WEBVTT - Meta Wins in Antitrust & Texas Loses in Redistricting 0:00:02.759 --> 0:00:07.000 This is Bloomberg Law with June Grossel from Bloomberg Radio. 0:00:09.000 --> 0:00:12.520 It's a massive blow to the federal government that's been 0:00:12.560 --> 0:00:15.600 trying to break up Meta for the last five years. 0:00:15.920 --> 0:00:19.360 The tech giant has won a key ruling that its 0:00:19.440 --> 0:00:25.280 acquisitions of Instagram and WhatsApp didn't violate US anti trust law. 0:00:25.920 --> 0:00:30.040 DC Federal Judge James Bosberg said the Federal Trade Commission 0:00:30.360 --> 0:00:33.880 had to show that Meta continues to hold monopoly power 0:00:34.080 --> 0:00:37.720 in social networking now, and that it had failed to 0:00:37.760 --> 0:00:41.519 do so. My guest is anti trust expert Harry First, 0:00:41.760 --> 0:00:45.400 a professor at NYU Law School. Harry, how big a 0:00:45.400 --> 0:00:47.360 blow is this to the FTC. 0:00:48.479 --> 0:00:51.440 Well, it's a blow, all right. So this is the 0:00:51.479 --> 0:00:56.440 first big loss in these high tech platform cases. So 0:00:56.520 --> 0:00:58.960 two of them have now come to a conclusion of 0:00:59.000 --> 0:01:02.320 the trial, you know, both against Google, both successful for 0:01:02.400 --> 0:01:06.760 the Justice Department remedy another story maybe. So this is 0:01:06.800 --> 0:01:11.640 the third. They're five total, and it's the first loss. 0:01:11.959 --> 0:01:15.720 It's sort of not a surprising loss because this judge 0:01:15.720 --> 0:01:18.959 has been skeptical of this case clearly from the very beginning. 0:01:19.040 --> 0:01:23.080 He had dismissed it originally, so he's been very skeptical 0:01:23.120 --> 0:01:26.520 and he said it in his opinions. So this case 0:01:26.520 --> 0:01:30.760 has not been well received by the judiciary, shall we say, 0:01:31.120 --> 0:01:35.160 so it's not surprising. The opinion itself is a little surprising, 0:01:35.480 --> 0:01:37.880 but the result is not so surprising. 0:01:38.440 --> 0:01:40.880 What do you say? The opinion is surprising. 0:01:40.720 --> 0:01:43.560 So in two ways. First of all, he's taken a 0:01:43.680 --> 0:01:50.000 very novel approach to time in the opinion. So he 0:01:50.160 --> 0:01:52.960 says that the proof has to be as of the 0:01:53.040 --> 0:01:56.680 time I make my decision almost I mean, this is 0:01:56.720 --> 0:02:01.640 an impossible standard. He said, maybe maybe they were monopoly, 0:02:02.280 --> 0:02:05.400 Maybe this was a properly defined product market in twenty 0:02:05.440 --> 0:02:08.399 twenty when the suit was filed, you know, but as 0:02:08.480 --> 0:02:11.359 time has gone by, it's not that much time by 0:02:11.440 --> 0:02:14.360 now it's not. And the question is not whether it 0:02:14.480 --> 0:02:17.000 was then, but whether it is now. I mean, if 0:02:17.080 --> 0:02:20.799 you take that literally, that's a completely moving standard. You 0:02:20.840 --> 0:02:24.880 could never try a case because your evidence is always outdated. 0:02:25.000 --> 0:02:28.120 I mean, it's always about the past. You can't try 0:02:28.160 --> 0:02:31.799 a case about the future. So that's a departure. He's 0:02:31.840 --> 0:02:34.240 got some legal reasoning for why he does that, but 0:02:34.600 --> 0:02:36.959 that's a serious problem, and I think it's a serious 0:02:37.000 --> 0:02:39.720 anti trust problem. So there is that part of it. 0:02:39.760 --> 0:02:43.400 The second part is this judge is very confident of 0:02:43.400 --> 0:02:47.040 his opinion. So normally a district court judge, he's got 0:02:47.360 --> 0:02:50.280 seven things to decide in front of him, and they 0:02:50.360 --> 0:02:53.840 proceed logically, well, if if you go for this, you know, 0:02:54.080 --> 0:02:56.280 then you're done. But if you go for this and 0:02:56.639 --> 0:02:59.119 it's okay, you go to this number two, three, four, 0:02:59.240 --> 0:03:02.520 five had a long trial, but he only decides the 0:03:02.520 --> 0:03:05.920 first issue. Now, normally a judge would say, Okay, here's 0:03:05.960 --> 0:03:09.200 what I decide. This isn't a market. Market has to 0:03:09.200 --> 0:03:12.480 include such and such. They don't really have monopoly power. Okay, 0:03:12.600 --> 0:03:15.360 but if I'm wrong, here are the facts that I 0:03:15.440 --> 0:03:19.920 found about the conduct. And the conduct wasn't any competitive. 