Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon.
Speaker 2: Valley, NBN.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 1: I'm Caroline Heidel Bloomberg's world headquarters in New York, and
Speaker 1: I'm d Love Loo in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 1: Coming up Biden. He heads to the picket line. We
Speaker 1: go live d Wayne County, Michigan, where the President joins
Speaker 1: UAW workers on strike and discuss what it means for
Speaker 1: the EV industry.
Speaker 5: And we'll have the latest on big texts, antitrust battles
Speaker 5: as the FTC prepares to sue Amazon, while Google's trial continues.
Speaker 1: More ahead las Apple's biggest start of the year. No,
Speaker 1: not its iPhone, of course, but it's its case being
Speaker 1: panned by customers. Will have more on the product mis
Speaker 1: far ahead. Now, let's get out to someone who knows
Speaker 1: a thing or two about all to make has Ford
Speaker 1: in particular and indeed, well how all of this affects
Speaker 1: the EV transition. Just A Dawson, and I'm pleased to
Speaker 1: say is with us, and we are awaiting the president
Speaker 1: for well, I mean, in long as living memory, we
Speaker 1: haven't seen a President join the picket line. How important
Speaker 1: is this in terms of aligning himself with the UAW
Speaker 1: and what that means for ongoing negotiations.
Speaker 6: Well, that remains unclear. I mean, it's something that that
Speaker 6: Biden is doing at the invitation of UAW head Sean Fain,
Speaker 6: and he's clearly you know, casting his lot with labor.
Speaker 6: We've seen a summer of a lot of labor unrested activity,
Speaker 6: and it does feel like labor is a bit on
Speaker 6: the upswing and this is clearly something the President feels,
Speaker 6: you know, kind of dovetails with his message about better
Speaker 6: wages for workers. It remains to be seen, however, if
Speaker 6: there's any breakthrough in the talks, because the automakers and
Speaker 6: the union seem to be at loggerheads over any number
Speaker 6: of issues, including wages.
Speaker 5: Chester Ford has been from the expansion of the strike,
Speaker 5: you know, the UAW focus a little more in STILLANTIS
Speaker 5: and GM. But yesterday evening the union was upset with
Speaker 5: Ford about idling plants.
Speaker 4: What is the latest tension there?
Speaker 7: Yeah, that's right.
Speaker 6: Ed Ford had said that it's going to hit the
Speaker 6: pause button on an expected expansion of its electric vehicle
Speaker 6: you know, production capacity at a new plant that was
Speaker 6: to be built in Western Message, again with some key
Speaker 6: support from a leading Chinese battery maker, c L. So
Speaker 6: the reasoning for that is a little unclear, but it
Speaker 6: comes a very delicate time with the EAZWAYW talks. So
Speaker 6: it's something THEW has objected to. They see it as
Speaker 6: kind of a preemptive strike by Forward to prevent the
Speaker 6: unionization of those workers, among other things. So it just
Speaker 6: shows you how volatile this whole mix is. That plant
Speaker 6: was announced, you know, quite a while ago, and yet
Speaker 6: here we are it looks like there's gonna be no
Speaker 6: shovels the ground for the time being.
Speaker 1: Ultimately, this is all sort of precarious balancing app not
Speaker 1: only for corporate America, but also for the administration trying
Speaker 1: to push companies to invest in a transition and at
Speaker 1: the same time as having to share what have been
Speaker 1: some decent profits with workers as well. Just what's the
Speaker 1: investor reaction been, like? Have they been okay with the
Speaker 1: idea that basically, for the short term, maybe these automakers
Speaker 1: do need to realign where some of the money goes.
Speaker 6: Well, yes, that's a very good question. The certainly public
Speaker 6: opinion seems aligned with the workers. Where investors stand is
Speaker 6: a little unclear. I mean, you know, these the stocks
Speaker 6: of say GM and Ford in particular have kind of
Speaker 6: been you know, under a microscope really dating back to
Speaker 6: the start of these negotiations in Midsummer. So there is
Speaker 6: a big question about how much they can afford and
Speaker 6: still make all the investments they need. On the other hand,
Speaker 6: there does seem to be some recognition that they're going
Speaker 6: to have to compromise. Maybe they given on things like
Speaker 6: no more share of buybacks. I mean that certainly seems
Speaker 6: to be something that investors might be okay with the dividend,
Speaker 6: that's another matter.
Speaker 5: All right, Blombos Chester Dawson, who leads our industrials and
Speaker 5: allt to make a coverage out of Detroit, thank you
Speaker 5: so much. Look at the core of this is the
Speaker 5: electrification of an entire industry, and what we're talking about
Speaker 5: is where the money should go. Joining us now is
Speaker 5: arkdisos In, our founder and CEO at Free Wire Technology
Speaker 5: is a charging infrastructure company, energy solutions company. And the
Speaker 5: union's argument is that lots of public money is going
Speaker 5: into the infrastructure, it's going into the production capacity, but
Speaker 5: the labor is not going with it. Your argument is
Speaker 5: that those jobs on the assembly line can be reallocated
Speaker 5: to your industry for an example.
Speaker 4: That's right.
Speaker 8: I think this is going to be a redistribution of jobs.
Speaker 8: It's clear that the number of labor that it takes
Speaker 8: to produce an electric vehicle is forty percent lower than
Speaker 8: that of a combustion vehicle. Jim Farrelly has said this.
Speaker 8: But the fact of the matter is of your at
Speaker 8: the industry today. Three years ago, we have two battery
Speaker 8: manufacturing plants across the US. Today we have thirty either
Speaker 8: live or plan to go live over the next four years.
Speaker 8: By the end of the decade, we have twenty times
Speaker 8: the battery manufacturing capacity that we did in this country
Speaker 8: at the start of at the start of the decade.
