case. We'll look 0:02:30.840 --> 0:02:35.120 at what's at stake, who's likely to prevail, when and 0:02:35.200 --> 0:02:37.799 how Matt thinks will hear from the Supreme Court, and 0:02:37.919 --> 0:02:41.320 what President elect Trump might do about all of this 0:02:41.600 --> 0:02:44.720 once he takes office. As Matt said, if you have 0:02:44.760 --> 0:02:48.440 any questions, you know, throughout this discussion, just put them 0:02:48.440 --> 0:02:53.080 in the Q and A chat and we'll tackle them 0:02:53.280 --> 0:02:56.720 at some point during the conversation. Matt, before we get 0:02:56.760 --> 0:02:59.799 to your high level takeaways from the argument, you were 0:03:00.280 --> 0:03:02.520 in the courthouse today at the Supreme Court. It's always 0:03:02.520 --> 0:03:06.880 exciting for litigation analysts like us. You know, some of 0:03:06.919 --> 0:03:08.400 the best lawyers in the country, one of the most 0:03:08.480 --> 0:03:12.799 high profile cases you know presently. So why don't you 0:03:12.800 --> 0:03:15.120 give us this sort of your high level view of 0:03:15.160 --> 0:03:16.560 what it was like in the courthouse today. 0:03:16.600 --> 0:03:18.920 Oh, it was fantastic. I you know, I had the 0:03:18.960 --> 0:03:22.079 seat right behind the podium there, so I'm staring down 0:03:22.120 --> 0:03:26.559 the Chief Justice as as he's he's asking these questions 0:03:27.040 --> 0:03:29.760 to the best lawyers in the land. So there's no 0:03:29.880 --> 0:03:32.680 better seat in Washington, d C. And so it's so 0:03:33.040 --> 0:03:35.240 great fun to be there. And I think we got 0:03:35.240 --> 0:03:36.040 a lot to talk about. 0:03:36.360 --> 0:03:39.760 Yeah, absolutely, and we'll grow into the details during this conversation, 0:03:40.400 --> 0:03:42.640 But why don't we start with your high level takeaways. 0:03:42.680 --> 0:03:45.320 You followed the case from the get go. You were, 0:03:45.520 --> 0:03:48.680 like we said, in the courthouse this morning You went 0:03:48.920 --> 0:03:53.000 into today's hearing saying that TikTok had a chance to 0:03:53.040 --> 0:03:57.280 win this case and stopped the January nineteenth ban, but 0:03:57.320 --> 0:03:59.040 you didn't think they had a great chance. You put 0:03:59.080 --> 0:04:02.320 it at thirty percent going in. Where are you now 0:04:02.440 --> 0:04:03.240 after the argument? 0:04:03.480 --> 0:04:07.280 Yeah, it went a lot how I thought it would go, 0:04:07.360 --> 0:04:10.160 But I think I've reduced the odds after the argument. 0:04:10.280 --> 0:04:13.480 I'm down to twenty percent for TikTok. It's just very 0:04:13.520 --> 0:04:19.120 difficult to see five justices voting in TikTok's favor, both 0:04:19.240 --> 0:04:23.320 on the pause of the law and on striking the 0:04:23.360 --> 0:04:27.320 whole thing down. As you listen to the questions from 0:04:27.360 --> 0:04:32.799 the justices, only I could see TikTok winning one solid vote. 0:04:32.880 --> 0:04:37.040 Justice Gorsic seem to be a vote in the company's favor, 0:04:37.800 --> 0:04:41.119 But then it's a lot harder to get to five 0:04:41.279 --> 0:04:45.000 for TikTok. On the other hand, it's much easier to 0:04:45.040 --> 0:04:50.000 get to five for the United States. With Chief Justice Roberts, 0:04:50.080 --> 0:04:53.880 I think most likely going to be in the majority, 0:04:54.000 --> 0:04:56.600 so he'll likely decide who gets to write the decision. 