0:03:19.960 --> 0:03:22.360 So even if you had monopoly power, this was not 0:03:22.480 --> 0:03:25.280 exclusionary conduct, less than any competitive and so you go 0:03:25.400 --> 0:03:29.119 through all the things because if a court of appeals 0:03:29.120 --> 0:03:32.960 disagrees with you, now what you've got to retry the 0:03:33.000 --> 0:03:36.720 whole case. So this is a judge who thinks no 0:03:36.720 --> 0:03:40.800 one's going to disagree with me man, And maybe maybe 0:03:41.400 --> 0:03:43.880 part of it is because the narrative of the case 0:03:44.560 --> 0:03:49.080 is at least potentially stronger than the market definition. So 0:03:50.000 --> 0:03:53.520 that's when you know all the emails about how Mark 0:03:53.600 --> 0:03:57.560 Zuckerberg's theory was to buy them or you know, bury them, 0:03:57.920 --> 0:04:01.000 and you know what he tried to do with with competitors, 0:04:01.040 --> 0:04:04.800 and why he paid so much for Instagram and for WhatsApp. 0:04:05.120 --> 0:04:08.880 WhatsApp drops out of this case like right away. I 0:04:08.880 --> 0:04:11.640 don't know third word or something he says, at some point, 0:04:11.800 --> 0:04:13.560 we're done with them. We don't have to talk about 0:04:13.600 --> 0:04:17.520 them anymore because we don't get to them. That's not 0:04:17.560 --> 0:04:21.880 involved in the market definition. So that's pretty unusual, I think. 0:04:21.920 --> 0:04:25.920 And it's either hubris or confidence, I don't know which, 0:04:26.320 --> 0:04:29.720 but he does not do what I think most district 0:04:29.760 --> 0:04:32.720 court judges would do, which is decide the full case. 0:04:33.000 --> 0:04:35.680 I thought the focus would be on the market when 0:04:36.440 --> 0:04:41.080 Meta bought Instagram and WhatsApp and whether it was anti 0:04:41.120 --> 0:04:46.640 competitive conduct when it's alleged that Meta couldn't compete with 0:04:46.720 --> 0:04:50.159 these two apps, and Zuckerberg said it's better to buy 0:04:50.240 --> 0:04:51.000 than compete. 0:04:51.920 --> 0:04:55.000 Well, what he tried to say was, well, we've got 0:04:55.040 --> 0:04:58.040 to do it as of now, in part because of 0:04:58.279 --> 0:05:02.720 the FTC's remedy powers asking for an injunction, and they 0:05:02.720 --> 0:05:07.120 can only stop conduct that is illegal now. So I've 0:05:07.160 --> 0:05:09.839 got to decide what's illegal now. Now, he could have 0:05:10.040 --> 0:05:13.800 very well said, that's a remedy question. We'll decide that 0:05:13.839 --> 0:05:16.960 when we get to remedy, whether it's a continuing violation 0:05:17.279 --> 0:05:19.480 or not. We should look at whether there was a 0:05:19.560 --> 0:05:24.080 violation then. So, for example, if this were suit for damages, 0:05:24.640 --> 0:05:26.920 you wouldn't say, well, we have to see whether it's 0:05:26.920 --> 0:05:30.920 a violation today. You would say, let's see whether there 0:05:30.920 --> 0:05:34.400 was a violation at the time that the offense was 0:05:34.480 --> 0:05:39.160 committed and what damages were caused. So those two things 0:05:39.200 --> 0:05:43.599 are are separate. So it's really quite odd, and you're right. 0:05:43.880 --> 0:05:48.200 The argument that the Commission makes is that we look 0:05:48.240 --> 0:05:50.240 at what they did and why they did it, that 0:05:50.360 --> 0:05:53.479 this was an effort to maintain their monopoly. These two 0:05:53.520 --> 0:05:57.000 acquisitions for which they wildly overpaid. Why were they paying 0:05:57.080 --> 0:06:01.440 nineteen billion dollars for a company that have any revenue? 0:06:01.480 --> 0:06:04.119 That was what's app And the answer was they didn't 0:06:04.120 --> 0:06:08.719 want them to develop into a competing social network platforms. 