Speaker 8: The fact is the redistribution of jobs will happen. It
Speaker 8: won't impact everyone the same way. But going from jobs
Speaker 8: that pay today eighteen to thirty two dollars an hour
Speaker 8: to jobs that will invariably pay more in the battery
Speaker 8: manufacturing sector, that's fundamentally what's happening. And the UAW strike
Speaker 8: against the automobile OEMs is not fundamentally about their employees
Speaker 8: or their labor it's fundamentally about the UAW because those
Speaker 8: they will not be there to support battery manufacturing as
Speaker 8: well as chip and semiconductor production.
Speaker 5: You have hundreds of fast charges here in North America.
Speaker 5: You're active in Europe as well. Are you in a
Speaker 5: position where you're like, okay, the money's coming from the
Speaker 5: Inflation Reduction Act?
Speaker 4: Are you in a position to.
Speaker 5: Offer jobs to those that are currently working on the
Speaker 5: assembly line are worried about their future.
Speaker 8: We have jobs that are available for UAW workers today
Speaker 8: that are displaced, but the fact of the matter is
Speaker 8: we won't be able to take all of the demands
Speaker 8: that these OEMs have to give up. So there are
Speaker 8: hundreds of companies in the space, from battery manufacturing to
Speaker 8: charger technologies that are absorbing many of these jobs. And
Speaker 8: similar to what happens in the transition from fuels to solar,
Speaker 8: a lot of the jobs went into the solar industry,
Speaker 8: high paying, distributed, dispersed jobs that are seeing great result
Speaker 8: right now.
Speaker 1: Oh god, it's interesting you bring up solar. So there's
Speaker 1: another industry that was highly dependent on China, really and
Speaker 1: you're seeing that same issue here at play with battery
Speaker 1: making here in the United States. We're just hearing from
Speaker 1: Justin Dawson about Ford being blasted by the UAW itself
Speaker 1: at the moment for putting on ice that three and
Speaker 1: a half billion dollar battery plant because it was going
Speaker 1: to be working with coatl. How much are you having
Speaker 1: to get supply chain from China? How much do you
Speaker 1: think jobs in the US are dependent on an ongoing
Speaker 1: somewhat friendly relationship.
Speaker 4: That's right, Carolyn.
Speaker 8: I think there is a concern that some of the
Speaker 8: battery production and as well as chips and semiconductors charging
Speaker 8: infrastructure will come from the Chinese market. But unlike solar,
Speaker 8: I think the Biden administration has taken a good look
Speaker 8: at that ahead of the blossoming of this industry. We've
Speaker 8: already put certain tariffs in place on battery cells coming
Speaker 8: in from China, and we've incentivized US domestic manufacturing of chips,
Speaker 8: semi conductors, charging instructure, and batteries all across. That is,
Speaker 8: so we expect this market to play out a little
Speaker 8: bit differently than it did in the solar industry free Wire,
Speaker 8: particularly because of the incentives that are in place. We've
Speaker 8: transitioned all production out of China. In fact, we only
Speaker 8: have one single supplier left from China for a small
Speaker 8: inconsequential part. The vast majority of our other suppliers are
Speaker 8: coming from the US and European markets, and more.
Speaker 1: Broadly, therefore, you have seen incentives with which to do this.
Speaker 1: Can the industry eventually be standing on its own two
Speaker 1: feet without the necessary sort of help with an ILRA
Speaker 1: or indeed ensuring that well you're getting the right labor
Speaker 1: at the right time without the incentive process there.
Speaker 8: Yes, I think so, and you can see that corollaria
Speaker 8: happening in Europe.
Speaker 4: Whereas in the US we use the.
Speaker 8: Carrot via the incentives, in Europe they really use the
Speaker 8: stick and said, by twenty thirty you're unable to drive
Speaker 8: electric or you're going to pay twenty five pounds by
Speaker 8: going into the city of London if unless you have
Speaker 8: an electric vehicle.
Speaker 4: And the business model there works.
Speaker 8: You can see that as adoption ramps up in the US,
Speaker 8: seven percent of all new vehicles sold last quarter, we're
Speaker 8: fully electric. In the US twenty five percent of new
Speaker 8: vehicle sold in California, we're fully electric. As adoption happens,
Speaker 8: the business models start to turn and work. So I
Speaker 8: am encouraged to see that while we do need incentives
Speaker 8: to get through the next two to three years while
Speaker 8: adoption is still low, we won't need them by the
Speaker 8: end of the decade.
Speaker 5: Well, it's your assessment, Arkada, of the lasting or near
Speaker 5: term impact of this. You're hopeful, of course that more
Speaker 5: people by electric vehicles and use your charges, But do
Speaker 5: you see that this temporary halt talks between the UAW
Speaker 5: and the OEMs is going to impact production for the
Speaker 5: next year eighteen months and therefore the availability of EV
Speaker 5: models right now?
Speaker 8: That's right, but I think a lot of the demand
Speaker 8: will shift to the to Tesla. Frankly speaking, they're still
Speaker 8: one of the largest adopters, still one of the large
Speaker 8: producers of electric vehicles. This is only going to solidify
Speaker 8: their market dominance, and so while you will see fewer
Speaker 8: makes and models of vehicles from the traditional big three OEMs,
Speaker 8: there's still plenty of supply and capacity available for consumers
Speaker 8: to pick up.
Speaker 1: Wow, we're going to be combining all of those stories
Speaker 1: with a discussion on Tesla's effect, well with EU subsidies
Speaker 1: as well. Our codecersn't have absolutely great to speak with you.
Speaker 7: Thank you.
Speaker 1: Free Wire technologies on all thing uaw here in the US.