0:04:57.760 --> 0:05:01.880 Justice Barrett, who earlier this year had suggested maybe foreign 0:05:02.240 --> 0:05:04.920 companies don't have First Amendment rights in the same way 0:05:05.240 --> 0:05:08.159 as other social media companies. I think she was hitting 0:05:08.160 --> 0:05:10.680 that note again. And then you can add, you know, 0:05:11.000 --> 0:05:14.719 three or four other justices pretty easily on the United 0:05:14.720 --> 0:05:18.360 States side. So if I'm TikTok, I'm pretty concerned coming 0:05:18.400 --> 0:05:21.120 out of that, out of that argument, I'm at twenty percent, 0:05:21.360 --> 0:05:24.880 and that might be high in terms of TikTok's chances 0:05:24.880 --> 0:05:25.480 going forward. 0:05:26.440 --> 0:05:31.359 And we'll, you know, we'll discuss in detail why you 0:05:31.400 --> 0:05:34.120 think that some more. But maybe just to make sure 0:05:34.120 --> 0:05:37.200 everyone's on the same page on this call, why don't 0:05:37.240 --> 0:05:41.360 you maybe walk us through how the law operates, what 0:05:41.400 --> 0:05:44.120 it does to TikTok, and how it affects other companies. 0:05:44.320 --> 0:05:47.520 Yeah, so at a high level, January nineteenth is the 0:05:47.640 --> 0:05:51.120 date to know, the one that matters, because when Congress 0:05:51.160 --> 0:05:54.560 passed this law in April, it said two hundred and 0:05:54.600 --> 0:05:59.280 seventy days later, that's when this ban takes effect unless 0:05:59.560 --> 0:06:05.760 bitingts has divested TikTok by then, and no divestiture has happened. 0:06:06.000 --> 0:06:08.719 And so here we are, January nineteenth, And what does 0:06:08.760 --> 0:06:10.800 a ban mean. So it's not a it's not going 0:06:10.839 --> 0:06:14.479 to strip it off everyone's phone on January nineteenth. What 0:06:14.600 --> 0:06:18.480 happens on January nineteenth. Is that any company that hosts 0:06:18.520 --> 0:06:22.120 TikTok in an app store or on a server in 0:06:22.160 --> 0:06:25.000 the United States in a way that makes it available 0:06:25.080 --> 0:06:30.240 for Americans to update and maintain faces liability if they 0:06:30.279 --> 0:06:34.440 continue to host TikTok to allow that on January nineteenth. 0:06:34.720 --> 0:06:38.719 The liability is massive. It's five thousand dollars per user. 0:06:39.000 --> 0:06:42.200 One hundred and seventy million users times five thousand dollars 0:06:42.640 --> 0:06:46.560 is eight hundred and fifty billion dollars. So it's the 0:06:46.640 --> 0:06:49.360 kind of number that companies need to pay attention to 0:06:49.960 --> 0:06:52.800 because they don't want to deal with with potential liabilities. 0:06:52.880 --> 0:06:58.160 So companies like Oracle that that host TikTok, companies that 0:06:58.160 --> 0:07:02.440 that other companies that carried in the app store, so Google, 0:07:03.240 --> 0:07:06.760 Apple that carry it there to the extent that it's 0:07:06.839 --> 0:07:10.440 using cloud services from Amazon or other companies like that, 0:07:10.480 --> 0:07:16.000 those companies would face potential liability starting on January nineteen. 0:07:17.320 --> 0:07:21.120 So it sounds like TikTok is sort of seeking two things, right. 0:07:21.120 --> 0:07:25.120 They want an injunction to stop the January nineteenth deadline, 0:07:26.120 --> 0:07:28.800 and they want the court to strike down the law 0:07:28.920 --> 0:07:33.920 completely on the grounds that violates the first Amendment. You 0:07:34.000 --> 0:07:37.240 sort of gave us your high level thoughts on both 0:07:37.240 --> 0:07:39.480 those things at the outset, but maybe you can walk 0:07:39.560 --> 0:07:41.600 us and walk us through in more detail why you 0:07:41.600 --> 0:07:45.520 don't think TikTok will get to support a five justices, right. 0:07:45.480 --> 0:07:49.400 Yeah, And that came up at the end. One of 0:07:49.440 --> 0:07:52.280 the justices raised the idea of a stay towards the 0:07:52.800 --> 0:07:56.600 end of an argument of the argument. The problem for 0:07:56.720 --> 0:08:00.200 TikTok is the standard for the court to issue a 0:08:00.320 --> 0:08:05.400 stay is really whether TikTok is likely to prevail in 0:08:05.440 --> 0:08:09.120 this case. So the two things sort of run together. 