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

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Speaker 1: In his first public remarks since authoring the opinion that

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Speaker 1: wiped out the constitutional right to abortion, Justice Samuel Alito

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Speaker 1: mocked the world leaders who criticized that opinion in a

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Speaker 1: speech at a religious liberty summit in Rome. I had

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Speaker 1: the honor this term of writing, I think the only

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Speaker 1: Supreme Court decision in the history of that institution that

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Speaker 1: has been land based by a whole string of foreign leaders.

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Speaker 1: One of these was former Prime Minister Boris Johnson. But

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Speaker 1: he paid the price. My guest is constitutional law scholar

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Speaker 1: Kim Whaley, a professor at the University of Baltimore Law School. Kim,

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Speaker 1: this seems so out of character for Supreme Court justice.

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Speaker 1: I can't remember another justice or even a judge who

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Speaker 1: ridiculed world leaders publicly. Well, I'm not entirely surprised, because

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Speaker 1: he made a pretty shocking speech in to the Federal

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Speaker 1: Society where he really crossed some lines of independence. But

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Speaker 1: of course, you know, getting into sort of the international

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Speaker 1: political arena in that way, so deliberately making fun of

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Speaker 1: Boris Johnson and the royal family, etcetera. But what really

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Speaker 1: bothered me about it is that he introduced the topic

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Speaker 1: of saying he had quote the honor of writing unquote

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Speaker 1: this opinion that is jobbed that was lambasted the honor,

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Speaker 1: when meanwhile he seems to just shrug off the fact

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Speaker 1: that tends, if not hundreds of thousands of women and

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Speaker 1: girls are horrified by this, and many will be physically

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Speaker 1: and emotionally and psychologically and personally deeply affected in negative

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Speaker 1: ways by virtue of what he says was an honor.

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Speaker 1: So that just rubbed me wrong as as a person

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Speaker 1: tripping with sarcasm. He called it the decision whose name

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Speaker 1: may not be spoken. It's such a contrast to the

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Speaker 1: kind of careful, discreete speeches Supreme Court justices usually give.

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Speaker 1: And he had to know that his remarks would be

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Speaker 1: picked up around the world. Was that his intention or

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Speaker 1: you know what was his intention? Well, I'm no psychologist,

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Speaker 1: but the level of defensiveness and the sarcasm, to me

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Speaker 1: reveals some deep insecurities as a personal matter, because people

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Speaker 1: who are confident in their decision making, particularly when it

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Speaker 1: comes to something so somber and important. You know, he

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Speaker 1: opened his job's opinion talking about how abortion is a

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Speaker 1: moral issue that he would address it in such a

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Speaker 1: trivial way, take it so personally that people take issue

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Speaker 1: with this, you know, landmark ruling that reverse fifty years

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Speaker 1: of precedent and as I said, withdraws for the first

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Speaker 1: time in American history and established individual constitutional right and

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Speaker 1: effects women and girl. I think it was more of

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Speaker 1: an insight into kind of how potentially small he feels

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Speaker 1: as a person that he has to do that, rather

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Speaker 1: than something that he can think be lauded for respected

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Speaker 1: for it. You know, it makes me uncomfortable to even

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Speaker 1: hear that, given his stature as a Supreme Court justice

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Speaker 1: and know that someone is in that positions that had

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Speaker 1: that kind of low self esteem. Frankly, Supreme Court Justice

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Speaker 1: Alito has a history of not behaving with the decorum

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Speaker 1: we'd expect of a Supreme Court justice. We all remember

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Speaker 1: his shaking his head and mouthing the words not true

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Speaker 1: during President Obama's State of the Union address when he

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Speaker 1: criticized the Citizens United decision. And he also mocked the

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Speaker 1: late Justice Ruth Bader Ginsburg by pursing his lips and

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Speaker 1: shaking his head and rolling his eyes as she read

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Speaker 1: a descent from the bench in so is this perhaps

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Speaker 1: par for the course for him well as a constitutional

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Speaker 1: law professor and thinker. If you look at act with

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Speaker 1: the substance of what he said and again what he

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Speaker 1: said in at this Federal Society speech, I mean, it

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Speaker 1: looks like Justice Alito really believes that religion and I

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Speaker 1: would guess, based on his comments Christianity, because he seemed

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Speaker 1: aghast that a ten year old would not know who

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Speaker 1: Jesus was, and talked about an image of Jesus in

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Speaker 1: Germany and he was stunned that the child didn't know

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Speaker 1: what that was. I mean, I think there are plenty

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Speaker 1: of Christians that would not know iconic images from other religions,

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Speaker 1: for example. It looks like he really has this personal

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Speaker 1: sense that religion is under assault that is almost irrational, right.

