WEBVTT - Alphabet Fights Effort to Break Up Google, Netflix’s “Recession-Proof” Appeal 0:00:02.520 --> 0:00:09.160 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.240 --> 0:00:14.960 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.400 --> 0:00:20.720 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:34.840 --> 0:00:37.360 Live from New York. This is Bloomberg Technology. Coming up. 0:00:37.640 --> 0:00:40.880 Google heads back to court to take on the Department 0:00:40.960 --> 0:00:43.200 of Justice over a search monopoly fix. 0:00:43.720 --> 0:00:45.279 Plus in an era of tariffs. 0:00:45.320 --> 0:00:48.279 Netflix stands out why Wall Streets is the stock as 0:00:48.320 --> 0:00:52.600 recession proof, and TSMC warns there will be challenges limiting 0:00:52.720 --> 0:00:56.040 China from its AI chips. Details this hour, but first 0:00:56.040 --> 0:00:58.639 we check in on the markets, which once again are 0:00:58.720 --> 0:01:01.200 under pressure. The Naza bears the brunt when NASAK one 0:01:01.280 --> 0:01:03.560 hundred off by more than two point three let's call 0:01:03.600 --> 0:01:05.600 it two point four percent on the day. We are 0:01:05.600 --> 0:01:08.199 worried about the macro, about the future of j. Powell 0:01:08.200 --> 0:01:10.080 at the Fed, and we see the impact on the 0:01:10.120 --> 0:01:11.039 Magnificent seven. 0:01:11.240 --> 0:01:12.399 Not though on crypto. 0:01:12.560 --> 0:01:15.840 We see bitcoin bounce that as gold gets once again 0:01:16.080 --> 0:01:18.280 that desire to get into a haven trade, so too. 0:01:18.319 --> 0:01:20.720 There's a shorter end of the treasuries, but Bitcoin up 0:01:20.720 --> 0:01:22.920 three point seven percent, the high sets we've seen since 0:01:22.959 --> 0:01:25.399 the beginning of March eighty eight thousand, Move on and 0:01:25.440 --> 0:01:28.160 have a look at some individual stocks, because Tesla, on 0:01:28.200 --> 0:01:30.040 the downside, what off by more than six percent, one 0:01:30.040 --> 0:01:32.960 of the key contributors in terms of points. Apple's falling 0:01:33.000 --> 0:01:35.240 in video is falling, but Tesla too. Will dig into 0:01:35.319 --> 0:01:38.080 why we're concerned kind of all important earnings this week 0:01:38.120 --> 0:01:40.760 come Tuesday. Remember we've got a whole raft of earnings, 0:01:40.760 --> 0:01:42.680 but we've already got a little bit of sentiment. Check 0:01:43.120 --> 0:01:45.240 on what seems to be resilient in the face of 0:01:45.280 --> 0:01:48.360 macro pressure. Netflix up two point eight percent, the best 0:01:48.360 --> 0:01:51.080 performer on the Nasdaq one hundred from a points perspective. 0:01:51.080 --> 0:01:53.720 But let's get to Ryanvstelica, who can join us now 0:01:53.760 --> 0:01:57.160 on the weight that mag seven is feeling today. Seems 0:01:57.160 --> 0:01:58.920 to be a macro one, seems to be one of 0:01:58.960 --> 0:02:01.720 the fed. There are some standouts when it comes to earnings. 0:02:02.880 --> 0:02:04.280 Hey, good morning, thanks for having me. 0:02:04.480 --> 0:02:07.160 Yeah, there's still a lot of uncertainty out there, and 0:02:07.200 --> 0:02:10.800 the new news surrounding you know, is Powell potentially at risk? 0:02:11.440 --> 0:02:14.240 That is just adding to the level of uncertainty out there. 0:02:14.240 --> 0:02:17.400 There's so much polity uncertainty in this broader sense that 0:02:17.480 --> 0:02:20.239 maybe the US isn't the sort of safe haven economy 0:02:20.440 --> 0:02:22.880 that it has been viewed as really for decades. So 0:02:22.960 --> 0:02:26.160 that is a massive shift out there and causing a 0:02:26.200 --> 0:02:27.200 lot of uncertainty. 0:02:27.600 --> 0:02:31.160 Netflix is, from an equity perspective, deemed a haven. 0:02:31.560 --> 0:02:33.519 We are going to hear from so many. 0:02:33.240 --> 0:02:36.920 CEOs this week, whether it's well some that have to 0:02:37.000 --> 0:02:40.120 face the court but also have to fase earnings. I mean, 0:02:40.160 --> 0:02:42.320 we know that we're going to be hearing from the 0:02:42.360 --> 0:02:43.920 CEO of Google in that capacity. 