WEBVTT - Why Rock Legend Neil Young Is Suing Trump 0:00:00.560 --> 0:00:05.360 This is Bloomberg Law with June Grasso from Bloomberg Radio. 0:00:07.040 --> 0:00:14.600 You can't always get what you want. You can't always 0:00:14.680 --> 0:00:25.840 get what you want Travel the Rolling Stones, Elton John 0:00:25.840 --> 0:00:28.280 and Phil Collins are just some of the rock stars 0:00:28.320 --> 0:00:31.480 who have complained about the Trump campaign using their hit 0:00:31.560 --> 0:00:34.839 songs at campaign events. Neil Young is even suing the 0:00:34.880 --> 0:00:38.200 campaign over it. But Eddie Grant has a more unusual 0:00:38.280 --> 0:00:52.280 complaint about the use of his signature hit Electric Avenue. 0:00:54.720 --> 0:00:58.160 In August, President Trump tweeted an animated ad that shows 0:00:58.200 --> 0:01:00.840 a high speed Trump train ray sing through a town 0:01:01.120 --> 0:01:04.720 while now President elect Joe Biden follows along slowly in 0:01:04.720 --> 0:01:08.759 a railroad hand car. Electric Avenue plays in the background 0:01:08.800 --> 0:01:12.400 with random odd snippets from Biden. Grant says he never 0:01:12.560 --> 0:01:15.160 licensed the song to Trump or his campaign, and he's 0:01:15.160 --> 0:01:19.600 suing for copyright infringement. My guest is intellectual property litigator 0:01:19.760 --> 0:01:24.280 Terence ross A partner captn Uten Rosenman. What would normally happen. 0:01:24.360 --> 0:01:27.039 Let's say I want to do a video and I 0:01:27.080 --> 0:01:29.960 want to use someone's music. Could I use small parts 0:01:30.040 --> 0:01:32.600 of it? Or do I have to get permission no 0:01:32.640 --> 0:01:35.080 matter what I use it for? So the way This 0:01:35.080 --> 0:01:38.880 would normally work is that the creator of the video 0:01:38.959 --> 0:01:42.800 would take it to a lawyer and a pain pre clearance, 0:01:43.280 --> 0:01:46.280 and the lawyer would analyze the video to determine whether 0:01:46.360 --> 0:01:50.200 or not a license for the music was required or not. 0:01:50.640 --> 0:01:54.000 In a very large number of cases, that determined that 0:01:54.440 --> 0:01:58.000 no license is required because the use being made in 0:01:58.040 --> 0:02:00.760 the video is a fair use after the copyright law 0:02:01.120 --> 0:02:04.200 therefore does not constant copyright infringement. Why do you think 0:02:04.240 --> 0:02:08.240 the Trump campaign just didn't get a license. I assume 0:02:08.280 --> 0:02:11.760 they obtained legal advice that they didn't have to. Quite frankly, 0:02:11.800 --> 0:02:14.440 that would be pretty good legal advice. Really, So what 0:02:14.520 --> 0:02:18.320 has the Trump campaign come back with in its response 0:02:18.400 --> 0:02:21.800 to the complaint? So the Trump campaign moves to dismiss 0:02:21.840 --> 0:02:24.520 the lawsuit, which in the federal court system is a 0:02:24.560 --> 0:02:28.280 mechanism for an early termination with prejudice based on a 0:02:28.520 --> 0:02:32.560 failure of the complaint to state a legal claim for relief. 0:02:32.840 --> 0:02:34.880 You know, the basis of the motion to dismiss on 0:02:34.960 --> 0:02:39.200 the Trump campaigns part is exclusively the fair use doctrine. 0:02:39.320 --> 0:02:44.720 The fair use doctrine is a well established legal principle 0:02:45.240 --> 0:02:48.480 under copyright law that's codified in the Copyright Act of 0:02:48.560 --> 0:02:52.440 nine that says there are instances in which a person 0:02:52.520 --> 0:02:56.880 may use a copyright at work without permission because there 0:02:56.880 --> 0:03:01.639 are public policy reasons why we as a society need 0:03:01.760 --> 0:03:05.240 to allow such use. Here, it strikes me that the 0:03:05.280 --> 0:03:08.240 fair used doctor and his tailor made or the defense 0:03:08.400 --> 0:03:11.119 of this lawsuit by the Trump campaign, if you look 0:03:11.160 --> 0:03:14.040 at the statute and the case law that is evolved 0:03:14.080 --> 0:03:16.800 around the fair use doctrine in the United States, a 0:03:16.880 --> 0:03:20.600 defendant would have to show four items are established to 0:03:21.240 --> 0:03:25.040 obtain a dismissal based on fair use, and those are 0:03:25.440 --> 0:03:28.280 that somehow the use of the copyright at work was 0:03:28.320 --> 0:03:32.960 transformed by their own use. Second, that somehow the nature 0:03:33.120 --> 0:03:36.440 of the copyright at work deserve less protection, Third, that 0:03:36.720 --> 0:03:40.160 very little of the copyright at work was actually used, 0:03:40.480 --> 0:03:43.080 and force that there is no impact or very little 0:03:43.280 --> 0:03:47.000 impact upon the market for the copyright at work. And 0:03:47.280 --> 0:03:51.040 the Trump campaign here as filed emotion in which it 0:03:51.200 --> 0:03:54.560 has argued that three of those four requirements for fair 0:03:54.640 --> 0:03:57.720 use are met under these facts and their forts entitled 0:03:57.720 --> 0:04:00.960 to have the lawsuit dismissed with prejudice. R. Cavenue I 0:04:01.000 --> 0:04:04.320 believe was forty seconds out of a fifty second video. 0:04:04.720 --> 0:04:07.800 Does that matter. It matters a lot. The measurement you 0:04:08.000 --> 0:04:11.080 use for that prong of the fair use test is 0:04:11.360 --> 0:04:15.280 how much was used Visa v. The copyright at work. 0:04:15.560 --> 0:04:18.719 The copyright at work was over three minutes long and 0:04:18.839 --> 0:04:22.560 about forty seconds were used in this animated video by 0:04:22.600 --> 0:04:27.359 the Trump campaign, and in past cases that level of 0:04:27.520 --> 0:04:29.960 usage has been held as a matter of law to 0:04:30.480 --> 0:04:35.960 be sufficiently limited to justify invocation and fair use. Doctor Grants, Attorney, 0:04:36.000 --> 0:04:39.480 says that the Trump campaign should have gotten a synchronization 0:04:39.680 --> 0:04:42.680 license to sink the music to the video. Is that 0:04:42.720 --> 0:04:46.120 a separate question? Now not necessarily. You only need a 0:04:46.200 --> 0:04:50.719 license if there is copyright infringement going on. So the 0:04:50.760 --> 0:04:53.919 fair use doctrine here, if the court finds it to 0:04:53.960 --> 0:04:57.200 be applicable, would give the Trump campaign a complete pass 0:04:57.240 --> 0:05:00.080 on this lawsuit. This lawsuit would go away, and the 0:05:00.800 --> 0:05:04.880 synchronization license issue, whether or not it's required or not required, 0:05:05.240 --> 0:05:08.880 probably would be required if there was copyright infringement. That 0:05:08.880 --> 0:05:11.560 would only come up if the plaintiff can get passed 0:05:11.720 --> 0:05:15.120 this fair use defense. Cherry explain why the Trump campaign 0:05:15.279 --> 0:05:19.839 says this video was a transformative use of electric avenue 0:05:20.320 --> 0:05:22.880 So June in the second Circuit. That element of a 0:05:22.920 --> 0:05:26.520 fair use doctrine is often regarded as the most important element, 0:05:26.839 --> 0:05:29.560 and the Trump campaign takes it on in its motion 0:05:29.600 --> 0:05:32.880 to dismiss right up front, knowing what the law in 0:05:32.880 --> 0:05:35.800 the second circuit, which includes New York City is, and 0:05:35.839 --> 0:05:38.760 they say that what they've done here with the song 0:05:39.080 --> 0:05:42.520 is taking a tiny portion of it and repurposed it 0:05:42.680 --> 0:05:47.440 for political purposes in an animated video that attacks the 0:05:47.520 --> 0:05:52.520 Biden candidacy. And the case for this being a transformedive 0:05:52.640 --> 0:05:56.520 use as a legal matter is very strong. There are 0:05:56.720 --> 0:06:00.479 past instances in this court in which small portions of 0:06:00.560 --> 0:06:04.159 songs have been used in this way with pictures or video, 0:06:04.279 --> 0:06:07.280 and the court is how that that does indeed constitute 0:06:07.520 --> 0:06:11.640 transformedtive use. Of particular importance here is the repurposing of 0:06:11.680 --> 0:06:17.080 the song from a popular entertainment media to a political 0:06:17.320 --> 0:06:20.520 use in the context of a specific campaign, and that 0:06:20.680 --> 0:06:23.479 is going to be a very strong argument for the 0:06:23.480 --> 0:06:26.240 Trump campaign that the fair use doctrine should apply here. 0:06:26.680 --> 0:06:30.800 It must frustrate the artists to have their work used, 0:06:31.279 --> 0:06:34.560 even if