0:08:09.320 --> 0:08:12.280 Will they win in their constitutional challenge? And are they 0:08:12.440 --> 0:08:16.120 entitled to a stay? Because the test looks always does 0:08:16.160 --> 0:08:19.000 TikTok have a serious case here? And as I said, 0:08:19.440 --> 0:08:22.000 it doesn't look like there are five justices that are 0:08:22.000 --> 0:08:24.440 going to say there's a First Amendment problem with this 0:08:24.560 --> 0:08:28.480 law that justifies striking it down. And for that reason, 0:08:29.400 --> 0:08:34.959 a stay, which would pause Congress's deadline isn't very likely 0:08:35.000 --> 0:08:38.320 because those justices are looking at the same question, is 0:08:38.400 --> 0:08:41.880 TikTok going to prevail on its First Amendment challenge? And 0:08:42.360 --> 0:08:46.760 so I think TikTok is likely to lose on both 0:08:46.960 --> 0:08:49.920 And I think they're both likely to go in the 0:08:49.960 --> 0:08:53.160 same direction. We could talk about an administrative stay. 0:08:53.360 --> 0:08:53.720 I don't know. 0:08:53.760 --> 0:08:55.640 We can get to that later if you want in. 0:08:55.559 --> 0:08:59.760 The way I mean, maybe want to just suddress that now, 0:09:00.280 --> 0:09:02.000 because because I guess it's two different things, right, an 0:09:02.000 --> 0:09:06.679 administrative stay versus preliminary injunction. And I know likelihood a 0:09:06.720 --> 0:09:09.640 success of the merits on the merits is the standard 0:09:09.720 --> 0:09:12.480 for one of the elements of getting an injunction. But 0:09:12.679 --> 0:09:14.880 is that also, you know, one of the elements for 0:09:14.920 --> 0:09:16.840 an administrative stay or does something else. 0:09:16.679 --> 0:09:19.160 Playing I don't know that there are clear elements for 0:09:19.240 --> 0:09:22.880 an administrative stay. And maybe the Court uses administrative stays 0:09:22.960 --> 0:09:27.600 for housekeeping purposes, and you know, it's trying to do 0:09:27.640 --> 0:09:29.680 its work as fast as it can and sometimes it 0:09:29.720 --> 0:09:32.880 has to temporarily hit pause on things. I think the court, 0:09:33.160 --> 0:09:35.240 you know that did come up today, can can we 0:09:35.360 --> 0:09:39.680 can we issue an administrative stay? I don't think the 0:09:39.720 --> 0:09:42.719 Court is going to be inclined to go down that 0:09:42.880 --> 0:09:49.160 road and and to issue an administrative stay because President 0:09:49.200 --> 0:09:52.120 Trump asked for it or or or something along those lines. 0:09:52.640 --> 0:09:55.280 You know, the fact that they're considering a stay and 0:09:55.320 --> 0:09:59.160 denying it. You know says a lot, and I don't 0:09:59.160 --> 0:10:00.839 think they're going to want to go down the road 0:10:01.080 --> 0:10:06.199 of creating a precedence of doing you know, administrative stays. 0:10:06.200 --> 0:10:08.360 For that reason, it's possible they could try to kick 0:10:08.360 --> 0:10:10.840 it a couple of days into the Trump administration using 0:10:10.880 --> 0:10:13.520 this this this procedure. I don't want to say that's 0:10:13.520 --> 0:10:17.720 it's absolutely not going to happen. But again, I think 0:10:17.800 --> 0:10:20.200 you need a majority of the court to do these things, 0:10:20.240 --> 0:10:22.000 and you didn't really have a majority of the court 0:10:22.200 --> 0:10:24.160 to do it. The other thing is, I'm not and 0:10:24.160 --> 0:10:27.320 we can talk about this later as as president we 0:10:27.320 --> 0:10:30.320 talk about President