1 00:00:00,320 --> 00:00:05,120 Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio. 2 00:00:12,840 --> 00:00:16,400 Speaker 1: The Sound of Large Madness a big business for the 3 00:00:16,520 --> 00:00:20,840 Speaker 1: National College Athletic Association, bringing nearly a billion dollars in 4 00:00:20,920 --> 00:00:24,759 Speaker 1: revenue last year, but zero to the players. The Supreme 5 00:00:24,840 --> 00:00:27,159 Speaker 1: Court has agreed to consider the latest effort to have 6 00:00:27,240 --> 00:00:30,800 Speaker 1: the n C double As amateurism rules declared a violation 7 00:00:30,840 --> 00:00:33,920 Speaker 1: of the antitrust laws, something that could up end the 8 00:00:34,040 --> 00:00:37,920 Speaker 1: multibillion dollar business model for college sports. Joining me is 9 00:00:37,960 --> 00:00:40,880 Speaker 1: Audrey Anderson, who had the higher education practice at bass 10 00:00:41,040 --> 00:00:45,040 Speaker 1: Barian Sims so Aurey. The Justices will review the Ninth 11 00:00:45,040 --> 00:00:49,360 Speaker 1: Circuit decision that allowed student athletes to be compensated as 12 00:00:49,400 --> 00:00:52,080 Speaker 1: long as it was tied to education. What's the n 13 00:00:52,120 --> 00:00:57,680 Speaker 1: C double as argument for overturning that decision? The argument 14 00:00:58,120 --> 00:01:04,360 Speaker 1: is that when you're looking at a rule that promote amateurism, 15 00:01:04,720 --> 00:01:06,760 Speaker 1: the court should give the m C double A some 16 00:01:07,040 --> 00:01:12,040 Speaker 1: leeway because without those rules, the products that the n 17 00:01:12,120 --> 00:01:16,240 Speaker 1: C double A is putting forward college athletics won't exist. 18 00:01:16,440 --> 00:01:20,120 Speaker 1: So an antitrust law, there is a doctrine that says 19 00:01:20,200 --> 00:01:23,480 Speaker 1: if you have a joint venture, which is what college 20 00:01:23,480 --> 00:01:27,280 Speaker 1: athletics is, all the colleges come together to put forward 21 00:01:27,319 --> 00:01:30,520 Speaker 1: this product of college athletics. Because you have a joint venture, 22 00:01:30,920 --> 00:01:34,120 Speaker 1: the participants in that joint venture are allowed some leeway 23 00:01:34,240 --> 00:01:39,080 Speaker 1: to put together rules or agreements that allow the joint 24 00:01:39,120 --> 00:01:41,839 Speaker 1: venture to exist, and the courts are supposed to give 25 00:01:41,880 --> 00:01:44,680 Speaker 1: those participants some leeway. So the n C double as 26 00:01:44,760 --> 00:01:48,560 Speaker 1: argument is, Hey, the Ninth Circuit was much too strict 27 00:01:48,680 --> 00:01:52,840 Speaker 1: in the way it reviewed our amateurism rule in this case. 28 00:01:53,280 --> 00:01:56,720 Speaker 1: Why are both sides saying there please? The court took 29 00:01:56,800 --> 00:02:00,800 Speaker 1: this case at the trial court level. The Ninth Circuit 30 00:02:01,320 --> 00:02:04,520 Speaker 1: neither side got everything it wanted, So both sides there 31 00:02:04,560 --> 00:02:09,520 Speaker 1: pleased because the plaintiffs, the student athletes, wanted much more. 32 00:02:10,160 --> 00:02:13,800 Speaker 1: They wanted full out what we call pay for play. 33 00:02:14,240 --> 00:02:18,440 Speaker 1: All they got was that they could be given benefits 34 00:02:18,560 --> 00:02:23,280 Speaker 1: tied to education, and even those benefits that were tied 35 00:02:23,320 --> 00:02:27,200 Speaker 1: to education, if they were cash or cash like, they're 36 00:02:27,240 --> 00:02:31,280 Speaker 1: limited an amount. So it's conceivable that the Supreme Court 37 00:02:31,320 --> 00:02:35,680 Speaker 1: would say that the Ninth Circuit was not strict enough 38 00:02:35,720 --> 00:02:39,120 Speaker 1: in the way it looked at the MP double A rules, 39 00:02:39,160 --> 00:02:43,520 Speaker 1: and you can still have a collegiate market with even 40 00:02:43,639 --> 00:02:47,320 Speaker 1: fewer limits on the benefits the college athletes are able 41 00:02:47,360 --> 00:02:52,000 Speaker 1: to obtain. Does the courts decision in an n C 42 00:02:52,320 --> 00:02:55,440 Speaker 1: double A case tell us anything about how it might 43 00:02:55,480 --> 00:02:58,280 Speaker 1: decide the current case. Well, I think the two sides 44 00:02:58,320 --> 00:03:01,480 Speaker 1: have very different views. I mean answer to that question June, 45 00:03:01,680 --> 00:03:05,960 Speaker 1: that four case gives us very limited information and how 46 00:03:06,000 --> 00:03:10,200 Speaker 1: the Court will approach this case. Because when the Court 47 00:03:10,320 --> 00:03:14,000 Speaker 1: was talking about the rules around amateurism in the nineteen 48 00:03:14,000 --> 00:03:17,720 Speaker 1: eighty four case, they were looking at rules about television contracts. 