Speaker 1: I mean, while speaking of strikes, look voice actors performers
Speaker 1: who work in video games. They voted to authorize a
Speaker 1: strike ahead of their contract negotiations this week. Like the
Speaker 1: SAG after strikes, the concern for video game makers involved
Speaker 1: how artificial intelligence can be used to recreate the actor's
Speaker 1: voice and images at the moment that the vote only
Speaker 1: authorizes a strike, and we're going to rebring you any
Speaker 1: updates sis to whether they actually action on that authorization.
Speaker 5: Ed All right, coming up, We're going to go from
Speaker 5: what's happening on the ground with strikes, what's happening in
Speaker 5: Capitol Hill.
Speaker 4: Amazon versus the FTC.
Speaker 5: We'll talk about the impact of the FTC's lawsuit on
Speaker 5: the future of Amazon, but also big tech anti trust
Speaker 5: at large. That's coming up next. This is Bloomberg Technology.
Speaker 5: It's official the FTC is suing Amazon. FTC investigators and
Speaker 5: Lina Khan's office have been working on the complaint for months,
Speaker 5: which accuses the e commerce giant of monopolizing online marketplace
Speaker 5: services by degrading quality for shoppers and then overcharging the sellers.
Speaker 5: That's bringing Bloomberg's editing out of Seattle for more. And
Speaker 5: this is the fourth suit that the FTC is put
Speaker 5: in front of Amazon. Give us the specifics this time
Speaker 5: around of what they're claiming.
Speaker 2: Yeah, this is the big one that we've been waiting for.
Speaker 2: The other three complaints were focused on the consumer protection
Speaker 2: issues at the FTC say with Amazon, and this is
Speaker 2: the big anti trust case. So, like you said, this
Speaker 2: case focuses on two different aspects of Amazon's business, both
Speaker 2: the way that the e commerce giant sells to customers
Speaker 2: and also the way that sellers use the website to
Speaker 2: reach their own customers.
Speaker 1: We've been anticipating it. Amazon too had been anticipating it.
Speaker 1: And we get the response from the company criticizing the
Speaker 1: FTC lawsuit, saying it's wrong on facts on law, and
Speaker 1: they said they look forward to making the case in court.
Speaker 1: In fact, Amazon really says the FTC has quote radically
Speaker 1: departed from consumer mission. From that perspective, this isn't This
Speaker 1: isn't a realignment of how the FTC ces big tech,
Speaker 1: isn't it. It's not just look what gets the consumer
Speaker 1: that this price, but the way in which they go
Speaker 1: about doing it.
Speaker 4: So the sellers too, that's.
Speaker 2: Absolutely right, and that's one reason why this case is
Speaker 2: so interesting. You know, Lena Khan, the chair of the FTC,
Speaker 2: as a law student at Yale, wrote her most famous
Speaker 2: law review paper about Amazon's business practices and why current
Speaker 2: anti trust law is inadequate to address that kind of
Speaker 2: anti competitive measure. And this case is really going to
Speaker 2: be the test of some of those theories whether or
Speaker 2: not you can fit a different kind of business like
Speaker 2: Amazon that didn't exist back when our current anti trust
Speaker 2: statutes were written a century ago, whether you can fit
Speaker 2: that kind of case into current anti trust law. So
Speaker 2: this will be a really important case both to test
Speaker 2: Lena Khan's legal theory and also Amazon's defense.
Speaker 4: You know, Amazon's come out quickly in response to this.
Speaker 5: Cara outlined their response that merchants on the site have
Speaker 5: had this complaint against Amazon for a really long time,
Speaker 5: that it's a one sided relationship. The FTC suit is
Speaker 5: also conjunction with seventeen other states. How does it play
Speaker 5: out from here? Anna, you know, is this can be
Speaker 5: law long and drawn out and protracted or do we
Speaker 5: expect sort of some quick decision to be made in
Speaker 5: the courts.
Speaker 2: Yeah, the solar aspect of This is really interesting because
Speaker 2: for these third party merchants, Amazon is both a competitor
Speaker 2: and a business partner. So that's one reason why these
Speaker 2: merchants have long complained that Amazon has too much power
Speaker 2: over their relationship with their customers. So we'll see how
Speaker 2: this plays out in federal court. Like I said, this
Speaker 2: is going to be an important test of this kind
Speaker 2: of legal theory, and we do expect this to be,
Speaker 2: you know, a long process. There will be plenty of appeals,
Speaker 2: and Amazon had asked for Lena Khan to accuse herself
Speaker 2: from this case because of kind of the past history
Speaker 2: writing about and investigating the company. So you know, we'll
Speaker 2: see what kind of defense they present in court. But
Speaker 2: they also have been waiting for this for a long
Speaker 2: time and they're definitely prepared to make their case.
Speaker 1: Important times for you to be out there in Seattle.
Speaker 1: We thank you, Anna Egeton.
Speaker 5: SEC Chair Gary Gensler appearing before the House Financial Services
Speaker 5: Committee tomorrow to testify about regulation of the crypto industry
Speaker 5: of conversation that has.
Speaker 4: Been ongoing for a little while.
Speaker 5: Now joining us in the program Bloomberg Shnali Basset, but
Speaker 5: also Caracalbot coinbase head of US policy.
Speaker 4: Chanali, take it away.
Speaker 9: Kara, thank you for joining us ahead of this pretty
Speaker 9: critical hearing. The reality of the situation, though, is the
Speaker 9: SEC has a lot on its agenda, crypto being just
Speaker 9: one part of it. The lawmakers themselves also facing a
Speaker 9: potential government shut down, a lot going going on. How
Speaker 9: do you win the attention over to the needs that
Speaker 9: you have for the crypto industry when there are so
Speaker 9: many distractions.
Speaker 10: Absolutely, well, thank you so much for having me today.