Trump. But even if they did kick 0:10:30.360 --> 0:10:34.559 it into President Trump's term, I'm not so sure there's 0:10:34.640 --> 0:10:37.760 a lot he can do to say we get it 0:10:37.760 --> 0:10:42.120 into President Trump's term. What exactly is that going to 0:10:42.240 --> 0:10:45.240 change as a practical matter, when you talk about the 0:10:45.280 --> 0:10:48.439 liability exposure we we mentioned earlier, I'm not sure it 0:10:48.520 --> 0:10:50.480 changes very much. But we can get into that too. 0:10:50.760 --> 0:10:53.720 Yeah, let and let's send a Trump and what he 0:10:53.840 --> 0:10:56.480 might be able to do in a minute, But just 0:10:56.679 --> 0:10:59.240 on on the merits of the case, on what you 0:10:59.320 --> 0:11:02.040 heard today on the amendment arguments, Why don't you think 0:11:02.040 --> 0:11:05.600 there's five justices that would side with TikTok. 0:11:06.000 --> 0:11:07.800 It was a lot like what we saw at the 0:11:07.880 --> 0:11:12.319 DC's circuit when this was argued in September. There was 0:11:12.640 --> 0:11:17.160 just a sense, like, you know, there really wasn't a 0:11:17.280 --> 0:11:20.720 sense that this is a major First Amendment crisis for 0:11:20.760 --> 0:11:24.200 our country because of the unique circumstances. This is a 0:11:24.280 --> 0:11:28.760 company that is the parent company is located in China, 0:11:29.200 --> 0:11:32.760 and as the government made the argument to the justices, 0:11:32.880 --> 0:11:36.880 the idea that look, we're not trying to change anything 0:11:37.000 --> 0:11:40.640 about how TikTok speaks or how its users operate. They 0:11:40.640 --> 0:11:44.880 can use the same algorithm on December I'm sorry, on 0:11:44.960 --> 0:11:48.720 January twenty fifth as they do today if they want 0:11:48.760 --> 0:11:51.760 to don't. We just don't want it owned by a 0:11:51.840 --> 0:11:57.200 parent company in China. And Justice after Justice seemed inclined 0:11:57.280 --> 0:12:01.079 to defer to the government on that and say, look, 0:12:01.160 --> 0:12:04.000 this is sort of a narrow issue we're addressing here. 0:12:04.120 --> 0:12:09.640 This is about corporate structure, foreign ownership. It's not about uh, 0:12:09.760 --> 0:12:13.360 you know, regulating social media companies generally. It's about the 0:12:13.440 --> 0:12:17.280 foreign ownership there. That caught on a lot more with 0:12:17.400 --> 0:12:21.480 the justices than did any concerns about how the First 0:12:21.480 --> 0:12:23.800 Amendment issues that that this law raises. 0:12:23.600 --> 0:12:27.400 And what what about TikTok's arguments which they sort of 0:12:28.240 --> 0:12:31.040 focused on at the very end in the in the 0:12:31.200 --> 0:12:36.640 summary rebuttal that that there are less restrictive alternatives that 0:12:36.640 --> 0:12:39.600 that the government could have taken. If it were concerned 0:12:39.640 --> 0:12:44.160 with you know, data privacy, it could have just said, well, 0:12:44.280 --> 0:12:48.280 you know, you ban the transfer of data from TikTok 0:12:48.320 --> 0:12:51.360 to bydance or something like that. And you know, if 0:12:51.400 --> 0:12:55.160 you were concerned with covert manipulation, you could just have 0:12:55.360 --> 0:12:56.360 risk disclosures. 0:12:56.679 --> 0:13:00.400 Yeah, TikTok's always had strong arguments in my view. You know, 0:13:00.559 --> 0:13:04.400 it's a serious First Amendment case. Did Congress really need 0:13:04.440 --> 0:13:07.040 to go this far? You know, a band's a big 0:13:07.080 --> 0:13:09.559 step or an effective band, whatever you want to call it. 0:13:09.880 --> 0:13:12.080 Did they really need to go this far? When I 0:13:12.160 --> 0:13:14.480 first came to this case, you know, you read these 0:13:14.480 --> 0:13:16.920 briefs and you say, hey, this is a decent argument. 