0:02:44.080 --> 0:02:46.000 It's to capacity that being alphabet too. 0:02:46.120 --> 0:02:48.440 But also you've got intell, You've got IBM, you've got 0:02:48.840 --> 0:02:49.840 Texas instruments. 0:02:49.840 --> 0:02:51.839 There's a lot that we can take a gauge of. Ryan. 0:02:53.120 --> 0:02:55.359 Yeah, absolutely so Netflix is maybe a little bit of 0:02:55.400 --> 0:02:58.240 an anomaly compared to those other names you mentioned, not 0:02:58.360 --> 0:03:01.200 quite as subject to the tear of risk as some 0:03:01.240 --> 0:03:03.600 of the chip makers and hardware companies out there, which 0:03:03.600 --> 0:03:06.320 have really been driving a lot of the selling this year. 0:03:06.520 --> 0:03:10.240 It is also seen as a recession resistant company, given 0:03:10.240 --> 0:03:12.639 the idea that you know, if people are pulling back, 0:03:12.680 --> 0:03:15.560 by which I mean consumers, they're not likely to cut 0:03:15.560 --> 0:03:17.480 their Netflix subscription in the way that they might be 0:03:17.480 --> 0:03:20.519 pulling back on other kinds of discretionary spending. So it 0:03:20.600 --> 0:03:23.799 seems like it has both offensive and defensive characteristics. That's 0:03:23.840 --> 0:03:26.240 what one of the analyst notes I read this morning said. 0:03:26.480 --> 0:03:30.240 So obviously a pretty positive company, a pretty positive earnings report, 0:03:30.280 --> 0:03:32.480 and that stock has been doing well this year, especially 0:03:32.520 --> 0:03:35.640 relative to the rest of the mag seven, the old fangs, 0:03:35.960 --> 0:03:37.160 just the broader market. 0:03:37.800 --> 0:03:40.360 Certainly, and the moment only five names on the nasat 0:03:40.400 --> 0:03:43.040 one hundred are in the green. One of the micro strategy, 0:03:43.240 --> 0:03:45.280 the other Netflix, Key ran Vasselica. 0:03:45.400 --> 0:03:46.120 We thank you so much. 0:03:46.200 --> 0:03:48.280 Let's get more on the tech market sell off more broadly, 0:03:48.480 --> 0:03:52.680 Scott Labner's with US Horizon Investments, and just at this moment, Scott, 0:03:52.800 --> 0:03:56.920 within this uncertainty from a macro perspective, do you want 0:03:57.000 --> 0:03:59.040 to be buying in some of this weakness and tech? 0:04:00.160 --> 0:04:02.560 Hey, Caroline, Yeah, I think you actually do. 0:04:02.640 --> 0:04:04.520 I mean, I think this is one place where you 0:04:04.560 --> 0:04:06.360 can start putting some some money to work and some 0:04:06.600 --> 0:04:08.720 some new money to work. Probably I'd be a little careful, 0:04:08.960 --> 0:04:10.600 you know, as you guys are just talking about it's 0:04:10.600 --> 0:04:12.680 probably not the time for the chips because of all 0:04:12.720 --> 0:04:15.280 the tarif uncertainty. But you know, something more like like 0:04:15.320 --> 0:04:17.960 an equal weight sort of tech play. You know, you 0:04:18.160 --> 0:04:20.159 get you know, catch on the themes with AI. You know, 0:04:20.360 --> 0:04:22.320 like if you remember, you know, the starting place before 0:04:22.320 --> 0:04:24.039 all the tarif stuff, we're all talking about AI. 0:04:23.880 --> 0:04:26.000 Still because it was still a really big deal. It 0:04:26.000 --> 0:04:27.080 will continue to be a big deal. 0:04:27.080 --> 0:04:29.480 It's just being overshadowed currently, and so you know, this 0:04:29.520 --> 0:04:31.479 is probably a pretty good time to start putting money 0:04:31.520 --> 0:04:33.479 to work towards that sector and towards that theme. 0:04:34.240 --> 0:04:37.760 Okay, but if it's not chips, how are you thinking 0:04:37.760 --> 0:04:39.160 about the AI opportunity. 0:04:39.760 --> 0:04:41.360 Yeah, look, I think it's a little bit more nuanced 0:04:41.440 --> 0:04:41.720 right now. 0:04:41.760 --> 0:04:43.200 You know that this is you know, you can think 0:04:43.200 --> 0:04:45.360 about the AI trade as being or you know, the 0:04:45.400 --> 0:04:48.359 AI investments broadly, as as following a couple of different phases. 