1
00:00:02,759 --> 00:00:13,440
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.

2
00:00:14,080 --> 00:00:18,520
Speaker 2: Temperatures dipped into negative numbers Friday morning in Minneapolis, but

3
00:00:18,640 --> 00:00:22,160
Speaker 2: crowds of demonstrators still turned out at the Federal Building

4
00:00:22,320 --> 00:00:25,599
Speaker 2: to protest ICE operations in the state that led to

5
00:00:25,640 --> 00:00:29,880
Speaker 2: the killing of two US citizens by federal immigration agents.

6
00:00:30,240 --> 00:00:34,720
Speaker 2: Also on Friday, in a significant reversal, Deputy Attorney General

7
00:00:34,840 --> 00:00:38,640
Speaker 2: Todd Blanche announced that the Justice Department has opened a

8
00:00:38,680 --> 00:00:42,639
Speaker 2: civil rights investigation into the shooting of alex Pretty by

9
00:00:42,680 --> 00:00:44,440
Speaker 2: two Border patrol agents.

10
00:00:44,880 --> 00:00:48,320
Speaker 3: We're looking at everything that would get shed light on

11
00:00:48,440 --> 00:00:51,160
Speaker 3: what happened that day and in the days and weeks

12
00:00:51,240 --> 00:00:54,880
Speaker 3: leading up to what happened. And that's like any investigation

13
00:00:55,080 --> 00:00:58,200
Speaker 3: that the Department of Justice and the FBI does every day.

14
00:00:58,280 --> 00:01:03,040
Speaker 3: It means we're looking at videos, talking to witnesses, trying

15
00:01:03,080 --> 00:01:06,720
Speaker 3: to understand what happened. I mean, you're talking about an

16
00:01:06,720 --> 00:01:09,000
Speaker 3: incredibly tragic morning.

17
00:01:09,560 --> 00:01:15,880
Speaker 2: Previously, ICE's Homeland Security Investigations Branch had been leading the investigation,

18
00:01:16,360 --> 00:01:21,160
Speaker 2: and investigating law enforcement shootings is not something they're usually

19
00:01:21,280 --> 00:01:24,479
Speaker 2: tasked with. Joining me is former Palm Beach County State

20
00:01:24,520 --> 00:01:26,160
Speaker 2: Attorney Dave Ehrenberg.

21
00:01:26,600 --> 00:01:26,759
Speaker 1: Dave.

22
00:01:26,880 --> 00:01:30,360
Speaker 2: Let's look at the potential legal repercussions for the agents

23
00:01:30,400 --> 00:01:34,520
Speaker 2: involved in these shootings. So the federal government could prosecute

24
00:01:34,560 --> 00:01:37,560
Speaker 2: these agents, but under what circumstances.

25
00:01:38,200 --> 00:01:41,720
Speaker 4: Yes, the federal government has the power to prosecute those

26
00:01:41,920 --> 00:01:45,399
Speaker 4: who act unreasonably in the circumstances if they were reckless

27
00:01:45,680 --> 00:01:49,640
Speaker 4: in discharging their duties. Yes, but the federal government has

28
00:01:49,680 --> 00:01:52,040
Speaker 4: said that they will not even investigate.

29
00:01:52,200 --> 00:01:53,680
Speaker 5: They were in a good shooting.

30
00:01:53,720 --> 00:01:56,800
Speaker 4: Now, when it comes to the Alex Pretty shooting, President

31
00:01:56,800 --> 00:02:00,480
Speaker 4: Trump said that they will have an investigation. So it's

32
00:02:00,520 --> 00:02:03,680
Speaker 4: unsure at this point whether they would move ahead for

33
00:02:03,960 --> 00:02:06,120
Speaker 4: the Pretty shooting, which, by the way, I think has

34
00:02:06,160 --> 00:02:08,959
Speaker 4: a stronger case of a prosecution there. I think that

35
00:02:09,040 --> 00:02:13,440
Speaker 4: the agent's actions there multiple agents are more likely to

36
00:02:13,560 --> 00:02:16,760
Speaker 4: be open to criminal liability than the shooting death of

37
00:02:16,760 --> 00:02:17,400
Speaker 4: Renee Good.

38
00:02:17,639 --> 00:02:20,920
Speaker 2: Explain why the Pretty case is stronger.

39
00:02:20,600 --> 00:02:24,359
Speaker 4: The Renee Good shooting. You had an agent who could

40
00:02:24,520 --> 00:02:26,920
Speaker 4: argue he was in reasonable fear of his life because

41
00:02:26,960 --> 00:02:29,880
Speaker 4: the card did lurch towards him, even though it was

42
00:02:29,880 --> 00:02:32,240
Speaker 4: clear that she was trying to avoid the agent. She

43
00:02:32,360 --> 00:02:34,400
Speaker 4: was pulling her card to the right, the steering wheel

44
00:02:34,400 --> 00:02:36,320
Speaker 4: to the right. But the card did lurch forward. You

45
00:02:36,360 --> 00:02:39,560
Speaker 4: could hear him say WHOA. And because of that, I

46
00:02:39,560 --> 00:02:42,880
Speaker 4: can see how a jury would say, yeah, he was

47
00:02:42,919 --> 00:02:45,240
Speaker 4: in reasonable fear of his life and that's why he shot. Now,

48
00:02:45,240 --> 00:02:47,079
Speaker 4: the problem in that case is that he shot a

49
00:02:47,120 --> 00:02:50,160
Speaker 4: second and third time when he was not in any danger.

50
00:02:50,200 --> 00:02:53,160
Speaker 4: But oftentimes they will look at all the shots together,

51
00:02:53,280 --> 00:02:55,160
Speaker 4: like if you can shoot once, they'll say you can

52
00:02:55,240 --> 00:02:58,440
Speaker 4: continue shooting until the threat is neutralized. Prosecutors in that

53
00:02:58,480 --> 00:03:01,560
Speaker 4: case will slow down the video to make each shot

54
00:03:01,680 --> 00:03:05,400
Speaker 4: unique on its own, as opposed to one quick decision. Now,

55
00:03:05,440 --> 00:03:08,519
Speaker 4: when it comes to Alex Preddy, you had situation where

56
00:03:08,560 --> 00:03:12,160
Speaker 4: he was not engaging in any criminal behavior. He was

57
00:03:12,160 --> 00:03:14,280
Speaker 4: trying to help a woman who had been pushed down

58
00:03:14,360 --> 00:03:17,080
Speaker 4: by an over aggressive border control agent. And then he

59
00:03:17,120 --> 00:03:19,480
Speaker 4: got pepper spray for his troubles, and then he was

60
00:03:19,520 --> 00:03:22,519
Speaker 4: thrown to the ground, and then he had seven different

61
00:03:22,560 --> 00:03:25,160
Speaker 4: agents on top of him. They saw him with a

62
00:03:25,200 --> 00:03:28,400
Speaker 4: phone the entire time, and the gun he had was

63
00:03:28,440 --> 00:03:30,840
Speaker 4: concealed and he had a permit for it, and then

64
00:03:30,919 --> 00:03:33,160
Speaker 4: it was taken away. And after it was taken away,

65
00:03:33,639 --> 00:03:37,440
Speaker 4: then someone yelled that gun and perhaps that gun went off.

66
00:03:37,480 --> 00:03:40,280
Speaker 4: The one that was taken away and ten shots rang

67
00:03:40,320 --> 00:03:42,040
Speaker 4: out in five seconds. He was shot ten times at

68
00:03:42,080 --> 00:03:44,680
Speaker 4: five seconds, so I think that one is going to

69
00:03:44,760 --> 00:03:45,840
Speaker 4: be tougher to defend.

70
00:03:45,880 --> 00:03:46,720
Speaker 5: They may say was a.

71
00:03:46,680 --> 00:03:50,400
Speaker 4: Mistake of fact where they thought that the gun went off,

72
00:03:50,440 --> 00:03:53,680
Speaker 4: but I don't think it's reasonable, based on the videos

73
00:03:53,760 --> 00:03:56,200
Speaker 4: for them to believe that he had a gun in

74
00:03:56,280 --> 00:03:59,080
Speaker 4: his hand that was going off against them.

75
00:03:59,400 --> 00:04:04,600
Speaker 2: The top blow prosecutor in Minneapolis has opened homicide investigations

76
00:04:04,640 --> 00:04:10,160
Speaker 2: into both shootings, but federal officers are generally immune from

77
00:04:10,240 --> 00:04:14,760
Speaker 2: state prosecutions. Explain how the officers would raise that, how

78
00:04:14,800 --> 00:04:15,440
Speaker 2: it would work.

79
00:04:16,160 --> 00:04:19,200
Speaker 4: What's going to happen is that the federal government is

80
00:04:19,279 --> 00:04:21,919
Speaker 4: unlikely to prosecute the cases, and so the state of

81
00:04:21,920 --> 00:04:26,719
Speaker 4: Minnesota will seek a criminal indictment. They can undergo a separate,

82
00:04:26,720 --> 00:04:29,520
Speaker 4: independent investigation, which I think has already begun, and then

83
00:04:29,560 --> 00:04:31,600
Speaker 4: they can seek a grand jury indictment, which I think

84
00:04:31,640 --> 00:04:36,280
Speaker 4: they will. And when that happens, the federal agent, because

85
00:04:36,279 --> 00:04:39,039
Speaker 4: he's a federal agent, will ask to remove the case

86
00:04:39,080 --> 00:04:41,680
Speaker 4: of federal court. Now the case will still be a

87
00:04:41,839 --> 00:04:45,359
Speaker 4: state prosecution. You'll have state prosecutors, you'll have state law

88
00:04:45,839 --> 00:04:49,360
Speaker 4: enforce but the case would be in federal court with

89
00:04:49,440 --> 00:04:51,919
Speaker 4: a federal judge and a federal jury, which means that

90
00:04:51,960 --> 00:04:56,120
Speaker 4: the jury pool will consist of residents of Minnesota from

91
00:04:56,120 --> 00:04:58,520
Speaker 4: all over the state, so advantage to the defendant. But

92
00:04:58,839 --> 00:05:01,480
Speaker 4: when it comes to im unity, the federal judge would

93
00:05:01,520 --> 00:05:04,719
Speaker 4: make that call, and the question is did the agent

94
00:05:04,839 --> 00:05:08,560
Speaker 4: or agents act in furtherance of the duties in a

95
00:05:08,560 --> 00:05:12,080
Speaker 4: way that was necessary and proper to carry out their duties?

96
00:05:12,200 --> 00:05:14,920
Speaker 4: And if the answer is yes, then he gets immunity

97
00:05:15,120 --> 00:05:17,480
Speaker 4: and it's game over. There will be no prosecution. If

98
00:05:17,480 --> 00:05:20,240
Speaker 4: he says no, it'll be appealed, but then it'd be

99
00:05:20,240 --> 00:05:23,360
Speaker 4: game on for a state prosecution in front of that

100
00:05:23,400 --> 00:05:24,120
Speaker 4: federal jury.

