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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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Speaker 1: and on Bloomberg dot com slash podcasts. Big tech is

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Speaker 1: under attack, and it's a bipartisan assault from multiple places

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Speaker 1: over a range of grievances that underscores the kind of

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Speaker 1: reckoning the companies could face in the future. Four of

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Speaker 1: the biggest US tech firms, Amazon, Facebook, Google, and Apple

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Speaker 1: defended themselves before the House Antitrust Subcommittee yesterday. Chairman David

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Speaker 1: Cicilini was obviously prepared for his attack on Amazon, suggesting

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Speaker 1: it uses its control over data to thwart competition on

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Speaker 1: its platform. Do you use consumer data to favor Amazon products?

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Speaker 1: Because before you answer that, analysts estimate that between eighty

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Speaker 1: and of sales go to the Amazon by box, So

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Speaker 1: you collect all the stata about the most popular products

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Speaker 1: where they're selling, and you're saying you don't use that

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Speaker 1: in any way to change an algorithm to support the

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Speaker 1: sale of Amazon branded products. The answer was no. A

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Speaker 1: little explanation joining me as Bloomberg Intelligence Senior litigation analyst

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Speaker 1: Jennifer Reid. So, Jen, this was the four big tech

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Speaker 1: companies facing this tough questioning from the panel. Was the

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Speaker 1: bottom line, the concern about sheer size and the dominance

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Speaker 1: of these firms. You know, yes and no. So overall, yes,

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Speaker 1: this is all beginning and all of these investigations are

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Speaker 1: starting because there are general concerns about the dominance, the

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Speaker 1: size of these companies, their power, uh, their ability to

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Speaker 1: to hinder arrivals and small arrivals and new entrants. But

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Speaker 1: you know, an antitrust is fact specific and its conduct specific,

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Speaker 1: and I think many of the committee members recognize that.

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Speaker 1: So to some extent, some of them started getting into

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Speaker 1: very detailed conduct. For instance, what we just heard with

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Speaker 1: Cicilyne talking about Amazon and what Amazon does. And there

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Speaker 1: were even some questions about Apple and why a prompt

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Speaker 1: for Apple's iCloud for NS comes up when you go

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Speaker 1: into an Apple device. So so it was both UH

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Speaker 1: and they are going to have to get into the

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Speaker 1: specifics if something is to be done along the lines

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Speaker 1: of antitrust here to curb these companies, because monopolistic conduct

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Speaker 1: has has to do with conduct and it's very fact specific.

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Speaker 1: So which company faced the most criticism and which the

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Speaker 1: least well in the hearing yesterday, I think Amazon really

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Speaker 1: had the most heat, for sure, and I would say

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Speaker 1: Facebook the least. And while that might sound surprising, that's

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Speaker 1: probably because Yeah, but the thing is, Facebook's problems are

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Speaker 1: really more rooted in privacy concerns and and this was

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Speaker 1: an antitrust hearing, so there was certainly um questioning a

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Speaker 1: Facebook as to who how much competition it has in

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Speaker 1: social media and Facebook really had a little bit of

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Speaker 1: trouble answering that question. Um, But like I said, the

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Speaker 1: privacy concerns the bigger issue for Facebook, and with Amazon

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Speaker 1: faced a lot of heat, I would say Apple the

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Speaker 1: least so well, and we know Facebook was facing its

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Speaker 1: own problems over its attempt to have cryptocurrency or another committee. So, um,

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Speaker 1: is this criticism by lawmakers likely to go anywhere? I

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Speaker 1: mean past legislation there there there seems to be biportistans

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Speaker 1: support here, That's right, and I think that's the ultimate

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Speaker 1: goal here. So this hearing was the second hearing and

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Speaker 1: what is meant to be a series of antitrust hearings

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Speaker 1: and an investigation because that could include a subpoena and

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Speaker 1: getting documents from these companies. Uh. And the goal is

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Speaker 1: to understand if there's a problem, how to solve the

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Speaker 1: problem and weather legislation makes sense, and then how to

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Speaker 1: craft that legislation. So it's going to be difficult and

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Speaker 1: it's going to be somewhat of a long process, but

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Speaker 1: that is the idea here. Some people were saying this

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Speaker 1: hearkens back to Microsoft when when Bill Gates appeared before

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Speaker 1: the Senate in and then Microsoft was the target of

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Speaker 1: a government lawsuit. Uh. Short time later two months later.