it's transformed, to have it used in ways 0:06:34.640 --> 0:06:37.360 that they don't agree with or by people they don't 0:06:37.400 --> 0:06:42.320 agree with. Yes, It really does have represented many artists 0:06:42.360 --> 0:06:45.120 who come to me with that complaint, and it is 0:06:45.160 --> 0:06:49.839 a genuine line, heart felt concerned that they expressed and 0:06:49.839 --> 0:06:54.240 should be respected. But you have to understand that in 0:06:54.360 --> 0:06:58.200 order to prevent the copyright hack from being turned into 0:06:58.279 --> 0:07:04.080 some sort of mechanism for censoring speech, we have to 0:07:04.200 --> 0:07:08.000 allow at the margins for this sort of fair use. 0:07:08.360 --> 0:07:12.960 We cannot judge the fair use based on our politics, 0:07:13.080 --> 0:07:17.840 or our morality or any other subjective criteria. We have 0:07:18.040 --> 0:07:21.120 to really focus on the fact that this Further's First 0:07:21.160 --> 0:07:37.640 Amendment right by allowing such fair you heely Young is 0:07:37.680 --> 0:07:41.040 also sue Trump's campaign for playing his songs Roughing in 0:07:41.080 --> 0:07:44.520 the Free World and Devil's Sidewalk at rallies, saying he 0:07:44.600 --> 0:07:47.040 can't allow his music to be used as a theme 0:07:47.120 --> 0:07:50.840 song for a divisive un American campaign. Is this also 0:07:50.880 --> 0:07:54.560 a copyright infringement lawsuit? So at its core, it is 0:07:54.560 --> 0:07:59.000 a copyright lawsuit, but it's really based on licensing law. 0:07:59.520 --> 0:08:03.960 This is not something that's new to this particular campaign cycle. 0:08:04.320 --> 0:08:08.280 Recording artists have complained about the use of their music 0:08:08.640 --> 0:08:13.239 for several decades now, specifically the use at rallies, live 0:08:13.600 --> 0:08:17.640 appearances by candidate as well as in political commercials, and 0:08:17.680 --> 0:08:21.160 so it's not really something new. So Neil Young contends 0:08:21.200 --> 0:08:25.480 that at a Trump rally in June in Tulsa, Oklahoma, 0:08:25.680 --> 0:08:29.200 two of his song were played apparently in their hole 0:08:30.080 --> 0:08:33.640 at the rally as part of hyping up the crowd, 0:08:33.880 --> 0:08:37.960 and that the Trump campaign in doing that did not 0:08:38.240 --> 0:08:41.840 have a license to play the songs and did not 0:08:42.040 --> 0:08:46.000 have Neil Young's authorization to play the songs. Could the 0:08:46.000 --> 0:08:48.920 Trump campaign to be operating under the theory that they 0:08:49.000 --> 0:08:52.319 have an ask cap a general license from as CAP 0:08:52.480 --> 0:08:56.920 or b m I. So when Donald Trump first announced 0:08:56.960 --> 0:08:59.960 that he was running for president in two thousands fifteen, 0:09:00.440 --> 0:09:02.800 this campaign but to the license on the song that 0:09:02.920 --> 0:09:07.360 was played as he famously descended the escalator Trump Power 0:09:07.440 --> 0:09:11.200 to make the announcement, and the performer of that song complained, 0:09:11.440 --> 0:09:13.920 but the fact remained that it was not copyright in 0:09:13.960 --> 0:09:17.680 French because the Trump campaign had obtained a license to 0:09:17.960 --> 0:09:21.280 perform the song in public and was therefore entitled to 0:09:21.280 --> 0:09:24.920 do so. And that's the problem typically with all of 0:09:24.960 --> 0:09:30.439 these recording artists bringing lawsuits against politicians. The way the 0:09:30.520 --> 0:09:35.400 business has worked since is that recording artists, in order 0:09:35.440 --> 0:09:39.400 to obtain licensing revenues, give the licensing rights to one 0:09:39.440 --> 0:09:44.120 of several large licensing organizations, and they then go out 0:09:44.200 --> 0:09:49.199 and vigorously enforced the copyright laws against anybody playing that 0:09:49.400 --> 0:09:53.080 artists music in public and generate quite a lot of revenue. 