101
00:05:24,560 --> 00:05:28,440
Speaker 2: The state's at a disadvantage here in its investigation because

102
00:05:28,520 --> 00:05:33,160
Speaker 2: the federal government is refusing to share the evidence that

103
00:05:33,240 --> 00:05:34,120
Speaker 2: it's collected.

104
00:05:34,440 --> 00:05:37,000
Speaker 4: This case is so unusual because when I was state

105
00:05:37,040 --> 00:05:39,160
Speaker 4: attorney in Palm Beach County for twelve years, we worked

106
00:05:39,160 --> 00:05:41,880
Speaker 4: with the Feds. The Feds would come in and sometimes

107
00:05:41,920 --> 00:05:43,320
Speaker 4: they would say they want to take the case, and

108
00:05:43,360 --> 00:05:46,839
Speaker 4: we would stand down. Normally, if the Feds say we're

109
00:05:46,880 --> 00:05:49,159
Speaker 4: not giving you the evidence, it's because they want to

110
00:05:49,160 --> 00:05:51,560
Speaker 4: preserve the integrity of the evidence so they can do

111
00:05:51,640 --> 00:05:55,160
Speaker 4: their own prosecution, not to prevent a suspect from ever

112
00:05:55,240 --> 00:05:58,440
Speaker 4: being prosecuted. So this is uncharted territory. So this is

113
00:05:58,440 --> 00:06:00,240
Speaker 4: what I think will happen. I think the state is

114
00:06:00,279 --> 00:06:04,119
Speaker 4: going to file a lawsuit in federal court to get

115
00:06:04,200 --> 00:06:06,680
Speaker 4: the federal government to turn over the evidence. I think

116
00:06:06,720 --> 00:06:09,240
Speaker 4: the state is going to ask a federal judge to

117
00:06:09,279 --> 00:06:11,960
Speaker 4: require the federal government to turn over the evidence they have.

118
00:06:12,240 --> 00:06:14,000
Speaker 4: And I think I'll have a good claim here because

119
00:06:14,000 --> 00:06:16,800
Speaker 4: the federal governments may clear that they're not going to

120
00:06:16,800 --> 00:06:20,039
Speaker 4: even investigate they were in a good shooting. And I

121
00:06:20,080 --> 00:06:22,960
Speaker 4: think the federal judge, whoever it is in this case,

122
00:06:23,080 --> 00:06:26,600
Speaker 4: will say, you can't conceal the evidence from state authorities

123
00:06:26,760 --> 00:06:29,680
Speaker 4: for the purpose of protecting a suspect. Only if you

124
00:06:29,800 --> 00:06:33,240
Speaker 4: really have a good faith basis for investigating yourself and

125
00:06:33,320 --> 00:06:36,839
Speaker 4: prosking the case yourself, can you withhold evidence from the state.

126
00:06:37,040 --> 00:06:39,479
Speaker 4: So I think that the federal judge will grant the

127
00:06:39,480 --> 00:06:41,919
Speaker 4: state's motion. But even if they don't, even if the

128
00:06:42,000 --> 00:06:45,039
Speaker 4: state does not get the evidence from the Feds, the

129
00:06:45,080 --> 00:06:49,919
Speaker 4: state prosecutors already started a web portal where they're seeking

130
00:06:50,000 --> 00:06:55,200
Speaker 4: and obtaining videos and witness testimony and other evidence pertain

131
00:06:55,240 --> 00:06:57,760
Speaker 4: to the case, and you could file charges. In this case,

132
00:06:57,760 --> 00:07:00,640
Speaker 4: you can get indictment based on the videos. Al you

133
00:07:00,720 --> 00:07:03,559
Speaker 4: don't need necessarily to have the car because the Feds

134
00:07:03,600 --> 00:07:06,960
Speaker 4: have the car when it comes to Rene Good and

135
00:07:07,080 --> 00:07:09,400
Speaker 4: that would be helpful, but the state doesn't need it

136
00:07:09,480 --> 00:07:12,560
Speaker 4: to seek charges because remember, when you get indictment, you

137
00:07:12,600 --> 00:07:15,800
Speaker 4: just need problem cause once someone's indicted, then discovery begins

138
00:07:15,800 --> 00:07:18,000
Speaker 4: and then you'll get more information and it doesn't do

139
00:07:18,160 --> 00:07:21,000
Speaker 4: the it would be defendants in this case. The agents

140
00:07:21,200 --> 00:07:24,120
Speaker 4: doesn't do them any favors by withholding the evidence from

141
00:07:24,120 --> 00:07:27,360
Speaker 4: the state because the evidence that the federal government has

142
00:07:27,600 --> 00:07:30,760
Speaker 4: can also be exculpatory, meaning it could be to the

143
00:07:30,760 --> 00:07:34,760
Speaker 4: defendant's benefit, especially because the FEDS are a favorable agency

144
00:07:35,200 --> 00:07:39,000
Speaker 4: for these ice and Border control agents. So that's why

145
00:07:39,080 --> 00:07:42,360
Speaker 4: I would think as defendants, they would want the federal

146
00:07:42,400 --> 00:07:44,520
Speaker 4: government to turn over all evidence they have to the

147
00:07:44,560 --> 00:07:46,120
Speaker 4: state or else the state is going to do their

148
00:07:46,160 --> 00:07:49,080
Speaker 4: own investigation, and I think it will result in an indictment.

149
00:07:49,640 --> 00:07:54,000
Speaker 2: And besides the immunity defense, what other defenses could the

150
00:07:54,160 --> 00:07:57,160
Speaker 2: agents raise if they are prosecuted.

151
00:07:56,720 --> 00:07:59,440
Speaker 4: Well, immunity is not even raised a trial. Immunity comes

152
00:07:59,480 --> 00:08:02,440
Speaker 4: before and now would shut it down. That prevents a

153
00:08:02,520 --> 00:08:05,400
Speaker 4: trial to happen in the first place. So if it

154
00:08:05,440 --> 00:08:08,760
Speaker 4: does go to trial, they would say that we acted

155
00:08:08,800 --> 00:08:13,000
Speaker 4: reasonably under the circumstances that their lives were at risk,

156
00:08:13,200 --> 00:08:16,320
Speaker 4: where they had an imminent threat against their lives, and

157
00:08:16,360 --> 00:08:18,920
Speaker 4: the imminent threat in the first case would be the

158
00:08:19,000 --> 00:08:23,040
Speaker 4: car lurching towards the ice agent. In the second case,

159
00:08:23,080 --> 00:08:27,119
Speaker 4: Alex Pretty, they would say mistake of fact, that they

160
00:08:27,320 --> 00:08:29,360
Speaker 4: were in reasonable fear of their life, even though it

161
00:08:29,400 --> 00:08:31,920
Speaker 4: was a mistake, but that mistake was reasonable because this

162
00:08:32,040 --> 00:08:34,120
Speaker 4: guy had a gun and they didn't know it was

163
00:08:34,200 --> 00:08:36,840
Speaker 4: taken away. It was all happening so quickly. And this

164
00:08:36,880 --> 00:08:38,960
Speaker 4: is their defense. I'm putting myself in their shoes. And

165
00:08:39,000 --> 00:08:42,680
Speaker 4: they would say that when someone yelled out gun and

166
00:08:42,720 --> 00:08:45,079
Speaker 4: then they heard a gun shot, they reacted the way

167
00:08:45,080 --> 00:08:46,800
Speaker 4: they were taught to neutralize the threat.

168
00:08:46,880 --> 00:08:48,760
Speaker 5: Now they'll say that whether it's.

169
00:08:48,600 --> 00:08:50,959
Speaker 4: One shot or ten, you shoot to kill, you shoot

170
00:08:50,960 --> 00:08:53,200
Speaker 4: to neutralize the threat. So that's going to be their defense.

171
00:08:53,280 --> 00:08:55,960
Speaker 4: I think it's a tougher defense in the Pretty case

172
00:08:56,000 --> 00:08:57,040
Speaker 4: and in the Renee Good case.

173
00:08:57,559 --> 00:08:59,960
Speaker 2: Does the defense have an advantage if the case is

174
00:09:00,160 --> 00:09:03,520
Speaker 2: tried in federal court even under state law.

175
00:09:03,920 --> 00:09:06,920
Speaker 4: The defendants will certainly remove the case of federal court

176
00:09:06,960 --> 00:09:10,200
Speaker 4: to get a jury pool from the entire state of Minnesota,

177
00:09:10,200 --> 00:09:14,120
Speaker 4: because in federal court, there's one judicial district, and that's

178
00:09:14,160 --> 00:09:18,160
Speaker 4: the entire state. Residents of Minnesota from all over the state, conservative, liberal,

179
00:09:18,240 --> 00:09:21,040
Speaker 4: not just from blue Hennepin County. So instead of getting

180
00:09:21,360 --> 00:09:23,920
Speaker 4: people who are angry about what's happening in Hennepin County,

181
00:09:23,920 --> 00:09:26,720
Speaker 4: you'll get a cross section of the entire state, including Republicans.

182
00:09:26,720 --> 00:09:29,480
Speaker 4: And that's why, even if this does go to trial

183
00:09:29,480 --> 00:09:32,560
Speaker 4: and immunity is rejected, it is still an uphill battle

184
00:09:32,720 --> 00:09:36,720
Speaker 4: for prosecutors because you've got to prove beyond a reasonable

185
00:09:36,760 --> 00:09:40,080
Speaker 4: doubt in front of a unanimous jury that these agents

186
00:09:40,120 --> 00:09:43,040
Speaker 4: committed crimes. And you have a natural inclination of people

187
00:09:43,120 --> 00:09:45,559
Speaker 4: to believe law enforcement, to trust law enforcement, to give

188
00:09:45,559 --> 00:09:48,120
Speaker 4: them the benefit of the doubt. And you have politics

189
00:09:48,120 --> 00:09:50,360
Speaker 4: at play where people can see the same video and

190
00:09:50,400 --> 00:09:52,959
Speaker 4: it's like a warshock test where they interpret it differently,

191
00:09:53,160 --> 00:09:54,880
Speaker 4: And so how are you going to get twelve jurors

192
00:09:54,960 --> 00:09:59,040
Speaker 4: to all agree one way? That's the challenge that prosecutors face, Dave.

193
00:09:59,080 --> 00:10:02,240
Speaker 2: There are so many video already of the pretty shooting

194
00:10:02,360 --> 00:10:05,800
Speaker 2: from different angles. Does that make it easier for the

195
00:10:05,880 --> 00:10:09,240
Speaker 2: prosecutors or perhaps not just more confusing.

