1 00:00:00,560 --> 00:00:05,360 Speaker 1: This is Bloomberg Law with June Grassoe from Bloomberg Radio. 2 00:00:05,720 --> 00:00:09,119 Speaker 1: The FTC has been criticized for being overly friendly to 3 00:00:09,280 --> 00:00:12,840 Speaker 1: large businesses in recent years. Over the last decade, we've 4 00:00:12,880 --> 00:00:17,360 Speaker 1: heard about some enormous acquisitions by the tech giants, for example, 5 00:00:17,520 --> 00:00:24,760 Speaker 1: facebook purchase of WhatsApp, Microsoft's deal for linked In, Amazon's 6 00:00:25,760 --> 00:00:29,280 Speaker 1: acquisition of Whole Foods. But there are also a huge 7 00:00:29,400 --> 00:00:32,760 Speaker 1: number of tiny deals, deals too small to draw the 8 00:00:32,840 --> 00:00:37,800 Speaker 1: FTC's attention. Until now, the FTC appears to be reconsidering 9 00:00:37,960 --> 00:00:40,920 Speaker 1: and wondering whether it missed troubling signs in the wave 10 00:00:41,000 --> 00:00:44,640 Speaker 1: of smaller acquisitions by the tech giants. Joining me is 11 00:00:44,720 --> 00:00:49,360 Speaker 1: Jennifer Ree, Bloomberg Intelligence Senior litigation analyst. Jen would you 12 00:00:49,400 --> 00:00:52,720 Speaker 1: say the FTC has taken a permissive approach to the 13 00:00:52,760 --> 00:00:55,920 Speaker 1: tech industry at this point, June? While I believe that 14 00:00:56,000 --> 00:00:59,040 Speaker 1: there are probably antitrust thinkers out there that actually do 15 00:00:59,160 --> 00:01:01,560 Speaker 1: believe the ft C has been two lacks for many 16 00:01:01,640 --> 00:01:04,000 Speaker 1: years on the tech industry, I don't really know that 17 00:01:04,040 --> 00:01:05,840 Speaker 1: we can say that. I mean, in fact, they have 18 00:01:06,040 --> 00:01:09,319 Speaker 1: investigated tech company deals. You know, they have looked closely 19 00:01:09,360 --> 00:01:12,000 Speaker 1: at these deals and considered whether or not these deals 20 00:01:12,000 --> 00:01:14,679 Speaker 1: should close and in fact challenged a tech deal in 21 00:01:14,720 --> 00:01:17,360 Speaker 1: the past that was an already consummated deal in one 22 00:01:17,440 --> 00:01:19,400 Speaker 1: in that case. So you know, we're not paying as 23 00:01:19,480 --> 00:01:22,760 Speaker 1: much attention to what they have done in the past. Instead, 24 00:01:22,800 --> 00:01:25,040 Speaker 1: what we're thinking about is what we view as too 25 00:01:25,160 --> 00:01:28,200 Speaker 1: much dominance at this point for tech companies. But we're 26 00:01:28,200 --> 00:01:30,679 Speaker 1: not really looking at what the FTC has done in 27 00:01:30,720 --> 00:01:33,839 Speaker 1: the past that has in some cases curved tech dominance. 28 00:01:34,360 --> 00:01:40,440 Speaker 1: So now the FTC is asking for new information from Google, Apple, Amazon, Facebook, 29 00:01:40,520 --> 00:01:44,039 Speaker 1: and Microsoft. What kind of information? What are they looking for? 30 00:01:44,360 --> 00:01:47,440 Speaker 1: This investigation is under the FTC X Section six B, 31 00:01:47,760 --> 00:01:50,120 Speaker 1: and what it is. It allows the FTC to go 32 00:01:50,160 --> 00:01:53,600 Speaker 1: in and seek a broad range of documents, data and 33 00:01:53,680 --> 00:01:56,240 Speaker 1: information from these companies even if they don't really have 34 00:01:56,280 --> 00:01:58,960 Speaker 1: an ultimate enforcement goal. So in other words, even if 35 00:01:58,960 --> 00:02:03,200 Speaker 1: they don't necessarily suspect that there has been anti competitive activity, 36 00:02:03,480 --> 00:02:06,520 Speaker 1: they can go in and kind of conduct this fishing expedition. Now, 37 00:02:06,560 --> 00:02:09,520 Speaker 1: what they're looking for here is information on past deals 38 00:02:09,560 --> 00:02:12,800 Speaker 1: that these companies have done that fell underneath the