0:09:53.480 --> 0:09:56.840 What they will tell the world is that you don't 0:09:56.880 --> 0:09:58.800 need to get in trouble with us. You can come 0:09:58.800 --> 0:10:01.920 and get a blanket license to perform the music of 0:10:01.960 --> 0:10:05.720 all of our artists in our stable and in that 0:10:05.760 --> 0:10:10.720 way have protection from any copyright infringement lawsuits. And so 0:10:11.360 --> 0:10:16.640 many advertising agencies, many venues, particularly stadiums, will go out 0:10:16.720 --> 0:10:20.559 and obtain these blanket licenses. And in the complaint that 0:10:20.640 --> 0:10:23.160 Neil Young has brought against the Trump campaign, he goes 0:10:23.200 --> 0:10:25.360 out of his way to point app that although the 0:10:25.520 --> 0:10:28.720 venue where this Trump rally and post local helmet took 0:10:28.720 --> 0:10:31.760 place did have a license, that under the terms of 0:10:31.760 --> 0:10:34.760 that license, a third party coming in and using the 0:10:34.880 --> 0:10:38.480 venue could not take advantage of the license, and therefore 0:10:38.559 --> 0:10:41.640 the Trump campaign was unlicensed. And this is a common 0:10:41.679 --> 0:10:45.440 mistake that organizations coming in and renting a venue make, 0:10:45.520 --> 0:10:49.640 thinking that they're entitled to piggyback on the ASCAP license 0:10:49.720 --> 0:10:52.840 that the venue has. The venue has that license in 0:10:52.920 --> 0:10:55.600 order to play music during intermissions and as the crowds 0:10:55.640 --> 0:10:58.079 coming in, But that does not give the third party 0:10:58.160 --> 0:11:01.280 organization in this case Trump organs as the right piggieback 0:11:01.280 --> 0:11:04.319 on it. They needed, arguably to take their own license 0:11:04.400 --> 0:11:07.160 to play the Neelly Young music, and Neil Young contends 0:11:07.200 --> 0:11:09.679 that they did not have such a license. Can an 0:11:09.800 --> 0:11:14.559 artist like Neil Young instruct as CAP or b m 0:11:14.640 --> 0:11:18.599 I that he doesn't want his music licensed to the 0:11:18.640 --> 0:11:22.560 Trump campaign, So June, that's a great question, um, and 0:11:22.600 --> 0:11:25.120 the one and one that has not been resolved yet 0:11:25.160 --> 0:11:27.360 by the courts and has to be at some point. 0:11:28.080 --> 0:11:31.280 In the nineteen forties, UM, the United States government brought 0:11:31.320 --> 0:11:35.600 antitrust lawsuits against a SCAP and b m I, saying 0:11:35.640 --> 0:11:39.160 that in effect that they were monopolizing the business of 0:11:39.240 --> 0:11:42.960 music because they would pick and choose who they wanted 0:11:43.000 --> 0:11:45.840 to license to and in that way be able to 0:11:45.920 --> 0:11:51.240 drive up UM the prices for the licensing. UM. The 0:11:51.679 --> 0:11:55.760 Rather than take that lawsuit through the courts, UMSCOT b 0:11:55.920 --> 0:11:59.760 m I entered into what it called antitrust consent decrees, 0:12:00.559 --> 0:12:02.960 and under the terms of those decrees, which are still 0:12:02.960 --> 0:12:07.440 in effect, eight years later, the both of them are 0:12:07.520 --> 0:12:15.239 required to license any song or portfolio songs upon request. 0:12:16.080 --> 0:12:19.960 They do not get to pick and choose. And therefore, 0:12:20.600 --> 0:12:25.640 if and artists took that position, it may very well 0:12:25.679 --> 0:12:27.959 expose a scap or b am I too ant I 0:12:28.000 --> 0:12:32.480 trust considerations. There are artists who are now trying to 0:12:32.520 --> 0:12:37.920 do exactly that, and they will probably in the long 0:12:38.040 --> 0:12:41.000 run face some sort of legal consequences as they continue 0:12:41.000 --> 0:12:43.520 insist on doing this, and it does threaten the very 0:12:43.600 --> 0:12:47.440 nature of these consent decrees. An artists who wants to 0:12:47.559 --> 0:12:50.160 UM be able to pick and choose who can license 0:12:50.200 --> 0:12:54.280 their works, and in particular to discriminate amongst political candidates 0:12:54.360 --> 0:12:59.760 or political campaigns, probably needs to take their songs out 0:12:59.800 --> 0:13:03.520 of a step and be a mindset their own licensing 0:13:04.240 --> 0:13:08.520 UM organizations. So the artists, by the way, a very 0:13:08.640 --> 0:13:13.120 good defense here to the for the Trump campaign UM 0:13:13.160 --> 0:13:17.240 to argue that UH that Neil Young was not free 0:13:17.559 --> 0:13:21.640 under the antitrust laws and under that consent degree too 0:13:22.160 --> 0:13:27.679 UM deny them UM a license and could have limiting 0:13:27.920 --> 0:13:34.000 effect upon any damages or injunction that gets issued. Is 0:13:34.000 --> 0:13:37.760 there any case to be made that this implies a 0:13:37.840 --> 0:13:43.319 false endorsement by the artist to have their music played 0:13:43.360 --> 0:13:46.320 at a Trump rally. So that's an argument that you 0:13:46.360 --> 0:13:49.000 hear recording artists make all the time in this context, 0:13:49.040 --> 0:13:55.199 that somehow they are being pegged at supporting this candidate. 