196
00:10:09,640 --> 00:10:13,000
Speaker 4: I think the more videos the better, the more transparency,

197
00:10:13,080 --> 00:10:16,720
Speaker 4: the more angles the better, because if you don't have

198
00:10:16,960 --> 00:10:20,520
Speaker 4: the full picture, you're gonna have reasonable doubt.

199
00:10:20,640 --> 00:10:21,319
Speaker 5: So there you go.

200
00:10:21,400 --> 00:10:24,400
Speaker 4: If you're the government, you want to have enough proof

201
00:10:24,440 --> 00:10:26,960
Speaker 4: that you can prove the unreasonable doubt that these officers

202
00:10:27,360 --> 00:10:30,199
Speaker 4: were not in imminent danger and it was not reasonable

203
00:10:30,240 --> 00:10:31,640
Speaker 4: for them to think.

204
00:10:31,480 --> 00:10:32,839
Speaker 5: That their lives were at risk.

205
00:10:32,920 --> 00:10:37,280
Speaker 4: But that's what good lawyering is about, is about deciding

206
00:10:37,520 --> 00:10:39,959
Speaker 4: how to present the videos. For example, in the Rodney

207
00:10:40,040 --> 00:10:44,400
Speaker 4: King case, you remember that the prosecution showed the video

208
00:10:44,400 --> 00:10:46,480
Speaker 4: and I was appalling a horrific video, but the defense

209
00:10:46,559 --> 00:10:50,240
Speaker 4: slowed it down, frame by frame and they showed see

210
00:10:50,720 --> 00:10:54,640
Speaker 4: the officer reacted here because Rodney King was resisting, and

211
00:10:55,160 --> 00:10:57,480
Speaker 4: they showed that in slow motion and he was acquitted

212
00:10:57,520 --> 00:11:00,240
Speaker 4: at the state level. Well, in this case, they're going

213
00:11:00,320 --> 00:11:04,200
Speaker 4: to slow the video down to try to convict the officers.

214
00:11:04,240 --> 00:11:06,240
Speaker 4: It's like the opposite, it's like the reverse Rodney King

215
00:11:06,280 --> 00:11:08,560
Speaker 4: where the government is going to say slow it down,

216
00:11:08,840 --> 00:11:11,040
Speaker 4: and you see that there are a good shooting shots

217
00:11:11,040 --> 00:11:14,400
Speaker 4: two and three were inappropriate, unreasonable, and also they're going

218
00:11:14,480 --> 00:11:15,160
Speaker 4: to slow it down.

219
00:11:15,480 --> 00:11:16,880
Speaker 5: In the Alex Peretty cases.

220
00:11:16,920 --> 00:11:20,160
Speaker 4: See look the gun was removed, it was walked away,

221
00:11:20,520 --> 00:11:23,240
Speaker 4: and then the shots began, even though it happened really quickly.

222
00:11:23,760 --> 00:11:26,439
Speaker 2: A long way to go and many many motions ahead

223
00:11:26,559 --> 00:11:30,000
Speaker 2: before any trial. Thanks so much, Dave. That's Dave Ehrenberg,

224
00:11:30,240 --> 00:11:33,520
Speaker 2: former Palm Beach County State Attorney. Coming up next on

225
00:11:33,520 --> 00:11:37,360
Speaker 2: the Bloomberg Laws Show. A landmark trial on social media

226
00:11:37,400 --> 00:11:41,560
Speaker 2: addiction starts in Los Angeles. I'm June Grosso. When you're

227
00:11:41,600 --> 00:11:43,440
Speaker 2: listening to Bloomberg.

228
00:11:45,080 --> 00:11:48,680
Speaker 6: Mister Zuckerberg, you and the companies before us, I know

229
00:11:48,760 --> 00:11:50,960
Speaker 6: you don't mean it to be so, but you have

230
00:11:51,000 --> 00:11:55,960
Speaker 6: blood on your hands. You have a product, you have

231
00:11:56,000 --> 00:11:59,080
Speaker 6: a product that's killing people.

232
00:11:59,360 --> 00:12:02,600
Speaker 2: That was book and Senator Lindsey Graham during a Senate

233
00:12:02,679 --> 00:12:07,040
Speaker 2: Judiciary Committee hearing two years ago, a rare instance where

234
00:12:07,080 --> 00:12:12,080
Speaker 2: Democrats and Republicans were united in their criticism of social

235
00:12:12,120 --> 00:12:16,960
Speaker 2: media CEOs like Mark Zuckerberg for not protecting kids online.

236
00:12:17,480 --> 00:12:21,679
Speaker 2: The Meta ceo pushed back on some studies that suggested

237
00:12:21,880 --> 00:12:25,160
Speaker 2: social media use is a detriment to the mental health

238
00:12:25,200 --> 00:12:26,080
Speaker 2: of teenagers.

239
00:12:26,679 --> 00:12:29,960
Speaker 7: Mental health is a complex issue, and the existing body

240
00:12:29,960 --> 00:12:33,000
Speaker 7: of scientific work has not shown a cause a link

241
00:12:33,040 --> 00:12:36,199
Speaker 7: between using social media and young people having worse mental

242
00:12:36,200 --> 00:12:36,920
Speaker 7: health outcomes.

243
00:12:37,280 --> 00:12:41,160
Speaker 2: Zuckerberg may make that same claim when he testifies to

244
00:12:41,280 --> 00:12:44,679
Speaker 2: a jury in a landmark trial over claims that the

245
00:12:44,679 --> 00:12:49,680
Speaker 2: top social media companies have deliberately gotten teenagers addicted through

246
00:12:49,720 --> 00:12:53,320
Speaker 2: their design choices. On trial are Meta, the owner of

247
00:12:53,360 --> 00:12:57,800
Speaker 2: Facebook and Instagram, and Google, the owner of YouTube. They

248
00:12:57,840 --> 00:13:02,040
Speaker 2: dispute the claims that their platforms deliberately harmed children and

249
00:13:02,120 --> 00:13:06,120
Speaker 2: cite the safeguards they've added over the years. Snap settled

250
00:13:06,120 --> 00:13:09,559
Speaker 2: the case last week and TikTok settled on the eve

251
00:13:09,600 --> 00:13:13,200
Speaker 2: of trial. Joining me is an expert in cybersecurity and

252
00:13:13,320 --> 00:13:17,880
Speaker 2: data privacy, Colin Walkee, a partner at Holestel. Colin, the

253
00:13:17,880 --> 00:13:20,640
Speaker 2: plaintiff in this case is a California woman who is

254
00:13:20,720 --> 00:13:23,880
Speaker 2: now twenty years old. Tell us about our allegations in

255
00:13:23,920 --> 00:13:24,719
Speaker 2: this lawsuit.

256
00:13:25,320 --> 00:13:27,520
Speaker 8: This is really the first one that's going to trial.

257
00:13:27,720 --> 00:13:31,240
Speaker 8: There are dozens, if not hundreds, of similar lawsuits out there,

258
00:13:31,320 --> 00:13:33,400
Speaker 8: and the basic allegation in this case, in all of

259
00:13:33,400 --> 00:13:37,160
Speaker 8: the cases, is that the algorithms that have been put

260
00:13:37,200 --> 00:13:39,840
Speaker 8: out there by the social media companies, as well as

261
00:13:39,920 --> 00:13:42,199
Speaker 8: all the bells and whistles they put on their social

262
00:13:42,240 --> 00:13:46,760
Speaker 8: media platforms, have made their products addictive. So this is

263
00:13:46,920 --> 00:13:50,960
Speaker 8: very much akin to the tobacco litigation in the nineteen nineties.

264
00:13:51,360 --> 00:13:53,280
Speaker 8: One is it addictive? And then two are there harms

265
00:13:53,320 --> 00:13:55,160
Speaker 8: that flow from it? The jury is ultimately going to

266
00:13:55,160 --> 00:13:55,839
Speaker 8: decide that in this.

267
00:13:55,880 --> 00:13:59,439
Speaker 2: Case, and the plaintiff's theory is a novel one that

268
00:13:59,520 --> 00:14:03,239
Speaker 2: compares social media sites to defective products.

269
00:14:03,920 --> 00:14:05,960
Speaker 8: Yes, and in fact, some of the claims even relate

270
00:14:06,040 --> 00:14:09,120
Speaker 8: back to like a nuisance type claim. But long story

271
00:14:09,160 --> 00:14:12,199
Speaker 8: short is that the way these algorithms operate is they

272
00:14:12,240 --> 00:14:16,199
Speaker 8: get you addicted through casino style techniques. So casinos know,

273
00:14:16,280 --> 00:14:18,320
Speaker 8: for example, that every time that you put a quarter

274
00:14:18,360 --> 00:14:20,240
Speaker 8: in you shouldn't get a reward because then you won't

275
00:14:20,240 --> 00:14:23,000
Speaker 8: come back. So it's the timing with which you see

276
00:14:23,000 --> 00:14:25,760
Speaker 8: and the content that you see it in and then

277
00:14:25,840 --> 00:14:28,400
Speaker 8: what are the consequences that flow from that, So for example,

278
00:14:28,840 --> 00:14:31,720
Speaker 8: mental health harms as a result of that. You could

279
00:14:31,720 --> 00:14:34,640
Speaker 8: think about children in school and the distractions that's some

280
00:14:34,720 --> 00:14:37,000
Speaker 8: of the allegations that have come out in these cases is,

281
00:14:37,520 --> 00:14:40,920
Speaker 8: you know, Instagram started losing teenagers and they were sitting

282
00:14:40,960 --> 00:14:43,200
Speaker 8: there going how do we get back more teenagers? Well,

283
00:14:43,280 --> 00:14:45,960
Speaker 8: let's figure out a way to get our platforms in schools, right,

284
00:14:46,360 --> 00:14:48,680
Speaker 8: And so the harms that flow from this are unique

285
00:14:48,720 --> 00:14:51,240
Speaker 8: to each individual, but you can see how they compound.

286
00:14:51,520 --> 00:14:53,560
Speaker 2: So they're going to try to show that the social

287
00:14:53,640 --> 00:14:58,840
Speaker 2: media companies deliberately made these addictive design choices.

288
00:14:58,920 --> 00:15:02,280
Speaker 8: Correct that that they have done this. And I think

289
00:15:02,320 --> 00:15:04,880
Speaker 8: that there's plenty of testimony out there that probably supports

290
00:15:04,920 --> 00:15:09,680
Speaker 8: the goal of making individuals remain on platforms as long

291
00:15:09,720 --> 00:15:12,440
Speaker 8: as possible, keeping their attention there so that they can

292
00:15:12,520 --> 00:15:15,480
Speaker 8: increase the number of viewers and thereby increase the number

293
00:15:15,560 --> 00:15:18,600
Speaker 8: of advertisements. So I don't think there's really anything new

294
00:15:18,640 --> 00:15:21,640
Speaker 8: about that. But the tech companies are coming in and saying, whoa, whoa.