filing 39 00:02:12,800 --> 00:02:15,400 Speaker 1: thresholds of the Heart's got Redino Act. So, in other words, 40 00:02:15,680 --> 00:02:18,000 Speaker 1: they weren't filed with the government because the companies didn't 41 00:02:18,040 --> 00:02:20,040 Speaker 1: have to file with the government and they were free 42 00:02:20,080 --> 00:02:22,640 Speaker 1: to just go ahead and close right away without giving 43 00:02:22,639 --> 00:02:25,240 Speaker 1: the government, FTC or d o J time to review 44 00:02:25,240 --> 00:02:27,959 Speaker 1: the deal. So the FTC wants to know about ten 45 00:02:28,040 --> 00:02:30,359 Speaker 1: years worth of these sorts of deals by the companies 46 00:02:30,360 --> 00:02:33,920 Speaker 1: that you named, and they're trying to understand whether or 47 00:02:33,960 --> 00:02:36,720 Speaker 1: not they need to change the HSR rules or do 48 00:02:36,880 --> 00:02:40,520 Speaker 1: something that might capture small deals that might have been 49 00:02:40,520 --> 00:02:43,680 Speaker 1: anti competitive. And in fact, if they believe they find 50 00:02:43,720 --> 00:02:46,480 Speaker 1: evidence of wrongdoing, which they could because this will be 51 00:02:46,480 --> 00:02:50,040 Speaker 1: a very broad, sweeping investigation, they can then go back 52 00:02:50,080 --> 00:02:54,160 Speaker 1: and start an enforcement action targeting specific deals that could 53 00:02:54,160 --> 00:02:56,960 Speaker 1: be two, three, four or five years old. Explain some 54 00:02:57,080 --> 00:03:01,560 Speaker 1: of the different reasons why tech companies might buy startups 55 00:03:01,600 --> 00:03:04,359 Speaker 1: what they're looking for. There are any number of reasons, 56 00:03:04,360 --> 00:03:06,919 Speaker 1: and obviously what the FTC is wondering as are those 57 00:03:06,960 --> 00:03:09,919 Speaker 1: reasons anti competitive? In other words, is there really no 58 00:03:10,040 --> 00:03:13,160 Speaker 1: reason to buy this startup company other than to eliminate 59 00:03:13,240 --> 00:03:17,400 Speaker 1: threatening competition in a certain segment. So you know this 60 00:03:17,480 --> 00:03:20,120 Speaker 1: is something the FTC will be looking for. Now. The 61 00:03:20,160 --> 00:03:22,200 Speaker 1: other thing they may be thinking about is whether or 62 00:03:22,200 --> 00:03:24,600 Speaker 1: not some of these acquisitions were done just in order 63 00:03:24,639 --> 00:03:27,640 Speaker 1: to gain the data that the startup company is able 64 00:03:27,639 --> 00:03:30,240 Speaker 1: to collect. I think sometimes when you think about the 65 00:03:30,280 --> 00:03:33,680 Speaker 1: Google Ways acquisition that the News has targeted as something 66 00:03:33,720 --> 00:03:37,080 Speaker 1: the FTC may be looking at the question, maybe was 67 00:03:37,160 --> 00:03:39,960 Speaker 1: this because of the user data that Ways was able 68 00:03:39,960 --> 00:03:43,800 Speaker 1: to collect from this platform, which was a user generated platform. 69 00:03:44,440 --> 00:03:48,320 Speaker 1: The other reason sometimes startups are acquired, especially by tech 70 00:03:48,400 --> 00:03:51,360 Speaker 1: is to gain intellectual property that that startup might have, 71 00:03:51,680 --> 00:03:54,640 Speaker 1: or even the talent the employees that the company may have. 72 00:03:55,480 --> 00:03:58,880 Speaker 1: Senator Elizabeth Warren, of course, a Democrat running for president, 73 00:03:59,160 --> 00:04:02,760 Speaker 1: has described a kill zone. What is she talking about now? 74 00:04:02,760 --> 00:04:05,120 Speaker 1: I believe what she's talking about is also what's called 75 00:04:05,200 --> 00:04:08,720 Speaker 1: killer acquisitions that the idea is sort of just to catch, buy, 76 00:04:08,840 --> 00:04:11,160 Speaker 1: and kill off the company. This is one of those 77 00:04:11,200 --> 