0:06:08.720 --> 0:06:11.720 So you know now that that part also had problems 0:06:11.720 --> 0:06:15.600 that had issues. You know, the Federal Trade Commission and 0:06:15.720 --> 0:06:19.760 its earlier guys let those acquisitions go through, so there 0:06:19.760 --> 0:06:22.360 were issues with it. But so in that sense, that's 0:06:22.400 --> 0:06:23.800 a really strange aspect. 0:06:24.160 --> 0:06:27.840 Did the judge come to this decision because of the 0:06:27.880 --> 0:06:31.200 way he defined the market and the fact that he 0:06:31.279 --> 0:06:34.360 put YouTube and TikTok in the market. 0:06:34.760 --> 0:06:37.719 Yeah, so the first question and you have to show 0:06:37.800 --> 0:06:41.960 that that defendant has monopoly power in a relevant market. 0:06:42.240 --> 0:06:45.040 So he says, okay, we have to start with market definition. 0:06:45.640 --> 0:06:49.239 So that's true, that's the way it's normally done. And 0:06:49.279 --> 0:06:51.640 then he says, okay, yes, let's look at the market 0:06:51.920 --> 0:06:55.400 and what we have to do. He basically puts in 0:06:56.320 --> 0:07:00.240 you know, he says, these these platforms have converged, these 0:07:00.279 --> 0:07:05.160 are all sort of similar, and particularly TikTok, you know, 0:07:05.520 --> 0:07:09.320 was posing a competitive threat. Says, people don't want to 0:07:09.320 --> 0:07:12.920 talk to their friends anymore. They just want unconnected videos. 0:07:13.360 --> 0:07:17.800 So you know, here's TikTok comes along and they're posing 0:07:17.880 --> 0:07:23.360 some threat, and Facebook responds with reels and short videos. 0:07:23.400 --> 0:07:26.920 And so that has now changed how we define the 0:07:27.000 --> 0:07:30.640 market because users switch back and forth between the two, 0:07:30.680 --> 0:07:32.680 and we have to include TikTok and we have to 0:07:32.720 --> 0:07:37.160 include YouTube or users switch to those videos later. The 0:07:37.240 --> 0:07:39.280 sort of at the end of the opinion says, well, 0:07:39.560 --> 0:07:42.520 the argument for YouTube actually is a little thinner. But 0:07:42.600 --> 0:07:46.000 even if it's just TikTok, that's enough. We would include 0:07:46.080 --> 0:07:50.000 that in However we define the market, whatever we want 0:07:50.040 --> 0:07:52.400 to call it doesn't really give it a name. And 0:07:52.480 --> 0:07:56.840 at that point, if we include TikTok, then there's no 0:07:57.000 --> 0:08:02.400 monopoly power meta. Facebook does not have monopoly power. That 0:08:02.560 --> 0:08:07.880 TikTok takes away too much time. All those kids are 0:08:07.920 --> 0:08:12.440 frittering where other time on TikTok instead of frittering where 0:08:12.440 --> 0:08:16.520 other time on Facebook. He had various evidence of, you know, 0:08:16.560 --> 0:08:21.040 the willingness to switch, and that people switched between those 0:08:21.080 --> 0:08:25.160 two normally for looking at substitutes. You say, so, if 0:08:25.200 --> 0:08:28.240 the celer rates its price, what would people switch to? Well, 0:08:28.280 --> 0:08:30.960 the thing is Facebook doesn't have a price. 0:08:30.880 --> 0:08:31.640 In that sense. 0:08:32.240 --> 0:08:34.160 What has his ads? I don't know if you've looked 0:08:34.160 --> 0:08:35.760 at your Facebook feed recently. 0:08:36.040 --> 0:08:39.800 I'm not on Facebook. I will confess I got. 0:08:39.640 --> 0:08:40.360 You on that one. 0:08:40.520 --> 0:08:42.760 Yeah, well, there are a lot of ads on Facebook, 0:08:43.040 --> 0:08:46.680 and so you know, that's sort of the price. But 0:08:47.640 --> 0:08:50.160 the judge didn't seem to think that people minded those 0:08:50.200 --> 0:08:53.679 ads so much. They're nice, ads didn't really interfere so much, 0:08:54.440 --> 0:09:00.520 so not so bad, and people were switching particularly, I 0:09:00.640 --> 0:09:05.320 think younger people were switching over to TikTok to you know, 0:09:05.400 --> 0:09:08.400 for whatever you get in TikTok, now, what you don't 0:09:08.400 --> 0:09:13.360 get in TikTok particularly are friends groups of friends, and 0:09:13.360 --> 0:09:16.840 that's what the