295
00:15:22,160 --> 00:15:24,800
Speaker 8: We already know based off of the Spring Courts ruling

296
00:15:24,800 --> 00:15:30,040
Speaker 8: on section two thirty that the algorithms themselves are protected speech.

297
00:15:30,400 --> 00:15:33,240
Speaker 8: And so the unique claim in this particular case is, yes,

298
00:15:33,280 --> 00:15:36,520
Speaker 8: that may be speech, but the other bells and whistles

299
00:15:36,520 --> 00:15:38,640
Speaker 8: that you're putting onto this and what you're doing within

300
00:15:38,720 --> 00:15:41,680
Speaker 8: it is not speech, and rather it's conduct that it's

301
00:15:41,720 --> 00:15:43,880
Speaker 8: getting us addicted to your platform.

302
00:15:44,000 --> 00:15:47,520
Speaker 2: The tech companies are also arguing that they're not legally

303
00:15:47,600 --> 00:15:51,560
Speaker 2: responsible for the effect of the content made by users,

304
00:15:51,600 --> 00:15:53,640
Speaker 2: So explain what they're out is here what they're trying

305
00:15:53,640 --> 00:15:54,320
Speaker 2: to get.

306
00:15:54,120 --> 00:15:56,880
Speaker 8: To, right, So, in short, the fact that you're being

307
00:15:57,000 --> 00:16:00,160
Speaker 8: shown what you want to see is your own choice.

308
00:16:00,360 --> 00:16:03,600
Speaker 8: You could choose to see and view different things based

309
00:16:03,640 --> 00:16:06,240
Speaker 8: off of the likes, and you're viewing habits and all

310
00:16:06,240 --> 00:16:08,680
Speaker 8: of that. So they're essentially saying, all we're doing is

311
00:16:08,680 --> 00:16:11,360
Speaker 8: giving you what you want. We're not doing anything to

312
00:16:11,400 --> 00:16:14,120
Speaker 8: make it more enticing than it already is. And you know,

313
00:16:14,280 --> 00:16:17,240
Speaker 8: part of the argument too is how much is your

314
00:16:17,320 --> 00:16:22,840
Speaker 8: cell phone itself addictive versus the platforms themselves. Right, So

315
00:16:23,000 --> 00:16:25,640
Speaker 8: every time you get an iPhone update, for example, it

316
00:16:25,680 --> 00:16:28,960
Speaker 8: becomes a little bit brighter. Why the brighter the screen,

317
00:16:29,000 --> 00:16:31,320
Speaker 8: the more dopamine in the brain. The more dopamine the brain,

318
00:16:31,360 --> 00:16:33,000
Speaker 8: the more you want to look on your screen. That's

319
00:16:33,000 --> 00:16:35,080
Speaker 8: why it's hard for you to figure out without going

320
00:16:35,080 --> 00:16:37,040
Speaker 8: to Google how to set your screen to black and white.

321
00:16:37,080 --> 00:16:38,760
Speaker 8: They don't want you to know that, so part of

322
00:16:38,800 --> 00:16:41,240
Speaker 8: their argument here, too, is is how do you distinguish

323
00:16:41,280 --> 00:16:43,240
Speaker 8: which component of this is addictive.

324
00:16:43,480 --> 00:16:46,200
Speaker 2: The plaintiff in the case, a twenty year old woman

325
00:16:46,240 --> 00:16:50,800
Speaker 2: identified only by the initials KGM, claims that more than

326
00:16:50,840 --> 00:16:55,160
Speaker 2: a decade of social media use left her addicted and depressed.

327
00:16:55,520 --> 00:17:00,560
Speaker 2: The defendants are challenging that narrative, saying she experienced difficult

328
00:17:00,560 --> 00:17:05,480
Speaker 2: family relationships, abuse in bullying at school and that played

329
00:17:05,480 --> 00:17:08,440
Speaker 2: a role in her mental health struggles. I mean, how

330
00:17:08,480 --> 00:17:12,159
Speaker 2: difficult is causation going to be here for her to

331
00:17:12,280 --> 00:17:16,080
Speaker 2: prove that, you know, it was her addiction to the

332
00:17:16,119 --> 00:17:19,840
Speaker 2: platform rather than all the other things happening in her life.

333
00:17:20,160 --> 00:17:21,879
Speaker 8: Well, it's one of the sayings that we have in

334
00:17:21,880 --> 00:17:24,640
Speaker 8: personal injury cases, which is you find your planiffs as

335
00:17:24,680 --> 00:17:27,600
Speaker 8: they are. And so in this particular case, yes, they

336
00:17:27,600 --> 00:17:30,440
Speaker 8: have some pretty good arguments that the mental health harms

337
00:17:30,480 --> 00:17:33,359
Speaker 8: are a result of her history. But the question then

338
00:17:33,400 --> 00:17:38,840
Speaker 8: becomes were they exacerbated by virtue of the negligent conduct?

339
00:17:39,160 --> 00:17:42,000
Speaker 8: And if that's the case, then the approximate cause is

340
00:17:42,040 --> 00:17:45,159
Speaker 8: in fact the social media platform and not the historical

341
00:17:45,200 --> 00:17:47,879
Speaker 8: trauma that she experienced. It is going to be an

342
00:17:47,880 --> 00:17:50,560
Speaker 8: issue for the jury to determine about the mental health harms,

343
00:17:50,640 --> 00:17:53,440
Speaker 8: what was the ultimate cause, what are those damages? And

344
00:17:53,560 --> 00:17:55,359
Speaker 8: on top of that, are punitive damage is something that.

345
00:17:55,359 --> 00:17:56,040
Speaker 9: Could be afforded.

346
00:17:56,520 --> 00:17:59,920
Speaker 2: There is a debate within the mental health field about

347
00:18:00,160 --> 00:18:05,960
Speaker 2: the connection between social media and increasing teenage rates of depression, anxiety,

348
00:18:06,280 --> 00:18:10,000
Speaker 2: suicide ideation. Is that debate going to enter the courtroom

349
00:18:10,000 --> 00:18:12,960
Speaker 2: where we're going to see experts on both sides of

350
00:18:13,000 --> 00:18:13,600
Speaker 2: the issue.

351
00:18:14,119 --> 00:18:17,200
Speaker 8: Absolutely, you will, just like you saw with its Abacko litigation.

352
00:18:17,320 --> 00:18:19,760
Speaker 8: I mean, that's the reality is you're going to find

353
00:18:19,800 --> 00:18:22,280
Speaker 8: experts on both sides of this issue. But at the

354
00:18:22,359 --> 00:18:24,240
Speaker 8: end of the day, the reason why the jury trial

355
00:18:24,280 --> 00:18:27,159
Speaker 8: system is so good here in the United States is

356
00:18:27,200 --> 00:18:31,320
Speaker 8: because our jurors really are good at detecting bs, and

357
00:18:31,400 --> 00:18:34,280
Speaker 8: so they'll be able to figure out pretty quickly not

358
00:18:34,359 --> 00:18:37,080
Speaker 8: just from what the testimony is, but from their own

359
00:18:37,240 --> 00:18:41,080
Speaker 8: personal experiences. I don't think that anyone can ultimately hear

360
00:18:41,080 --> 00:18:45,280
Speaker 8: the testimony of these executives and former executives and decide

361
00:18:45,280 --> 00:18:48,520
Speaker 8: that they didn't at least try to make it more addictive.

362
00:18:48,720 --> 00:18:51,359
Speaker 8: Whether they accomplish that goal maybe a different story, but

363
00:18:51,400 --> 00:18:54,200
Speaker 8: it's pretty clear they at least tried explain.

364
00:18:53,840 --> 00:18:57,399
Speaker 2: What a Bellweather trial is and is this a Bellweather trial.

365
00:18:58,000 --> 00:19:01,040
Speaker 8: This is absolutely a Bellweather trial. It's very similar. Recently,

366
00:19:01,080 --> 00:19:03,600
Speaker 8: for example, you saw a Tesla I actually went to

367
00:19:03,640 --> 00:19:06,360
Speaker 8: trial and won on one of the cases where they're

368
00:19:06,359 --> 00:19:10,560
Speaker 8: automatic driving vehicle injured somebody, and so that is going

369
00:19:10,600 --> 00:19:13,439
Speaker 8: to embolden Tesla into the future. So if you imagine

370
00:19:13,440 --> 00:19:16,119
Speaker 8: a scenario in which the social media companies do win

371
00:19:16,200 --> 00:19:19,000
Speaker 8: this case, they're going to feel emboldened to continue to

372
00:19:19,000 --> 00:19:21,080
Speaker 8: pursue it. On the flip side of that coin, if

373
00:19:21,119 --> 00:19:22,960
Speaker 8: the plaintiffs win this case, then at the end of

374
00:19:22,960 --> 00:19:25,120
Speaker 8: the day, you're going to start seeing a lot more settlements.

375
00:19:25,640 --> 00:19:30,800
Speaker 2: And speaking of settlements, the fact that Snap and TikTok

376
00:19:31,040 --> 00:19:35,840
Speaker 2: settled TikTok on the eve of trial, both for undisclosed sums,

377
00:19:36,200 --> 00:19:38,560
Speaker 2: what does that tell you about how the social media

378
00:19:38,640 --> 00:19:42,679
Speaker 2: companies are evaluating the risk of going to trial.

379
00:19:43,200 --> 00:19:46,040
Speaker 8: I think what most people don't realize is that lawyer's

380
00:19:46,119 --> 00:19:48,439
Speaker 8: jobs are to manage risk. We are risk managers, that

381
00:19:48,560 --> 00:19:51,200
Speaker 8: is it. And so for the plaintiffs in this case,

382
00:19:51,680 --> 00:19:53,960
Speaker 8: if they settled, the reason why is because they know

383
00:19:54,000 --> 00:19:55,040
Speaker 8: that this is going to be taken all the way

384
00:19:55,040 --> 00:19:56,639
Speaker 8: to the Supreme Court, and that's going to take another

385
00:19:56,680 --> 00:19:59,480
Speaker 8: five years, whereas they can get some money today and

386
00:19:59,520 --> 00:20:01,840
Speaker 8: avoid that risk. Right, So there's an incentive for the

387
00:20:01,840 --> 00:20:04,680
Speaker 8: plaintiffs to settle from that regard, and there's an incentive

388
00:20:04,720 --> 00:20:07,040
Speaker 8: for the defendant to settle because they don't want this

389
00:20:07,119 --> 00:20:09,639
Speaker 8: information to get out there in the real world about

390
00:20:09,680 --> 00:20:12,280
Speaker 8: how much you know your privacy is being pilfered for profit.