0:04:48.560 --> 0:04:50.839 You know, we've been in mostly sort of. 0:04:50.839 --> 0:04:53.600 The infrastructure phase and that's and that's dominated obviously by chips, 0:04:53.800 --> 0:04:55.400 by the hard work kind of kinds of things, just 0:04:55.400 --> 0:04:57.160 like routers dominated the first part. 0:04:57.080 --> 0:04:57.880 Of the Internet cycle. 0:04:58.040 --> 0:05:00.320 We're getting now into more of the prove it stage 0:05:00.320 --> 0:05:02.360 of AI, which is where you know, we're comps. 0:05:02.400 --> 0:05:03.919 You're gonna have to figure out and prove to the 0:05:03.920 --> 0:05:06.200 market that hey, I'm using this stuff. I know how 0:05:06.200 --> 0:05:06.560 to make it. 0:05:06.680 --> 0:05:08.159 I know how to use it in my company to 0:05:08.240 --> 0:05:12.040 dry productivity, dry processes, and to get higher margins ultimately, 0:05:12.080 --> 0:05:13.400 which is really the name of the game for this. 0:05:14.040 --> 0:05:16.400 And so you know, finding those companies that can help 0:05:16.600 --> 0:05:19.359 deliver that type of margin expansion through through productivity growth 0:05:19.680 --> 0:05:22.040 using AI is really is what we think is kind 0:05:22.040 --> 0:05:23.400 of the next trade. And so that's why that that 0:05:23.480 --> 0:05:25.560 more equal weight treatment we think is probably a better play. 0:05:26.120 --> 0:05:28.200 When we think about this week, though, Scott and the 0:05:28.279 --> 0:05:32.600 amount of guidance we might get from earnings from CEOs, 0:05:32.680 --> 0:05:35.000 whether it's the telecom sector that comes thick and fast, 0:05:35.040 --> 0:05:37.400 whether you've got some of those chip names, whether it's 0:05:37.400 --> 0:05:41.200 Intel or Texas Instruments, Are you expecting the guidance to 0:05:41.240 --> 0:05:41.680 be lower? 0:05:42.400 --> 0:05:45.599 We expect the guidance to be completely fuzzy, Like, look, 0:05:45.720 --> 0:05:47.640 I'm not sure who's who's gonna leave guidance. 0:05:48.120 --> 0:05:48.279 You know. 0:05:48.360 --> 0:05:50.960 Yeah, United Airlines come out, you know, last week and say, look, 0:05:51.000 --> 0:05:52.800 here's our guidance for a recession. Here's our guidance for 0:05:52.839 --> 0:05:55.559 non recession. Like that's not guidance, I mean, that's actually 0:05:55.640 --> 0:05:57.560 it's just fairly useless. And so you know, what we're 0:05:57.560 --> 0:05:59.280 really going to be focusing on is like how are 0:05:59.279 --> 0:06:02.400 companies thinking operating? So, you know, in terms of the guidance, 0:06:02.440 --> 0:06:04.240 like the numbers aren't really going to mean anything, nobody's 0:06:04.240 --> 0:06:06.960 gonna believe them, But in terms of like philosophically, like 0:06:06.960 --> 0:06:09.520 how are you operating in this environment through this uncertainty? 0:06:09.640 --> 0:06:12.000 How are you thinking about cappex What sort of contingency 0:06:12.000 --> 0:06:13.839 plans do you have in place? It's really gonna be 0:06:13.839 --> 0:06:15.240 those types of things that the people are going to 0:06:15.279 --> 0:06:16.880 be looking for. It's it's going to be a you know, 0:06:17.200 --> 0:06:20.080 a kind of a tip of the cap towards good management. 0:06:20.240 --> 0:06:23.120 You know, good management and thoughtful management will probably you know, 0:06:23.120 --> 0:06:25.920 get a premium through this kind of cycle. Yeah, but 0:06:25.960 --> 0:06:27.640 it's you know, it's gonna be really those types of 0:06:27.680 --> 0:06:30.160 more squishy qualitative things that folks can be looking for 0:06:30.320 --> 0:06:32.000 rather than focusing on the hard numbers this quarter. 