Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: Former Vice President Mike Penns has spoken and written about
Speaker 1: conversations he had with former President Donald Trump about why
Speaker 1: he wouldn't follow Trump's demands to reject Electoral College votes
Speaker 1: from key swing states. When he oversaw the joint session
Speaker 1: of Congress to certify Joe Biden's victory on January six,
Speaker 1: picked up the phone and the President asked me where
Speaker 1: I was on the electoral account that would take place
Speaker 1: that day. And I told him, despite what you issued
Speaker 1: last night from your campaign, Mr President, you know, I've
Speaker 1: been very clear, but I don't have the authority to
Speaker 1: reject votes. And I reminded him we both took an
Speaker 1: oath to support and defend the constitution of the United States.
Speaker 1: I told him it was a promise that I may
Speaker 1: to the American people and to Almighty God. Now. Special
Speaker 1: Counsel Jack Smith wants to hear from Pence as part
Speaker 1: of his investigation into efforts by Trump and others to
Speaker 1: overturn the presidential election. He subpoenaed Pence to appear before
Speaker 1: the grand jury, but the former Vice president says he'll
Speaker 1: fight the subpoena using a novel legal theory around his
Speaker 1: role as President of the Senate and the section of
Speaker 1: the Constitution known as the speech or debate Clause. Joining
Speaker 1: me is national security expert Bradley Moss, a partner Mark
Speaker 1: Zad Brad and his memoir, Pence revealed that he was
Speaker 1: part of a number of conversations where Trump and his
Speaker 1: legal advisors were pushing claims about widespread voter fraud or
Speaker 1: floating novel legal theories that could be used to keep
Speaker 1: Trump in the White House. And in a Wall Street
Speaker 1: Journal opinion piece, Pennce said he told Trump that it
Speaker 1: would be illegal for him to interfere in the count
Speaker 1: during an Oval office meeting with lawyer John Eastman. So
Speaker 1: how can he claim privilege? Hasn't he waived it? So
Speaker 1: what he could argue is that he can only be
Speaker 1: forced to testify regarding those matters that he's already disclosed.
Speaker 1: And obviously what he put into the memoir, what he
Speaker 1: discussed in the op ed isn't truly of the interest.
Speaker 1: I mean, it's relevant, it's certainly something that the Special
Speaker 1: Council's team would want on the record and under oath,
Speaker 1: but it's not the critical pieces of information. What they
Speaker 1: want are things such as what Mike Pence and Donald
Speaker 1: Trump said to each other in private on those phone calls,
Speaker 1: including in the final hours and the last day or
Speaker 1: so leading up to January six, where there was no
Speaker 1: other aid with Mike Pence. We know he said in
Speaker 1: his staff out of the room. We know there was
Speaker 1: staff with Donald Trump, but they didn't hear what Mike
Speaker 1: Pence said. And that's the kind of information that the
Speaker 1: Special Council will be going after, and that Mike Pence
Speaker 1: has not disclosed anywhere. So Pence is going to fight
Speaker 1: the subpoena using the argument that he was acting as
Speaker 1: President of the Senate during the January six insurrection and
Speaker 1: invoking the speech or debate clause. Tell us more about
Speaker 1: his argument. So it's a novel argument. It's an interesting one.
Speaker 1: You know, constitutional scholars will get a kick out of it,
Speaker 1: but there's not a lot in the way of any
Speaker 1: kind of real precedent to guide anybody as to how
Speaker 1: it would play out. So, yes, under the Constitution, the
Speaker 1: vice president it kind of has two roles. One, obviously
Speaker 1: is the executive branch role under Article two of the Constitution,
Speaker 1: very limited authorities. But that's what the role is set
Speaker 1: up to do. The other one is what is set
Speaker 1: up under Article one of the Constitution, which deals with Congress,
Speaker 1: and that is that the Vice President serves as the
Speaker 1: President of the Senate, you know, can break ties things
Speaker 1: like that, and also of course ultimately convenes and presides
Speaker 1: over the certification of the electoral votes to decide who
Speaker 1: is the next president. So is this sort of non
Speaker 1: frivolous argument that because of the dual roles, he can
Speaker 1: argue that he was acting in that legislative capacity. He
Speaker 1: was fulfilling a legislative activity, and therefore any discussions he
Speaker 1: had about and leading up to his actions on January
Speaker 1: six in that role would be covered by the speech
Speaker 1: and debate clause. It's never been done before. There's been
Speaker 1: some limited arguments on this in court, such as the
Speaker 1: just Department invoked that same clause de protect mini civil suit.