Speaker 10: It's a really pivotal moment here in Washington. And I
Speaker 10: think how we are doing this is we are bringing
Speaker 10: the faces the voices the Americans who own and care
Speaker 10: about crypto and they are coming to Washington for the
Speaker 10: first ever Stand with Crypto Day tomorrow. So we have
Speaker 10: more than fifty companies represented, representing more than thousands and
Speaker 10: thousands of jobs across the United States. They are coming
Speaker 10: to meet with their members of Congress to talk about
Speaker 10: why they care about crypto policy. And that is historic.
Speaker 10: And it just so happens that it's on the exact
Speaker 10: same day that Chairman Gensler is testifying in front of
Speaker 10: the House Financial Services Committee.
Speaker 9: Well, what does this mean for the constituents that you're
Speaker 9: bringing down to Washington when they're having conversations with lawmakers.
Speaker 7: Are they mostly.
Speaker 9: Preparing those lawmakers to grill Gary Gensler tomorrow or are
Speaker 9: they trying to win back lawmakers that are not yet
Speaker 9: on their side.
Speaker 10: I think they're trying to educate, but I think it's
Speaker 10: also really trying to help people understand why crypto matters
Speaker 10: to the fifty two million Americans who own it today
Speaker 10: in the United States, and that is something that there
Speaker 10: are so many lawmakers that understand why YPTO is important,
Speaker 10: but are there are a few outliers, and there are
Speaker 10: some that are saying, including mister Gensler, that this industry
Speaker 10: is rife with corruption and fraud. And these folks are
Speaker 10: coming to Washington today to say, this is my job.
Speaker 10: You're talking about my family, my economic situation, your state.
Speaker 10: That really needs to consider how this industry as a
Speaker 10: whole is influencing the country, is influencing the future of
Speaker 10: the country and innovation.
Speaker 4: Car I appreciate the education argument.
Speaker 5: What is the end goal though, Is it sort of
Speaker 5: specific oversight from a legislation perspective that you're looking for
Speaker 5: at the end of the road.
Speaker 10: Absolutely, I think Congress, is it an opportunity, has an
Speaker 10: opportunity to pass legislation that will create a comprehensive framework
Speaker 10: for crypto. It's what Americans are asking for. It's about
Speaker 10: consumer protection, it's about enabling innovation, and really about US competitiveness.
Speaker 4: As a whole.
Speaker 10: And so what we're here to talk about both as
Speaker 10: Coinbase and I think from the rest of the founders,
Speaker 10: as we've had discussions across the country, they want to
Speaker 10: see legislation, whether it's the Financial Innovation and Technology Act
Speaker 10: for the twenty first Century, if it's the stable Coin
Speaker 10: Bill that has been worked on in a biparisan fashion
Speaker 10: over the course of the last year to eighteen months.
Speaker 10: There is legislation on the table that I think Congress
Speaker 10: really needs to consider and vote to pass. A vote
Speaker 10: in November for this legislation is a vote for consumer
Speaker 10: protection and for Americans who want to own and use crypto.
Speaker 10: A vote against this legislation is really a vote against
Speaker 10: the future innovation, jobs, economics. That is what is going
Speaker 10: to carry a lot of these members through through twenty
Speaker 10: twenty four.
Speaker 4: Cara.
Speaker 5: A few weeks ago, the Ripple co founder Chris last
Speaker 5: And joined me on the program, and he said that
Speaker 5: above Gary Gensler at the administration level, the Biden administration
Speaker 5: has chosen to drive the crypto and blockchain industries offshore.
Speaker 5: Is that a position that Coinbase share.
Speaker 7: It is certainly having an impact.
Speaker 10: Yes, there have been studies done where two percent of
Speaker 10: developers are going overseas. That means a million jobs by
Speaker 10: twenty thirty. And if you think about technology, I've been
Speaker 10: working in technology for twenty years. You see startups, they
Speaker 10: have knock on effects four to six jobs per small startup.
Speaker 10: That means four to six million jobs that are going
Speaker 10: overseas by twenty thirty.
Speaker 7: So yes, it's having a very real.
Speaker 10: Impact where unelected bureaucrats are making decisions that I think
Speaker 10: Americans really rely on elected officials to do. And so
Speaker 10: I think the administration and others really need to think
Speaker 10: carefully about how they proceed in the next six to
Speaker 10: eighteen months.
Speaker 9: There's a lot at stake from Coinbase obviously as well.
Speaker 9: When you think about your own suit when it comes
Speaker 9: to the SEC what are you most looking for Congress
Speaker 9: to tackle First? You have now a new stake in circle,
Speaker 9: so that puts stable coins on the table more dramatically
Speaker 9: and there's also the staking issue.
Speaker 4: What do you prioritize.
Speaker 7: All of it?
Speaker 10: Honestly, I think the comprehensive nature of the legislation is
Speaker 10: really important because at this point digital assets is not
Speaker 10: a one size fit all ecosystem. We have commodities, we
Speaker 10: have stable coins, and then we have what is I
Speaker 10: think a fledgling industry right now with digital asset securities,
Speaker 10: because there's no pathway to registration for the sec so
Speaker 10: we really need a comprehensive approach. So by that nature,
Speaker 10: we're really pushing for pieces of legislation in all three
Speaker 10: of those areas.
Speaker 5: All right, caracalvet Coinbase, Head of US Policy and of
Speaker 5: course our own Shinali Bassett, Welcome back to Member Technology.
Speaker 4: Ed Louvelow here in San Francisco.
Speaker 1: And Caroline hid in New York. You have some pictures
Speaker 1: we want to be brought up.
Speaker 4: Yeah.
Speaker 5: President Biden has touched down at Detroit Metropolitan Airport, Wayne County, Michigan.