0:13:55.600 --> 0:13:58.880 It is a cause of action that only exists in 0:13:59.640 --> 0:14:04.120 hands full of states, and it would be difficult one 0:14:04.200 --> 0:14:08.440 to make in this context. I think the American public 0:14:09.080 --> 0:14:13.319 is arguably sophisticated and not to understand that music gets 0:14:13.600 --> 0:14:18.040 used to sell all sorts of products, including candidates for office, 0:14:18.440 --> 0:14:22.360 and that does not necessarily imply an endorsement by the 0:14:22.400 --> 0:14:26.760 performing artist of whatever that product is, or in this 0:14:26.800 --> 0:14:31.200 case a candidate um So it would be a difficult 0:14:31.240 --> 0:14:34.640 cause of action to make, even in those states in 0:14:34.640 --> 0:14:38.080 which it is available as a cause of action. So 0:14:38.160 --> 0:14:42.400 it appears that the Eddie Grant lawsuit might be dismissed 0:14:42.520 --> 0:14:46.040 on a motion to dismiss before you really get into 0:14:46.320 --> 0:14:50.240 discovery and any kind of heavy litigation. But what about 0:14:50.400 --> 0:14:54.240 the Neily Young lawsuit? So June the motion is smiss 0:14:54.240 --> 0:14:57.000 brought in the Eddie Grant case by the Trump Organization 0:14:57.160 --> 0:15:00.360 has a long pedigree in the in that federal court. 0:15:00.880 --> 0:15:03.360 It is regularly allowed because all you do is look 0:15:03.400 --> 0:15:06.120 at the face the complaint and the facts as alleged 0:15:06.120 --> 0:15:09.840 by the copyright owner, and it's relatively easy to determine 0:15:09.840 --> 0:15:13.920 whether or not the fair use doctrine has the factual 0:15:14.000 --> 0:15:18.040 predicates on the face of complaint um to be considered 0:15:18.160 --> 0:15:20.960 at an early point in case. And that's probably a 0:15:20.960 --> 0:15:23.560 good thing here for the Trump organization. I think that 0:15:23.640 --> 0:15:29.160 lawsuits likely to be resolved relatively quickly without discovery. In contrast, 0:15:29.240 --> 0:15:32.960 the Nenal Young lawsuit will turn on a lot of 0:15:33.840 --> 0:15:37.560 details in the facts that are not evident on the 0:15:37.600 --> 0:15:42.120 face of the complaint and therefore going to require factual 0:15:42.160 --> 0:15:47.240 discovery and likely to be um long and dragged out, 0:15:47.920 --> 0:15:51.520 and may take as much as a few years to 0:15:51.520 --> 0:15:55.480 to decide if it isn't dropped in the interim given 0:15:55.520 --> 0:15:59.320 the results of the election. Thanks Terry. That's Terence Ross, 0:15:59.400 --> 0:16:05.000 a partner Caton Uchen Rosenman. The United States versus Google, 0:16:05.280 --> 0:16:08.160 it will be an epic antitrust court battle as the 0:16:08.200 --> 0:16:12.360 government tries to prove that Google illegally monopolized Internet search. 0:16:12.920 --> 0:16:15.040 It's just the beginning of what's expected to be a 0:16:15.120 --> 0:16:17.920 long battle, with the government having the burden of proving 0:16:18.040 --> 0:16:20.760 several elements to make at its case. Joining me is 0:16:20.840 --> 0:16:24.120 Sam Weinstein, a professor Cardozo Law School and a former 0:16:24.160 --> 0:16:28.080 official in the Justice Department's antitrust Division. First, the government 0:16:28.080 --> 0:16:30.960 has to prove that Google has monopoly power in the market. 