government sort of honed in on. It's 0:09:16.840 --> 0:09:21.080 a social network. It's put together by who your friends are, 0:09:21.880 --> 0:09:27.080 and what Bosberg observes is that at least some users 0:09:27.080 --> 0:09:30.079 don't really care so much about their friends. They want 0:09:30.120 --> 0:09:33.640 to be put together more by interests. You know, I like, 0:09:34.240 --> 0:09:37.880 I don't know Japanese cooking, so I get lots of 0:09:38.040 --> 0:09:40.640 videos about Japanese cooking. You know, I don't know the 0:09:40.720 --> 0:09:43.760 Japanese cooks, and I are not my friends, but that's 0:09:43.760 --> 0:09:46.080 what I like to look at. Or I like recipes 0:09:46.559 --> 0:09:49.080 you know that are easy to make or crazy to 0:09:49.120 --> 0:09:52.680 look at, whatever TikTok has. So people have switched to 0:09:52.760 --> 0:09:57.720 that and away from Facebook. Now, the odd thing in 0:09:57.760 --> 0:10:02.120 some ways is if so many people are switching, how 0:10:02.160 --> 0:10:05.760 come so many people are still on Facebook. He gives 0:10:06.320 --> 0:10:10.280 two hundred and thirty million US users, I think is 0:10:10.320 --> 0:10:14.600 the number and ad revenues of one hundred and sixty 0:10:14.679 --> 0:10:19.760 one billion dollars. So when you read his description, it 0:10:19.840 --> 0:10:22.320 sounds like this is a company that is just in 0:10:22.400 --> 0:10:27.160 the throes of death from TikTok, and then he says, 0:10:27.600 --> 0:10:32.079 this is an amazingly successful product. Give people a compelling 0:10:32.120 --> 0:10:35.319 product for free, then sell ads that can be seen 0:10:35.360 --> 0:10:39.360 by millions. Yes, he thinks those are good. Two hundred 0:10:39.400 --> 0:10:43.400 and forty million active users in the United States. That's 0:10:43.440 --> 0:10:46.640 a lot of people. So apparently they haven't been dissuaded 0:10:46.679 --> 0:10:49.760 by TikTok, which is also free, and you know they 0:10:49.760 --> 0:10:53.520 don't give all their time there. They're still on Facebook. 0:10:53.600 --> 0:10:57.480 So the argument, presumably from the government, is that by 0:10:57.520 --> 0:11:02.240 incorporating Reels, they've managed to defend their core business, and 0:11:02.280 --> 0:11:07.680 their core business is social network putting people together, and 0:11:08.080 --> 0:11:10.680 they still get a lot of people who like that product, 0:11:10.720 --> 0:11:13.800 even though some people also use different products. 0:11:13.880 --> 0:11:17.200 Coming up next, I'll continue this conversation with Professor Harry 0:11:17.240 --> 0:11:21.559 First of NYU Law School. Will the government appeal the decision? 0:11:22.200 --> 0:11:28.000 I'm Jim Grosso and you're listening to Bloomberg. Meta prevailed 0:11:28.040 --> 0:11:31.960 over an existential challenge to its business that could have 0:11:32.080 --> 0:11:36.040 forced the tech giant to spin off Instagram and WhatsApp 0:11:36.400 --> 0:11:39.680 in a loss for the FTC A judge rule that 0:11:39.720 --> 0:11:44.160 the company doesn't hold a monopoly in social networking. I've 0:11:44.160 --> 0:11:47.760 been talking to NYU Law School professor Harry First. Harry, 0:11:47.760 --> 0:11:51.920 here's what an FTC spokesperson said about the loss to Meta. 0:11:52.040 --> 0:11:55.800 We're deeply disappointed in this decision, but the deck was 0:11:55.880 --> 0:12:00.560 always stacked against us because of the judge has ruled 0:12:00.600 --> 0:12:04.120 against the Trump administration in some high profile cases this year, 0:12:04.160 --> 0:12:07.560 and he's also been frequently criticized by the President and 0:12:07.600 --> 0:12:12.160 the Attorney General. This just continues the Justice departments attacks 0:12:12.200 --> 0:12:12.880 on judges. 