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Speaker 1: He talks about how people and he even sort of

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Speaker 1: made a nod to his colleagues them assuming the progressives

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Speaker 1: want no special protection for religion, he said, and he

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Speaker 1: compared those who aren't staunch believers in you know, protecting

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Speaker 1: religion even in the public sphere. That's his position. He

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Speaker 1: compared them to you know, Green Bay packers fans, and

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Speaker 1: the idea that people who don't adhere to his strong

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Speaker 1: view of Christianity as central to American culture and society,

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Speaker 1: as somehow thinking of religion as a sports team, and

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Speaker 1: that's just not true. I think the other justices and

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Speaker 1: people that care about this issue, and most Americans understand

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Speaker 1: there's a there's a line to be drawn between the

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Speaker 1: free exercise clause and what we know is the establishment clause.

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Speaker 1: And in two cases this term, the court whittled down

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Speaker 1: the establishment clause. I think what we're going to see, frankly,

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Speaker 1: is religion back in government. And when you hear Justice Alito,

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Speaker 1: he's doing more than calling balls and strikes under the law,

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Speaker 1: which is really what the role of judges are in

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Speaker 1: the federal system, because they're not elected, and he really

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Speaker 1: believes he's on some bigger mission. He equated not having

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Speaker 1: religion and government to potentiality for totalitarianism. He suggested little

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Speaker 1: look at the Soviets. They pushed religion out and they fell.

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Speaker 1: You know. Of course, he's ignoring places like Afghanistan and

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Speaker 1: the Taliban, where religion has been used to justify tremendous

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Speaker 1: human rights violation. And he spends a lot of time

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Speaker 1: talking about the protections under International Code for certain individual

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Speaker 1: rights and liberties, and he says, you know, religion is there,

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Speaker 1: but what about girls and women's rights to bodily autonomy.

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Speaker 1: He's really kind of almost off kilter, frankly, in terms

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Speaker 1: of what should sound like from a Supreme Court justice

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Speaker 1: as neutral, thoughtful, unemotional, un ideological assessment of the law

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Speaker 1: and the fact his reference his little tale about the

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Speaker 1: crucifix was particularly jarring to me because it seems so

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Speaker 1: out of touch with, you know, where the world is nowadays.

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Speaker 1: An atheist activist group Freedom from Religion Foundation called his

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Speaker 1: comments disturbing. They said Alito appeared to single out nonbelievers

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Speaker 1: as implied enemies of religious freedom. Is it appropriate for

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Speaker 1: a Supreme Court justice to be sort of proselytizing like that.

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Speaker 1: I mean, I agree with that comment. I think that

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Speaker 1: is the tone of his remarks is that, you know,

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Speaker 1: boo on the people that are not religious, and that's

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Speaker 1: a problem for America, that it's religiosity is not as

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Speaker 1: fun as center as he would like. Of course, it's inappropriate.

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Speaker 1: Of course it's problematic. And it's problematic because the Supreme Court,

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Speaker 1: when it construes ambiguous language and the constitution that functions

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Speaker 1: like an amendment to the Constitution unless there is an

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Speaker 1: actual amendment which requires supermajorities of both Houses of Congress

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Speaker 1: and state legislatures. So voters, right voters. It's virtually impossible

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Speaker 1: to amend the Constitution through the electoral process. But when

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Speaker 1: Justice Alito, you know, and his colleagues get five people

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Speaker 1: that are unelected and then they're there for life to

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Speaker 1: agree with his interpretation of something like the First Amendment

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Speaker 1: or the due process, cause that binds the rest of us.

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Speaker 1: And it's inherently antidemocratic, you know, in its worst form,

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Speaker 1: it is a recipe for the very totalitarianism that he

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Speaker 1: pretends to be rejecting, because there's no accountability. You know,

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Speaker 1: people talk a lot these days about January six and

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Speaker 1: Donald Trump and how, you know, we're losing our democracy,

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Speaker 1: and I'm one of those who say that. But really

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Speaker 1: the biggest threat from where I stand is what's happening

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Speaker 1: on the United States Supreme Court. That is, these people

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Speaker 1: believe that they have this some kind of mandate. And

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Speaker 1: maybe for Justice Alito, it's divine to reshape America through

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Speaker 1: constitutional interpretation with no buying and no accountability through the voters,

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Speaker 1: And in my mind, that's inherently undemocratic rights. The founding

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Speaker 1: generations fought and died to not have a single sovereign

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Speaker 1: state anymore and to have the people decide. And that's

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Speaker 1: not what's happening on this court. These folks are really

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Speaker 1: taking you know, it's not a surgical knife, it's a

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Speaker 1: machete to longstanding constitutional principles. And so when he feels

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Speaker 1: that he can say these things publicly, it just demonstrates

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Speaker 1: the belief I think on this majority that's whatever they do,

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Speaker 1: there's nothing anyone can do about it. And they're probably right.