391
00:20:12,359 --> 00:20:14,639
Speaker 8: They don't want their dirty laundry aired. And so this

392
00:20:14,760 --> 00:20:17,920
Speaker 8: is why settlements happen, is because both sides are incentivized

393
00:20:18,240 --> 00:20:21,159
Speaker 8: to not continue on with the case whether they're right

394
00:20:21,240 --> 00:20:21,560
Speaker 8: or wrong.

395
00:20:22,160 --> 00:20:25,960
Speaker 2: Zuckerberg is expected to be among the first witnesses called.

396
00:20:26,400 --> 00:20:30,679
Speaker 2: He has testified before Congress, But explain how different it

397
00:20:30,800 --> 00:20:34,720
Speaker 2: is to be testifying in a courtroom before a jury

398
00:20:35,000 --> 00:20:36,960
Speaker 2: where you're subject to cross examination.

399
00:20:37,840 --> 00:20:40,680
Speaker 8: Well, it's wildly different, because if you remember back when

400
00:20:40,680 --> 00:20:43,880
Speaker 8: Mark Zuckerberg came and testified in front of Congress, one

401
00:20:43,920 --> 00:20:47,000
Speaker 8: of the congressmen actually thought the reference to a cookie

402
00:20:47,119 --> 00:20:49,560
Speaker 8: was an edible item and not a pixel contained on

403
00:20:49,600 --> 00:20:52,920
Speaker 8: your computer screen. Okay, So the difference is that these

404
00:20:53,000 --> 00:20:57,640
Speaker 8: attorneys in the courtroom know the technology, they know the facts,

405
00:20:57,640 --> 00:21:00,000
Speaker 8: and they're going to be able to effectively cross exams

406
00:21:00,119 --> 00:21:02,720
Speaker 8: and someone about what a cookie is and how they're

407
00:21:02,800 --> 00:21:06,040
Speaker 8: tracking your data from one website to another, and then

408
00:21:06,119 --> 00:21:08,879
Speaker 8: it begs the question, why are you tracking my information

409
00:21:08,960 --> 00:21:11,720
Speaker 8: from my insurance carrier? Oh, well so we can show

410
00:21:11,720 --> 00:21:13,840
Speaker 8: you more ads? Okay, why are you showing more ads? Well,

411
00:21:13,840 --> 00:21:15,639
Speaker 8: so we can get you addicted. So that's how the

412
00:21:15,680 --> 00:21:17,320
Speaker 8: cross examination is going to work that you would have

413
00:21:17,320 --> 00:21:18,200
Speaker 8: never seen in Congress.

414
00:21:18,359 --> 00:21:21,639
Speaker 2: I think Zuckerberg as a tendency to sometimes appear a

415
00:21:21,640 --> 00:21:25,119
Speaker 2: little bit wooden when he talks. How much depends on

416
00:21:25,280 --> 00:21:27,520
Speaker 2: how the jurors view him.

417
00:21:27,920 --> 00:21:29,720
Speaker 8: Well, it goes back to the old saying that you

418
00:21:29,760 --> 00:21:32,399
Speaker 8: know a jury, if they like you, they like your cause.

419
00:21:32,840 --> 00:21:35,000
Speaker 8: And so that's a hurdle that the tech companies are

420
00:21:35,040 --> 00:21:37,280
Speaker 8: going to have to overcome at the start of this trial,

421
00:21:37,320 --> 00:21:39,840
Speaker 8: because they've had enough black eyes already that the jury's

422
00:21:39,840 --> 00:21:40,920
Speaker 8: not going to like them out the.

423
00:21:40,880 --> 00:21:43,760
Speaker 2: Gate and the plaintif here will have to take the stand.

424
00:21:44,240 --> 00:21:46,040
Speaker 8: Yes, the Planoff will have to take the stand. And

425
00:21:46,440 --> 00:21:48,840
Speaker 8: I have no doubt that her mental health history will

426
00:21:48,840 --> 00:21:50,720
Speaker 8: come up and the trauma that she has suffered, and

427
00:21:50,800 --> 00:21:54,360
Speaker 8: all of that is fodder for cross examination. As painful

428
00:21:54,400 --> 00:21:56,760
Speaker 8: as it may be for someone to go through that process,

429
00:21:57,119 --> 00:21:59,320
Speaker 8: it has to occur in order for the jury to

430
00:21:59,359 --> 00:22:02,200
Speaker 8: have a full under standing an appreciation of whether or

431
00:22:02,240 --> 00:22:05,120
Speaker 8: not the trauma in this case was related to addiction

432
00:22:05,240 --> 00:22:07,480
Speaker 8: from social media or prior experiences.

433
00:22:07,920 --> 00:22:11,040
Speaker 2: Jury selections started this week tell us the kind of

434
00:22:11,119 --> 00:22:14,239
Speaker 2: jurors that the plaintiff's lawyer will be looking for and

435
00:22:14,280 --> 00:22:16,800
Speaker 2: the kind of jurors that the defendant's lawyer will be

436
00:22:16,840 --> 00:22:17,440
Speaker 2: looking for.

437
00:22:17,960 --> 00:22:20,240
Speaker 8: So, if I'm the planiff's lawyer, I am looking for

438
00:22:20,400 --> 00:22:25,040
Speaker 8: individuals who are going to be used to using social

439
00:22:25,160 --> 00:22:29,120
Speaker 8: media and find it problematic for themselves or their family members. Right,

440
00:22:29,160 --> 00:22:31,120
Speaker 8: So we all have the uncle or the dad who

441
00:22:31,119 --> 00:22:33,800
Speaker 8: spends all day long on Twitter, and you're rolling your

442
00:22:33,800 --> 00:22:36,760
Speaker 8: eyes like sitting there, going do you not have anything

443
00:22:36,760 --> 00:22:39,880
Speaker 8: else to do? You want somebody who is frustrated about

444
00:22:39,920 --> 00:22:42,680
Speaker 8: the system on there. From the plantiff's perspective and from

445
00:22:42,680 --> 00:22:46,560
Speaker 8: the defendants perspective, you're looking for someone who is willing

446
00:22:46,600 --> 00:22:49,200
Speaker 8: to say, you know what, we live in a capitalistic

447
00:22:49,280 --> 00:22:53,760
Speaker 8: society in which individuals have freedom of choice, and these

448
00:22:53,800 --> 00:22:58,040
Speaker 8: people are choosing to download this app and spend time

449
00:22:58,119 --> 00:23:00,600
Speaker 8: on it. That is a choice that they are making,

450
00:23:01,040 --> 00:23:03,720
Speaker 8: and so you're gonna want someone who is very libertarian

451
00:23:04,160 --> 00:23:05,720
Speaker 8: in their perspectives on life.

452
00:23:06,320 --> 00:23:09,199
Speaker 2: Would you say it's more or less likely that the

453
00:23:09,200 --> 00:23:11,720
Speaker 2: trial is actually going to start after jury selection.

454
00:23:12,400 --> 00:23:14,840
Speaker 8: So, first of all, ninety three percent of all cases

455
00:23:14,840 --> 00:23:17,600
Speaker 8: settle before trial, so only some percent of cases actually

456
00:23:17,600 --> 00:23:20,160
Speaker 8: go to trial. And in that regard, many cases settle

457
00:23:20,200 --> 00:23:22,520
Speaker 8: midway through trial. You get pick your jury, and you

458
00:23:22,520 --> 00:23:24,199
Speaker 8: sit there and you go, I don't really like this,

459
00:23:24,280 --> 00:23:26,439
Speaker 8: let's go talk. So there is still a chance for

460
00:23:26,560 --> 00:23:29,040
Speaker 8: to settle. Although I was recently involved in a case

461
00:23:29,040 --> 00:23:30,480
Speaker 8: where the other side made it to clear this is

462
00:23:30,480 --> 00:23:33,080
Speaker 8: a test case for them. And so if that's the

463
00:23:33,080 --> 00:23:36,160
Speaker 8: position of either the social media company or the plaintiffs,

464
00:23:36,240 --> 00:23:38,280
Speaker 8: and I've got to imagine the plaintiffs have invested enough

465
00:23:38,280 --> 00:23:39,960
Speaker 8: money at this stage they don't have a choice but

466
00:23:40,000 --> 00:23:43,400
Speaker 8: to keep going. Then this is their bell Weather case

467
00:23:43,400 --> 00:23:44,919
Speaker 8: and they're going to figure out the answer a.

468
00:23:44,960 --> 00:23:48,360
Speaker 2: Bell Weather for the more than sixteen hundred other similar

469
00:23:48,440 --> 00:23:52,320
Speaker 2: cases against the tech companies. Thanks so much, Colin. That's

470
00:23:52,400 --> 00:23:55,480
Speaker 2: Colin Walkee of hall Estel coming up next on The

471
00:23:55,480 --> 00:23:59,639
Speaker 2: Bloomberg Law Show. Kid Rock testifies to Congress about ticket

472
00:23:59,680 --> 00:24:04,720
Speaker 2: scale helpers, price gouging, and the skyrocketing costs of concert tickets.

473
00:24:05,080 --> 00:24:08,879
Speaker 2: But the Justice Department and the FTC have already sued

474
00:24:08,960 --> 00:24:13,119
Speaker 2: Ticketmaster and Live Nation. So what's the solution? Remember you

475
00:24:13,160 --> 00:24:15,639
Speaker 2: can always get the latest legal news by listening to

476
00:24:15,680 --> 00:24:19,760
Speaker 2: our Bloomberg Law podcast wherever you get your favorite podcasts.

477
00:24:20,080 --> 00:24:22,840
Speaker 2: I'm June Grosso and you're listening to Bloomberg.

478
00:24:25,560 --> 00:24:29,199
Speaker 10: Secondary ticketing is driving up prices for the fans with

479
00:24:29,400 --> 00:24:31,840
Speaker 10: absolutely no benefit to the artist.

480
00:24:32,280 --> 00:24:36,000
Speaker 2: Not many fans or artists would dispute that testimony from

481
00:24:36,160 --> 00:24:40,920
Speaker 2: Kid Rock about the skyrocketing costs of concert tickets, whether

482
00:24:40,960 --> 00:24:44,720
Speaker 2: it's BTS, Beyonce or Bruno Mars. If you've tried to

483
00:24:44,720 --> 00:24:48,720
Speaker 2: buy tickets to the concerts of any major artists, you've

484
00:24:48,760 --> 00:24:54,320
Speaker 2: seen not only the astronomical prices, but probably also experience

485
00:24:54,480 --> 00:24:58,840
Speaker 2: the nightmare of trying to buy tickets online, waiting patiently

486
00:24:59,000 --> 00:25:02,199
Speaker 2: in a queue, and then watching the tickets vanish in

487
00:25:02,320 --> 00:25:06,200
Speaker 2: seconds before your eyes, sometimes even after they're in your

488
00:25:06,320 --> 00:25:10,280
Speaker 2: cart for purchase, and then seeing those tickets at three

489
00:25:10,400 --> 00:25:14,680
Speaker 2: or four times the price in the secondary markets. Kid Rock,

490
00:25:14,760 --> 00:25:18,479
Speaker 2: whose real name is Robert James Ritchie, didn't mince words

491
00:25:18,520 --> 00:25:22,439
Speaker 2: when describing the live concert and entertainment industry to the

492
00:25:22,480 --> 00:25:24,240
Speaker 2: Senate Commerce Subcommittee.