0:16:31.000 --> 0:16:34.200 And it's laid out three markets, that's right. So the 0:16:34.240 --> 0:16:37.480 government's alleging three markets, right. So one is general search services, 0:16:37.520 --> 0:16:39.680 which is what we think of when we enter a 0:16:39.680 --> 0:16:43.360 search term into Google. And then a search advertising market, 0:16:43.400 --> 0:16:46.640 which is a general market for search advertising. And something 0:16:46.680 --> 0:16:50.000 they call general search text advertising, which is the ads 0:16:50.000 --> 0:16:52.000 that show up on the top of your Google results page, 0:16:52.080 --> 0:16:56.240 right of sponsored ads above the organic so called organic peoples. Right. So, 0:16:56.320 --> 0:16:58.880 in the way these cases work, as the government has 0:16:58.880 --> 0:17:02.400 to allege these markets and then shows they are indeed markets, right, 0:17:02.400 --> 0:17:05.119 and then that Google has monopoly power in these markets, 0:17:05.160 --> 0:17:08.119 right WHI would be something about a seven share, And 0:17:08.200 --> 0:17:10.879 you know, Google will contest these market definitions. They will 0:17:10.920 --> 0:17:13.840 say that the markets are broader then the government is alleging, 0:17:13.960 --> 0:17:15.960 and Google wants them to be broader because then their 0:17:16.000 --> 0:17:20.119 share drops, and you know, in particular and search advertising 0:17:20.119 --> 0:17:23.120 and general search text advertising, I imagine Google will push 0:17:23.200 --> 0:17:25.880 back hard that those are relevant markets. Right, Google will 0:17:25.880 --> 0:17:29.760 say advertising dollars are distributing amongst things like billboards and 0:17:30.240 --> 0:17:34.280 podcasts and television, right, And that's the market general advertising, 0:17:34.359 --> 0:17:37.480 not not an internet not a search based advertising market. 0:17:38.119 --> 0:17:41.480 So then is it just the judge's decision what the 0:17:41.560 --> 0:17:45.600 market is? And for Google's monopoly share? Is that easy 0:17:45.680 --> 0:17:48.760 to figure out? I mean the numbers? So right, it's 0:17:48.760 --> 0:17:51.520 a good question. Right, So the fact finder, it's in 0:17:51.520 --> 0:17:53.399 front of the judge and tromp. The jury will determine 0:17:53.440 --> 0:17:55.720 in the end what the market is. And you know, 0:17:55.720 --> 0:17:57.560 if you say, for instance, let's say the market is 0:17:57.600 --> 0:17:59.600 general search, and I think that's an easier market for 0:17:59.680 --> 0:18:02.040 the god want to prove, there's going to be data 0:18:02.040 --> 0:18:04.160 out there that economists will put together to say how 0:18:04.160 --> 0:18:06.679 many searches are done a year in the United States 0:18:06.800 --> 0:18:08.880 and how many of those go to Google. Um, that's 0:18:08.880 --> 0:18:13.000 Google's percentage of general search. So that's pretty straightforward advertising. 0:18:13.040 --> 0:18:16.000 I think. Also, if in fact the finders fact in 0:18:16.040 --> 0:18:19.359 the case agrees that the market is search advertising, an 0:18:19.359 --> 0:18:21.640 economist will come along and say, well, the next number 0:18:21.680 --> 0:18:23.760 of dollars are spent on search advertising this year, and 0:18:24.040 --> 0:18:26.359 these are how many dollars want to Google, and here's 0:18:26.359 --> 0:18:29.320 Google's percentage, and that's how they would determine Google's percentage 0:18:29.320 --> 0:18:32.679 of you above or below seven sever five percent not 0:18:32.720 --> 0:18:35.320 a magic number, but the case will suggests you have 0:18:35.400 --> 0:18:37.520 to be above sent five percent, so you know that. 0:18:37.560 --> 0:18:39.680 The steps would be defining the role that market first 0:18:39.760 --> 0:18:43.320 and then proving Google share that levant market. Google earned 0:18:43.320 --> 0:18:47.480 se of search advertising revenue in the US, according to 0:18:47.520 --> 0:18:51.440 a report by E Markett. If that number holds, does 0:18:51.480 --> 0:18:54.159 that mean that Google is not a monopoly in that market? 0:18:54.800 --> 0:18:56.639 The parties would fight about this, right, So there's no 0:18:56.760 --> 0:18:58.840 hard and fast number. I used. Seven percent is a 0:18:58.840 --> 0:19:02.000 shorthand be because there is some case law saying you 0:19:02.040 --> 0:19:04.440 know above stating his pipercent probably is a monopoly share. 