00:04:13,440 Speaker 1: acquisitions that would be for no other reason but to 78 00:04:13,480 --> 00:04:17,560 Speaker 1: eliminate competition. It is not what the Facebook, Instagram or 79 00:04:17,600 --> 00:04:20,760 Speaker 1: the Facebook What's App acquisitions were, because of course Facebook 80 00:04:20,800 --> 00:04:25,279 Speaker 1: put assets and capital into those acquisitions and continue those businesses, 81 00:04:25,680 --> 00:04:27,760 Speaker 1: so those were not sort of a catch and kill 82 00:04:28,120 --> 00:04:31,440 Speaker 1: type acquisition. But it doesn't necessarily mean that they automatically 83 00:04:31,440 --> 00:04:35,480 Speaker 1: become pro competitive and not anti competitive. But what Elizabeth 84 00:04:35,480 --> 00:04:39,159 Speaker 1: Warren is talking about are these startups that could potentially 85 00:04:39,520 --> 00:04:42,640 Speaker 1: rise up. Their nascent competitors could rise up and threaten 86 00:04:42,920 --> 00:04:47,400 Speaker 1: businesses that Google, Amazon, Facebook, etcetera. Are already in and 87 00:04:47,440 --> 00:04:49,520 Speaker 1: the purpose for the deal is just to buy them 88 00:04:49,680 --> 00:04:53,440 Speaker 1: kill off the competition. The FDC chairman described the new 89 00:04:53,480 --> 00:04:57,760 Speaker 1: review of these smaller mergers as a policy project, not 90 00:04:57,920 --> 00:05:01,680 Speaker 1: a law enforcement action. What's the difference, you know. The 91 00:05:01,720 --> 00:05:06,279 Speaker 1: difference really is that when an enforcement type investigation is opened, 92 00:05:06,279 --> 00:05:08,920 Speaker 1: it usually is because of complaints that have come in 93 00:05:09,200 --> 00:05:12,400 Speaker 1: or something that the FTC has seen that suggests it's 94 00:05:12,440 --> 00:05:16,279 Speaker 1: possible wrongdoing has occurred or is occurring. This doesn't have 95 00:05:16,320 --> 00:05:19,840 Speaker 1: any necessary suspicion of wrongdoing. This is just a fact 96 00:05:19,960 --> 00:05:23,240 Speaker 1: finding mission, so it sits on the policy side rather 97 00:05:23,279 --> 00:05:26,480 Speaker 1: than on the enforcement side. It could lead to enforcement 98 00:05:26,520 --> 00:05:29,200 Speaker 1: actions because of course they're going to be gathering documents, 99 00:05:29,360 --> 00:05:32,440 Speaker 1: and if those documents that they review suggest that wrongdoing 100 00:05:32,480 --> 00:05:35,800 Speaker 1: has occurred, this could then lead to an investigation, which 101 00:05:35,839 --> 00:05:38,760 Speaker 1: is under the enforcement arm. I've been talking with Jennifer 102 00:05:38,760 --> 00:05:43,320 Speaker 1: Ree Bloomberg Intelligence senior litigation analysts about the FTC going 103 00:05:43,400 --> 00:05:47,040 Speaker 1: back to review acquisitions by tech companies that they once 104 00:05:47,080 --> 00:05:50,200 Speaker 1: thought were too small to bother with. So this review 105 00:05:50,360 --> 00:05:54,320 Speaker 1: could lead to enforcement actions. But aren't these small companies 106 00:05:54,360 --> 00:05:58,359 Speaker 1: by now already integrated into the tech giants. Could the 107 00:05:58,440 --> 00:06:02,400 Speaker 1: FTC unwind them at this point? This would be fact based, 108 00:06:02,400 --> 00:06:04,880 Speaker 1: It would be deal by deal. In some cases, yes, 109 00:06:04,960 --> 00:06:09,279 Speaker 1: assets are gone, they're completely merged. Really you can't unscramble 110 00:06:09,320 --> 00:06:11,960 Speaker 1: the eggs in certain cases. But in other cases, the 111 00:06:12,080 --> 00:06:15,720 Speaker 1: acquired entity maybe operating as a separate subsidiary. It might 112 00:06:15,760 --> 00:06:18,760 Speaker 1: be a situation where it's easier to carve off those assets. 