0:06:32.480 --> 0:06:35.720 Let's go to the squishy CAPEX then, Scott, because what. 0:06:35.680 --> 0:06:38.760 Are you expecting in terms of companies commitment to continue 0:06:38.800 --> 0:06:42.440 to spend? We're all questioning it from well, the hyperscale 0:06:42.480 --> 0:06:45.960 is when it comes to in video investment, for example, you. 0:06:45.880 --> 0:06:47.479 Know, I think I think it's going to be a 0:06:47.560 --> 0:06:49.919 time scale type of type of argument. So, you know, 0:06:50.040 --> 0:06:52.080 I don't think like nobody's very confident in the next 0:06:52.080 --> 0:06:55.360 few months, Like nobody has any visibility into what these policies. 0:06:55.000 --> 0:06:56.560 Are actually going to look like, what these serves are 0:06:56.560 --> 0:06:57.360 actually going to look like. 0:06:57.560 --> 0:06:59.600 What we're really focusing on is like, what are folks 0:06:59.600 --> 0:07:01.320 thinking about for the next two to three years and 0:07:01.680 --> 0:07:04.000 are they actually being are they going to start executing 0:07:04.200 --> 0:07:06.320 on some of those plans? So, you know, again, it's 0:07:06.360 --> 0:07:09.039 it's just a tip towards the towards of management, towards 0:07:09.040 --> 0:07:11.280 the guide you know, towards uh, you know, teams that 0:07:11.320 --> 0:07:12.960 are proven that they can think through some of the 0:07:12.960 --> 0:07:15.160 short term issues, manage through some of the short term issues, 0:07:15.160 --> 0:07:17.080 and really focus more on the medium term stuff that 0:07:17.120 --> 0:07:19.240 will like you know, that can have the benefits accrue 0:07:19.280 --> 0:07:21.240 to them through time. It's you know, again, it's not 0:07:21.280 --> 0:07:22.600 going to be a easy charge. I mean, this is 0:07:22.600 --> 0:07:24.720 not going to be an easy earning season to figure 0:07:24.720 --> 0:07:26.800 out and sort of bottom line for folks. It's really 0:07:26.800 --> 0:07:28.440 going to be kind of a company by company, hand 0:07:28.480 --> 0:07:29.120 to hand battle. 0:07:29.760 --> 0:07:33.080 What about global exposure versus domestic exposure? I think of 0:07:33.080 --> 0:07:36.800 the telecoms names, and they've weathered relatively resiliently because they're 0:07:36.800 --> 0:07:37.480 focused on a. 0:07:37.440 --> 0:07:38.800 Consumer here in the US. 0:07:39.440 --> 0:07:42.600 How do you think about opportunities to invest abroad or 0:07:42.640 --> 0:07:44.520 companies that have exposure abroad right now? 0:07:44.520 --> 0:07:45.760 Scott, Yeah. 0:07:45.760 --> 0:07:47.800 I mean, look, if you're thinking about investing in broad 0:07:48.000 --> 0:07:50.200 you know, it's really about two things right now for US. 0:07:50.560 --> 0:07:52.440 One is, you know, we do think the dollar down 0:07:52.480 --> 0:07:55.080 trend is going to be fairly strong and and fairly 0:07:55.120 --> 0:07:56.640 persistent for the next couple of years. 0:07:57.120 --> 0:07:59.520 And you know that that in and of itself, it gives. 0:07:59.400 --> 0:08:01.760 You a pretty to a tailwind if you're an international 0:08:02.000 --> 0:08:04.920 investor investing international equities. So you know that's that's a 0:08:04.920 --> 0:08:06.480 starting place and so you've got to get the dollar 0:08:06.520 --> 0:08:08.800 part right for that, and we do think that dollar 0:08:08.840 --> 0:08:09.480 trend is lower. 0:08:09.760 --> 0:08:13.760 The other thing, though, is importantly the fiscal expansion. 0:08:13.840 --> 0:08:15.840 You know, like on fiscal thrust is now the realm 0:08:16.040 --> 0:08:18.240 of internationals and not the realm of the United States, 0:08:18.520 --> 0:08:21.240 you know, companies and or the United States governments. Sorry, 0:08:21.920 --> 0:08:25.040 and you know that the market definitely rewards fiscal expansion. 0:08:25.120 --> 0:08:26.560 We saw that through COVID, We've seen that over the 0:08:26.640 --> 0:08:27.240 last ten years. 0:08:27.240 --> 0:08:29.679 Really and so you know, the sort of the dual 0:08:29.720 --> 0:08:34.400 thing of fiscal expansion internationally versus the US, and you know, 0:08:34.440 --> 0:08:37.199 and and the dollar trending lower against most major trading partners. 