Speaker 5: As we know, Caroline is going to later meeting with
Speaker 5: UAW representatives. Joining the picket line at the invitation of
Speaker 5: UAW right now meeting with local representatives ahead of that,
Speaker 5: and the talks ongoing between the UAW principally GM and
Speaker 5: STILLANTIS the sticking point. Ford was spared from the expanded strike,
Speaker 5: but there are issues over it, pausing plans for new
Speaker 5: battery facilities in that state. President Brighten on the ground
Speaker 5: there in Wayne County, Michigan.
Speaker 1: Yeah. Meanwhile, let's get a quick check on the markets,
Speaker 1: as we will discuss what's happening with autos, but more brawly,
Speaker 1: as we see what's happening in the technology field. I
Speaker 1: just want to be looking at the NASDAQ one hundred
Speaker 1: still underwater. We're worried about consumer sentiment today, economic environment,
Speaker 1: and we're rarely what the rowing costs are happening. Two
Speaker 1: year yield we're getting actually a two year debata auction
Speaker 1: later today. Two basis points on the highest side, still
Speaker 1: above that five percentage point levels. Meanwhile, Bitcoin is on
Speaker 1: the downside. The story of dollar strength, interestingly, even as
Speaker 1: we've perhaps see some slightly weaker economic data, but that
Speaker 1: dollar strength has really been a narrative that we've seen
Speaker 1: in the last few training days. Move on, let's have
Speaker 1: a look at what's happening on individual names. Bring you
Speaker 1: t Mobile. It's one of the key out performers from
Speaker 1: a point perspective, we're up eight tens of percent. They're
Speaker 1: fighting Dish in court. They want new airwaves to be sold.
Speaker 1: In particular, there seems to be a delay on the
Speaker 1: three and a half billion dollars of airways purchase that
Speaker 1: Dish is going to be doing from T Mobile. I'm
Speaker 1: looking at Amazon on the downside, as we know, the
Speaker 1: FTC making clear its intentions and deciding to of course
Speaker 1: lay the focus on competition when it comes to Amazon.
Speaker 1: Today we see the same with Alphabet and of course
Speaker 1: we understand that Edieq is going to be giving evidence
Speaker 1: over the Google trial as well. Today, let's get back
Speaker 1: to Capitol Hill where Apple is testifying at the Google
Speaker 1: anti trust trial to defend what is a lucrative deal
Speaker 1: that made Google search engine. We understand the default option
Speaker 1: on the iPhone, the DOJ alleging that Google has paid
Speaker 1: billions of dollars to maintain a monopoly over the search
Speaker 1: market via agreements with tech rivals like Apple. Let's bring
Speaker 1: in many shirts for more now at the moment, and
Speaker 1: we have I understand Eddieq actually currently talking at the
Speaker 1: trial being that well, he just says it's a better
Speaker 1: product and that's why they've taken payment and made it
Speaker 1: the default search.
Speaker 11: Yeah. Basically, what he's saying is, look, if we at
Speaker 11: Apple could have made a better product, we would have
Speaker 11: done it ourselves, like they do compete with Google on
Speaker 11: other products like maps and on iPhone software. So Apple's saying,
Speaker 11: we are happy to use Google as a default because
Speaker 11: it's clearly a better product.
Speaker 1: Can you outline just how many billions Google is paid
Speaker 1: because is this just oh yes, here have a billion
Speaker 1: or so, or is this actually take a percentage of
Speaker 1: our advertising revenue? And that's actually something that's happening with
Speaker 1: the competitive tute.
Speaker 11: So these are being kept as confidential numbers. But what
Speaker 11: we do know from some of the early court proceedings
Speaker 11: was that by twenty twenty, Google was paying Apple four
Speaker 11: to seven billion dollars for these for these for these agreements,
Speaker 11: and overall they get about ten billion dollars annually in
Speaker 11: these to be default, to be the default on web
Speaker 11: and phone browsers. So it is significant chunk for them,
Speaker 11: and then clearly companies like Apple, they get a cut
Speaker 11: of the revenue that is generated in those search results.
Speaker 5: Molly, good to see you if you're coming to this
Speaker 5: story cold you'd be a bit confused, right, Okay, this
Speaker 5: is about Google is decision by Apple to use Google Search,
Speaker 5: But there's a much broader Google antitrust story. What are
Speaker 5: the other battles that Alphabet, the parent of Google faces.
Speaker 11: Well, the main battle really is about search obviously. For
Speaker 11: right now we're talking about Search and Apple because of
Speaker 11: Apple's iPhone. And but obviously you know Search and Google
Speaker 11: Search is available on web browsers and on Android phones
Speaker 11: and on lots of other you know products as well,
Speaker 11: and it's not illegal for them to be dominant or
Speaker 11: even to have a monopoly. But the problem is, and
Speaker 11: what the what the DOJ is looking at is whether
Speaker 11: you know, what kinds of agreements did they strike to
Speaker 11: maintain that monopoly and did they harm their competitors like
Speaker 11: Microsoft being and Duck dot Go that have been big
Speaker 11: complainants in this case, did they harm them in the process.
Speaker 5: All Right, Bloomberg's Molly Schuetz, thank you so much. Let's
Speaker 5: keep the conversation going, and Brian Lee Hepner, legal counsel
Speaker 5: of the American Economic Liberties Project, for more not just
Speaker 5: on this specific specific focus on Google Search and iPhone,
Speaker 5: but also of course we had the headlines from Amazon
Speaker 5: and the FTC, and that's where I want to start lead.
Speaker 5: The FTC has done what we expected, filed its suit
Speaker 5: in federal courts against Amazon. Your reaction, but also thoughts
Speaker 5: on the likelihood that the FTC wins in this case.
Speaker 12: Yeah, and first of all, thank you so much for
Speaker 12: having me. I'm glad we're starting off with FTC versus Amazon.