0:13:17.040 --> 0:13:21.520 Maybe the judges are going to make Congress rethink this 0:13:21.760 --> 0:13:23.880 and do it over make sure they got it right 0:13:23.920 --> 0:13:26.520 at least, and really think about did they need to 0:13:26.559 --> 0:13:29.600 go that far? You just haven't seen that catch on 0:13:30.040 --> 0:13:33.720 despite its potential appeal to you know, in legal circles, 0:13:34.040 --> 0:13:37.200 the judges kind of maybe it's because it's so rare 0:13:37.280 --> 0:13:40.160 for Congress to agree to something like this on a 0:13:40.200 --> 0:13:44.839 bipartisan basis, and we had such a strong consensus that 0:13:44.880 --> 0:13:48.440 this needed to happen for national security reasons that I 0:13:48.480 --> 0:13:51.840 think judges are a little concerned to get in the 0:13:51.840 --> 0:13:55.240 middle of that on legal technicalities. And so I think 0:13:55.280 --> 0:13:59.880 there's a real reluctance to stop a national security law 0:14:00.040 --> 0:14:04.280 if that's Congress's judgment, and so I just it's a 0:14:04.320 --> 0:14:06.720 serious argument. It just hasn't really caught on. 0:14:08.320 --> 0:14:11.240 All Right, So let's talk about timing and what you 0:14:11.320 --> 0:14:14.719 think happens next. When do you expect that we'll see 0:14:14.720 --> 0:14:16.280 your decision from the Supreme Court? 0:14:16.640 --> 0:14:19.640 Yeah, so this is such a unique case that usually 0:14:19.680 --> 0:14:22.120 we can, you know, we can give you averages on 0:14:22.200 --> 0:14:24.960 exactly how long the court takes for these things and 0:14:25.840 --> 0:14:28.360 really give you a really clear idea. This is so 0:14:28.600 --> 0:14:31.680 unique that the Court took this case on such a 0:14:32.200 --> 0:14:36.200 fast track schedule and they're facing this January nineteenth deadline, 0:14:36.200 --> 0:14:39.880 and they're they're balancing both that the stay issue and 0:14:39.960 --> 0:14:43.680 the merits issue. That it's hard to know exactly, but 0:14:44.320 --> 0:14:49.160 my best sense is that what I think they'll they'll 0:14:49.160 --> 0:14:52.200 try to do, and what might be easiest for them 0:14:52.240 --> 0:14:55.880 to do, is to very quickly address the stay issue 0:14:55.960 --> 0:15:00.960 that the ban taking effect on January nineteenth. TikTok has 0:15:01.000 --> 0:15:03.920 asked them to pause. That the Court is meeting in 0:15:03.960 --> 0:15:07.640 a conference today after the argument in their private conference, 0:15:08.160 --> 0:15:12.840 and very often after those private conferences, they the next 0:15:12.960 --> 0:15:17.320 Monday put out an order list that addresses what they 0:15:17.360 --> 0:15:20.520 talked about in that conference. It wouldn't surprise me at 0:15:20.560 --> 0:15:24.800 all if they release an order on the stay coming 0:15:24.880 --> 0:15:28.520 out of this afternoon's conference. One thing to watch for, 0:15:28.720 --> 0:15:30.520 and I kind of want to watch the headlines as 0:15:30.520 --> 0:15:34.480 they're coming in. When things are urgent, sometimes the Supreme 0:15:34.520 --> 0:15:37.480 Court won't wait till Monday. Sometimes they'll they'll put them 0:15:37.520 --> 0:15:40.920 out Friday afternoon. And there is real urgency here. The 0:15:41.560 --> 0:15:43.600 TikTok said, Look, we have all these companies trying to 0:15:43.600 --> 0:15:46.560 figure out what do we do about January nineteenth, and 0:15:46.640 --> 0:15:49.720 so there is an urgency. So I think there's a 0:15:49.760 --> 0:15:54.600 possibility that the Court very quickly releases an order on 0:15:54.640 --> 0:15:58.000 that stay as early as this afternoon. The other alternative 0:15:58.040 --> 0:16:00.160 that I can't rule out is that they try to 0:16:00.200 --> 0:16:03.520 address the full First Amendment question and write a full 0:16:03.560 --> 0:16:08.520 opinion on whether this violates the First Amendment by January nineteenth. 