0:08:37.400 --> 0:08:39.079 You know, we think those two tailwinds are going to 0:08:39.120 --> 0:08:41.320 you know, really really be to be to the benefit 0:08:41.400 --> 0:08:43.640 of international equity investing for the next probably year or so. 0:08:43.800 --> 0:08:45.320 Most major trading partners. 0:08:45.360 --> 0:08:46.840 I don't know if you count China as one of 0:08:46.840 --> 0:08:50.200 them any more, Scott, but what about China's investment the 0:08:50.200 --> 0:08:52.120 fiscal stimulus and whether or not you want to me 0:08:52.160 --> 0:08:53.640 in some of these Chinese internet names for. 0:08:53.600 --> 0:08:55.280 Example, yeah, Karion Lens. 0:08:55.360 --> 0:08:57.840 Really, it's obviously a pretty tricky one, you know. You know, 0:08:57.920 --> 0:08:59.439 China we think is going to get it's kind of 0:08:59.440 --> 0:09:01.480 getting bullied, just like Europe is kind of getting bullied 0:09:01.480 --> 0:09:03.720 in into doing the fiscal expansion thing. We think China's 0:09:03.720 --> 0:09:05.520 gonna get bullied a little bit by Trump into doing 0:09:05.840 --> 0:09:10.160 uh sort of countercyclical fiscal expansion, countercyclical policies, which. 0:09:09.920 --> 0:09:12.560 They've really been resistant to for the last couple of years. 0:09:12.760 --> 0:09:14.200 You know, one thing that we think is pretty important, 0:09:14.280 --> 0:09:17.360 especially for Chinese tech though, is you know, you premiere 0:09:17.440 --> 0:09:20.520 she he's dropped the common prosperity language. We've not heard 0:09:20.559 --> 0:09:22.800 common prosperity come out of his mouth or or in 0:09:22.880 --> 0:09:25.320 written for him for many months now, and that you 0:09:25.360 --> 0:09:27.560 know that when that common prosperity the language just started 0:09:27.559 --> 0:09:29.880 to take hold, it's really the death note towards Chinese, 0:09:29.880 --> 0:09:32.920 so towards Chinese equities and Chinese tech in particular. And 0:09:32.960 --> 0:09:34.640 so you know that that language being dropped, we think 0:09:34.679 --> 0:09:37.080 is important. And so you know, the combination of that 0:09:37.120 --> 0:09:39.880 language being dropped, so he's signaling a changed uh, you know, 0:09:39.960 --> 0:09:42.960 changing his mindset towards capitalism, changes his mindset towards those 0:09:43.040 --> 0:09:44.959 Chinese tech companies. Plus what we think is going to 0:09:45.040 --> 0:09:47.640 have to be some sort of fiscal countercyclical uh you 0:09:47.640 --> 0:09:49.960 know response by the Chinese governments, you know, you know, 0:09:50.040 --> 0:09:52.440 makes those you know, probably probably okay to invest in. 0:09:52.640 --> 0:09:53.960 But man, that is a tricky one. 0:09:54.200 --> 0:09:57.880 Scott Ladner, Horizon Investments, thanks so much for joining us today. 0:09:58.080 --> 0:09:59.800 Coming up, Alphabet heads to. 0:09:59.760 --> 0:10:03.520 Call as the government continues its push to split up Google. 0:10:04.240 --> 0:10:16.840 This is Blue Meg Technology today. Alphabet's Google. 0:10:16.920 --> 0:10:19.640 Well, it's in court of a US government prosal to 0:10:19.679 --> 0:10:22.720 split up the company. It follows a ruling last year 0:10:22.720 --> 0:10:26.080 that Google has an illegal monopoly in web search. Lumeg's 0:10:26.080 --> 0:10:28.880 Michael Shepherd has the details in Washington, and last week 0:10:28.960 --> 0:10:31.080 it was all about that landmark ad. 0:10:30.800 --> 0:10:31.880 Tech monopoly ruling. 0:10:31.920 --> 0:10:34.320 This week, when we're reminded of the search ruling, what 0:10:34.360 --> 0:10:36.400 are the remedies that likely to be discussed? 