493
00:25:24,320 --> 00:25:27,560
Speaker 10: It's no secret none that this industry is full of greedy,

494
00:25:27,600 --> 00:25:31,320
Speaker 10: snakes and scoundrels. Too many suits lining their pockets off

495
00:25:31,359 --> 00:25:35,280
Speaker 10: talent they never had, and fans they mislead. The truth

496
00:25:35,359 --> 00:25:38,400
Speaker 10: is much of this could have been, or still could

497
00:25:38,480 --> 00:25:43,280
Speaker 10: be solved through technology, especially proof of humanity tools. It

498
00:25:43,320 --> 00:25:45,879
Speaker 10: hasn't happened yet because there's just too much money in

499
00:25:45,920 --> 00:25:47,280
Speaker 10: the secondary ticket market.

500
00:25:47,480 --> 00:25:50,480
Speaker 2: But the hearing seemed to raise as many questions as

501
00:25:50,480 --> 00:25:53,440
Speaker 2: it answered. Joining me is an entertainment lawyer in the

502
00:25:53,520 --> 00:25:58,440
Speaker 2: music industry. Ron Beanstock, a partner at Fox Rothschild. Ron

503
00:25:58,560 --> 00:26:02,480
Speaker 2: kid Rock, started out his testimony by reminding the committee

504
00:26:02,560 --> 00:26:07,360
Speaker 2: that Pearl Jam sat before Congress thirty years ago testifying

505
00:26:07,400 --> 00:26:10,399
Speaker 2: against Ticketmaster. I mean, in thirty years, are we in

506
00:26:10,440 --> 00:26:11,720
Speaker 2: the same spot.

507
00:26:11,960 --> 00:26:15,359
Speaker 11: Yes, and no, we are probably not exactly the same spot,

508
00:26:15,480 --> 00:26:20,200
Speaker 11: because there's appearances, there's litigation, there's investigation, But the truth

509
00:26:20,280 --> 00:26:23,800
Speaker 11: is overall, what has not changed and has probably only

510
00:26:23,960 --> 00:26:26,760
Speaker 11: sort of manifestly become more difficult, is that we're talking

511
00:26:26,800 --> 00:26:30,080
Speaker 11: about Live Nation and ticket Master. They're a monopoly. Ticketmasters

512
00:26:30,160 --> 00:26:34,480
Speaker 11: sells what five hundred million tickets in thirty countries, and

513
00:26:34,520 --> 00:26:36,960
Speaker 11: they have eighty percent of the US market. That's where

514
00:26:37,000 --> 00:26:39,600
Speaker 11: your problem lies, is right, you have no competition on this.

515
00:26:39,960 --> 00:26:42,520
Speaker 11: I think where this problem starts is that there's a

516
00:26:42,640 --> 00:26:46,000
Speaker 11: misconception about ticket pricing and bands and artists and how

517
00:26:46,000 --> 00:26:49,560
Speaker 11: this all works. So my clients, yes, they'll set the

518
00:26:49,560 --> 00:26:51,560
Speaker 11: ticket price, but here's how it works. Let's say you've

519
00:26:51,600 --> 00:26:53,760
Speaker 11: set a ticket price, and you want to be reasonable

520
00:26:53,840 --> 00:26:56,840
Speaker 11: and have fans have accessibility to the show, and so

521
00:26:56,880 --> 00:26:59,239
Speaker 11: your ticket price, let's say, is one hundred dollars, and

522
00:26:59,280 --> 00:27:02,280
Speaker 11: we also have to talk about the incredible increase in

523
00:27:02,400 --> 00:27:05,199
Speaker 11: production costs to get an artist on the road. But

524
00:27:05,400 --> 00:27:07,760
Speaker 11: let's say it's one hundred dollars ticket it goes through

525
00:27:07,840 --> 00:27:10,160
Speaker 11: sale through ticket Master. Now it's one hundred and seventy

526
00:27:10,200 --> 00:27:12,720
Speaker 11: with all the tack on items. As many manager as

527
00:27:12,720 --> 00:27:14,800
Speaker 11: I spoke to, I called a few people to get

528
00:27:14,920 --> 00:27:17,400
Speaker 11: some background. Man, there are a lot of epithets being

529
00:27:17,480 --> 00:27:21,760
Speaker 11: tossed around by management. But effectively, when you want to

530
00:27:21,800 --> 00:27:24,640
Speaker 11: offer the artist price at one hundred out to the

531
00:27:24,680 --> 00:27:27,520
Speaker 11: marketplace your fan group, and it comes one hundred and

532
00:27:27,520 --> 00:27:30,320
Speaker 11: seventy when they order with all the tack on stuff,

533
00:27:30,480 --> 00:27:33,280
Speaker 11: your ticket price is up by forty percent. I think

534
00:27:33,320 --> 00:27:36,520
Speaker 11: the problem there is that every artist wants to make

535
00:27:36,560 --> 00:27:39,399
Speaker 11: it accessible to the fan, and they get blamed for

536
00:27:39,480 --> 00:27:42,960
Speaker 11: the extra costs that are tacked on by ticket Master,

537
00:27:43,560 --> 00:27:46,760
Speaker 11: and it's not the artist that's doing that. The artist

538
00:27:46,880 --> 00:27:50,359
Speaker 11: wants their fans to be there. There's a secondary market

539
00:27:50,400 --> 00:27:53,520
Speaker 11: problem where tickets that go on sale and the fans

540
00:27:53,560 --> 00:27:55,639
Speaker 11: are able to gobble up the good tickets, then the

541
00:27:55,680 --> 00:27:57,600
Speaker 11: back of the hall tickets come up, and you know

542
00:27:57,640 --> 00:27:59,800
Speaker 11: what I mean, all the way the back tickets come

543
00:27:59,880 --> 00:28:02,160
Speaker 11: up and people will say, I can still get into

544
00:28:02,200 --> 00:28:04,600
Speaker 11: the show, and those tickets are still at one hundred

545
00:28:04,640 --> 00:28:07,399
Speaker 11: and seventy total or more when they really shouldn't be.

546
00:28:07,440 --> 00:28:10,640
Speaker 11: They're not the primary seats. So the secondary issue comes up.

547
00:28:10,840 --> 00:28:15,240
Speaker 11: There's just so many factors in offering your fans a

548
00:28:15,280 --> 00:28:19,639
Speaker 11: fair price for a ticket, and technically you're supposed to

549
00:28:19,720 --> 00:28:23,320
Speaker 11: have under the face value exchange. Now you're supposed to

550
00:28:23,400 --> 00:28:26,000
Speaker 11: know exactly what you're paying for. But again I don't

551
00:28:26,000 --> 00:28:29,080
Speaker 11: think that's worked out because the monopolistic.

552
00:28:28,440 --> 00:28:31,800
Speaker 2: Situation you talk about, you know, the markup the artists

553
00:28:31,840 --> 00:28:33,520
Speaker 2: won one hundred dollars a ticket and then it goes

554
00:28:33,560 --> 00:28:36,200
Speaker 2: to one hundred and seventy. Who's getting those seventy dollars?

555
00:28:36,800 --> 00:28:39,360
Speaker 11: Those markups are going to ticket Master and other similar

556
00:28:39,400 --> 00:28:41,640
Speaker 11: companies that work with them, Right, you're going to get

557
00:28:41,640 --> 00:28:44,800
Speaker 11: ticket Master and Live Nation are going to because they're

558
00:28:44,920 --> 00:28:47,680
Speaker 11: the same company. They're going to be taking those additional

559
00:28:47,720 --> 00:28:50,719
Speaker 11: cost home with them. That's their profit. While the band

560
00:28:50,840 --> 00:28:53,760
Speaker 11: has more of a difficulty here because they have I

561
00:28:53,760 --> 00:28:55,560
Speaker 11: mean band, it's irrespective of genre.

562
00:28:55,560 --> 00:28:57,240
Speaker 9: I'll just refer to as artists and bands.

563
00:28:57,600 --> 00:29:01,240
Speaker 11: They have the difficulty in trying to get a ticket

564
00:29:01,280 --> 00:29:04,000
Speaker 11: price that allows a fan to get a good seat

565
00:29:04,000 --> 00:29:06,840
Speaker 11: to see them at the same time that they're balancing

566
00:29:07,040 --> 00:29:10,120
Speaker 11: all the additional costs it takes to travel to get

567
00:29:10,160 --> 00:29:14,360
Speaker 11: there to present that show. And that conundrum is faced

568
00:29:14,400 --> 00:29:18,080
Speaker 11: every day by artists. I want to add one little thing.

569
00:29:18,440 --> 00:29:21,920
Speaker 11: I think there's something that everybody's overlooking that increases the costs,

570
00:29:22,240 --> 00:29:26,360
Speaker 11: and that is most artists make up the differential even

571
00:29:26,400 --> 00:29:28,600
Speaker 11: if they ask for a lower ticket price, they make

572
00:29:28,680 --> 00:29:32,800
Speaker 11: up the differential with merchandise sales. Well, that's problematic because

573
00:29:32,840 --> 00:29:36,840
Speaker 11: merchandise sales are fixed. You're paying somebody to go sell.

574
00:29:36,880 --> 00:29:40,720
Speaker 11: You may have a merchandise deal and there'll be a booth, window, table,

575
00:29:40,760 --> 00:29:43,680
Speaker 11: whatever it is, and you're selling your hats, your T shirts,

576
00:29:43,680 --> 00:29:47,040
Speaker 11: your hoodies, whatever it may be. And the fan walks

577
00:29:47,120 --> 00:29:50,920
Speaker 11: up and doesn't understand that when they buy that sweatshirt,

578
00:29:51,520 --> 00:29:55,200
Speaker 11: the venue that the artist is playing in is taking

579
00:29:55,280 --> 00:29:58,000
Speaker 11: twenty five to thirty five percent of that for doing

580
00:29:58,040 --> 00:29:58,800
Speaker 11: literally nothing.

581
00:29:59,160 --> 00:30:02,120
Speaker 2: And those prices have gone up and up. I mean

582
00:30:02,120 --> 00:30:04,240
Speaker 2: you look at a T shirt sometimes it's like forty

583
00:30:04,240 --> 00:30:06,640
Speaker 2: to fifty bucks. It's crazy, the prices.