Speaker 1: It's unclear how it would play out here in a
Speaker 1: criminal context. We really don't know. You have to assume
Speaker 1: to some extent, you know, Jack Smith, the Special Council's
Speaker 1: team has played out the legal arguments and decided they
Speaker 1: have sufficient grounds to move forward if it's challenged on
Speaker 1: its basis it protects legislators from certain law enforcement actions
Speaker 1: if the conduct is related to their legislative duties. Right,
Speaker 1: So would this protect him if you know, he was
Speaker 1: having conversations with Trump that were not exactly related to
Speaker 1: his legislative duties. That happened, you know, before the Capitol attack,
Speaker 1: that happened in the White House. So again that's where
Speaker 1: there there's limited case, lot of guide as the most
Speaker 1: recent sort of guy posts we have is what Senator
Speaker 1: Lindsey Graham dealt with dot in Georgia when he fought
Speaker 1: Fulton County the piano to testify before that special grand jury.
Speaker 1: He was partially successful. The courts ultimately include that even
Speaker 1: informal sort of you know, fact finding efforts done by
Speaker 1: Lindsey Graham in his legislative capacity during those phone calls
Speaker 1: he had with Georgia officials were sufficiently you know, within
Speaker 1: the scope of legislative activity and he couldn't be forced
Speaker 1: to testify about it. But beyond that, separate actions such
Speaker 1: as what was described as you know, cajoling and you know,
Speaker 1: trying to extore the Secretary of State down Georgia to
Speaker 1: throw out votes things along those lines. That is something
Speaker 1: the courts concluded would not fall within the scope of
Speaker 1: legislative activity and therefore he could be questioned about it,
Speaker 1: and he ultimately was what he said. We don't know yet.
Speaker 1: We're waiting to see what we find out on Thursday
Speaker 1: when some of this grand jury report comes out in
Speaker 1: from Georgia. But that's kind of where this is likely going,
Speaker 1: is that what Pence is trying to do is get
Speaker 1: the scope of this subpoena ultimately narrowed. This is my
Speaker 1: view where he's realistically doing this, get it narrowed, parcel
Speaker 1: out what can and cannot be asked of him, sort
Speaker 1: of narrowed down where the Special Council can go with this,
Speaker 1: and then he'll respond as necessary. Apparently there have been
Speaker 1: months of negotiations with the Special Counsel and and Pence
Speaker 1: his lawyers, and they haven't been able to come to
Speaker 1: any resolution. Obviously, or the Special Council wouldn't have taken
Speaker 1: this step. Do you think a court would be better
Speaker 1: able to parse it out? I think part of that
Speaker 1: is politics and optics that obviously Mike Pence is going
Speaker 1: to run for president. He can't be seen as you
Speaker 1: know voluntarily complying with the Justice Department's investigation here, or
Speaker 1: lest he you know, anger some of that very conservative
Speaker 1: base that obviously he's going to be courting um in
Speaker 1: the primaries for the presidential race, so he's got at
Speaker 1: least put up some sort of fight. We have no
Speaker 1: idea what the negotiations look like between his team and
Speaker 1: the Special Council. Maybe a Special Council's team wasn't willing
Speaker 1: to narrow things sufficiently, and pensive team thought they had
Speaker 1: sufficient basis, you know, in court to get it further narrowed.
Speaker 1: We just don't know, but at a minimum, I'm not
Speaker 1: shocked heeps putting up some sort of legal fight. He
Speaker 1: has to do that for politics of nothing else. How
Speaker 1: long will it take for a fight like this to
Speaker 1: play out in the courts? I mean, there want to
Speaker 1: be appeals, it might go to Supreme Court. So the
Speaker 1: good news is because this is a criminal matter, because
Speaker 1: there's you know, a pending grand jury. It's not like
Speaker 1: a civil action where it could take months years. You
Speaker 1: think about the Lindsay Graham matter that was handled in
Speaker 1: a couple of months. So you know, let's say there's
Speaker 1: a court action that's filed this week to quash the subpoena.
Speaker 1: You know, we're in February. It's very plausible to imagine
Speaker 1: this being resolved, even to get all the way up
Speaker 1: to the Supreme Court, no later than mayor June. I
Speaker 1: don't think you'll actually take that long. I have a
Speaker 1: feeling this is, just like I said, a negotiating tactic
Speaker 1: to narrow down the scope of what's going to be asked.