113 00:06:18,800 --> 00:06:21,120 Speaker 1: And in addition, one of the things the FTC has 114 00:06:21,160 --> 00:06:23,960 Speaker 1: done in the past and d o J is required 115 00:06:24,000 --> 00:06:27,039 Speaker 1: the company to go into the company and create a 116 00:06:27,040 --> 00:06:30,440 Speaker 1: separate division where they've actually integrated assets, to go in 117 00:06:30,480 --> 00:06:33,880 Speaker 1: and separate out out those assets, create a separate division, 118 00:06:34,160 --> 00:06:36,720 Speaker 1: incentivize the employees to go with the division, and then 119 00:06:36,720 --> 00:06:40,040 Speaker 1: sell off that division. I can't imagine what the industry's 120 00:06:40,279 --> 00:06:42,960 Speaker 1: reaction has been to this, because it sounds like it's 121 00:06:43,000 --> 00:06:46,600 Speaker 1: going to require a lot from them initially and perhaps 122 00:06:46,680 --> 00:06:50,039 Speaker 1: lead to more problems down the road. That is absolutely right. 123 00:06:50,080 --> 00:06:52,880 Speaker 1: You know, the legal departments of these big tech companies, 124 00:06:52,920 --> 00:06:55,159 Speaker 1: the five you mentioned earlier. Have to be so busy 125 00:06:55,279 --> 00:06:58,480 Speaker 1: right now because this is just one of many investigations 126 00:06:58,640 --> 00:07:01,120 Speaker 1: that is ongoing right now. You know, you have Congress 127 00:07:01,160 --> 00:07:03,760 Speaker 1: looking into these companies. We know that the Department of 128 00:07:03,800 --> 00:07:07,000 Speaker 1: Justice is looking at Google, looking at Apple and possibly 129 00:07:07,040 --> 00:07:10,640 Speaker 1: other tech companies. We know the FTCs investigating Facebook, We 130 00:07:10,680 --> 00:07:13,600 Speaker 1: know the European Commission has been looking at these companies. 131 00:07:13,800 --> 00:07:16,200 Speaker 1: So they are very busy, and you know, there is 132 00:07:16,240 --> 00:07:18,920 Speaker 1: a lot of sort of add on here in terms 133 00:07:18,920 --> 00:07:22,760 Speaker 1: of polling documents and probably some repetitive documents, the same 134 00:07:22,760 --> 00:07:26,160 Speaker 1: documents that respond to both investigations. So they are very busy. 135 00:07:26,200 --> 00:07:30,360 Speaker 1: And certainly every time a company turns over a lot 136 00:07:30,480 --> 00:07:35,000 Speaker 1: of their ordinary course business documents, including texts and emails, 137 00:07:35,400 --> 00:07:39,600 Speaker 1: you know, notes of telephone conversations, they add risk because 138 00:07:39,680 --> 00:07:42,600 Speaker 1: you could have the greatest compliance program internally in the world, 139 00:07:42,640 --> 00:07:45,640 Speaker 1: but you still don't necessarily have control over the things 140 00:07:45,680 --> 00:07:48,360 Speaker 1: that your vast number of employees are saying and doing 141 00:07:48,640 --> 00:07:50,800 Speaker 1: in the everyday running of the business, and you're turning 142 00:07:50,840 --> 00:07:53,280 Speaker 1: all of that over to the government. Does the FTC 143 00:07:53,520 --> 00:07:57,560 Speaker 1: have the resources and the people to go through all 144 00:07:57,600 --> 00:08:00,600 Speaker 1: the information that's going to be coming from these huge companies. 145 00:08:00,960 --> 00:08:04,440 Speaker 1: You know, the FTC has always been, in my experience, 146 00:08:04,600 --> 00:08:07,840 Speaker 1: very good at doing a lot with limited resources. The 147 00:08:07,960 --> 00:08:11,160 Speaker 1: FTC themselves have said to Congress they need more resources 148 00:08:11,160 --> 00:08:13,240 Speaker 1: in order to do what they're doing and to sort 149 00:08:13,240 --> 00:08:16,560 Speaker 1: of tackle the new technological economy that we're in right now. 150 00:08:17,040 --> 00:08:20,160 Speaker 1: They are up against the big legal teams that these 151 00:08:20,200 --> 00:08:23,240 Speaker 1: companies