Speaker 12: This is a case that a lot of people have
Speaker 12: been waiting for. It's certainly been part of why cherolen
Speaker 12: Na Khan has risen to prominence and become such a
Speaker 12: leader of the Federal Trade Commission. You know, this is
Speaker 12: a case where the FTC is alleging, really that Amazon
Speaker 12: has viol the law not by being big, but by
Speaker 12: preventing other rivals from getting big enough to challenge it.
Speaker 12: It uses its vast market power to implement several strategies
Speaker 12: simultaneously designed to keep rivals from gaining the number of
Speaker 12: sellers and buyers that they need to compete to actively
Speaker 12: compete with Amazon. One of those pieces that I think
Speaker 12: we've heard a little a bit about earlier in your
Speaker 12: program is the fee that they charge to small businesses
Speaker 12: who sell on Amazon. That fee has risen dramatically over
Speaker 12: the years and is now estimated at some fifty percent
Speaker 12: of every item that you purchase on Amazon goes to
Speaker 12: Amazon itself. Furthermore, those small businesses are prevented from raising
Speaker 12: their prices on other platforms, meaning that they are just
Speaker 12: losing that money. These are small businesses bunched by Amazon,
Speaker 12: and that's really what this is about.
Speaker 1: These are, though also perhaps beneficial for consumers in some
Speaker 1: way if they're keeping prices low. That's what we heard
Speaker 1: Amazon articulate, in particular the lawyer coming out and saying, look,
Speaker 1: this could mean fewer products, this could mean higher prices.
Speaker 1: And ultimately Amazon claims the SEC has radically departed from
Speaker 1: consumer focused mission. What do you think the argument to
Speaker 1: count that is at the momently right.
Speaker 12: Well, first of all, Amazon has been able to raise
Speaker 12: its price for Amazon Prime multiple times over the past
Speaker 12: several years. Usually when the price goes up, consumers take
Speaker 12: their business elsewhere. If Amazon is not losing market share
Speaker 12: even though they are raising prices, that's indicative of monopoly power.
Speaker 12: Customers are being hurt in other ways though, too, and
Speaker 12: we are dealing with a new type of monopolist where
Speaker 12: price isn't the only thing that matters. When you lose
Speaker 12: things like innovation use, you lose things like product quality.
Speaker 12: When you lose the ecosystem of small businesses that are
Speaker 12: out there trying to innovate and create better products, that's
Speaker 12: a real cost to the consumer too. There are costs
Speaker 12: to workers who are being injured in Amazon warehouses. I
Speaker 12: think when we start to think more broadly about the
Speaker 12: external costs of what Amazon's business model entails, it's not
Speaker 12: just about price. It's about the societal costs that ripple
Speaker 12: out from Amazon's business model.
Speaker 1: And let's therefore tie together what we were just discussing
Speaker 1: when it comes to Google and Apple trying to vindicate
Speaker 1: the payments that it takes to keep it as its
Speaker 1: key search. But the argument goes is that look with
Speaker 1: Google as a pretty dominant force, but a good dominant
Speaker 1: force in terms of actually user interaction with search, but
Speaker 1: ultimately it's stifling innovation because it hasn't allowed the others,
Speaker 1: the competitors, such as being induct Dog, to be able
Speaker 1: to access the data needed to become a better product.
Speaker 1: How much is Search lost out because of that?
Speaker 12: Do you think, yeah, it's a relevant comparison I mean
Speaker 12: Google is a free product. People intuitively like Google Search.
Speaker 12: I think the problem is compared to what there's no
Speaker 12: real credible alternative to Google Search. They command ninety percent
Speaker 12: of this market, and we're learning today with EDDIEQ on
Speaker 12: the stand, your last speaker spoke a little bit about
Speaker 12: what he was going to be testifying to really the
Speaker 12: way that Google is able to degrade privacy protections and
Speaker 12: to scrape information about users of Google Search. So anybody
Speaker 12: who thinks that Google is providing a truly free product
Speaker 12: is mistaken. They are gathering information from you and selling
Speaker 12: it to advertisers who they are then abusing on the
Speaker 12: other side of the market. So Google is a really
Speaker 12: apt comparison of something that appears free but really has
Speaker 12: a lot of costs, and we're learning about those details
Speaker 12: in this trial right now.
Speaker 5: When we had the Microsoft Activision deal, there were all
Speaker 5: kinds of questions posed that had the FTC one, Lena
Speaker 5: Kahan would go after many other tech companies and she
Speaker 5: would have momentum.
Speaker 4: In the end.
Speaker 5: Activision Microsoft were able to proceed in this jurisdiction. There
Speaker 5: was a feeling that Lena Khan was picking battles that
Speaker 5: she couldn't win, and yet their proceeding this federal case
Speaker 5: against Amazon. I say all of that to ask you
Speaker 5: how strong is this FTC is a regulator? How much
Speaker 5: likelihood does it have of being successful in the in
Speaker 5: the actions it's choosing to take.
Speaker 12: Well, let me start with just saying that the FTC
Speaker 12: is appealing the decision in the Microsoft Activision case. That
Speaker 12: case is not dead in the water, though Microsoft Activision
Speaker 12: has prevailed in many jurisdictions.
Speaker 4: You know, these are cases that.
Speaker 7: Are difficult to bring.
Speaker 12: You know, these are antitrust laws that were crafted over
Speaker 12: a century ago to treat a different type of monopolist.
Speaker 12: They have been eroded dramatically over the fifty years to
Speaker 12: focus on things that are solely about consumer price, for instance,
Speaker 12: while you know, completely ignoring other issues around the benefits
Speaker 12: of competition and innovation in markets, and the value of
Speaker 12: small businesses and the dignity of workers. So I don't
Speaker 12: think this is as much about the FTC as it
Speaker 12: is about the law itself and the way that it's
Speaker 12: been cod by the courts. So, you know, these cases
Speaker 12: are not easy to bring. The FTC is going to
Speaker 12: have an uphill battle with Amazon as it did with
Speaker 12: Microsoft Activision. I don't think that's a reason not to
Speaker 12: bring cases about understewed monopolists in our economy.