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Speaker 1: Americans seem to be losing confidence in the Supreme Court.

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Speaker 1: According to a recent ap North Pole, forty three of

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Speaker 1: Americans have hardly any confidence in the Court at all,

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Speaker 1: have only some confidence. Should they take into account the

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Speaker 1: fact that people are just losing confidence in the court

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Speaker 1: with all these radical decisions that don't respect precedent, of course,

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Speaker 1: and that's because it's part of why people talk a

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Speaker 1: lot about the rule of law. And this also gets

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Speaker 1: to the January sixth situation and the peaceful transfer of power.

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Speaker 1: I mean, you know, think about if you've got a

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Speaker 1: kid who's in a in a little league and your

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Speaker 1: kids team loses, you take them out for pizza and

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Speaker 1: you say, you know, next time at a boy it'll

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Speaker 1: be better, um or at a girl. Right, um. But

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Speaker 1: you don't leave the league. But if it turns out

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Speaker 1: that the umpire it's fixed, that the rules of the

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Speaker 1: game are unfair, that they're one sided, that their arbitrary,

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Speaker 1: that they're ideological, you're not only going to be angry,

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Speaker 1: you're gonna pull your kid out. And that's really the

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Speaker 1: concern in this moment, and it's across the electoral process

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Speaker 1: as well, after money, is that people lose faith in

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Speaker 1: our institutions. You know, the Supreme Court doesn't have its

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Speaker 1: own army to enforce what it says is the rule

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Speaker 1: of law that it gave itself that authority in the

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Speaker 1: nineteenth century in a landmark case called Marbury versus Madison.

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Speaker 1: What happens if and when people say listen, I don't

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Speaker 1: need to listen to the Supreme Court, they're a joke,

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Speaker 1: they don't matter. Then what happens to the whole fabric

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Speaker 1: and structure of our legal system? And when why do

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Speaker 1: we care about that? Because we want to have an

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Speaker 1: ordered society, We want to know we can walk outside

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Speaker 1: our door and not just be violently sort of assaulted

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Speaker 1: by by one of our enemies and have no accountability.

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Speaker 1: We want to be people to stop at red lights

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Speaker 1: so that our kids are safe when you know they

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Speaker 1: get their license. Is succeeding, right. We want to get

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Speaker 1: on a plane and not have it crashed into another

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Speaker 1: plane or have it hijacked by some domestic terrorists because

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Speaker 1: they don't think anything will happen. I mean, the implications

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Speaker 1: of this cannot really be overstated. And this is why

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Speaker 1: I think it's what people like you know, Justice Soda,

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Speaker 1: Miller and Kig and are right have been sounding the

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Speaker 1: alarm in some of their descents now for a few

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Speaker 1: years that when you degrade the institutions, it's very hard

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Speaker 1: to rebuild them. So that the damage that's being done

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Speaker 1: I think, you know, by a lego speech, but also

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Speaker 1: by what they're doing to the Constitution by rejecting these things.

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Speaker 1: It's very very serious. Now, the upside might be that

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Speaker 1: now leto speech is drawing attention to the problem on

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Speaker 1: the court. Right, if they did this quietly, that might

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Speaker 1: be under the radar. And as you know, I've written

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Speaker 1: now three books on basic legal literacy. How to read

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Speaker 1: the Constitution? Why you know what you need to know

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Speaker 1: about body? And why? How do you think like a lawyer?

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Speaker 1: And why because if you had to pull a lot

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Speaker 1: of Americans, they wouldn't really know what the Supreme Court

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Speaker 1: does or how the Constitution works. You know, I think

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Speaker 1: historically only a third of Americans could even name the

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Speaker 1: three branches of government. So if this triggers greater civic literacy,

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Speaker 1: you know, I think that's that's a light in the

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Speaker 1: darkness here in this tunnel. Representative Alexandrio Casio Cortez has

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Speaker 1: said that this speech, together with the leak of his opinion,

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Speaker 1: is SUSPICI and you know, are we ever going to

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Speaker 1: find out who leaked that? You know, I don't know.

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Speaker 1: And honestly, that is not something that gets me particularly concerned.