0:16:09.480 --> 0:16:13.680 That's possible. The Court typically takes over one hundred days 0:16:13.920 --> 0:16:17.120 after argument to issue a decision. We're probably going to 0:16:17.200 --> 0:16:21.040 have a dissent from Justice Gorsic in this case, and 0:16:21.080 --> 0:16:26.000 balancing those things takes time. So writing an opinion that 0:16:26.120 --> 0:16:29.320 sets the First Amendment law going forward is going to 0:16:29.360 --> 0:16:32.280 be real tough for the Court in the next nine 0:16:32.320 --> 0:16:35.360 days or so, So that to me, isn't the most 0:16:35.560 --> 0:16:41.280 likely path. Much more likely I think that they address 0:16:41.320 --> 0:16:45.600 the stay first with a short decision saying no, we 0:16:45.680 --> 0:16:48.480 are not going to hit pause on January nineteenth. Then 0:16:48.520 --> 0:16:51.560 they can take their time get these legal details right 0:16:51.640 --> 0:16:55.160 on the First Amendment. Address that in March April May. 0:16:56.360 --> 0:16:58.760 And if they don't pause it, I mean, that's a 0:16:58.800 --> 0:17:00.640 pretty big clue to how they're. 0:17:00.480 --> 0:17:02.600 Going to rule exactly exactly. 0:17:03.120 --> 0:17:08.000 All right, Let's talk about President President elect Trump and 0:17:08.119 --> 0:17:10.600 what he might do. He's said he has a warm 0:17:10.640 --> 0:17:12.639 spot in his heart. I think that's a quote for 0:17:12.720 --> 0:17:15.240 TikTok because it might have helped him win the election. 0:17:16.359 --> 0:17:20.600 He also filed an amicus brief in this case, which 0:17:20.640 --> 0:17:26.199 is pretty unusual, asking the Supreme Court to halt the 0:17:26.320 --> 0:17:29.760 law so that he can resolve the issue through political means, 0:17:29.760 --> 0:17:31.560 saying that he wanted to pursue what he called a 0:17:31.640 --> 0:17:35.239 negotiated resolution. You know, how did that come up in 0:17:35.280 --> 0:17:37.639 the argument today? Did it get any attraction with the 0:17:37.680 --> 0:17:39.840 court And do you think it'll have any effect? 0:17:40.080 --> 0:17:44.520 Yeah, it did come up pretty directly. I think it 0:17:44.560 --> 0:17:47.240 was just this Kavanaugh that that that may have raised 0:17:47.280 --> 0:17:53.520 it about midway through. Maybe Justice Alito mentioned it as well, 0:17:55.240 --> 0:17:58.320 but and also the Solicitor General mentioned it in her 0:17:58.520 --> 0:18:02.160 in her response on this and and I think, as 0:18:02.200 --> 0:18:06.600 I said earlier, the problem when President Trump filed that 0:18:06.640 --> 0:18:10.440 amikis brief, he didn't make a legal argument. The Court 0:18:10.520 --> 0:18:13.520 is into legal arguments. It does it does things based 0:18:13.560 --> 0:18:18.200 on the law. And he told the court how great 0:18:18.240 --> 0:18:20.760 he is on social media, but he didn't really give 0:18:20.840 --> 0:18:27.680 them a path legally to issue a stay. And so 0:18:27.960 --> 0:18:31.399 that came up today and whether they you know, they 0:18:31.440 --> 0:18:34.000 could just push it to the next administration. And the 0:18:34.040 --> 0:18:37.720 Solicitor General said, well that the standard for a stay 0:18:38.000 --> 0:18:42.320 is is TikTok likely to prevail on the merits and 0:18:42.320 --> 0:18:44.679 and and there, I think TikTok's going to have a 0:18:44.720 --> 0:18:49.000 tough time prevailing on the merits. And so, you know, 