hire and can afford to hire, so it is 152 00:08:23,360 --> 00:08:26,840 Speaker 1: very difficult for them. They would probably benefit from more resources, 153 00:08:26,840 --> 00:08:30,000 Speaker 1: but I also wouldn't doubt that the FTC can do 154 00:08:30,040 --> 00:08:32,040 Speaker 1: the job that they need to do with the resources 155 00:08:32,080 --> 00:08:35,920 Speaker 1: they have. The FTC said it might use this review 156 00:08:36,080 --> 00:08:39,400 Speaker 1: to change rules about when deals need to be submitted 157 00:08:39,440 --> 00:08:42,840 Speaker 1: for review. What are the rules now? So the HSR 158 00:08:42,960 --> 00:08:45,679 Speaker 1: Act hearts guard Redino Acts sets out the thresholds for 159 00:08:45,760 --> 00:08:47,800 Speaker 1: when a deal needs to be notified, and it's actually 160 00:08:47,800 --> 00:08:51,080 Speaker 1: really quite complicated now. Most big law firms that have 161 00:08:51,120 --> 00:08:54,000 Speaker 1: an M and A practice have an HSR specialist. That 162 00:08:54,200 --> 00:08:56,560 Speaker 1: the only thing this lawyer does is every time a 163 00:08:56,600 --> 00:08:58,680 Speaker 1: deal comes in, they assess it to determine whether it 164 00:08:58,679 --> 00:09:02,000 Speaker 1: needs to be filed. Generally, deals that are worth less 165 00:09:02,000 --> 00:09:04,760 Speaker 1: than ninety three million right now don't need to be filed, 166 00:09:04,760 --> 00:09:07,000 Speaker 1: and deals that are worth more than three seventy six 167 00:09:07,080 --> 00:09:10,120 Speaker 1: million must be filed. And in between deals some yes 168 00:09:10,160 --> 00:09:13,680 Speaker 1: and some know. It depends, and that threshold changes every year, 169 00:09:14,000 --> 00:09:15,400 Speaker 1: And there are a lot of exemptions, there are a 170 00:09:15,440 --> 00:09:18,120 Speaker 1: lot of safe harpers. So what the FTC might want 171 00:09:18,120 --> 00:09:20,280 Speaker 1: to look at when they collect these documents is an 172 00:09:20,360 --> 00:09:23,080 Speaker 1: understanding of the kinds of deals that are happening that 173 00:09:23,200 --> 00:09:25,840 Speaker 1: aren't falling within those thresholds, or that are fitting one 174 00:09:25,880 --> 00:09:28,000 Speaker 1: of those exemptions. And maybe what they want to do 175 00:09:28,080 --> 00:09:29,840 Speaker 1: is say, Hey, a lot of tech deals seem to 176 00:09:29,840 --> 00:09:33,080 Speaker 1: fall under exemption X, so let's get rid of exemption X. 177 00:09:33,240 --> 00:09:35,360 Speaker 1: That's the kind of thing they might be thinking. The 178 00:09:35,440 --> 00:09:37,679 Speaker 1: idea if they change the rules would be to ensnare 179 00:09:37,679 --> 00:09:41,120 Speaker 1: more deals require the filing, which then requires an automatic 180 00:09:41,160 --> 00:09:44,520 Speaker 1: waiting period before the companies can close. This move is 181 00:09:44,640 --> 00:09:49,480 Speaker 1: part of a broader reconsideration of US antitrust law that 182 00:09:49,520 --> 00:09:54,880 Speaker 1: focuses on in customer prices and consumer harm. So explain 183 00:09:55,640 --> 00:09:59,040 Speaker 1: where we are now with the way these things are judged, 184 00:09:59,160 --> 00:10:04,200 Speaker 1: and I wear looking at it again. Generally, when deals 185 00:10:04,280 --> 00:10:07,280 Speaker 1: are reviewed by the antitrust regulators, what they're looking for 186 00:10:07,480 --> 00:10:10,840 Speaker 1: is a deal that has the likelihood of substantially lessening 187 00:10:10,880 --> 00:10:15,240 Speaker 1: competition and could cause consumer harm. Consumer harm is usually 188 00:10:15,320 --> 00:10:18,240 Speaker 1: increased prices. This is the most obvious way consumers are 189 00:10:18,240 --> 00:10:21,640 Speaker 1: harmed harmed, but it has never been limited to justin 190 00:10:21,720 --> 