0:19:04.720 --> 0:19:07.520 But that's a moving target, right, so a judge or 0:19:07.680 --> 0:19:09.800 the journy will decide what the Probably the judge will 0:19:09.800 --> 0:19:12.800 decide what the appropriate legal standard is. But I think 0:19:13.520 --> 0:19:16.639 is a good shorthand for monopoly power. So if the 0:19:16.680 --> 0:19:19.440 government can prove Google is a monopoly and at least 0:19:19.440 --> 0:19:22.680 one market, then it has to show that Google illegally 0:19:22.800 --> 0:19:26.359 keeps control of that market. And the suit focuses on 0:19:26.400 --> 0:19:29.040 the billions of dollars that Google pays each year to 0:19:29.160 --> 0:19:33.040 make sure it's search engine is the default on mobile 0:19:33.040 --> 0:19:37.240 phones and web browsers. So, any monopolization case, what we 0:19:37.240 --> 0:19:39.879 call Section to at the Sherman Act, has two parts. 0:19:40.000 --> 0:19:42.280 The plainests. In this case, the government has a burden 0:19:42.320 --> 0:19:44.919 to prove two things. One is monopoly power. Let's we 0:19:45.000 --> 0:19:47.080 just talked about, right, so a certain share of a 0:19:47.119 --> 0:19:50.119 relevant market. And the second is some bad acts, some 0:19:50.320 --> 0:19:53.880 bad conduct that either allowed to defend it, to acquire 0:19:54.040 --> 0:19:56.480 or to maintain the monopoly share. And this is a 0:19:56.520 --> 0:19:59.760 monopoly maintenance case. So the alleged bad conduct is a 0:19:59.800 --> 0:20:02.480 few ease of agreements that the government is saying Google 0:20:02.560 --> 0:20:05.800 uses to maintain its monopoly shia and it does so unlawfully. 0:20:06.400 --> 0:20:08.960 On their face, when you hear about those agreements, they 0:20:09.040 --> 0:20:12.880 sound like Google's locking in the market. So what could 0:20:12.880 --> 0:20:16.439 Google come back with as a legitimate reason for those 0:20:17.240 --> 0:20:19.159 So I mean, I think if I'm Google, let me 0:20:19.359 --> 0:20:20.720 just lay out a little bit what will happen on 0:20:20.760 --> 0:20:22.159 the on the context side of the case. Right, the 0:20:22.240 --> 0:20:24.760 government has a burden to come forward with an allegation 0:20:24.760 --> 0:20:27.600 of anti competitive conduct. And here we'll just say for 0:20:27.640 --> 0:20:31.359 shorthand is these various agreements like preinstallation agreements for the 0:20:31.359 --> 0:20:34.480 search engine, revenue sharing agreements right with the big phone manufacturers. 0:20:35.040 --> 0:20:36.600 So the government's going to allege that those are anti 0:20:36.600 --> 0:20:40.240 competitive agreements, and Google can then attack the governments of 0:20:40.280 --> 0:20:42.080 the anti competitive theory, and Google will come back with 0:20:42.119 --> 0:20:45.440 its own pro competitive explanations. Right, So let's first talk 0:20:45.440 --> 0:20:48.240 about the government's theory. The government's theory is that these 0:20:48.280 --> 0:20:52.359 agreements lock in distribution for Google, lockout distribution for the 0:20:52.400 --> 0:20:55.000 Google's rivals, right, raised rivals costs to try to get 0:20:55.080 --> 0:20:58.440 their search engines to consumers. So if I'm Google, I 0:20:58.440 --> 0:21:00.200 think the first thing I'm going to argue is, well, 0:21:00.200 --> 0:21:02.800 that's not really what's happening, right, That's not how consumers 0:21:02.800 --> 0:21:06.320 actually choose search engines. So to me, this case many 0:21:06.320 --> 0:21:08.679 people have made this observation harkens back to the Microsoft came. 0:21:08.720 --> 0:21:11.399 In the Microsoft case, one of the allegations among many 0:21:11.720 --> 0:21:15.320 was that Microsoft ups for closed distribution of rival Internet 0:21:15.359 --> 0:21:17.480 browsers by locking up space on the hard drive the 0:21:17.520 --> 0:21:20.840 ali apps. Right, people making this has looked similar. Right, 0:21:20.880 --> 0:21:24.159 these agreements allegedly locked up space on the phone or 0:21:24.200 --> 0:21:26.400 on your computer. From what you see as a default 0:21:26.440 --> 0:21:29.800 is Google search engine. But Google is pretty straightforward. Counter 0:21:29.840 --> 0:21:32.520 argument is you can switch anytime if you don't like Google. 