Speaker 1: But this will certainly if he moves the quash, it
Speaker 1: will delay things for weeks, if not month, But if
Speaker 1: not going to be you know, outcome determinative comps. Lawyers
Speaker 1: say that he intends to exert executive privilege to fight
Speaker 1: the Special Council subpoena of Pence. There seemed to be
Speaker 1: several problems with that one. This is a criminal investigation,
Speaker 1: isn't it correct? So he certainly can invoke it. That
Speaker 1: is still his right and in his standing to invoke it,
Speaker 1: but it will likely fail in to be far weak
Speaker 1: er legal case ace than what Pence is apparently considering
Speaker 1: doing with the speech and debate clause argument. The executive
Speaker 1: privilege claim here would come back to the Supreme Court
Speaker 1: precedent from the seventies with Nixton. Even there, the Supreme
Speaker 1: Court concluded that if there is a compelling interest that
Speaker 1: the Justice departments inquiry into criminal activity would override an
Speaker 1: incumbent president's legitimate, otherwise legitimate executive privilege claims, there's no
Speaker 1: reason to believe that argument would somehow hold up here,
Speaker 1: And that's probably why Pence isn't really going with that
Speaker 1: line of argument. If anything would be a throwaway, the
Speaker 1: legislative activity one is a far more interesting one, far
Speaker 1: more legally confusing one, which is the late things longer.
Speaker 1: And Trump has attempted to claim executive privilege several times
Speaker 1: to try to block the House January six committee, apparently
Speaker 1: also to try to block some testimony to the federal
Speaker 1: grand jury. Has he been successful in any of those,
Speaker 1: for the ones that have been made public, No, he
Speaker 1: has not. He has at most potentially narrowed some things
Speaker 1: that obviously the grand jury procedes because their secret A
Speaker 1: lot of that. We don't know what's gone on behind
Speaker 1: the scene. We know people who have gone through testify
Speaker 1: before the grand jury, we don't know the extent to
Speaker 1: which they actually were allowed to answer questions, to what
Speaker 1: extent there were fights over executive privilege in terms of
Speaker 1: they invoked it at the Grand jury proceeding itself, and
Speaker 1: then there was additional fighting behind the scenes. We just
Speaker 1: don't know. It still remains secret, but in the public fights,
Speaker 1: especially with the January six Committee and then his fight
Speaker 1: with Nara over the turnover of documents the Generous Sex Committee,
Speaker 1: we know that the former president failed time and time
Speaker 1: again in those regards. Let's turn to the Special Council's
Speaker 1: inquiry into the classified documents found at Trump's marrow La
Speaker 1: go Home. Apparently Trump's team turned over an empty folder
Speaker 1: mark classified. And here's what Trump attorney Timothy Parla Tory
Speaker 1: said about that m folder on CNN. The folder is
Speaker 1: kind of one of the more humorous aspects of this
Speaker 1: whole thing. Uh, this is not a classified folder. This
Speaker 1: is a folder that when my team went through and
Speaker 1: searched and they wrote up their report which we turned
Speaker 1: over to d o J, they saw it's a It's
Speaker 1: a folder Manola folder that says classified Evening Summary on it.
Speaker 1: And it was in the President's bedroom. He has one
Speaker 1: of those landline telephones next to his bed and it
Speaker 1: has a blue light on it, and he keeps them
Speaker 1: up at night, so he took the Minola folder and
Speaker 1: put it over it so that it would keep the
Speaker 1: light down so you can sleep at night. And it's
Speaker 1: just this folder. It says classified Evening Evening Summary on it.
Speaker 1: Is not a classification marking. It's not anything that is
Speaker 1: controlled in any way. There's nothing illegal about it. There's
Speaker 1: nothing in it. And when d J found out about it,
Speaker 1: they went crazy and they said, hey, actually gave me
Speaker 1: a spiana to say, give us over this empty folder.
Speaker 1: That means nothing. I mean, I'm just wondering where that
Speaker 1: came from and why. So, yeah, this this was a
Speaker 1: very clever little piece of media technique and tactics by
Speaker 1: the Trump lawyer trying to use this the red herring
Speaker 1: to make it sound like all we're talking about is
Speaker 1: a bunch of you know, former folders. Now, so there
Speaker 1: was a folder at issue that apparently was labeled as
Speaker 1: classified Evening Briefing that was not turned over. We don't
Speaker 1: know the extent of what was what kind of marketings
Speaker 1: were on it, but let's be clear if the folder
Speaker 1: was empty, and all it was is the Manilla folder
Speaker 1: with the original markings on it. The folder itself is
Speaker 1: not classified it shouldn't have been in its possession anyways,
Speaker 1: and if it's subject speed, you turn it over anyways.