0:12:14.160 --> 0:12:17.160 I hadn't read that, and you sort of wish that 0:12:17.240 --> 0:12:20.520 they hadn't done that. Yes, Judge Bosberg did stand up 0:12:20.720 --> 0:12:24.880 to the Trump administration, and Trump singled him out as 0:12:25.400 --> 0:12:31.560 I forget what description crazy something lunatic judge. So now 0:12:31.960 --> 0:12:35.080 I don't know which way it even goes, particularly given 0:12:35.120 --> 0:12:38.440 the fact that there was a report of Mark Zuckerberg 0:12:38.880 --> 0:12:42.520 meeting with Trump in the Oval Office to settle this case, 0:12:43.040 --> 0:12:47.720 and Trump was dissuaded apparently from settlement by the efforts 0:12:47.760 --> 0:12:50.160 not so much of the chair of the Federal Trade Commission, 0:12:50.440 --> 0:12:53.760 but by the head of the Justice Department any Trust Division, 0:12:54.080 --> 0:12:57.720 Gail Slater. So maybe the FTC should have settled it, 0:12:57.760 --> 0:13:00.720 then maybe it would have done better. But it's just, 0:13:01.280 --> 0:13:04.280 first of all, it's in some ways so wrong because 0:13:04.600 --> 0:13:08.679 Boseburg took this position way before the immigration cases came up, 0:13:08.760 --> 0:13:12.360 from the beginning when he dismissed the complaint, the original 0:13:12.400 --> 0:13:17.240 complaint and let them refile it. He's been critical of 0:13:17.280 --> 0:13:20.760 this case. So to see this as a connection of 0:13:21.200 --> 0:13:26.520 you know, some craze judge who what is just against 0:13:26.520 --> 0:13:29.680 the government, I mean, it's just wrong. I wish they'd 0:13:29.720 --> 0:13:32.920 stick to the problem that they've got, which is that 0:13:33.000 --> 0:13:36.480 this is bad law for the FTC and for any 0:13:36.520 --> 0:13:40.000 trust enforcement. And you know, now we're going to see 0:13:40.400 --> 0:13:41.960 what they're going to do about it. Are they going 0:13:42.000 --> 0:13:44.040 to appeal this decision or not? 0:13:44.679 --> 0:13:46.200 Yeah, so that was my next question. 0:13:46.280 --> 0:13:49.199 I mean, it sounds like they should appeal because of 0:13:49.400 --> 0:13:53.000 the timeline that he's defining markets on. But might they not. 0:13:53.160 --> 0:13:57.000 I mean, Zuckerberg has been courting Trump for quite some time. 0:13:57.840 --> 0:14:03.480 It's hard to assess the political wins because conservatives had 0:14:03.520 --> 0:14:07.760 been upset with Facebook, thinking that their algorithm has you know, 0:14:08.200 --> 0:14:12.360 discriminated against them. I sent an email to my niece 0:14:12.600 --> 0:14:15.600 last night, who uses Facebook all the time, and she 0:14:15.760 --> 0:14:18.040 says she thinks they don't post any of her left 0:14:18.120 --> 0:14:21.760 leaning posts. They don't seem to get moved up into 0:14:21.800 --> 0:14:22.240 the feed. 0:14:22.360 --> 0:14:25.400 But you know the calm ones do. I don't know. 0:14:25.600 --> 0:14:27.360 I like what they're doing. Research at night. 0:14:27.600 --> 0:14:30.600 That's research. That's my that's my empirical research. 0:14:31.640 --> 0:14:36.040 Fair enough, although Zuckerberg seems to have tried to turn 0:14:36.120 --> 0:14:43.280 that around by weakening hate speech policies and eliminating fact checking. 0:14:44.360 --> 0:14:46.880 My view of Mark Zuckerberg he hasn't turned at all, 0:14:47.400 --> 0:14:50.240 is that he just turns whichever way the politics are 0:14:50.320 --> 0:14:52.880 so so now it's this way, and that's fine with 0:14:53.000 --> 0:14:55.880 him too, as long as he keeps You know, they're 0:14:56.400 --> 0:15:01.880 apparently the third largest digital advertiser after Google and Amazon, 0:15:02.040 --> 0:15:06.880 so they're doing really, really well. Despite Bozberg's feeling that 0:15:06.920 --> 0:15:09.920 nobody wants to talk to their friends, apparently a lot 0:15:09.920 --> 0:15:13.200 of people still do and they read those ads and 0:15:13.240 --> 0:15:14.160 click on them. 0:15:14.760 --> 0:15:19.040 If this were an administration that just based its decisions 0:15:19.080 --> 0:15:22.800 on the law, would they appeal to try to get 0:15:22.800 --> 0:15:25.800 this ruling that the government has to show monopoly power 0:15:26.000 --> 0:15:31.400 now reversed or because of Zuckerberg's attempts to court Trump, 0:15:31.880 --> 0:15:33.360 do you think they might not appeal. 