0:18:49.320 --> 0:18:52.720 judges love kicking things to the political branches and avoiding 0:18:52.800 --> 0:18:56.080 having to decide cases if they can, If they could 0:18:56.080 --> 0:18:59.159 get a political resolution of this case, I think they 0:18:59.160 --> 0:19:03.040 would love that. But I don't think that that instinct 0:19:03.160 --> 0:19:07.920 or that impulse is enough to justify overriding a deadline 0:19:07.960 --> 0:19:12.280 that Congress sets. It's not the judge's job to change, 0:19:12.359 --> 0:19:16.000 you know, to set a new deadline that that's different 0:19:16.080 --> 0:19:19.040 from the one that Congress set for national security reasons. 0:19:19.080 --> 0:19:23.080 So I don't really see that leading to a change. 0:19:23.119 --> 0:19:26.560 And as we talked about earlier, an administrative stay is 0:19:26.640 --> 0:19:30.200 possible that sort of kicks it into the next administration 0:19:31.119 --> 0:19:35.200 while the court writes this up. But then there's real 0:19:35.280 --> 0:19:40.439 questions about what could President Trump do at that point. 0:19:40.960 --> 0:19:44.119 Yeah, so let's talk about that, and let's sort of 0:19:44.160 --> 0:19:47.000 operate under the assumption that you're right, because you usually are. 0:19:47.520 --> 0:19:52.199 And the Supreme Court ruled against TikTok, doesn't issue a 0:19:52.280 --> 0:19:55.960 stay of the January nineteenth, date, the band takes effect 0:19:56.000 --> 0:19:59.280 on that day. President Trump comes into office. The next day, 0:19:59.359 --> 0:20:02.880 January twenty, what if anything, can he do to try 0:20:02.920 --> 0:20:05.000 to step in and save tik Tok. 0:20:05.480 --> 0:20:09.520 Yeah, so it's a great question. He first of all, 0:20:09.560 --> 0:20:12.680 the law is enforced by the Justice Department, and President 0:20:12.680 --> 0:20:15.640 Trump will be in charge of the Justice Department. So 0:20:15.680 --> 0:20:19.959 he could tell his Justice Department, look, I'm not you know, 0:20:20.160 --> 0:20:22.320 we're not going to enforce this. And he could tell 0:20:22.359 --> 0:20:26.000 all the companies that face those hundreds of billions of 0:20:26.040 --> 0:20:30.639 dollars in liability, don't worry about that. It's not a concern. 0:20:31.240 --> 0:20:33.479 And then there was, you know, some question that came 0:20:33.560 --> 0:20:36.160 up at the court today, if if they reversed him, 0:20:36.200 --> 0:20:38.080 if he reversed himself on that, would they have a 0:20:38.160 --> 0:20:42.680 due process claim? And maybe is the question is is 0:20:42.800 --> 0:20:47.239 the resolution is the answer on that? So the but 0:20:47.280 --> 0:20:51.040 then Justice Soda Mayor asked, I think they pushed back 0:20:51.080 --> 0:20:53.920 and said to this Solicitor General, what what is the 0:20:53.960 --> 0:20:56.679 statute of limitations on that? And I think the response 0:20:56.800 --> 0:20:59.480 was five years, which, you know, maybe we get into 0:20:59.520 --> 0:21:03.360 the next of the next president. And so all of it. 0:21:03.359 --> 0:21:07.520 It's if I'm a company facing hundreds of billions of 0:21:07.560 --> 0:21:12.800 dollars of liability exposure and you're dealing with the president 0:21:12.880 --> 0:21:16.959 who sometimes changes his mind or sometimes likes to use 0:21:17.080 --> 0:21:20.000 leverage against you. I'm not going to take that on. 0:21:20.640 --> 0:21:23.439 And so this law does have a provision that allows 0:21:23.480 --> 0:21:27.080 a ninety day extension of the president to issue a 0:21:27.160 --> 0:21:31.600 ninety day extension of that January nineteenth deadline. It's not 0:21:31.880 --> 0:21:36.439 entirely clear though, that you can extend after