0:10:36.440 --> 0:10:40.720 Chat Well, Carol, you're right that this is another front 0:10:40.840 --> 0:10:45.000 in a broader antitrust push against Alphabet and a number 0:10:45.040 --> 0:10:47.880 of other tech companies. But here we're talking about search, 0:10:48.120 --> 0:10:51.400 and what the government is saying is that, look, Google 0:10:51.480 --> 0:10:54.960 has this illegal monopoly per judges ruling back in August, 0:10:55.320 --> 0:10:57.600 and these are the remedies that we would like to see. 0:10:57.640 --> 0:11:00.200 This is the so called penalty a remedy phase, and 0:11:00.240 --> 0:11:02.760 before the same judge who made that rolling back in August, 0:11:02.800 --> 0:11:05.360 they are calling for a couple of big changes. One 0:11:05.440 --> 0:11:08.840 is that Google should sell off its Chrome browser. Another 0:11:08.960 --> 0:11:12.319 is that it should be licensing more data to its competitors, 0:11:12.520 --> 0:11:15.440 and then finally, it should stop making all those billions 0:11:15.440 --> 0:11:18.559 of dollars in payments to companies like Apple and others 0:11:18.840 --> 0:11:23.400 to guarantee a good position on those platforms for its 0:11:23.400 --> 0:11:28.200 search engine. Something that the judge found signaled anti competitive behavior. 0:11:28.440 --> 0:11:32.120 Now Google has countered with saying that, look, making changes 0:11:32.200 --> 0:11:36.360 like this will hinder innovation, it will put us at risk, 0:11:36.400 --> 0:11:39.080 put the US at is at risk of losing a 0:11:39.160 --> 0:11:42.400 competitive edge on the global stage. In essence, they are 0:11:42.440 --> 0:11:46.600 saying that, look, the Justice Department's proposed fixes would seek 0:11:46.679 --> 0:11:48.840 to break something that doesn't need fixing. 0:11:49.559 --> 0:11:53.199 What's really interesting is just the time that it's been 0:11:53.280 --> 0:11:56.280 more than forty years since we got the breakup of 0:11:56.320 --> 0:11:59.000 marbll AT and t is in twenty five years since 0:11:59.080 --> 0:12:03.280 Microsoft was under the microscope chev What do we think 0:12:03.320 --> 0:12:05.440 will actually be an outcome in any sort of time 0:12:05.480 --> 0:12:06.280 horizon here. 0:12:07.559 --> 0:12:11.400 Well, they're talking about perhaps August to actually learn what 0:12:11.520 --> 0:12:14.560 the judge's decision as far as the remedy goes. But 0:12:14.679 --> 0:12:17.559 this will go on for years to come. This case 0:12:17.720 --> 0:12:22.040 is not over now or in August. No matter what happens, 0:12:22.480 --> 0:12:24.920 either a ruling in favor of the government again or 0:12:24.960 --> 0:12:27.800 against the government, it will head to the Supreme Court 0:12:27.840 --> 0:12:30.520 Foreign Appeal. Both sides have a lot at stake here, 0:12:30.720 --> 0:12:32.920 and the US government is not showing any signs of 0:12:33.000 --> 0:12:36.160 letting up in its anti trust push against the major 0:12:36.200 --> 0:12:39.560 tech companies. We saw the Meta trial being pushed in 0:12:39.600 --> 0:12:42.640 the case being pushed by the Federal Trade Commission proceeding 0:12:42.720 --> 0:12:46.040 last week with testimony from Mark Zuckerberg and Cheryl Sandberg 0:12:46.440 --> 0:12:50.040 about the company's alleged anti competitive behavior there and then 0:12:50.080 --> 0:12:52.840 here in Google. As we were talking at the top 0:12:52.920 --> 0:12:57.000 about the two front push there from the government against Alphabet, 0:12:57.240 --> 0:13:00.360 and then there are other companies as well, Apple for 0:13:00.400 --> 0:13:05.440 instance and Amazon are also under pressure over competitive practices 0:13:05.480 --> 0:13:08.440 that the government has singled out is potentially harmful to 0:13:08.480 --> 0:13:08.920 the market. 0:13:09.000 --> 0:13:12.240 Care not to mention on the EU's been looking at too. 0:13:12.440 --> 0:13:15.960 Greenberg's Michael Shepherd with all things from Washington, let's discuss 0:13:16.000 --> 0:13:19.360 this further the former Nebraska Attorney General Doug Peterson with 0:13:19.480 --> 0:13:24.280 US currently at Keating O'Gara and Doug, it's really interesting 0:13:24.400 --> 0:13:28.240 as to how much you with AG and Nebraska pushed 0:13:28.280 --> 0:13:31.000 forward on this particular case or many others that surround 0:13:31.040 --> 0:13:33.400 Alphabet at the moment, and it was under the previous 0:13:33.440 --> 0:13:35.920 Trump administration that first kicked off in twenty twenty. 