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Speaker 1: A much much much more concerned with the relationship between

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Speaker 1: Jenny Thomas's connections with the anti democratic far right wing

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Speaker 1: groups that were behind the carnage on January six and

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Speaker 1: are still seeking to cancel elections in America to put

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Speaker 1: a minority single party in power indefinitely. There's a lot

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Speaker 1: of smoke there. Did she influence her husband in four

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Speaker 1: cases involving the election in one in which he was

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Speaker 1: the sole dissenter when all Congress wanted to do was

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Speaker 1: to get official records from the National Archives, and he said, no,

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Speaker 1: That to me is where the energy should go, because

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Speaker 1: you know, leaking the opinion is probably not going to

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Speaker 1: change the outcome. But having a justice make decisions based

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Speaker 1: on influenced by radical groups through his wife, if that

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Speaker 1: is the case, that doesn't affect the outcome. And as

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Speaker 1: I said earlier, I mean if if he's a deciding

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Speaker 1: vote on a revised construction of a critical provision of

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Speaker 1: the Constitution that's in place forever and until there's a

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Speaker 1: new configuration on the Court, until Congress decides to expand

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Speaker 1: the quarter, until there's constitutional amendment, all of which are

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Speaker 1: close to impossible. And you know the Court did accept

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Speaker 1: this year, Sirchiroory in a case UM that would consider

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Speaker 1: a radical view of the election system. UM, the independent

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Speaker 1: Legislature's clause right where the idea would be, UM, And

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Speaker 1: I think they're probably gonna rule yes, as my guest,

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Speaker 1: they wouldn't take the case that only state legislatures can

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Speaker 1: decide elections. It can't be state constitutions, it can't be

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Speaker 1: state judges. It can't be from governors, it can't be

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Speaker 1: anybody that's the legislature delegates authority to and we've got

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Speaker 1: jerrymandered legislatures across the country. So that's just to me,

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Speaker 1: that is, that's a much bigger issue than the leaked opinion.

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Speaker 1: That is, you know, how is Thomas going to rule

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Speaker 1: on something that important and the extent to which it's

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Speaker 1: affected by Jenny Thomas, who was in contact with Mark

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Speaker 1: Meadows and others are urging that they not acknowledge Joe

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Speaker 1: Biden clear wind for the presidency. That is much more terrifying,

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Speaker 1: and frankly, it's very troubling that the Democrats haven't even

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Speaker 1: held hearings on that topic. That case is going to

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Speaker 1: be next year's Dabbs. Thanks so much for your insights, Kim.

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Speaker 1: That's Professor Kim Whalley of the University of Baltimore Law School.

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Speaker 1: In this day of the Mega merger, the Biden administration

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Speaker 1: is cracking down on consolidation in industries. Indeed, President Joe

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Speaker 1: Biden signed an executive order in July of last year

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Speaker 1: directing federal government agencies to enforce the nation's antitrust laws

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Speaker 1: and prevent companies from taking advantage of labor and potential competitors.

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Speaker 1: I expect the federal agencies and they know this, to

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Speaker 1: help restore competition so that we have lower prices, higher wages,

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Speaker 1: more money, more options. And the Justice Department is doing

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Speaker 1: just that, going to trial to block Penguin Random House,

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Speaker 1: the largest US book publisher, from buying Simon and Schuster,

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Speaker 1: the fourth largest, for two point eighteen billion dollars. My

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Speaker 1: guest is Jennifer Ree, Bloomberg Intelligence senior litigation analyst. So, John,

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Speaker 1: the Justice Department is using a rather novel theory here,

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Speaker 1: focusing on the impact this merger will have on the

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Speaker 1: livelihood of authors and choices for consumers, rather than a

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Speaker 1: traditional focus on prices. You know, it's a very interesting

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Speaker 1: argument because it is a bit different than a typical

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Speaker 1: antitrust argument made to try to block a merger. So

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Speaker 1: what they say here is that there will be an

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Speaker 1: impact on labor, in other words, authors of anticipated top

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Speaker 1: selling books. So these are the authors that come along

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Speaker 1: you expect the book to be really big, and these

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Speaker 1: publishers are bidding for the rights to that book, and

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Speaker 1: you know, they bid against each other and the price

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Speaker 1: goes up. And the authors are paid more. So they're

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Speaker 1: saying that that kind of head to head competitions boost

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Speaker 1: these authors pay, you know, and spurs the publishers to

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Speaker 1: give better editorial and marketing services to get those book rights.

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Speaker 1: They aren't arguing that people like me or like you

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Speaker 1: that go out and buy a book are actually going

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Speaker 1: to pay more for a book. That's a more traditional

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Speaker 1: antitrust theory. This theory is about labor and what it's

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Speaker 1: called as a monopsony theory too few buyers rather than

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Speaker 1: too few sellers. So is this a theory that is

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Speaker 1: so new the judge will have to decide whether or

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Speaker 1: not to accept it? So interestingly, I think it's been

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Speaker 1: called very new. I actually don't think of it as new.