Speaker 4: A Lee.
Speaker 1: I think what's interesting, though, is we actually have got
Speaker 1: competition in the world of search and it's chat ChiPT.
Speaker 1: Suddenly we have seen innovation although golgunctuan scale in artificial
Speaker 1: intelligence and generative AI. So is that not some sort
Speaker 1: of argument about the fact that, no, it hasn't stifled innovation,
Speaker 1: this sort of well product that everyone really likes.
Speaker 12: Well, I love this example, and we talked about this
Speaker 12: a lot that AI is going to shake up Google Search,
Speaker 12: It's going to shake up all these different parts of
Speaker 12: our economy. I think when you look at the analyses
Speaker 12: that are being conducted right now, you see that that's
Speaker 12: actually not the case. Microsoft had a lead with AI
Speaker 12: on its search engine and was not able to disrupt
Speaker 12: Google's market share at all. I think what you'll see
Speaker 12: with AI is that this new technology that is supposed
Speaker 12: to spring a new innovation is just being grafted onto
Speaker 12: the market structures of today. The monopolists are going to
Speaker 12: control development of that technology. That's what the FTC or
Speaker 12: that's what the case the DOJ's case against Google searches
Speaker 12: right now is about how AI gets to develop over
Speaker 12: the next quarter century. Is Google going to have a
Speaker 12: stranglehold on that development.
Speaker 5: Of the many actions the FTC has taken league quickly,
Speaker 5: which do you think it legally has the best chance
Speaker 5: of success against which company?
Speaker 12: Well, I'm really excited about the Amazon case. I mean,
Speaker 12: they've been laying the foundation for this for quite some time.
Speaker 12: They've been methodically researching this. Many cases have been brought
Speaker 12: in state courts that they are building on. I don't
Speaker 12: think the FTC would be bringing this landmark case that
Speaker 12: it filed this morning if it didn't think it had
Speaker 12: a good opportunity to win. You can look at any
Speaker 12: of the other successes that the FTC has already had.
Speaker 6: Though.
Speaker 12: This is actually remarkably effective commission. Despite a couple of
Speaker 12: high profile court glasses, the FTC is doing a darn
Speaker 12: good job, and I'm excited to see this Amazon case proceed.
Speaker 1: Hepner, legal counsel at the American Economic Liberties Project. We
Speaker 1: thank you for your time.
Speaker 4: All right, time for talking tech.
Speaker 5: First up can now Network Technology is officially filing for
Speaker 5: its Hong Kong initial public offering the logistics unit of
Speaker 5: Aali barber can Now would be the first of its
Speaker 5: spinoff units to go public. Initial reports said the firm
Speaker 5: was home and arrays at least one billion dollars. City
Speaker 5: CITEC Securities and JP Morgan are the sponsors, and Roku
Speaker 5: and Samsung are getting hit with a lawsuit targeting tech
Speaker 5: companies for how they advertise. Both companies sell ads that
Speaker 5: leverage automatic content recognition or ACR to collect user data
Speaker 5: based on individual interests. The two investors behind the suit
Speaker 5: say the methods use to collect the data violate six
Speaker 5: of their patents plus. The European Union is urging social
Speaker 5: media platforms to boost their efforts fighting disinformation. X formerly
Speaker 5: known as Twitter, was cited as the biggest outlet for
Speaker 5: pedlars of disinformation pertaining to Russia and pro Kremlin narratives.
Speaker 5: European Commissioned Vice President Vera Jarova said platforms should act
Speaker 5: swiftly ahead of elections over the next year.
Speaker 1: Caroline, meanwhile, look the new material for Apple's eco friendly
Speaker 1: iPhone cases, drawn some criticism from consumers. One review when
Speaker 1: as far as calling it one of the worst accessories
Speaker 1: Apples produced. Who Impag's mark German pretty sure is all
Speaker 1: over it. And what is it that people don't like?
Speaker 1: Apart from perhaps a slightly pricing point.
Speaker 3: Well, I'm using a ClearCase, so no impact to me.
Speaker 3: I had a feeling that the fine Wilbur case wasn't
Speaker 3: going to be so hot, so I decided to get
Speaker 3: a plastic case this year. In the past I used
Speaker 3: the leather cases fine Wilbur. It is picking up stains
Speaker 3: when you leave it on a table. If you go
Speaker 3: into an our store like many of us did over
Speaker 3: the weekend and you saw the fine woven cases on display,
Speaker 3: a lot of them are scratched up.
Speaker 7: I think people are taking their nails.
Speaker 3: And scratching on it and pretending that it's like an
Speaker 3: old school vinyl record.
Speaker 7: Right.
Speaker 3: It makes a similar sound, though it feels a little
Speaker 3: bit like Swede and it feels a little bit like
Speaker 3: a record. So clearly people are unhappy with the dirt
Speaker 3: and the oil and anything from your fingers that it
Speaker 3: may pick up. They don't like the feel of the material.
Speaker 3: It just doesn't feel premium compared to leather, and it's
Speaker 3: coming in at about the same price.
Speaker 7: It's very understandable why Apple made this move, right.
Speaker 3: They wanted to transition away from leather and all their accessories,
Speaker 3: so they came up with a new material to do that.
Speaker 3: I and many others just don't think that they landed
Speaker 3: on that right material with fine woven. Perhaps there's other
Speaker 3: materials they can use, like some of the materials and
Speaker 3: fake leather as many car makers are using. So clearly
Speaker 3: there may be an alternative that Apple we need to switch.
Speaker 7: To in the future.