Speaker 1: But that's not a classified document, it's an empty folder.
Speaker 1: The documents that were returned over in January two, in June,
Speaker 1: and then we ultimately see in August of twenty two,
Speaker 1: those are what remains the issue of true criminal liability.
Speaker 1: Those weren't empty full there's those were documents. Those were
Speaker 1: documents with proper classification markings on them. That's what the
Speaker 1: true liability. This was just a little interesting media ployed
Speaker 1: by the Trump lawyer, which was clever, but ultimately irrelevant
Speaker 1: from a legal standpoint. Now we know that classified documents
Speaker 1: have been found at President Biden's home and former office,
Speaker 1: and at Mike Pence's home. Here's what Penn said in
Speaker 1: January about the discovery of classified documents at his Indiana residence.
Speaker 1: Those classified documents should not have been in my personal residence.
Speaker 1: Mistakes were made, and I take full responsibility. There's a
Speaker 1: special counsel for the Trump classified documents. There's a special
Speaker 1: counsel for the Biden classified documents. Do you think that
Speaker 1: Attorney General Merrick Garland is going to appoint a special
Speaker 1: counsel for the Pence documents as well. So if Mike
Speaker 1: Pence ultimately does announce a run for president, I ex
Speaker 1: act there will be an appointment of a special counsel,
Speaker 1: if only to remain consistent with what Mark Garland has
Speaker 1: been doing. He announced one for Donald Trump only after
Speaker 1: Trump announced his candidacy for the presidency. He announced one
Speaker 1: for President Joe Biden because it is the president and
Speaker 1: I its it advanced the point where it was looking
Speaker 1: like it was going to be at a potentially criminal inquiry,
Speaker 1: and it's the sitting president, so there was a concern
Speaker 1: about the conflict of interest. I understood why Marrick Garland
Speaker 1: did that. Mike Pence is not running yet. If he
Speaker 1: were to announced tomorrow, I would fully expect that they
Speaker 1: would shortly thereafter being announcement of a special counsel for
Speaker 1: the Pence document I don't expect anything to come about
Speaker 1: criminal wise with respect of the Pence doctor stuff and
Speaker 1: Brod your final thoughts on Pence's challenge to the grand
Speaker 1: jury subpoena. Legal academics are you know, popping the pop corps.
Speaker 1: But now it's an abstract legal discussion. It most of
Speaker 1: what it is and it's a fascinating one. It's possibly
Speaker 1: got a flesh out some really interesting guide posts, an
Speaker 1: article one article authorities. He's going to testify in some
Speaker 1: limited regard. Thanks so much, Brad. That's Bradley Moss apartment,
Speaker 1: Mark Zade. The Federal Trade Commission has halted its in
Speaker 1: house lawsuit challenging Meta platforms acquisition of VR developer Within Unlimited.
Speaker 1: This follows a federal judge denying the FTC's motion for
Speaker 1: preliminary injunction to halt the deal after a trial. Joining
Speaker 1: me to look behind this reprieve for Meta is Bloomberg
Speaker 1: Intelligence senior litigation analyst Jennifer ree So. Meta has a
Speaker 1: history of buying up promising VR technology, including Beat Games
Speaker 1: and Oculus, and it's reminiscent of Facebook's early purchase of
Speaker 1: Instagram and What'sapp. So tell us about the FTC suing
Speaker 1: to stop Meta from purchasing Within. Now, you're exactly right, June.
Speaker 1: Meta does have this history of acquisitions, particularly in the
Speaker 1: VR space, and I think the FTC is really concerned
Speaker 1: about what has happened in the last ten years with
Speaker 1: big tech platforms that they kind of swallow up these
Speaker 1: small nascent companies that might have grown into big companies
Speaker 1: and been their competitors, and they're trying to nip this
Speaker 1: stuff in the bud now. So what they're looking at
Speaker 1: today are Meta's ambitions in the virtual reality space, and
Speaker 1: they understand that they really want to be the leader
Speaker 1: there and they think fitness apps in the virtual reality
Speaker 1: space are very important. So what they did here is
Speaker 1: they tried to stop Meta from buying a small company
Speaker 1: within which makes this virtual reality fitness app because they
Speaker 1: said that Meta could do this on their own and
Speaker 1: that would increase competition if Meta did it, rather than
Speaker 1: buying up an entity that it might compete within the future.