0:15:33.880 --> 0:15:37.600 Who knows exactly which wins, and the wins may go 0:15:37.640 --> 0:15:43.040 the other way because a populist wing of the party 0:15:43.720 --> 0:15:48.160 feels that these platforms have too much power and need 0:15:48.200 --> 0:15:51.040 to be cut down. So who knows exactly. But if 0:15:51.080 --> 0:15:54.760 you look straight at the legal issues, usually appeals from 0:15:55.480 --> 0:16:00.120 adverse decisions of trial courts are hard to win an 0:16:00.160 --> 0:16:04.280 appeal because they're mostly fact based, So you have to 0:16:03.880 --> 0:16:08.040 look for legal issues. And there's a you know, an 0:16:08.080 --> 0:16:11.600 important legal issue of you know, whether he applied the 0:16:11.600 --> 0:16:15.120 correct standard for defining the market and for assessing when 0:16:15.160 --> 0:16:17.640 a violation occurred. And that one's sort of a very 0:16:17.960 --> 0:16:21.680 pointed legal issue. How it will fare in the court 0:16:21.680 --> 0:16:23.560 of appeals if they do take it, I don't know. 0:16:24.240 --> 0:16:28.240 And does this decision have any implications for the other 0:16:28.360 --> 0:16:31.800 antitrust cases against tech platforms. 0:16:32.280 --> 0:16:37.600 Yeah, that's a good question. Perhaps I'm thinking of Amazon 0:16:37.680 --> 0:16:42.720 for example. So these are platform cases, and platform strategy 0:16:42.880 --> 0:16:46.400 is you have a core product, and what you want 0:16:46.440 --> 0:16:48.760 to do is to keep people on the platform and 0:16:48.800 --> 0:16:52.200 engaged because of the strength of the core product, and 0:16:52.240 --> 0:16:56.280 you defend the core product by acquiring things around the 0:16:56.320 --> 0:16:59.520 periphery that might challenge it or by doing things. You know, 0:16:59.560 --> 0:17:03.280 these companies are always subject to some competitive forces, even 0:17:03.320 --> 0:17:09.480 if they're monopolis. So certainly Facebook was TikTok did pose 0:17:09.520 --> 0:17:14.800 a competitive threat, and Amazon similarly has competitive threats to 0:17:14.840 --> 0:17:20.200 which they respond. But the basic strategy is pretty similar, 0:17:20.320 --> 0:17:24.520 and the market definition in some ways is similar because 0:17:24.560 --> 0:17:28.679 they offer a bunch of different products in the same place, 0:17:29.200 --> 0:17:34.640 much as supermarkets do, like whole foods for example. So 0:17:34.840 --> 0:17:37.000 you have a you know, sort of core product and 0:17:37.040 --> 0:17:40.400 then other things that they offer that other firms may 0:17:40.440 --> 0:17:44.159 compete on. I mean, look at your smartphone, so thirty 0:17:44.160 --> 0:17:47.040 five millimeters cameras compete on cameras, but you know, are 0:17:47.040 --> 0:17:50.640 they in the same market. No, so you could say 0:17:50.680 --> 0:17:55.520 this is this is quite similar. You know, Yes, TikTok competes. 0:17:55.920 --> 0:17:59.720 I'm surprised Twitter's not mentioned. Twitter competes, you know, to 0:17:59.800 --> 0:18:04.760 some extent. But these are all to some extent, and 0:18:05.000 --> 0:18:09.600 it's still a meta defending its core product in which 0:18:09.640 --> 0:18:13.440 it has a lot of power, as all advertisers know. 0:18:14.080 --> 0:18:14.920 Always a pleasure. 0:18:15.000 --> 0:18:18.960 Thanks so much, Harry, that's Professor Harry First of NYU 0:18:19.080 --> 0:18:24.480 Law School. Texas kicked off the nationwide redistricting battle, but now, 0:18:24.560 --> 0:18:27.879 a federal court has blocked the state from using a 0:18:27.920 --> 0:18:32.960 redrawn congressional map that was engineered to give Republicans five 0:18:32.960 --> 0:18:36.480 additional House seats. The ruling is a blow to President 0:18:36.520 --> 0:18:40.879 Trump's efforts to preserve a slim Republican majority ahead of 0:18:40.920 --> 0:18:44.880 the twenty twenty six elections. Joining me is elections law 0:18:44.920 --> 0:18:48.560 expert Richard Befalt, a professor at Columbia Law School. 