00:10:24,720 Speaker 1: increase in prices. This could also be a decrease in output, 191 00:10:24,960 --> 00:10:27,160 Speaker 1: it could be reduction in quality, and it could be 192 00:10:27,200 --> 00:10:31,760 Speaker 1: in fact reduced innovation. The FTC recently has actually challenged 193 00:10:31,840 --> 00:10:35,240 Speaker 1: deals because not just an increase in prices, but a 194 00:10:35,280 --> 00:10:40,040 Speaker 1: reduction and innovation, particularly in the pharmaceutical area. These are 195 00:10:40,080 --> 00:10:42,800 Speaker 1: generally the bucket of consumer harms that are looked at 196 00:10:42,880 --> 00:10:45,679 Speaker 1: and and the idea is to be predictive. You know, 197 00:10:45,720 --> 00:10:48,080 Speaker 1: you can't say what's definitely going to happen when two 198 00:10:48,120 --> 00:10:51,280 Speaker 1: companies merge, and it's a very difficult determination, you know, 199 00:10:51,320 --> 00:10:54,520 Speaker 1: we saw what happened with T Mobile and Sprint. The States, 200 00:10:54,880 --> 00:10:57,920 Speaker 1: many state ages believed that this was a deal that 201 00:10:58,000 --> 00:11:00,680 Speaker 1: was likely to have substantial anti compare out of effects, 202 00:11:00,720 --> 00:11:03,880 Speaker 1: but the Department of Justice, with a remedy didn't agree 203 00:11:04,360 --> 00:11:07,440 Speaker 1: um and a district court judge did not agree, deciding 204 00:11:07,480 --> 00:11:10,240 Speaker 1: that the deal could go forward and that the States 205 00:11:10,320 --> 00:11:13,480 Speaker 1: are hadn't shown that this would likely to be anti competitive, 206 00:11:13,760 --> 00:11:16,080 Speaker 1: and most judges will say, when they're looking at these 207 00:11:16,120 --> 00:11:18,160 Speaker 1: deals that are challenged by FTC or d o J, 208 00:11:18,440 --> 00:11:20,320 Speaker 1: you know, I need a crystal ball. How can I 209 00:11:20,360 --> 00:11:22,199 Speaker 1: predict the future of what will happen? So it's a 210 00:11:22,280 --> 00:11:25,280 Speaker 1: very difficult determination to make. What the d o J 211 00:11:25,440 --> 00:11:28,240 Speaker 1: and FTC do is use economic tools. They both have 212 00:11:28,480 --> 00:11:32,760 Speaker 1: groups of economists within the antitrust groups within each agency 213 00:11:32,880 --> 00:11:36,199 Speaker 1: that have a lot of complicated economic tools they use 214 00:11:36,400 --> 00:11:39,080 Speaker 1: to try to help make this prediction um And it's 215 00:11:39,120 --> 00:11:42,440 Speaker 1: difficult to do. And you know, sometimes the FTC is 216 00:11:42,480 --> 00:11:44,960 Speaker 1: wrong and d o J are wrong, and sometimes they're 217 00:11:44,960 --> 00:11:48,280 Speaker 1: absolutely right. Uh, you know, And it's a predictive judgment, 218 00:11:48,360 --> 00:11:50,800 Speaker 1: and they do the best that they can do. They 219 00:11:50,840 --> 00:11:54,200 Speaker 1: want to change what they're looking for. Do they want 220 00:11:54,240 --> 00:11:59,360 Speaker 1: to expand it away from consumer harm? Because sometimes tech 221 00:11:59,400 --> 00:12:03,960 Speaker 1: deals tech deals make things cheaper for consumers, that's right, 222 00:12:04,000 --> 00:12:06,480 Speaker 1: And I think that's been one of the conundrums, and 223 00:12:06,559 --> 00:12:09,880 Speaker 1: certainly right now, neither agency would want to do something 224 00:12:09,920 --> 00:12:15,480 Speaker 1: that somehow has this unintended consequence of harming consumers, such 225 00:12:15,520 --> 00:12:18,840 Speaker 1: as prices on Amazon going up, or a function that 226 00:12:18,880 --> 00:12:21,240 Speaker 1: we're used to having for free, like searching on Google 227 00:12:21,320 --> 00:12:24,480 Speaker 1: or using Facebook suddenly become go behind a paywall. They 228 00:12:24,520 --> 00:12:27,600 Speaker 1: do not want