Speaker 1: So what they did is they relied on this theory
Speaker 1: that they don't compete today Meta and this company within
Speaker 1: that they want to buy, but hey, they could compete
Speaker 1: in the future, and so the deal, the acquisition is
Speaker 1: anti competitive because of that potential competition possibility. Here, the
Speaker 1: judge accepted that theory but still ruled against the FTC.
Speaker 1: Why right, And I will say that the judge accepting
Speaker 1: the theory was really a win in this case for
Speaker 1: the FDC. I mean, I think they're probably pretty happy
Speaker 1: with where they came out here even though they lost
Speaker 1: the battle in a way. You know, Meta won the battle,
Speaker 1: but may have lost the war here because this theory,
Speaker 1: this potential competition theory is is an old theory. It's
Speaker 1: never really been endorsed by the Supreme Court, and there's
Speaker 1: some that say it's really not a valid theory. Um
Speaker 1: Meta argued that it wasn't a valid theory, and they
Speaker 1: also argued that even if it is a valid theory,
Speaker 1: the standard by which you have to prove that there'd
Speaker 1: be potential competition is very high. So in this case,
Speaker 1: not only did the court say, you know, this is
Speaker 1: a valid theory. You know, even though the case law
Speaker 1: is from the nineteen seventies and we haven't really seen
Speaker 1: anything since then, this is a valid theory that the
Speaker 1: FDC can rely on. A merger can be anti competitive
Speaker 1: even if one of the companies, the buyer, is only
Speaker 1: a potential entrant into the market and doesn't compete today.
Speaker 1: And I think that was a big step for the
Speaker 1: FTC to get that ruling. And the court also said
Speaker 1: that the standard isn't as high as Meta says it
Speaker 1: has to be. For them to prove that right, they
Speaker 1: have to prove some reasonable probability that the buyer would
Speaker 1: enter the market. They don't have to go beyond that.
Speaker 1: They don't have to show parallel conduct or oligobalistic conduct
Speaker 1: in the market today, which is what Meta had argued.
Speaker 1: So that's a win for the FTC because it gives
Speaker 1: it a blueprint for future cases. In line of that,
Speaker 1: why did the judge rule against the FTC in stopping
Speaker 1: the merger? So basically what the judge ruled here is
Speaker 1: the evidence simply didn't show Ben that there was a
Speaker 1: reasonable probability that they would have entered this dedicated VR
Speaker 1: fitness app market but for the acquisition of Within. They
Speaker 1: looked at all the evidence, the testimony and the documents.
Speaker 1: What it showed, the judge said, is that Meta thought
Speaker 1: about it, they contemplated it um and they thought about
Speaker 1: lots of possibilities in terms of getting into VR fitness,
Speaker 1: but that they would not have entered that. The FTC
Speaker 1: didn't show that they probably would have entered if they
Speaker 1: didn't buy Within. So this was a failure on the
Speaker 1: facts and on the evidence, and not a failure on
Speaker 1: the legal theory. And I think June, that's probably why
Speaker 1: the FTC chosen not to appeal right, because it's a
Speaker 1: lot harder on appeal to reverse a lower courts finding
Speaker 1: of facts based on the evidence. They are the ones
Speaker 1: that looked at the documents, the lower court judge, they're
Speaker 1: the ones that heard the testimony, and they're listening to
Speaker 1: that and reading the documents and determining how they think
Speaker 1: they shake out. The appellate panel can't really do that.
Speaker 1: So if the FTC were arguing, well, they made an
Speaker 1: error of law here, the appellate panel would have more
Speaker 1: discretion right to reverse the lower court, but not in
Speaker 1: this case, And in fact, the FTC is probably pretty
Speaker 1: happy with where they came out on the law. The FTC.
Speaker 1: You can challenge mergers on two tracks in the federal
Speaker 1: court system and in house. So could the FTC have
Speaker 1: tried to stop the deal in a process before an
Speaker 1: FTC administrative judge. Yes, absolutely, and that process was ongoing,
Speaker 1: and by the way, if it had continued, the FTC
Speaker 1: stopped it. But had it continued, the hearings would have
Speaker 1: started yesterday, and there was scheduled to start on February.