0:18:49.080 --> 0:18:50.000 Rich So this was a. 0:18:49.920 --> 0:18:53.280 Two to one decision. Will you explain why the judges 0:18:53.359 --> 0:18:58.120 decided that Texas couldn't use its new congressional plan. 0:18:58.600 --> 0:19:01.320 In a nutshell of a court concluded that this was 0:19:01.359 --> 0:19:05.679 a racial gerry mander and not a partisan gerrymander. And 0:19:05.760 --> 0:19:07.600 as you know, the Supreme Court has said parts in 0:19:07.680 --> 0:19:11.199 jerrymanders are not unconstitutional, there's no basis for challenging them 0:19:11.240 --> 0:19:14.760 in federal court. But racial gerry manders can be unconstitutional 0:19:15.000 --> 0:19:17.480 and can be challenged in federal court. So the heart 0:19:17.520 --> 0:19:19.439 of the court's decision was that this was a racial 0:19:19.480 --> 0:19:23.159 gerry mander. And what have they based that on? The 0:19:23.200 --> 0:19:26.119 court said what triggered this? Although we think of this 0:19:26.200 --> 0:19:31.080 as Trump demanding more Republican seats from the Texas congressional delegation. 0:19:31.640 --> 0:19:35.720 In the court's view, the Texas governor was initially reluctant 0:19:35.800 --> 0:19:39.280 to call the special Section to create the map until 0:19:39.320 --> 0:19:42.480 he got a letter from the Department of Justice in 0:19:42.720 --> 0:19:47.960 Washington that said several of the Texas districts were unconstantually 0:19:48.160 --> 0:19:51.960 created on racial grounds. In particular, the Department of Justice 0:19:52.000 --> 0:19:57.680 focused on so called coalition districts, which are districts which 0:19:57.720 --> 0:20:02.560 are majority minority but not one particular minority group. And 0:20:02.640 --> 0:20:05.359 for a period of time in the Fifth Circuit, courts 0:20:05.359 --> 0:20:07.679 there had said that the Voting Rights Act could be 0:20:07.760 --> 0:20:11.400 interpreted to require the so called coalition district district which, 0:20:11.720 --> 0:20:15.520 let's say is is forty percent Black and thirty percent Hispanic. 0:20:15.960 --> 0:20:18.040 Neither one is a majority, but together they add. 0:20:17.920 --> 0:20:20.760 Up to seventy percent. And so the Apartment. 0:20:20.400 --> 0:20:23.640 Of Justice says, well, we see four districts in your 0:20:23.960 --> 0:20:26.800 current in your twenty twenty one map that looked like 0:20:26.800 --> 0:20:29.960 their coalition districts to us, and based on a recent 0:20:30.000 --> 0:20:33.560 decision in the Fifth Circuit, we think that makes them unconstitutional. 0:20:33.840 --> 0:20:35.800 So you got to fix it. You've got to redo 0:20:35.840 --> 0:20:38.040 those districts. So what the three judge panel in this 0:20:38.080 --> 0:20:41.680 case concluded is that that was what was driving the redistricting. 0:20:42.040 --> 0:20:45.800 They looked at the statements of the governor, the governor Abbott, 0:20:45.840 --> 0:20:48.840 and of the leading members of the state legislature, and 0:20:48.880 --> 0:20:51.879 they also looked at the resulting map, and they pointed 0:20:51.920 --> 0:20:55.560 out that most of the changes in the redrawn districts 0:20:55.800 --> 0:21:00.280 went from being so called coalition districts, the districts which 0:21:00.560 --> 0:21:04.040 one race or another had a majority, and often an 0:21:04.119 --> 0:21:07.639 extremely narrow majority. They said there were three districts they 0:21:07.680 --> 0:21:10.560 were either Black or Hispanic, where the majority group had 0:21:10.640 --> 0:21:11.640 like fifteen. 0:21:11.240 --> 0:21:12.080 Point two percent. 0:21:12.320 --> 0:21:16.120 So they said the combination of the Department of Justice letter, 0:21:16.640 --> 0:21:21.200 the governor's statement calling the legislature decision, in statements by 0:21:21.800 --> 0:21:24.119 many of the leading members of legislature, and then the 0:21:24.560 --> 0:21:27.800 districts that were created. In their minds, this meant that 0:21:27.960 --> 0:21:32.320 race predominated the desire to create racial majority districts is 0:21:32.400 --> 0:21:35.200 what was driving this. It's through, the court said, and 0:21:35.200 --> 0:21:38.000 also clearly had partisan consequences in the nave and some 0:21:38.080 --> 0:21:41.840 partisan motivation as well. But they said that the dominant 0:21:41.880 --> 0:21:45.520 motive that they found was race, and thatfore this made 0:21:45.520 --> 0:21:47.280 it a nonconstitutional racial gerry matter. 