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Speaker 1: I think the monopsony aspect of mergers has always been

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Speaker 1: something that the Department of Justice and Federal Trade Commission

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Speaker 1: have thought about and looked at. Where it's new is

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Speaker 1: that it's untested in courts. So, in other words, perhaps

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Speaker 1: a deal in the past that was challenged that had

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Speaker 1: monops in the aspects, really the front and center was

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Speaker 1: the monopoly aspect and that was really what was tried,

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Speaker 1: and the monops in the aspect was a little bit

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Speaker 1: more besides show or where there were monopsony concerns, the

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Speaker 1: companies were able to settle with some sort of concessions

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Speaker 1: and then get the deal cleared and they never went

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Speaker 1: to court. So where this is new is we don't

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Speaker 1: have precedent on it, so it's going to be new

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Speaker 1: for this District Court judge. Then, is the market they're

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Speaker 1: talking about, the market for anticipated best selling books. Yes,

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Speaker 1: that's the market they're talking about, and they claim that

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Speaker 1: that market really includes only the top five publishers, what

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Speaker 1: they call the Big five, and among those Big five

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Speaker 1: are Penguin, Random House and Simon and Schuster. So in

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Speaker 1: their view, within this market for publishing rights to anticipated

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Speaker 1: top selling authors, you have five competitors, and this will

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Speaker 1: reduce the five to four. One analysts said it would

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Speaker 1: reduce it to one and then three others right, And

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Speaker 1: I think the reason for that is because when you

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Speaker 1: look at the market shares as a result of the deal,

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Speaker 1: this company will be a strong number one, So it

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Speaker 1: will not only have the number one spot, as it

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Speaker 1: will be pretty far away from the others. Now, according

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Speaker 1: to other data I've seen, though, the combined company would

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Speaker 1: have about share, And honestly, you know, that's not necessarily

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Speaker 1: a share that's in thought in the past to confirm

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Speaker 1: market power, you know, usually you're looking for something over

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Speaker 1: that's kind of borderline in terms of whether there could

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Speaker 1: be market power or anti competitive impact. So, even though

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Speaker 1: it does create a big one, I think the d

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Speaker 1: o J would be on a bit better footing here

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Speaker 1: if that combined share was a little higher. So the

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Speaker 1: judge will decide which market she uses exactly. I mean,

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Speaker 1: the DJ has to come and I prove that the

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Speaker 1: market they're defining is an appropriate market, that that is

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Speaker 1: a market in which competition takes place, and it is

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Speaker 1: different from let's say, smaller authors. It is a different

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Speaker 1: market from the market that the midsize of the smaller

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Speaker 1: publishers competence. They're going to have to prove that, and

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Speaker 1: I think that could be the crux of it. That

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Speaker 1: could be a difficult market to prove. They'll have to

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Speaker 1: see what the evidence shows. These two companies claim that

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Speaker 1: it's arbitrary and it's kind of a Jerryman or our ument,

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Speaker 1: you know, And what the companies say is that in

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Speaker 1: each of the past three years, three of the top

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Speaker 1: ten highest selling authors were published by publishers outside of

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Speaker 1: this big five, and that's one of the examples they

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Speaker 1: lay out to say that this market doesn't really make

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Speaker 1: sense because you have other smaller publishers that also compete

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Speaker 1: for some of these big highest selling authors. Also in

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Speaker 1: the defense argument is that this wouldn't lower the price

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Speaker 1: that new authors get and wouldn't affect the price for consumers. Right,

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Speaker 1: you know, obviously they're going to argue that they're going

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Speaker 1: to say there is still sufficient competition out there such

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Speaker 1: that when we're bidding for the publication rights for these

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Speaker 1: top authors, there will still be plenty of other bidders

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Speaker 1: against us, that that author will get the best price

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Speaker 1: that they're going to get, and as a result, there

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Speaker 1: won't be any impact on the ultimate consumers at the

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Speaker 1: end of the line buying the books. And the Justice

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Speaker 1: Department is simply going to have to have to prove

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Speaker 1: that that is not the case. That there's a potential

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Speaker 1: that with fewer bidders, the price won't be a bit

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Speaker 1: up as high, and perhaps the result of that could

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Speaker 1: be less paid to these authors and fewer books published,

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Speaker 1: which would have an impact on consumers. The Justice Department's

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Speaker 1: argument sounds logical. I don't know if they have the

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Speaker 1: stats to back it up. This is an industry that's

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Speaker 1: already undergone consolidation. Penguin Random House, that name shows consolidation, right,

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Speaker 1: you know, I think that's one of the most important

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Speaker 1: points here. In particular, the Department of Justice has said,

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Speaker 1: you know, they really want to broaden out the kinds

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Speaker 1: of deals that they challenge and broaden out the antitrust

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Speaker 1: approach to mergers, and one of the things they want

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Speaker 1: to think about more are just industries that have trended

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Speaker 1: toward consolidation that as you see a trend toward consolidation,

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Speaker 1: you kind of want to nip it in the bud

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Speaker 1: before it gets too far and too consolidated under your nose.