0:13:36.520 --> 0:13:38.120 What impact remind. 0:13:37.880 --> 0:13:40.720 Us does this have on the consumer, on the tech 0:13:41.080 --> 0:13:43.160 industry at large, this sort of form of. 0:13:43.040 --> 0:13:48.320 Control, I think the biggest issue that as attorney generals. 0:13:48.360 --> 0:13:49.559 That we had concerned. 0:13:49.160 --> 0:13:53.720 About was that big tech was accumulating so much personal data, 0:13:54.320 --> 0:13:59.360 and that data really presented the consumer almost as the product, 0:14:00.080 --> 0:14:03.520 because the data was what fed search, it's what feeds AI. 0:14:04.240 --> 0:14:07.240 And really we felt as AGS that we needed to 0:14:07.280 --> 0:14:11.000 step forward because their privacy and the use of their 0:14:11.080 --> 0:14:12.760 data for profit was a big concern. 0:14:13.400 --> 0:14:16.199 Let's talk about that for the consumer in this scenario, 0:14:16.320 --> 0:14:18.839 because Google would counter that this is going to hurt 0:14:18.840 --> 0:14:21.880 the consumer if you separate, for example, Chrome off suddenly 0:14:21.880 --> 0:14:24.240 that seamless approach if you're an Android user, if you're 0:14:24.240 --> 0:14:28.760 a Chrome user disintegrates. Does that ultimately hold firm in 0:14:28.800 --> 0:14:29.640 your mind? 0:14:30.880 --> 0:14:31.640 You know, I don't think so. 0:14:31.680 --> 0:14:33.720 I think one of the biggest concerns we had was 0:14:33.760 --> 0:14:36.320 that what Google did in maintaining and this is in 0:14:36.360 --> 0:14:40.840 the judge's August opinion, in maintaining this monopoly, it basically 0:14:40.880 --> 0:14:44.960 created this ecosystem where they entered into exclusionary contracts with 0:14:45.000 --> 0:14:48.720 all the important players, had some revenue sharing with us, 0:14:48.760 --> 0:14:51.520 which were very important, and then as a result they 0:14:51.560 --> 0:14:57.080 create this basically this feedback loop that keeps everything contained 0:14:57.160 --> 0:15:01.520 within Google, and the result of that is a disincentivize 0:15:01.560 --> 0:15:04.360 anyone from the outside actually being able to get any 0:15:04.400 --> 0:15:07.600 capital to challenge with a certain type of search engine 0:15:07.600 --> 0:15:10.640 that may be a better product, may better protect privacy. 0:15:10.880 --> 0:15:13.040 All of that is pretty much locked out because investors 0:15:13.080 --> 0:15:15.040 weren't going to invest in someone who's going to go. 0:15:15.080 --> 0:15:15.800 Up against Google. 0:15:16.160 --> 0:15:19.440 And second of all, all the players within that loop 0:15:19.600 --> 0:15:23.520 that they had through these exclusionary contracts, you know, we're 0:15:23.600 --> 0:15:27.520 disincentivized to look at working with any other technologies. So frankly, 0:15:28.040 --> 0:15:30.360 I think it's put a ten year hold on really 0:15:30.400 --> 0:15:32.920 developing better search technology. 0:15:33.080 --> 0:15:33.520 Interesting. 0:15:33.600 --> 0:15:35.400 I mean, eddie q is going to be giving evidence 0:15:35.600 --> 0:15:37.800 from Apple they get about twenty six billion dollars a 0:15:37.880 --> 0:15:40.680 year in terms of payments to be offering that exclusive 0:15:40.760 --> 0:15:44.160 nature of Google as a search option. But there are 0:15:44.240 --> 0:15:47.320 other companies out there are the search options that actually 0:15:47.360 --> 0:15:49.920 get money from Google too. What do you think we'll 0:15:49.960 --> 0:15:54.600 hear in terms of some of the evidence given this week, Well. 0:15:54.440 --> 0:15:56.520 I think there's several things. 