Speaker 1: I think what happened here is that it's much harder
Speaker 1: to prove the case in this internal proceeding, which is
Speaker 1: called a Part three than it was in the lower
Speaker 1: court in the hearing which was just for a preliminary junction.
Speaker 1: The standard is higher. So in court where they just lost,
Speaker 1: they really only had to show, well, there was some
Speaker 1: reasonable questions on the merits. Maybe it was fair to
Speaker 1: dig in deep Burg to see if they would have
Speaker 1: success to prove that this deal is anti competitive. But
Speaker 1: in the internal proceeding they really have to show that
Speaker 1: the deal itself would substantially less in competition. So it's
Speaker 1: it's harder to prove and so in this case, I
Speaker 1: think if you can't prove it with the lower standard,
Speaker 1: you probably can't prove it with the more difficult standard.
Speaker 1: And also the companies have closed, so once they're integrated
Speaker 1: and closed, it's much harder later, even if you win
Speaker 1: in court to get an order to unwind. So I
Speaker 1: think that's probably why they stopped. They withdrew the Part
Speaker 1: three and said we're done, and FTC spokesperson said the
Speaker 1: f GC is still deciding whether or not to continue
Speaker 1: an in house trial before the admit strative judge, so
Speaker 1: they could revive the challenge. Do you think there's any
Speaker 1: chance that they would I think it's probably unlikely. First
Speaker 1: of all, as I said, the deals closed, the companies
Speaker 1: are going to integrate. So even if they went before
Speaker 1: the judge and nine months from now or ten months
Speaker 1: from now they had a decision that was good for them,
Speaker 1: I doubt the judge would actually unwind the deal because
Speaker 1: it's just, you know, you're unscrambling the eggs um. And also,
Speaker 1: they recently lost in front of the Administrative Law judge
Speaker 1: a somewhat similar suit based on potential competition, and they
Speaker 1: may be worried that what they'll come out with is
Speaker 1: worse than what they've come out with from the district court.
Speaker 1: So I suspect they probably won't. You know, I always
Speaker 1: have heard that these agencies have an easier time before
Speaker 1: their own in house judges than in federal court. But
Speaker 1: you're saying the standards were higher before the in house judge.
Speaker 1: So in this case, the standard was higher because the
Speaker 1: FTC was seeking just a preliminary injunction, so they're not
Speaker 1: seeking an order that the deal is anti competitive. They're
Speaker 1: simply asking a judge to look at the likelihood that
Speaker 1: they could win on the merits, the likelihood that they
Speaker 1: could prove in a bigger and more drawn out proceeding
Speaker 1: that the deal would violate the antitrust laws, and all
Speaker 1: that they really have to do is raise questions that
Speaker 1: make it fair that it would be fair to dig
Speaker 1: in deeper, right, whereas in front of the administrative law
Speaker 1: judge they have to prove that it's anti competitive, So
Speaker 1: it's just it. It's a slightly higher standard. I think
Speaker 1: where we think about the fact that it might be
Speaker 1: easier for the FTC to win in front of their
Speaker 1: own administrative law judge than in front of the federal
Speaker 1: judge is that the federal judges historically have been business
Speaker 1: friendly and probably more business friendly than the administrative law
Speaker 1: judge at the FTC IS. And the other thing is,
Speaker 1: I think in the past we've seen them mostly win
Speaker 1: internally because they've brought cases that are easy for them
Speaker 1: to win. They've brought the cases that where the evidence
Speaker 1: always on their side. Things are different today. The FTCs
Speaker 1: bringing cases that are hard to win. They're bringing new cases,
Speaker 1: they're basing it on novel theories. These are cases that
Speaker 1: are harder to win. And so far, what they found
Speaker 1: is that the administrative law judge hasn't necessarily been on
Speaker 1: their side. As you said, the law was on their side,
Speaker 1: and they may be happy with that, But Lena khn
Speaker 1: is trying to push the boundaries of antitrust law. And
Speaker 1: when the public looks at this, what do they see?
Speaker 1: They see Meta one, This the FDC laws the FTC,
Speaker 1: you know what, its hands up in the air and
Speaker 1: drop its case. Is that a bad look for the FTC?