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Speaker 1: And you're exactly right. This is an industry that's had

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Speaker 1: loads of consolidation in the last couple of years. And

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Speaker 1: not only that, this top five companies that the d

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Speaker 1: o J is talking about have been accused of colluding

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Speaker 1: in the past. And that's another theory the d o

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Speaker 1: J will have hate the fewer you have, the more

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Speaker 1: likely it is that they can collude in the future.

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Speaker 1: One of the first witnesses for the government was best

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Speaker 1: selling horror author Stephen King, who testified against his own publisher.

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Speaker 1: He said the five biggest publishers have largely squeezed out

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Speaker 1: independence shops, making it harder for new authors to make

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Speaker 1: it into print. Did the government call King to put

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Speaker 1: some sort of celebrity pizzazz into the trial or for

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Speaker 1: more substantive reasons. I think it's a little bit of both.

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Speaker 1: But I think he can certainly add to the evidence.

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Speaker 1: He's been out there publishing for many, many, many years

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Speaker 1: before a lot of consolidation, and now after consolidation, he

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Speaker 1: can talk about the impact that that's had on him

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Speaker 1: or other colleagues that are also authors as the industry

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Speaker 1: has become consolidated. But you know, obviously that's just one

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Speaker 1: person testifying, and the judge is going to have to

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Speaker 1: look at where the weight of the evidence is, and

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Speaker 1: that's just a tiny percentage of what will be taken

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Speaker 1: in in terms of other testimony as well as the

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Speaker 1: company's documents and what those say. But certainly think that

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Speaker 1: it's more than just, hey, you know, this makes a

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Speaker 1: splash having Stephen King piband. Now if it were a

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Speaker 1: jury trial, King's appearance might make more of a difference. Now,

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Speaker 1: this has been described as a key test for the

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Speaker 1: Biden administrations pushed to expand antitrust enforcement. Do you see

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Speaker 1: it that way? You know I do, because, as I

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Speaker 1: said this, this concept that we're going to look at

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Speaker 1: the merger's impact on labor is barely untested and new

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Speaker 1: in court. To rest the entire theory of harm just

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Speaker 1: on that theory and go to court with it is

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Speaker 1: fairly new and untested. So we'll see how they can

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Speaker 1: prove that and how the district court judge views that,

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Speaker 1: and it could lay the groundwork for future challenges to

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Speaker 1: mergers that are based on the impact on labor. So

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Speaker 1: it is very new in that way. And I think

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Speaker 1: also with respect to what you just talked about, that

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Speaker 1: it's an effort to sort of stem the tide of

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Speaker 1: consolidation in an industry that's been trending in that direction.

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Speaker 1: And it'll be interesting to see how much the judge

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Speaker 1: takes that into account as well. So Biden signed an

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Speaker 1: executive order in promoting competition in the American economy. Has

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Speaker 1: the Justice Department been following through with more antitrust lawsuits? Oh?

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Speaker 1: I absolutely think so. Yes. I think both the Department

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Speaker 1: of Justice and now also the Federal Trade Commission, now

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Speaker 1: that there is finally both late of five commissioners and

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Speaker 1: a three commissioner democratic majority, are following through. Um. I

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Speaker 1: think they're both aggressively going after investigations of deals. They

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Speaker 1: have a lot of investigations of conduct generally ongoing, and

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Speaker 1: more lawsuits filed in the last six months than I

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Speaker 1: recall from the past. On the FTC is getting active

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Speaker 1: now too, with the newer challenge to Facebook trying to

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Speaker 1: buy a small virtual reality company called Within. So I

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Speaker 1: do think we are seeing a reaction by the DJ

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Speaker 1: and FTC to what was expressed in that executive order.