0:21:32.720 --> 0:21:34.920 It's a clicker way to do DUC dot go, which 0:21:34.960 --> 0:21:37.400 I think it's a pretty powerful argument. Now, it could 0:21:37.400 --> 0:21:39.920 be the government has alleged facts here when we don't 0:21:39.920 --> 0:21:42.679 see the backup for it, that consumers don't switch right 0:21:42.760 --> 0:21:44.640 that once you see on your phone Google is the default, 0:21:44.720 --> 0:21:46.240 that you're not going to switch over to DUC dot go. 0:21:46.440 --> 0:21:48.520 But it does seem pretty easy, a lot easier than 0:21:48.520 --> 0:21:50.880 it was in the Microsoft case to switch. So that's 0:21:50.920 --> 0:21:52.760 one thing I'm going to say if I'm Google. Those 0:21:52.760 --> 0:21:53.960 thing I'm going to say if I'm Google, and this 0:21:54.040 --> 0:21:56.080 is before I even get to my pro competitive justifications, 0:21:56.119 --> 0:21:59.119 is so you know the reason why consumers use Google, 0:21:59.480 --> 0:22:01.600 it's because we're really really good. It's true we have 0:22:01.640 --> 0:22:03.960 these agreements in place, but even if we didn't have them, 0:22:04.080 --> 0:22:07.639 consumers prefer us. That's probably pretty persuasive argument, you know, 0:22:07.680 --> 0:22:09.760 need to feel plays out right, But the government has 0:22:09.800 --> 0:22:11.760 to draw a link between these agreements and Google's monopoly, 0:22:11.760 --> 0:22:14.120 share them and Google to try to break that causation 0:22:14.359 --> 0:22:17.680 link by saying we're just really good. So that's if 0:22:17.720 --> 0:22:20.440 I'm Google. That's why I'm arguing to sort of overcome 0:22:20.520 --> 0:22:23.720 the government's prema facial case, right, their initial assertion that 0:22:24.160 --> 0:22:27.120 these agreements are any competitive. And then I'm going to say, okay, course, 0:22:27.119 --> 0:22:29.600 if you don't buy that, I have pro competitive justifications 0:22:29.600 --> 0:22:31.879 to agreement. Right, So what could that be? You know, 0:22:31.920 --> 0:22:33.719 it's a little unclear, right, So this is I think 0:22:33.760 --> 0:22:36.080 a little harder for Google. What is pro competitive about 0:22:36.080 --> 0:22:39.840 these agreements? Well, maybe it produces some certainty for them. 0:22:39.880 --> 0:22:43.320 Maybe it protects the Android operating system from being broken 0:22:43.359 --> 0:22:46.399 by third party apps. Right, you can imagine some explanation. 0:22:46.720 --> 0:22:49.280 It's a little harder for me to get there. We'll 0:22:49.320 --> 0:22:51.800 let to see what Google does explain with the rule 0:22:51.880 --> 0:22:54.520 of reason analysis is that the judge is going to 0:22:54.720 --> 0:22:58.040 use sure the great question. Right, So the rule of reason. 0:22:58.320 --> 0:23:00.199 You know, you can think of this a balancing test, right, 0:23:00.240 --> 0:23:03.040 And but it's it's done step by step. So first step, 0:23:03.080 --> 0:23:06.200 as the government says, hey, this conduct you're doing, defendant 0:23:06.240 --> 0:23:08.960 is anti competitive. Here's why we think it's any competitive. 0:23:09.440 --> 0:23:11.359 And then the defending gets to come back and say, no, 0:23:11.680 --> 0:23:13.920 first of all, we're gonna attack your assertions government that 0:23:14.080 --> 0:23:15.760 this is anti competitive. Second, we're going to show that's 0:23:15.760 --> 0:23:18.320 actually permpetitive. And then if if the defendant can come 0:23:18.400 --> 0:23:21.480 forth to some plausible pro competitive justifications that in the 0:23:21.520 --> 0:23:24.840 third steps the judge will determine will weigh the anti 0:23:24.840 --> 0:23:28.200 competitive conduct against the pro competitive justifications and come out 0:23:28.240 --> 0:23:30.200 one way or the other. So that's the theory behind 0:23:30.240 --> 0:23:32.160 the rule of reason. Why we're weighing what's bad about 0:23:32.200 --> 0:23:35.480 the conduct against what's good about the conduct. In reality, 0:23:35.480 --> 0:23:39.160 that hardly ever happens. In most cases, the judge will 0:23:39.200 --> 0:23:42.800 say something like, all I see here is any competitive conduct. 0:23:42.800 --> 0:23:45.439