0:21:47.840 --> 0:21:51.440 Even though we know that the reason that Greg Abbott 0:21:51.440 --> 0:21:55.520 called the special session was because President Donald Trump told 0:21:55.560 --> 0:21:58.479 him that he wanted to get, you know, extra seats 0:21:58.520 --> 0:21:59.400 in Texas. 0:21:59.760 --> 0:22:01.719 I think what you would you could say is that 0:22:02.359 --> 0:22:05.320 to Barbary Shakespeare, their partner of Justice was hoist by 0:22:05.359 --> 0:22:08.679 its own petard. I think when this all began, it's 0:22:08.720 --> 0:22:10.679 now like four months later, it's amazing how much has 0:22:10.720 --> 0:22:12.880 gone in four or five months. When this all began, 0:22:13.080 --> 0:22:15.919 maybe people thought it was too blatant to say this 0:22:16.000 --> 0:22:18.080 was all from partisan reasons. I mean, we've now been 0:22:18.119 --> 0:22:21.320 totally partisan and since June of this year in the redistricting, 0:22:21.640 --> 0:22:23.800 but maybe they thought it was just too blatant to 0:22:23.800 --> 0:22:25.520 say we're doing different partisan purposes. 0:22:26.000 --> 0:22:28.840 So the Department of Justice trumped up this racial argument. 0:22:29.560 --> 0:22:33.640 There was no argument actually that those coalition districts were unconstitutional. 0:22:34.160 --> 0:22:37.000 You could argue that there's no mandate that a state 0:22:37.119 --> 0:22:40.159 create them, and that's certainly true now, but there was 0:22:40.160 --> 0:22:43.919 no evidence that they were unconstitutionally drawn. Nonetheless, part of 0:22:44.000 --> 0:22:48.320 Justice having, I think, provided this kind of pretext for 0:22:48.359 --> 0:22:49.480 the state to go ahead and. 0:22:49.440 --> 0:22:51.000 Do the partisan gerrymander. 0:22:51.359 --> 0:22:54.440 But given that that was the stated reason, the court 0:22:54.560 --> 0:22:56.639 was able to say we think it's a racial gerrymander. 0:22:56.920 --> 0:23:00.200 They also made the point that the Democratic districts which 0:23:00.240 --> 0:23:04.840 were undone mostly fell into this category of coalition districts, 0:23:04.840 --> 0:23:07.800 and they pointed out there was one white majority Democratic 0:23:07.840 --> 0:23:11.800 district which was barely touched. So they do have some 0:23:12.000 --> 0:23:15.560 evidence suggesting that most of the focus of the legislature 0:23:16.080 --> 0:23:20.240 was on coalition districts and making them majority one race 0:23:20.359 --> 0:23:23.160 or the other. But I think what you've got here 0:23:23.200 --> 0:23:26.640 is this irony that at least in June of this year, 0:23:27.240 --> 0:23:29.880 the governor and the Department of Justice thought it's too 0:23:29.920 --> 0:23:33.120 blatant to do it for purely partisan reasons, so we're 0:23:33.160 --> 0:23:36.919 going to give them an anti race discrimination motivation, and that, 0:23:37.080 --> 0:23:39.320 as I think, turned around to sort of bite them 0:23:39.320 --> 0:23:40.640 in the rear, at least for now. 0:23:41.400 --> 0:23:44.600 And now the question is what will happen when this 0:23:44.720 --> 0:23:48.520 gets to the Supreme Court. Rich We've talked before about 0:23:48.560 --> 0:23:52.840 the case currently before the Supreme Court on the Louisiana maps. 0:23:53.320 --> 0:23:54.919 Does that fit in anywhere here? 0:23:55.119 --> 0:23:55.359 Well? 0:23:55.400 --> 0:23:58.760 Here, I think what the court three judge paneled, really 0:23:58.760 --> 0:23:59.240 two judges. 0:23:59.280 --> 0:24:01.720 There's a dissenter. The majority opinion is one hundred and 0:24:01.760 --> 0:24:03.680 sixty pages long. But I think. 0:24:03.680 --> 0:24:05.720 The Court said, here, yes, the issue was sort of 0:24:05.720 --> 0:24:10.639 disentangling race from party again to restate racial gerrymandering is 0:24:10.680 --> 0:24:14.000