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Speaker 1: So now the deal is blocked, Simon and Schuster's parent

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Speaker 1: is likely going to offload the publisher to a private

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00:24:06,400 --> 00:24:10,119
Speaker 1: equity firm. I think that's what the speculation is. I

433
00:24:10,160 --> 00:24:12,520
Speaker 1: think the issue is that the parent has said it

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00:24:12,880 --> 00:24:15,760
Speaker 1: will offload the company no matter what, and it may

435
00:24:15,760 --> 00:24:18,199
Speaker 1: be that some of these other publishers that would like

436
00:24:18,280 --> 00:24:20,240
Speaker 1: to buy it, or could buy it, which worried about

437
00:24:20,320 --> 00:24:23,200
Speaker 1: having a lawsuit just like this one. And when that happens,

438
00:24:23,280 --> 00:24:26,640
Speaker 1: usually the buyer ends up being private equity but it's

439
00:24:26,680 --> 00:24:28,520
Speaker 1: not to say that one of the smaller or mid

440
00:24:28,560 --> 00:24:31,360
Speaker 1: sized publishers, or even one of the big five that's

441
00:24:31,400 --> 00:24:36,040
Speaker 1: smaller than Penguin Random House couldn't acquire this trial. It'll

442
00:24:36,040 --> 00:24:38,639
Speaker 1: bring a lot of interest from the public. But do

443
00:24:38,720 --> 00:24:44,440
Speaker 1: these trials really cause any companies to hesitate when they're

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00:24:44,440 --> 00:24:47,399
Speaker 1: deciding to merge. I mean, is it really part of

445
00:24:47,440 --> 00:24:50,480
Speaker 1: their factoring in, Oh, we could be sued by the

446
00:24:50,560 --> 00:24:53,919
Speaker 1: Justice Department? I think sometimes yes. I think the bigger

447
00:24:54,480 --> 00:24:57,240
Speaker 1: right now, at least the bigger issue that might be

448
00:24:57,960 --> 00:25:02,399
Speaker 1: preventing more deal making is just the aggressive stance generally

449
00:25:02,560 --> 00:25:06,120
Speaker 1: that's been taken very openly and overtly by the Department

450
00:25:06,119 --> 00:25:08,919
Speaker 1: of Justice in Federal Trade Commission and sort of setting

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00:25:09,000 --> 00:25:12,160
Speaker 1: up roadblocks and hurdles that make the whole process more

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00:25:12,160 --> 00:25:15,280
Speaker 1: difficult from start to finish, you know, a longer investigation

453
00:25:15,320 --> 00:25:18,640
Speaker 1: and more difficult investigation, the potential for a novel, new

454
00:25:18,720 --> 00:25:21,640
Speaker 1: theory of harm that the company's can't anticipate going in.

455
00:25:21,960 --> 00:25:24,240
Speaker 1: So there's a lot of uncertainty, and I think that

456
00:25:24,359 --> 00:25:29,959
Speaker 1: uncertainty tends to diminish dealmaking. Can you compare the Biden

457
00:25:29,960 --> 00:25:34,800
Speaker 1: administration's approach to antitrust to the Trump administration's approach, well,

458
00:25:34,800 --> 00:25:37,760
Speaker 1: it's it's definitely more on the progressive side um and

459
00:25:37,800 --> 00:25:41,760
Speaker 1: more aggressive. Disadministration and the people that President Biden has

460
00:25:41,800 --> 00:25:44,439
Speaker 1: put in place to make the decisions in the anti

461
00:25:44,440 --> 00:25:49,320
Speaker 1: trust area are really trying to expand antitrust, trying to

462
00:25:49,359 --> 00:25:52,680
Speaker 1: be more aggressive, trying to stop at the consolidation we've

463
00:25:52,680 --> 00:25:55,520
Speaker 1: seen in many industries, and trying to sort of craft

464
00:25:55,560 --> 00:25:58,919
Speaker 1: away through court to develop some more novel theories and

465
00:25:59,000 --> 00:26:02,600
Speaker 1: make it easier to challenge deals or to challenge monopolistic conduct.

466
00:26:02,680 --> 00:26:06,120
Speaker 1: So it's definitely been more aggressive. Some of that started

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00:26:06,160 --> 00:26:08,640
Speaker 1: a bit though in the Trump administration. I don't want

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00:26:08,640 --> 00:26:13,760
Speaker 1: to say that the antitrust authorities under Trump we're not

469
00:26:13,800 --> 00:26:16,879
Speaker 1: doing anything, because they were actually quite aggressive as well.

470
00:26:17,280 --> 00:26:19,240
Speaker 1: And and some of the things that are happening that

471
00:26:19,359 --> 00:26:23,800
Speaker 1: this administration has followed up on started in the Trump administration,

472
00:26:23,920 --> 00:26:28,840
Speaker 1: like a distaste for settling mergers with behavioral conditions rather

473
00:26:28,880 --> 00:26:32,480
Speaker 1: than divestitures. I mean, I think that that's someone aggressive take,

474
00:26:32,560 --> 00:26:35,240
Speaker 1: and that started under the Trump administration. I don't know

475
00:26:35,359 --> 00:26:38,760
Speaker 1: if having two antitrust trials going on at the same

476
00:26:38,760 --> 00:26:42,879
Speaker 1: time means anything about the push but another trial on