0:15:56.560 --> 0:15:56.720 One. 0:15:56.800 --> 0:15:59.080 I think the Court in its August opinion made some 0:15:59.200 --> 0:16:02.800 really important five feeds about the effects of these revenue 0:16:02.800 --> 0:16:06.440 sharing contracts. I think the Court also really realized the 0:16:06.480 --> 0:16:10.120 importance of scale because having that data and Google being 0:16:10.160 --> 0:16:12.240 able to acquire so much of that just builds a 0:16:12.320 --> 0:16:16.760 scale that actually makes it very difficult for any competition 0:16:16.840 --> 0:16:19.440 to occur. So I think we're going to once again 0:16:19.480 --> 0:16:23.200 see evidence about how companies who wanted to develop products 0:16:23.200 --> 0:16:25.480 in general search and also in the area of search 0:16:25.480 --> 0:16:28.880 advertising text advertising will see evidence of how they've been 0:16:28.960 --> 0:16:31.800 kept out of the market and how it's necessary, including 0:16:31.840 --> 0:16:36.840 the divestiture of Chrome is an important element to balance 0:16:36.880 --> 0:16:38.400 out competition in the market. 0:16:38.880 --> 0:16:41.000 Alphabet shares currently act session laws by two and a 0:16:41.000 --> 0:16:43.440 half percent. They've got their earnings later this week, So 0:16:43.440 --> 0:16:44.840 Sono Pitch is a busy guy. 0:16:45.280 --> 0:16:45.520 Doug. 0:16:45.600 --> 0:16:49.360 I'm interested though, in the countering nature from Google also, 0:16:49.520 --> 0:16:52.160 is this is backward looking. We suddenly got a lot 0:16:52.280 --> 0:16:55.040 more competition in the search space because open AI is 0:16:55.080 --> 0:16:59.960 there and all perplexity these other generative AI forms of search. 0:17:00.360 --> 0:17:03.120 Is that an interesting argument. Is the timing wrong here? 0:17:04.480 --> 0:17:04.800 Well? 0:17:04.960 --> 0:17:08.119 No, Actually, I think the timing's really important because I 0:17:08.119 --> 0:17:11.560 think we both the Department of Justice and the state 0:17:11.840 --> 0:17:16.480 Attorneys General recognize that technology is moving so quickly. AI 0:17:16.560 --> 0:17:19.000 is moving very quickly. But what's the fuel of all 0:17:19.040 --> 0:17:22.640 of that, once again is data, And so we think 0:17:22.760 --> 0:17:25.280 actually part of what we're asking for in the remedy 0:17:25.720 --> 0:17:28.480 is to ask the court to keep a monitoring process 0:17:28.600 --> 0:17:31.119 going so that we can follow this as we go 0:17:31.200 --> 0:17:35.840 into the AI world development because really from a vent diagram, 0:17:35.840 --> 0:17:38.520 there's a lot of overlap, and so having an ongoing 0:17:38.640 --> 0:17:41.960 monitoring ability by the court will allow us to address 0:17:42.200 --> 0:17:45.160 some of the new technology challenges that might come forward. 0:17:45.680 --> 0:17:46.800 Back in private practice. 0:17:46.880 --> 0:17:49.880 But of course, the former Nebraska Attorney General Doug Peterson, 0:17:50.080 --> 0:17:51.280 wonderful to have some time with you. 0:17:51.520 --> 0:18:00.119 Thank you. 0:18:00.119 --> 0:18:00.199 You. 0:18:00.200 --> 0:18:01.119 Look at Tessa shares. 0:18:01.240 --> 0:18:04.360 They're off by or more than seven percent, worst day 0:18:04.440 --> 0:18:07.160 since April tenth for the stop the company's biggest falls. 0:18:07.240 --> 0:18:09.639 One of them at least sent a start warning to investors. 0:18:09.680 --> 0:18:11.880 Wedbush analyst d and I saying that this is code 0:18:11.960 --> 0:18:15.000 read this moment for Tesla and the elol Musk needs 0:18:15.080 --> 0:18:17.359 to pivot his focus from the Department of Government efficiency 0:18:17.480 --> 0:18:21.240 to avoid lasting brand damage. Remberg's David Welch joins us, Now, 0:18:21.400 --> 0:18:24.640 we've heard this revives before, but earnings come Tuesday. 0:18:24.680 --> 0:18:25.800 It's an important moment. 0:18:27.480 --> 0:18:31.400 That's right, and I think investors obviously Dan ives among them, 0:18:32.040 --> 0:18:34.600