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Speaker 1: Is that likely to happen here when there are four

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Speaker 1: different companies. Well, first of all, we have to remember

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Speaker 1: with the Microsoft situation that Bill Gates appeared in n

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Speaker 1: to testify, but the Department of Justice had been investigating

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Speaker 1: Microsoft since So timing wise, they have been investigating five years,

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Speaker 1: and I think the lawsuit by the Department of Justice

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Speaker 1: would have been brought and was getting set up for

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Speaker 1: that time period, you know, whether Bill Gates had testified

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Speaker 1: at that time or not. We're at a different place

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Speaker 1: with these big four tech companies because if there are

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Speaker 1: investigations ongoing already by the Federal Trade Commission, and Department

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Speaker 1: of Justice. They are likely at very beginning stages and

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Speaker 1: those investigations take years, not always five years, but definitely years.

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Speaker 1: Um So we have ongoing in parallel tracks, is this

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Speaker 1: house look into the market power and the impact of

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Speaker 1: that power on competition, and possibly FTC in Department of

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Speaker 1: Justice investigations. So at the end of the day, we

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Speaker 1: don't know where that will lead us to whether the

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Speaker 1: Department of Justice and FTC will find that each of

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Speaker 1: these four companies in the in the areas in which

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Speaker 1: they each have some power, have engaged in conduct that

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Speaker 1: is deemed to be illegal under the anti trust laws,

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Speaker 1: or whether they may find that just one of them has.

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Speaker 1: But it's going to be the fruits of these investigations,

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Speaker 1: the evidence they pull, documents, data, testimony that will lead

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Speaker 1: them to a place where they either settle, do nothing,

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Speaker 1: or bring a suit. So, and we've discussed before how

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Speaker 1: there was news that the Justice Department in the FTC

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Speaker 1: sort of divvied up the companies in order to to

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Speaker 1: start investigating them. Now, as you mentioned, and as Republican

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Speaker 1: Jim Senson Brenner said that just because of business is big,

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Speaker 1: that doesn't mean it's bad and anti trust law doesn't

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Speaker 1: exist to punish businesses because they're big. But isn't that

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Speaker 1: what most Americans think of as anti trust that they're

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Speaker 1: going to break up the big companies? Absolutely, and they say, hey,

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Speaker 1: that company has a monopoly, and isn't it isn't it

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Speaker 1: unlawful to have a monopoly. But Jim Sense and Brenner

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Speaker 1: actually stated the law as it exists currently, and I

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Speaker 1: think that's why they're taking this look because they understand

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Speaker 1: how the laws developed and what our law says. Our

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Speaker 1: Supreme Court has said it is not illegal to obtain

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Speaker 1: a monopoly, and it's not even illegal to charge high

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Speaker 1: prices monopoly prices that if the market will bear it,

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Speaker 1: and if a company has a lawful monopoly, And I

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Speaker 1: think the question becomes, well, then do we need legislation

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Speaker 1: because the state of the law doesn't necessarily give us

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Speaker 1: a lot of flexibility in going after these companies. But

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Speaker 1: the biggest issue is that you have these companies providing

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Speaker 1: great benefits for consumers, free products, lower prices, and that's

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Speaker 1: going to be the biggest battle because anti trust law

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Speaker 1: is really meant to protect consumers against higher prices. Now

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Speaker 1: the EU has opened a form they're always ahead of us.

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Speaker 1: There market the stayers is always ahead of us. As

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Speaker 1: far as anti trust, they opened a formal investigation into

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Speaker 1: Amazon's due role as retailer and online platform, which was

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Speaker 1: sort of what Cicilini was getting into yesterday. Yes, absolutely,

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Speaker 1: The question is if if you're playing on the platform,

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Speaker 1: you're the referee but are also competing, how is that

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Speaker 1: fair and is that a conflict of interest? Now we've

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Speaker 1: done that in the United States. You know, we often

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Speaker 1: are vertically integrated companies. UM, we we participate in you know,

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Speaker 1: let's say in a market, in a retail store where

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Speaker 1: they're selling a private label product that competes against a

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Speaker 1: branded product in that store, they are the distributor as

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Speaker 1: well as competing. So that occurs, and that is okay,

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Speaker 1: it's not necessarily conflict of interest. But if Amazon is

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Speaker 1: doing something, um, taking competitively sensitive information let's say of

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Speaker 1: a rival seller, that could be a problem, or demoting

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Speaker 1: that seller's products and using it to advantage itself, that

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Speaker 1: might be a problem. And yet people like those low prices,

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Speaker 1: as you mentioned, so we'll see what happens. That's Bloomberg

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Speaker 1: Intelligence Senior litigation analyst Jennifer read Thanks for listening to

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Speaker 1: the Bloomberg Law Podcast. You can subscribe and listen to

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Speaker 1: the show on Apple podcast US, SoundCloud, and on bloomberg

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Speaker 1: dot com slash podcast. I'm June Brosso. This is Bloomberg

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Speaker 1: m