an unintended consequence like that. I think 229 00:12:27,640 --> 00:12:30,680 Speaker 1: what what the agencies are thinking about right now is 230 00:12:30,720 --> 00:12:34,760 Speaker 1: not necessarily looking at some other standard outside of consumer harm, 231 00:12:35,000 --> 00:12:38,200 Speaker 1: but understanding whether there are ways that consumers are harmed 232 00:12:38,200 --> 00:12:40,680 Speaker 1: that they haven't really thought about in the past, such 233 00:12:40,720 --> 00:12:43,840 Speaker 1: as via the collection of data. Um what does that 234 00:12:43,880 --> 00:12:46,960 Speaker 1: mean and how does this data driven economy that we 235 00:12:47,040 --> 00:12:50,839 Speaker 1: live in right now affect consumers and how could that 236 00:12:50,920 --> 00:12:53,720 Speaker 1: contribute to consumer harms in ways that perhaps they haven't 237 00:12:53,720 --> 00:12:56,640 Speaker 1: really been thinking about in the past. Does in fact 238 00:12:56,679 --> 00:13:01,600 Speaker 1: privacy protection constitute part of that consumer harm? If a 239 00:13:01,679 --> 00:13:05,600 Speaker 1: company that offers greater privacy protections is acquired by a 240 00:13:05,640 --> 00:13:08,920 Speaker 1: company that offers lowered privacy protections, could that be a 241 00:13:08,960 --> 00:13:12,080 Speaker 1: consumer harm because now the consumers that are more concerned 242 00:13:12,080 --> 00:13:16,079 Speaker 1: about their privacy protection lose the option of the search engine, 243 00:13:16,160 --> 00:13:19,120 Speaker 1: let's say, or the social media platform that did provide 244 00:13:19,120 --> 00:13:22,200 Speaker 1: greater privacy protections. This is something I think some people 245 00:13:22,280 --> 00:13:25,680 Speaker 1: appointed to with Instagram that when Instagram was independent, it 246 00:13:25,760 --> 00:13:29,840 Speaker 1: offered perhaps greater privacy protections than Facebook did, and once 247 00:13:29,880 --> 00:13:33,480 Speaker 1: acquired users lost that option. So I think that this 248 00:13:33,559 --> 00:13:37,360 Speaker 1: is more about thinking about new ways that consumers may 249 00:13:37,400 --> 00:13:41,400 Speaker 1: be harmed by tech companies that operate differently than most 250 00:13:41,440 --> 00:13:44,120 Speaker 1: of the companies did that the agencies were looking at 251 00:13:44,160 --> 00:13:47,040 Speaker 1: fifty years ago. Now I'm saying that that I think 252 00:13:47,080 --> 00:13:49,440 Speaker 1: this is what the agencies are thinking about. There's certainly 253 00:13:49,800 --> 00:13:54,120 Speaker 1: advocates out there for looking at things like how deals 254 00:13:54,120 --> 00:13:58,600 Speaker 1: affect employment, how deals affect wages, which would be going 255 00:13:58,640 --> 00:14:01,960 Speaker 1: beyond the kinds of consumer harms that the agencies think about. Now, 256 00:14:02,280 --> 00:14:06,640 Speaker 1: there's been criticism of the FTC on a number of grounds, 257 00:14:06,679 --> 00:14:09,960 Speaker 1: one being that the number of criminal antitrust cases filed 258 00:14:09,960 --> 00:14:12,960 Speaker 1: in twenty team where at the lowest levels in almost 259 00:14:13,080 --> 00:14:16,839 Speaker 1: thirty years, And you had one senator Missouri Senator Josh 260 00:14:16,880 --> 00:14:19,800 Speaker 1: Holly saying the FTC should just be part of the 261 00:14:19,920 --> 00:14:24,160 Speaker 1: Justice Department, rolled into the Justice Department. So what's your 262 00:14:24,200 --> 00:14:28,480 Speaker 1: take on whether the FTC has not really done the 263 00:14:28,600 --> 00:14:31,280 Speaker 1: kinds of things that they should have in the past. 264 00:14:32,160 --> 00:14:34,720 Speaker 1: On the criminal side of it, the FTC doesn't have 265 00:14:34,840 --> 00:14:39,040 Speaker 1: jurisdiction to pursue companies