January nineteen 0:21:36.600 --> 0:21:41.240 once the law is in place. Maybe he can extend 0:21:41.280 --> 0:21:44.200 it after it's already in place, but it's much clear 0:21:44.320 --> 0:21:48.040 that President Biden could extend it today. The problem is 0:21:48.040 --> 0:21:50.440 the law says you can't just extend an agreement there 0:21:50.560 --> 0:21:52.679 extend the ban because you want to. You have to 0:21:52.720 --> 0:21:56.840 extend it because ByteDance has shown that it's entered into 0:21:56.840 --> 0:21:59.879 an agreement to do a divestiture. So that would have 0:21:59.880 --> 0:22:03.760 to apply for President Trump to use this extension power, 0:22:04.080 --> 0:22:06.560 even if he could, even if you can grant an 0:22:06.600 --> 0:22:09.439 extension of something that already took effect. And all of 0:22:09.480 --> 0:22:13.320 this turns on whether the companies are willing to gamble 0:22:13.560 --> 0:22:16.920 that Trump is right that he can extend it, and 0:22:16.960 --> 0:22:19.440 that that they're not going to at least a crew 0:22:20.080 --> 0:22:24.040 theoretical billions of dollars of liability on that date. If 0:22:24.080 --> 0:22:27.560 I'm a company facing that sort of risk, I'm not 0:22:27.600 --> 0:22:30.560 sure I can take my chances. Even if I want 0:22:30.600 --> 0:22:34.119 to appeal to the new administration and let him, you know, 0:22:34.280 --> 0:22:37.320 try to save the save the app, I'm not sure 0:22:37.320 --> 0:22:38.320 I can take on that risk. 0:22:38.640 --> 0:22:42.040 Yeah, So let's talk about what it means practically for 0:22:42.080 --> 0:22:43.920 some of these companies. First of all, you know what 0:22:44.119 --> 0:22:46.920 companies are we talking about? If Trump can't stop the 0:22:47.000 --> 0:22:50.040 law from operating, you know, what does it mean for 0:22:50.080 --> 0:22:53.400 the companies that host TikTok, companies that compete with TikTok, 0:22:53.440 --> 0:22:56.600 people who use TikTok, and what companies are we talking about? 0:22:56.960 --> 0:22:59.359 Yeah? So, I mean, I think you're you're thinking about 0:22:59.359 --> 0:23:03.159 a major op opportunity for TikTok social media competitors in 0:23:03.200 --> 0:23:06.720 the United States, And you're talking about YouTube shorts, You're 0:23:06.760 --> 0:23:12.119 talking about Meta's products, all those all those users, one 0:23:12.200 --> 0:23:15.399 hundred and seventy million users are going to need to 0:23:15.440 --> 0:23:19.280 go somewhere as a we should caution though. I think 0:23:19.280 --> 0:23:21.639 you're going to see social media posts on TikTok on 0:23:21.720 --> 0:23:25.160 January twenty first saying look nothing happened. You know, look 0:23:25.200 --> 0:23:30.639 I'm still here, and but it's very possible that that 0:23:30.800 --> 0:23:34.760 even with you know, these changes, TikTok tries to host 0:23:34.840 --> 0:23:38.240 outside of the US. As I said, it doesn't immediately 0:23:38.320 --> 0:23:42.760 strip the app off people's phones, but I think I 0:23:42.760 --> 0:23:45.960 think there's likely to be a decline. You know, the 0:23:45.960 --> 0:23:48.159 companies have said it in various ways. TikTok said, I 0:23:48.200 --> 0:23:50.480 think they was going to lose something like twenty five 0:23:50.560 --> 0:23:53.879 percent or in that ballpark of its revenue. With a 0:23:53.960 --> 0:23:58.639 thirty thirty day band it would lose a quarter of 0:23:58.640 --> 0:24:01.760 its revenue, something like a quarter of its users. So 0:24:02.440 --> 0:24:06.640 it's just big opportunities for TikTok's leading social media competitors 0:24:06.800 --> 0:24:10.520 in the United States. In terms of risks, there's risks, 0:24:10.520 --> 0:24:13.359