Speaker 5: The problem mark is that during the one the last event,
Speaker 5: they really emphasize the accessories moving away from leather to
Speaker 5: sustainability of the new materials. But this strategy has not
Speaker 5: gone down well with the consumer. It's part of basically
Speaker 5: bigger picture sustainabilities and carbon reduction goals.
Speaker 7: Right, Yeah, it's a long term thing.
Speaker 3: So you know, if this fine woven ends up being
Speaker 3: the failure that I think it is and then they
Speaker 3: end up having to move away from fine woven, there
Speaker 3: are alternatives. They can make a fake leather, they can
Speaker 3: source a fake leather that feels like real leather. They
Speaker 3: can improve this material significantly, Right, but what about all
Speaker 3: the people who've already bought this case. I saw people
Speaker 3: saying the best thing you can do with the fine
Speaker 3: woven case. If you bought one is leverage the Apple
Speaker 3: two week return policy and bring it back to the store,
Speaker 3: ship ef back to the online store and get a
Speaker 3: different type of case. Now, Apple does still sell the
Speaker 3: silicon cases.
Speaker 7: I have used those. I think they're pretty good.
Speaker 3: The problem is if you are wearing tight jeans, the
Speaker 3: case could really get stuck in your pocket. It picks
Speaker 3: up lint very easily.
Speaker 7: But they are quite protective.
Speaker 3: And of course there's a pretty marketplace of cases. I've
Speaker 3: already seen and used plenty of third party cases on
Speaker 3: the fifteen. They're pretty good alternatives up there.
Speaker 5: All right, Bloomberg's chief Apple correspondent with the show and
Speaker 5: tell there, Mark German, thank you very much. Now coming
Speaker 5: up here on Mania technology social media at Visco has
Speaker 5: got a new CEO or conversation with Eric Whitman on
Speaker 5: his vision for the.
Speaker 4: Future of that platform. That conversation.
Speaker 5: Next, this is Bloomberg Technology.
Speaker 1: French billionaire Xavier Neil is investing two hundred million euros.
Speaker 1: That's about two hundred twelve million dollars in you guessed
Speaker 1: at artificial intelligence. He was the law top French AI
Speaker 1: engineers back to their home country some of this investment
Speaker 1: it's going to be for a few research labs relocated
Speaker 1: in Paris, and I remember he's one of the people
Speaker 1: behind stati on f in Paris as well a big
Speaker 1: incubator there. Plus there's also going to be slack cloud
Speaker 1: supercomputing capabilities powered by Invidio hardware, while the rest we
Speaker 1: understand it's going to go for funding. Some of those
Speaker 1: startups interesting with Mistral.
Speaker 5: Yeah, one startup we've been talking to recently is Visco,
Speaker 5: the photo and video editor tool that went viral a
Speaker 5: few years ago on the back of the Visco girl trend.
Speaker 5: Recently announced, of course, the appointment of a new CEO,
Speaker 5: Eric Whitman, who was the president of the company up
Speaker 5: until that point. I got up with him last week
Speaker 5: to discuss the content create a battleground that counts the
Speaker 5: likes of YouTube and x in the contestants, and how
Speaker 5: he intends on growing Visco in that market. Have a listen.
Speaker 13: It's a fairly dynamic landscape. Things are changing quite often.
Speaker 13: I think if you take a step back and think
Speaker 13: about creators first, which is very much our ethos, and
Speaker 13: what their needs are, I think what you're going to
Speaker 13: find that creators really want tools to help them make
Speaker 13: things more quickly, more efficiently. They want a really healthy
Speaker 13: community that isn't being manipulated by algorithms or advertisements, and
Speaker 13: they want to be discovered by prospective clients or be
Speaker 13: able to more efficiently manage their businesses and have great
Speaker 13: relationships with their clients. So the platform that really does
Speaker 13: all three of those things very well, I think that's
Speaker 13: going to be the platform that wins, and that's very
Speaker 13: much our mission and what we're trying to do here
Speaker 13: at Visco.
Speaker 5: In October twenty twenty one, The New York Times reports
Speaker 5: that Pintrst is considering buying Visco. I think about some
Speaker 5: similar properties Instagram and where it sits within Meta's portfolio.
Speaker 5: The CEO now, strategically, would you be open to a
Speaker 5: sale to a bigger platform to help Visco grow and
Speaker 5: help is technology be more used?
Speaker 13: Yeah, I think at the end of the day, if
Speaker 13: it benefits our creators and if it helps us pursue
Speaker 13: this bigger, more ambitious strategy and vision that we have,
Speaker 13: then that's something that we would have a conversation with
Speaker 13: our border beout and make sure it's the right decision
Speaker 13: for us.
Speaker 5: How does Visco culturally grow? You know, Visco Girl was
Speaker 5: what people said and kind of the peak of Visco's use.
Speaker 5: How do you position it culturally to give it traction
Speaker 5: like TikTok, frankly has had at such a high level
Speaker 5: here in the United States for a long time.
Speaker 7: Yeah.
Speaker 13: So for us, it's really about again focusing on creators
Speaker 13: and their needs. And because we are a subscription business,
Speaker 13: we were not trying to drive a different type of
Speaker 13: engagement that's really promoting more ad driven business models, and
Speaker 13: that gives us a lot of freedom to actually make
Speaker 13: sure that we are actually paying attention to what their
Speaker 13: needs are and their needs continue to change. We're hearing
Speaker 13: more and more from creators today that they don't feel
Speaker 13: that a company really has their back, that's really supporting
Speaker 13: them first, and that's really going to continue to be
Speaker 13: our focus.
Speaker 1: Visco CEO that Eric Whitman. Meanwhile, look, that does it
Speaker 1: to this edition of Bloomberg Technology yet?
Speaker 7: Yeah.
Speaker 5: Recap on our podcast wherever you get your podcasts on
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