Speaker 1: You know, I would say yes, it is a bad
Speaker 1: look for the FTC in the short term. But I
Speaker 1: think what Lena Khan and the majority of the FDC
Speaker 1: have in mind is the long term. You know, they're
Speaker 1: trying to make substantial changes to the law or incremental
Speaker 1: changes I should say to the law that take time
Speaker 1: and will take losses and will take taking risks. So
Speaker 1: in the near term they lost, that's what most people
Speaker 1: will see in the news. They're losing other cases, They're
Speaker 1: bringing other risky cases, and I in the short term
Speaker 1: it doesn't look good for them, But in the long
Speaker 1: term this is probably going to help them because in
Speaker 1: this case, the facts just simply didn't support the idea
Speaker 1: that Meta was a potential entrant. But in the next case,
Speaker 1: they're good on the law at least in the Ninth
Speaker 1: Circuit and some other circuits. Northern District of California was
Speaker 1: where this was, and the facts and the evidence might
Speaker 1: be more on their side. There might be more substantial
Speaker 1: evidence that this buyer was thinking about and was a
Speaker 1: potential entrant and and didn't enter and instead bought a rival. Right,
Speaker 1: So this gives them a legau possibly in the next case,
Speaker 1: and so things might in the long term turn around
Speaker 1: and that they'll start to have wins. The FTC has
Speaker 1: separately filed a lawsuit against Meta, asking a court to
Speaker 1: force it to sell subsidiaries Instagram and WhatsApp. So those
Speaker 1: are done deals, done for a long time. Where does
Speaker 1: that stand? And how difficult to battle is that? That's
Speaker 1: a different kind of case in the federal court. It's
Speaker 1: taking a lot longer, that's in depth litigation, it's not
Speaker 1: a preliminary in junction. And I think again, I think
Speaker 1: that's probably a bit of a losing battle for the
Speaker 1: FTC because what they're trying to do is show that
Speaker 1: an intention by Meta over time to just seek out
Speaker 1: companies that might have competed with them, that might have
Speaker 1: grown to be a larger competitor um and been a
Speaker 1: threat and to buy them up before they could be
Speaker 1: a threat. And perhaps Meta did have that pattern, and
Speaker 1: perhaps that was the intention. But I think the difficulty
Speaker 1: here is that they would have to show that but
Speaker 1: for Facebook at the time buying what's happened buying Instagram,
Speaker 1: that those two companies would have risen up to be
Speaker 1: a social media networking competitor to Facebook. And I think
Speaker 1: that's a very very difficult thing to show this but
Speaker 1: four world, especially because some would argue that Instagram has
Speaker 1: become popular because of the resources that Facebook but behind
Speaker 1: Instagram after buying it. So I think that that's a
Speaker 1: very difficult case to prove, and where they're still in
Speaker 1: the discovery process there, so we've got some time ahead
Speaker 1: of us on that one. You talk about how the
Speaker 1: FTC is in this for the long haul, the antitrust battle,
Speaker 1: a battle against the tech companies. But if there's a
Speaker 1: change in administrations, the FTC maybe going in a totally
Speaker 1: different direction and this whole march forward may just be stopped.
Speaker 1: I mean, you're absolutely right. It all depends on new
Speaker 1: leadership at the FTC. If there's a change in administration,
Speaker 1: certainly the chair position will change and the majority will
Speaker 1: flip from Democratic to Republican if if there is a change,
Speaker 1: Even if the next president is also a Democrat, things
Speaker 1: could still change at the FTC because that there are
Speaker 1: terms that end for the commissioners. You know. I think
Speaker 1: that there is some bipartisan push here to try to
Speaker 1: do something to curb the power and dominance of the
Speaker 1: big tech platforms, and that is a bit behind what
Speaker 1: the FTC is doing. There's no doubt that they could
Speaker 1: make strides that could then get pulled back by the
Speaker 1: next administration. But I do think that there is a
Speaker 1: concern that is bipartisan right now about the dominance of
Speaker 1: big tech and some of the patterns of the last
Speaker 1: ten years of the big tech companies, And so I
Speaker 1: think there's a good chance that new leadership may actually
Speaker 1: they could pull back a little bit, but would still
Speaker 1: pursue some of what the FTC is pursuing. Now, Thanks Jen,
Speaker 1: that's Bloomberg Intelligence Senior litigation analyst Jennifer Ree, and that's
Speaker 1: it for this edition of the Bloomberg Law Show. Remember
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Speaker 1: week night at ten pm Wall Street Time. I'm June
Speaker 1: Grosso and you're listening to Bloomberg