477
00:26:43,040 --> 00:26:47,000
Speaker 1: competition started Monday in federal court in d C, where

478
00:26:47,000 --> 00:26:50,320
Speaker 1: the Justice Department is suing to block United Health Group,

479
00:26:50,800 --> 00:26:54,760
Speaker 1: which runs the biggest US health insurer, from acquiring health

480
00:26:54,840 --> 00:26:59,600
Speaker 1: tech company Change Healthcare. The government contends the thirteen billion

481
00:26:59,600 --> 00:27:03,280
Speaker 1: dollar deal would hurt competition and put too much healthcare

482
00:27:03,359 --> 00:27:06,720
Speaker 1: claim information in the hands of one company. Tell us

483
00:27:06,720 --> 00:27:09,200
Speaker 1: a little more about it. Yeah, I know, I wish

484
00:27:09,200 --> 00:27:11,040
Speaker 1: I were in Washington, d C. Right now, sitting in

485
00:27:11,080 --> 00:27:14,200
Speaker 1: a seriously going back and forth between these courtrooms, because

486
00:27:14,200 --> 00:27:17,320
Speaker 1: they're both interesting, interesting cases. So you know that one

487
00:27:17,400 --> 00:27:20,720
Speaker 1: is also a somewhat difficult case for the Department of

488
00:27:20,760 --> 00:27:25,040
Speaker 1: Justice because that theory is largely vertical in nature. Now,

489
00:27:25,240 --> 00:27:29,439
Speaker 1: United and Change Healthcare do have what we think of

490
00:27:29,480 --> 00:27:33,440
Speaker 1: as horizontal overlaps. In vertical overlaps horizontal meaning they both

491
00:27:33,480 --> 00:27:36,800
Speaker 1: have uh services or products that compete with each other.

492
00:27:37,000 --> 00:27:39,040
Speaker 1: But on that that's not going to be as big

493
00:27:39,040 --> 00:27:41,480
Speaker 1: an issue in trial because the companies have already agreed

494
00:27:41,520 --> 00:27:43,919
Speaker 1: to divest that part of the business and just eliminate

495
00:27:43,960 --> 00:27:47,280
Speaker 1: that overlap. So what's left to be tried really is

496
00:27:47,359 --> 00:27:51,360
Speaker 1: just the vertical relationship and by virtue of buying Change

497
00:27:51,560 --> 00:27:56,200
Speaker 1: The theory is United gets access to competitively sensitive data

498
00:27:56,240 --> 00:27:59,879
Speaker 1: and information of its insurer rivals like you know Etna

499
00:28:00,040 --> 00:28:04,160
Speaker 1: and Insignia and these companies that United competes with UM

500
00:28:04,200 --> 00:28:08,800
Speaker 1: for insurance health insurance. So by getting access to that data,

501
00:28:09,440 --> 00:28:13,879
Speaker 1: it alters competition. It makes an artificial competitive environment where

502
00:28:14,040 --> 00:28:16,240
Speaker 1: the company could pull its punches when it starts to

503
00:28:16,280 --> 00:28:19,360
Speaker 1: see the kinds of offers and contract terms that its

504
00:28:19,400 --> 00:28:22,359
Speaker 1: competitors have, and it could have an effect on competition.

505
00:28:22,400 --> 00:28:25,040
Speaker 1: And that is the theory that the Department of Justice

506
00:28:25,080 --> 00:28:27,880
Speaker 1: is going in with in that case. And it will

507
00:28:27,920 --> 00:28:30,840
Speaker 1: be very interesting to see what happens because again relatively

508
00:28:30,880 --> 00:28:36,439
Speaker 1: untested in court, two really interesting antitrust trials in one courthouse.

509
00:28:37,040 --> 00:28:41,440
Speaker 1: Thanks so much, Jen. That's Bloomberg Intelligence Senior Litigation Analyst

510
00:28:41,520 --> 00:28:44,760
Speaker 1: Jennifer Ree. You can read more of Jen's analysis by

511
00:28:44,800 --> 00:28:47,800
Speaker 1: going to b I go on the Bloomberg terminal. And

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Speaker 1: that's it for this edition of the Bloomberg Law Show.

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00:28:50,280 --> 00:28:52,600
Speaker 1: Remember you can always get the latest legal news on

514
00:28:52,680 --> 00:28:56,959
Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

515
00:28:57,160 --> 00:29:02,160
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516
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Speaker 1: And remember to Tune to The Bloomberg Law Show every

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00:29:05,240 --> 00:29:08,720
Speaker 1: week night at ten pm Wall Street Time. I'm June

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00:29:08,720 --> 00:29:10,920
Speaker 1: Grosso and you're listening to Bloomberg