584
00:30:06,880 --> 00:30:11,000
Speaker 11: Because the hall, the venue what we used to refer

585
00:30:11,080 --> 00:30:13,320
Speaker 11: to as a hall fee, that name is morphed a

586
00:30:13,320 --> 00:30:15,600
Speaker 11: little bit to make it more palatable, but it's still

587
00:30:15,760 --> 00:30:19,000
Speaker 11: money for nothing. To quote Mark Knopflin, it is twenty

588
00:30:19,000 --> 00:30:22,160
Speaker 11: five to thirty five percent additional tack on to the

589
00:30:22,200 --> 00:30:25,959
Speaker 11: merch costs. And you buying that T shirt see that

590
00:30:26,160 --> 00:30:29,640
Speaker 11: and say the band merch is so expensive, But the

591
00:30:29,720 --> 00:30:32,640
Speaker 11: band has to raise the price to make up for

592
00:30:32,720 --> 00:30:36,000
Speaker 11: this hall fee. And that would have taken care of

593
00:30:36,400 --> 00:30:40,240
Speaker 11: any deficit more minor deficit of playing the show for

594
00:30:40,280 --> 00:30:42,520
Speaker 11: a lower ticket price just to have the fans come.

595
00:30:42,720 --> 00:30:45,120
Speaker 11: They make it back on merch but if you're paying

596
00:30:45,160 --> 00:30:47,800
Speaker 11: twenty five to thirty five percent, I've seen forty percent,

597
00:30:48,240 --> 00:30:50,840
Speaker 11: then you ratchet up your merch fees, which is nothing

598
00:30:50,880 --> 00:30:52,840
Speaker 11: to do a ticket master. But you can see how

599
00:30:52,840 --> 00:30:55,720
Speaker 11: it starts with ticket Master, how it starts with the

600
00:30:55,760 --> 00:30:58,480
Speaker 11: expensive ticket prices and you want the fans to come

601
00:30:58,520 --> 00:31:01,720
Speaker 11: out and see you, but now you have this additional cost.

602
00:31:01,760 --> 00:31:03,200
Speaker 11: And I think this is kind of like one of

603
00:31:03,200 --> 00:31:05,680
Speaker 11: these little I don't want to say dirty little secrets,

604
00:31:05,680 --> 00:31:08,680
Speaker 11: but just one of these unknown issues that people don't

605
00:31:08,720 --> 00:31:12,000
Speaker 11: talk about. And you know, I spoke to several managers,

606
00:31:12,000 --> 00:31:15,600
Speaker 11: particularly one client's manager I've worked with for thirty five years,

607
00:31:15,640 --> 00:31:17,680
Speaker 11: and I valued his input, and he had said, you know,

608
00:31:18,120 --> 00:31:21,240
Speaker 11: what I'd really love to have would be the power

609
00:31:21,320 --> 00:31:24,520
Speaker 11: to organize all of the acts together, almost in a

610
00:31:24,640 --> 00:31:27,680
Speaker 11: union fashion, to say to all the venues, we won't

611
00:31:27,720 --> 00:31:31,000
Speaker 11: sell merch here just because you're going to take that cut.

612
00:31:31,120 --> 00:31:32,000
Speaker 9: Now, that's a.

613
00:31:31,920 --> 00:31:36,040
Speaker 11: Bit of you know, spitefulness to the venues, and we

614
00:31:36,120 --> 00:31:39,080
Speaker 11: lose the money as the artist. But you can understand

615
00:31:39,120 --> 00:31:41,520
Speaker 11: the sentiment there, and that is I don't want to

616
00:31:41,680 --> 00:31:43,840
Speaker 11: pay you for doing nothing. I'd rather not bring my

617
00:31:43,920 --> 00:31:46,960
Speaker 11: merch into the room rather just sell it online or

618
00:31:46,960 --> 00:31:48,000
Speaker 11: another methodology.

619
00:31:48,960 --> 00:31:52,120
Speaker 2: The Federal Trade Commission and a bypart is in group

620
00:31:52,160 --> 00:31:57,080
Speaker 2: of state attorneys general did sue Ticketmaster and its parent company,

621
00:31:57,160 --> 00:32:01,120
Speaker 2: Live Nation in September, saying they're I'm for seeing consumers

622
00:32:01,160 --> 00:32:04,160
Speaker 2: to pay more to see live events through a variety

623
00:32:04,320 --> 00:32:07,800
Speaker 2: of illegal tactics. But this month the company's asked a

624
00:32:07,840 --> 00:32:11,719
Speaker 2: federal judge to throw out the case. What's their argument?

625
00:32:12,440 --> 00:32:15,240
Speaker 11: So the defense here is that you have the wrong parties.

626
00:32:15,240 --> 00:32:18,560
Speaker 11: We are not responsible for the resellers. They're blaming the

627
00:32:18,600 --> 00:32:21,160
Speaker 11: bot buyers and the resellers, even though we've had the

628
00:32:21,200 --> 00:32:25,040
Speaker 11: Bock Buyers Act in twenty sixteen. They're saying, don't look

629
00:32:25,080 --> 00:32:28,760
Speaker 11: at us. You know, you're blaming us as being monopolistic here,

630
00:32:29,320 --> 00:32:32,360
Speaker 11: But it's really the bot buyers and resellers who are

631
00:32:32,360 --> 00:32:34,200
Speaker 11: causing the problem, not us.

632
00:32:34,480 --> 00:32:34,719
Speaker 9: You know.

633
00:32:34,840 --> 00:32:36,760
Speaker 11: I want to make one sort of comment here. It's

634
00:32:36,800 --> 00:32:40,080
Speaker 11: a little performative for Kid Rock because he has a

635
00:32:40,080 --> 00:32:42,880
Speaker 11: close relationship with this administration, and I want to take

636
00:32:43,080 --> 00:32:45,240
Speaker 11: slight umbrage to one thing he said when he said,

637
00:32:45,360 --> 00:32:47,560
Speaker 11: you know, I'm a maverick. I don't have to answer

638
00:32:47,560 --> 00:32:49,760
Speaker 11: to anybody. You know, I don't have to answer with

639
00:32:49,840 --> 00:32:52,360
Speaker 11: to a label or anything like this. Let's draw back

640
00:32:52,400 --> 00:32:54,960
Speaker 11: and have an overview about that. Labels have nothing to

641
00:32:55,000 --> 00:32:57,240
Speaker 11: do with this. That's not just red herring, that's just

642
00:32:57,320 --> 00:33:00,000
Speaker 11: not applicable. Labels have nothing to do with ticket prices.

643
00:33:00,160 --> 00:33:03,240
Speaker 11: Nobody at the labels is demanding that the artists set

644
00:33:03,280 --> 00:33:05,560
Speaker 11: ticket prices. They just want them to tour because they

645
00:33:05,600 --> 00:33:07,600
Speaker 11: want to sell product. They want to sell some vinyl

646
00:33:07,640 --> 00:33:10,200
Speaker 11: and hopefully get some downloads out of this. Of course

647
00:33:10,360 --> 00:33:13,719
Speaker 11: why wouldn't they, But it really is Ticketmaster that is

648
00:33:13,760 --> 00:33:17,280
Speaker 11: the problem in terms of monopolistic behavior, nothing to do

649
00:33:17,320 --> 00:33:19,040
Speaker 11: with labels. And I want to throw one more thing,

650
00:33:19,080 --> 00:33:22,040
Speaker 11: and while I'm on my soapbox, is that very few

651
00:33:22,120 --> 00:33:25,680
Speaker 11: artists are really with major labels. Now, so again this

652
00:33:26,040 --> 00:33:27,520
Speaker 11: you know, I'm a rock, I'm an island.

653
00:33:27,640 --> 00:33:28,040
Speaker 9: Look at me.

654
00:33:28,160 --> 00:33:30,400
Speaker 11: I don't answer to anybody, you know. I know that

655
00:33:30,480 --> 00:33:34,360
Speaker 11: fits his self proclaimed position in the industry. But everybody's

656
00:33:34,400 --> 00:33:37,040
Speaker 11: in the same position. Very few people are working with

657
00:33:37,160 --> 00:33:39,720
Speaker 11: major labels, which again nothing to do with ticket prices.

658
00:33:40,000 --> 00:33:42,680
Speaker 11: So almost everybody is in the same world, putting out

659
00:33:42,680 --> 00:33:46,160
Speaker 11: their own material through their own labels and going back

660
00:33:46,160 --> 00:33:48,880
Speaker 11: to their fans and trying to just you know, twice

661
00:33:48,920 --> 00:33:51,440
Speaker 11: a year, get on the road and stay relevant to

662
00:33:51,480 --> 00:33:54,920
Speaker 11: their fans and bring new materials sometimes new material to them.

663
00:33:55,080 --> 00:33:57,440
Speaker 9: But no, he's not the only one speaking up.

664
00:33:57,600 --> 00:34:00,000
Speaker 11: He gets an automatic vibe because he has that relationship

665
00:34:00,120 --> 00:34:01,560
Speaker 11: ship with this president administration.

666
00:34:02,000 --> 00:34:06,080
Speaker 2: If Ticketmaster really is the problem. The Justice Department filed

667
00:34:06,120 --> 00:34:10,720
Speaker 2: a sweeping antitrust lawsuit against ticket Master and Live Nation

668
00:34:11,440 --> 00:34:14,239
Speaker 2: in May of twenty twenty four. It accuses them of

669
00:34:14,320 --> 00:34:18,239
Speaker 2: running an illegal monopoly over live events and ask the

670
00:34:18,239 --> 00:34:21,360
Speaker 2: court to break them up. Trial is schedule for March.

671
00:34:21,640 --> 00:34:26,240
Speaker 2: So if the Justice Department wins, and if the judge

672
00:34:26,280 --> 00:34:29,520
Speaker 2: agrees to a breakup, will that solve some of the

673
00:34:29,600 --> 00:34:32,440
Speaker 2: problems We've been discussing the AT.

674
00:34:32,280 --> 00:34:34,920
Speaker 9: And T breakup. How did that work? Right?

675
00:34:35,680 --> 00:34:36,919
Speaker 2: Oh, don't go back in time.

676
00:34:37,320 --> 00:34:38,279
Speaker 9: I think the AT and.

677
00:34:38,320 --> 00:34:41,360
Speaker 11: T anti monopolistic filings I think are analogous to this,

678
00:34:41,520 --> 00:34:45,799
Speaker 11: because you know, everybody eventually got some choice, and you know,

679
00:34:45,840 --> 00:34:48,600
Speaker 11: the competition in the marketplace for tickets and ticket sales

680
00:34:48,640 --> 00:34:51,960
Speaker 11: is important, and if one company controls that, then they

681
00:34:51,960 --> 00:34:54,920
Speaker 11: get to control the narrative on cost. And you know,

682
00:34:55,080 --> 00:34:57,799
Speaker 11: don't look at us, it's someone else's fault. Right, they

683
00:34:57,840 --> 00:35:00,480
Speaker 11: blame everybody else. But what I don't don't want to

684
00:35:00,480 --> 00:35:03,200
Speaker 11: have happened here, And I think it's really important to

685
00:35:03,239 --> 00:35:05,080
Speaker 11: emphasize it's not the artist.