under the antitrust laws. Under the 266 00:14:39,040 --> 00:14:42,080 Speaker 1: criminal side of the anti dust laws, only the Department 267 00:14:42,080 --> 00:14:45,520 Speaker 1: of Justice does, and I think in some respects um 268 00:14:46,000 --> 00:14:49,520 Speaker 1: those statistics maybe a little bit misleading, only because there 269 00:14:49,600 --> 00:14:53,120 Speaker 1: was this raft of criminal prosecutions by the Department of 270 00:14:53,160 --> 00:14:58,040 Speaker 1: Justice following the banking crisis of two thousand. You had 271 00:14:58,080 --> 00:15:01,200 Speaker 1: a lot of rate rigging and bench mark rigging conduct 272 00:15:01,240 --> 00:15:04,440 Speaker 1: and cartel type conduct by the banks that the Department 273 00:15:04,440 --> 00:15:06,920 Speaker 1: of Justice went after in two thousand eleven and on 274 00:15:07,520 --> 00:15:10,560 Speaker 1: with a libor scandal. We all recall the for an 275 00:15:10,560 --> 00:15:14,200 Speaker 1: exchange rigging scandal you had is to fix um credit 276 00:15:14,240 --> 00:15:18,240 Speaker 1: default swaps conduct, and and you had this uptick in 277 00:15:18,520 --> 00:15:21,680 Speaker 1: the criminal prosecutions. And so now some of those cases 278 00:15:21,680 --> 00:15:24,240 Speaker 1: are wrapping up, and I do actually think the Department 279 00:15:24,240 --> 00:15:27,280 Speaker 1: of Justice maybe on the verge of filing more criminal 280 00:15:27,360 --> 00:15:30,640 Speaker 1: charges in the generic drug price fixing probe. And the 281 00:15:30,760 --> 00:15:34,280 Speaker 1: News has reported that the Department of Justice maybe also 282 00:15:34,600 --> 00:15:39,160 Speaker 1: going after some companies no poaching agreements criminally, in other words, 283 00:15:39,200 --> 00:15:43,080 Speaker 1: agreeing not to recruit each other's employees, which is sort 284 00:15:43,080 --> 00:15:45,480 Speaker 1: of a price fixing. It's a wage fixing, and it 285 00:15:45,520 --> 00:15:48,600 Speaker 1: affects those employees and the ability to get raises and 286 00:15:48,720 --> 00:15:51,960 Speaker 1: increased salaries. So we may be seeing more coming out 287 00:15:51,960 --> 00:15:54,840 Speaker 1: of the Department of Justice on criminal matters with respect 288 00:15:54,880 --> 00:15:57,040 Speaker 1: to the FTC. You know, I think it's really hard 289 00:15:57,080 --> 00:16:00,000 Speaker 1: to go back and criticize the FTC for not doing enough. 290 00:16:00,600 --> 00:16:04,640 Speaker 1: We have had a rapidly changing economy over the last 291 00:16:04,680 --> 00:16:08,840 Speaker 1: ten years, particularly in tech, and tech innovations move very 292 00:16:08,920 --> 00:16:12,680 Speaker 1: very quickly. The FTC. I believe we tend to overlook 293 00:16:13,120 --> 00:16:16,080 Speaker 1: much of what the FTC does in terms of blocking deals. 294 00:16:16,360 --> 00:16:19,040 Speaker 1: If you look at the statistics, they do not show 295 00:16:19,080 --> 00:16:22,280 Speaker 1: that there's any decreased level of interest activity coming out 296 00:16:22,320 --> 00:16:25,160 Speaker 1: of the FTC as compared to ten years ago. They 297 00:16:25,160 --> 00:16:27,000 Speaker 1: continued to do a lot of work, and I think 298 00:16:27,040 --> 00:16:29,280 Speaker 1: they continue to do what they can do given the 299 00:16:29,320 --> 00:16:33,080 Speaker 1: resources that they have. That's Jennifer Ree, Bloomberg Intelligence Senior 300 00:16:33,120 --> 00:16:36,560 Speaker 1: Litigation Analyst, and that's it for this edition of Bloomberg Law. 301 00:16:36,840 --> 00:16:39,880 Speaker 1: I'm June Glass. Thanks so much for listening, and remember 302 00:16:39,920 --> 00:16:42,240 Speaker 1: to tunit to the Bloomberg Law Show tomorrow night at 303 00:16:42,240 --> 00:16:44,800 Speaker 1: ten p m. Eastern right here on Bloomberg Radio.