686
00:35:05,719 --> 00:35:06,640
Speaker 9: I hear it all the time.

687
00:35:06,680 --> 00:35:09,440
Speaker 11: I don't want the artists taking the wrap here for

688
00:35:09,960 --> 00:35:12,520
Speaker 11: and that's upon I suppose, but taking the wrap for Oh,

689
00:35:12,640 --> 00:35:15,680
Speaker 11: these guys are being greedy. They're not selling records anymore,

690
00:35:15,920 --> 00:35:19,160
Speaker 11: so they're raising their ticket prices. That is not entirely

691
00:35:19,280 --> 00:35:22,440
Speaker 11: the case. The ticket prices, which I demonstrated when we

692
00:35:22,480 --> 00:35:25,280
Speaker 11: first started speaking, from one hundred to one hundred and seventy.

693
00:35:25,680 --> 00:35:28,160
Speaker 11: The band's only getting a portion of the one hundred.

694
00:35:28,800 --> 00:35:31,479
Speaker 11: They're not getting that seventy dollars overage. That's all going

695
00:35:31,520 --> 00:35:34,640
Speaker 11: to the ticket sellers and to some extent the venues.

696
00:35:34,920 --> 00:35:37,520
Speaker 11: And when we pile on now with the merch fees

697
00:35:37,560 --> 00:35:40,759
Speaker 11: at the hall, you can see the artist is it's

698
00:35:41,000 --> 00:35:43,919
Speaker 11: very difficult for them to get their ability to stay

699
00:35:43,960 --> 00:35:46,800
Speaker 11: out on the road and pay. You know, sometimes thirty

700
00:35:46,800 --> 00:35:48,640
Speaker 11: people are going to go out with a particular artists

701
00:35:48,719 --> 00:35:51,640
Speaker 11: or more right, we've got all kinds of texts and

702
00:35:51,920 --> 00:35:55,200
Speaker 11: crew and drivers, and you know, it's difficult to keep

703
00:35:55,239 --> 00:35:58,879
Speaker 11: this out there and everybody that I work with, it's

704
00:35:58,880 --> 00:36:01,400
Speaker 11: a bit of a struggle. Want to play for their fans.

705
00:36:01,440 --> 00:36:04,600
Speaker 11: That's the lifeblood of the industry. But if we have

706
00:36:04,920 --> 00:36:10,120
Speaker 11: constant ticket prices and constant raising of costs to get there,

707
00:36:10,560 --> 00:36:11,080
Speaker 11: people are going.

708
00:36:11,040 --> 00:36:11,600
Speaker 9: To stay home.

709
00:36:12,120 --> 00:36:16,280
Speaker 2: What about a law that limits the amount of overcharges

710
00:36:16,280 --> 00:36:17,760
Speaker 2: that you could put on a ticket.

711
00:36:18,000 --> 00:36:20,120
Speaker 11: We have that with credit cards, and I think we've

712
00:36:20,120 --> 00:36:23,120
Speaker 11: attempted that with ticket prices. I don't think it's been successful,

713
00:36:23,680 --> 00:36:27,080
Speaker 11: and I think that it's possible. And this isn't this administration.

714
00:36:27,160 --> 00:36:31,480
Speaker 11: This has been going on, you know since twenty fifteen,

715
00:36:31,880 --> 00:36:34,920
Speaker 11: twenty sixteen, We've got a solid ten years of people

716
00:36:35,000 --> 00:36:38,320
Speaker 11: trying to effectuate change here. It's going to take I think,

717
00:36:38,400 --> 00:36:41,880
Speaker 11: a true meaning of the minds between the ticket sellers,

718
00:36:42,000 --> 00:36:45,719
Speaker 11: ticket companies you know, ticket Master or Live Nation to

719
00:36:46,440 --> 00:36:48,920
Speaker 11: come to the table to say Remember, they're also going

720
00:36:48,960 --> 00:36:50,600
Speaker 11: to say, well, we have we have a right to

721
00:36:50,680 --> 00:36:53,160
Speaker 11: make a profit doing what we're doing. The problem is

722
00:36:53,560 --> 00:36:57,479
Speaker 11: it's like overage on credit card fees. When's the limit right?

723
00:36:57,920 --> 00:37:02,279
Speaker 11: How much is enough? Because eventually it'll strangle the live

724
00:37:02,480 --> 00:37:06,200
Speaker 11: entertainment business and pay per view never worked out. We

725
00:37:06,239 --> 00:37:08,680
Speaker 11: all know that so people still want to see bands

726
00:37:08,680 --> 00:37:12,400
Speaker 11: live and we have to do everything in the industry.

727
00:37:12,400 --> 00:37:14,520
Speaker 11: Everybody has to do everything they can to foster that

728
00:37:14,880 --> 00:37:17,279
Speaker 11: on a regular basis, and I think legislation is going

729
00:37:17,320 --> 00:37:18,759
Speaker 11: to have to be there, and maybe it's going to

730
00:37:18,800 --> 00:37:22,680
Speaker 11: have to be a breakup or culling down of the

731
00:37:22,719 --> 00:37:25,560
Speaker 11: actual cost factors. Maybe there is a cap that has

732
00:37:25,600 --> 00:37:26,319
Speaker 11: to come into being.

733
00:37:26,840 --> 00:37:30,799
Speaker 2: Of the things that Kid Rock suggested some of his solutions,

734
00:37:31,280 --> 00:37:34,359
Speaker 2: allowing artists to control who sells their tickets and how,

735
00:37:34,520 --> 00:37:39,120
Speaker 2: recapping resale ticket prices, enforcing the Bots Act to stop

736
00:37:39,200 --> 00:37:42,200
Speaker 2: brokers and bad actors. Do you see any of them

737
00:37:42,239 --> 00:37:43,720
Speaker 2: as being a real solution.

738
00:37:44,719 --> 00:37:47,520
Speaker 11: Well, no one's really enforced that Bots Act from twenty sixteen.

739
00:37:47,560 --> 00:37:50,520
Speaker 11: You've got ten years now, so he's not wrong. But

740
00:37:51,280 --> 00:37:54,400
Speaker 11: someone has to decide what their priorities are, and if

741
00:37:54,440 --> 00:37:58,520
Speaker 11: there's a prioritization to this, it may occur. But this

742
00:37:58,560 --> 00:38:01,000
Speaker 11: particular Department of Justice is that other priorities.

743
00:38:01,040 --> 00:38:02,239
Speaker 9: So you know this.

744
00:38:02,400 --> 00:38:04,040
Speaker 11: I think it's a lot of lip service to say

745
00:38:04,040 --> 00:38:06,400
Speaker 11: we support that, but I don't see the actions. The

746
00:38:06,440 --> 00:38:09,080
Speaker 11: actions were started long before this because they work their

747
00:38:09,080 --> 00:38:11,480
Speaker 11: way through the courts. If this administration truly wants to

748
00:38:11,520 --> 00:38:14,560
Speaker 11: see this take place. Then they can do that by

749
00:38:14,840 --> 00:38:17,040
Speaker 11: by having a bit of a summit, if you will,

750
00:38:17,239 --> 00:38:19,200
Speaker 11: and bringing people to the table to say we need

751
00:38:19,239 --> 00:38:20,319
Speaker 11: to do this, we need to cap this.

752
00:38:20,800 --> 00:38:21,759
Speaker 9: It's preferable for.

753
00:38:21,760 --> 00:38:26,799
Speaker 11: Business not to force this right, not to force the

754
00:38:26,840 --> 00:38:30,359
Speaker 11: anti monopolistic actions. But we're going to have to get

755
00:38:30,360 --> 00:38:32,439
Speaker 11: some cooperation. And by the way, I want to add

756
00:38:32,480 --> 00:38:34,520
Speaker 11: one thing. I don't know if the artist picking who

757
00:38:34,640 --> 00:38:38,120
Speaker 11: sells their tickets, because then we make it, get that

758
00:38:38,160 --> 00:38:41,120
Speaker 11: same behavior by the next group of people. You know,

759
00:38:41,560 --> 00:38:43,680
Speaker 11: I don't want to be pessimistic, but if the next

760
00:38:43,719 --> 00:38:46,879
Speaker 11: group says I'll handle all this for you people, same

761
00:38:46,880 --> 00:38:51,359
Speaker 11: thing occurs again. So there has to be some independence here,

762
00:38:51,800 --> 00:38:54,680
Speaker 11: non reliance on the same group of people. We don't

763
00:38:54,680 --> 00:38:56,960
Speaker 11: want to have the same thing. You know, I think

764
00:38:57,000 --> 00:39:00,960
Speaker 11: he quoted, you know, the who he did and his presentation.

765
00:39:01,280 --> 00:39:03,439
Speaker 11: Meet the new boss, same as the old boss. Meet

766
00:39:03,440 --> 00:39:05,480
Speaker 11: the new ticket seller, same as the old ticket seller.

767
00:39:05,600 --> 00:39:07,920
Speaker 11: And we really want to have change here, and that

768
00:39:08,040 --> 00:39:12,120
Speaker 11: change requires fortitude by either this administration or the DOJ

769
00:39:12,640 --> 00:39:16,320
Speaker 11: to dismantle an incredibly powerful monopoly.

770
00:39:16,760 --> 00:39:20,759
Speaker 9: You know, eighty percent, that's that's a monopoly.

771
00:39:21,120 --> 00:39:24,640
Speaker 2: I do think a lot depends on the antitrust trial

772
00:39:24,800 --> 00:39:27,600
Speaker 2: coming up in March, and we'll see what happens with

773
00:39:27,680 --> 00:39:30,839
Speaker 2: the FTC suit as well. Thanks for joining me, Ron.

774
00:39:31,160 --> 00:39:35,200
Speaker 2: That's Ron Beanstock, a partner at Fox Rothschild. And that's

775
00:39:35,239 --> 00:39:37,840
Speaker 2: it for this edition of The Bloomberg Law Show. Remember

776
00:39:37,880 --> 00:39:39,960
Speaker 2: you can always get the latest legal news on our

777
00:39:40,000 --> 00:39:44,160
Speaker 2: Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

778
00:39:44,360 --> 00:39:49,400
Speaker 2: and at www dot Bloomberg dot com slash podcast Slash Law,

779
00:39:49,800 --> 00:39:52,360
Speaker 2: and remember to tune into The Bloomberg Law Show every

780
00:39:52,440 --> 00:39:56,320
Speaker 2: weeknight at ten pm Wall Street Time. I'm June Grosso

781
00:39:56,480 --> 00:39:58,040
Speaker 2: and you're listening to Bloomberg