49 00:03:17,800 --> 00:03:20,440 Speaker 1: So they were only talking about the rules about amateurism 50 00:03:20,520 --> 00:03:25,040 Speaker 1: to distinguish them from rules about TV contracts. A lot 51 00:03:25,080 --> 00:03:27,680 Speaker 1: of people called that language in the nineteen eight four 52 00:03:27,760 --> 00:03:31,960 Speaker 1: case dicta not binding legal les. In addition to that, 53 00:03:32,120 --> 00:03:36,000 Speaker 1: the facts of college athletics have changed really dramatically in 54 00:03:36,040 --> 00:03:39,120 Speaker 1: the last thirty six years, and that's important when you're 55 00:03:39,120 --> 00:03:43,320 Speaker 1: doing an antitrust analysis. Could a decision by the Supreme 56 00:03:43,360 --> 00:03:47,960 Speaker 1: Court change the structure of college sports and the relationship 57 00:03:48,080 --> 00:03:52,560 Speaker 1: between college athletes and their schools. It definitely could. If 58 00:03:52,600 --> 00:03:58,440 Speaker 1: the Supreme Court held that the courts have free reign 59 00:03:58,680 --> 00:04:02,760 Speaker 1: to be very intrusive in reviewing the rules. The m 60 00:04:02,960 --> 00:04:06,600 Speaker 1: double A tries to put forward about what an amateur 61 00:04:06,800 --> 00:04:10,880 Speaker 1: is or what kind of commercial relationships a student athlete 62 00:04:10,880 --> 00:04:14,800 Speaker 1: can have with its college and still participate in college athletics. 63 00:04:14,840 --> 00:04:17,880 Speaker 1: That could really change things. If the point if one 64 00:04:18,080 --> 00:04:21,840 Speaker 1: full out, that is, student athletes can be paid for 65 00:04:21,880 --> 00:04:25,800 Speaker 1: their participation in college athletics, and the n C Double 66 00:04:25,839 --> 00:04:29,440 Speaker 1: A can't stop that, that would upend everything. I'd be 67 00:04:29,480 --> 00:04:32,640 Speaker 1: really surprised if the Supreme Court went that far, But 68 00:04:32,920 --> 00:04:37,159 Speaker 1: in any event, this could really change up what happens 69 00:04:37,240 --> 00:04:41,360 Speaker 1: in college athletics. So minor Supreme Court decision put an 70 00:04:41,480 --> 00:04:45,960 Speaker 1: end to this controversy over amateurism. Whatever happens in this case, 71 00:04:46,360 --> 00:04:48,960 Speaker 1: it's only one battle front for the m C Double A. 72 00:04:49,520 --> 00:04:52,159 Speaker 1: Even if they were to win this case and the 73 00:04:52,240 --> 00:04:55,279 Speaker 1: Court were to say yes as an antitrust matter, the 74 00:04:55,360 --> 00:04:58,920 Speaker 1: m C Double A gets to define what amateurism means. 75 00:04:59,600 --> 00:05:04,320 Speaker 1: The state legislatures are making laws saying that college athletes 76 00:05:04,400 --> 00:05:08,359 Speaker 1: can get unlimited amounts of money from third parties for 77 00:05:08,440 --> 00:05:11,760 Speaker 1: selling their name, image, and likeness, and that changes the 78 00:05:11,800 --> 00:05:14,680 Speaker 1: way that college sports looks quite a bit, and the 79 00:05:14,760 --> 00:05:17,960 Speaker 1: Supreme Court's decision isn't going to do anything to change 80 00:05:18,080 --> 00:05:22,440 Speaker 1: those efforts. Is already in the process of changing its 81 00:05:22,520 --> 00:05:26,240 Speaker 1: rules to allow athletes to be compensated for the use 82 00:05:26,240 --> 00:05:30,800 Speaker 1: of their names, images, and likenesses. Yes, they have proposed 83 00:05:31,000 --> 00:05:35,360 Speaker 1: some changed rules to allow student athletes to get some 84 00:05:35,720 --> 00:05:40,120 Speaker 1: limited compensation for name, image and likeness rights. But I 85 00:05:40,160 --> 00:05:43,599 Speaker 1: don't think that the rule changes will satisfy the state 86 00:05:43,680 --> 00:05:47,240 Speaker 1: legislatures who have already passed laws. They're just not enough. 87 00:05:47,600 --> 00:05:51,120 Speaker 1: As long as there's so much money in college athletics 88 00:05:51,160 --> 00:05:54,680 Speaker 1: that's going to the coaches and the universities and not 89 00:05:54,920 --> 00:05:57,480 Speaker 1: to the student athletes, the n C double A is 90 00:05:57,520 --> 00:06:00,560 Speaker 1: gonna have to withstand the pressure and of courts and 91 00:06:00,640 --> 00:06:03,880 Speaker 1: from the state legislatures to do something more to allow 92 00:06:04,000 --> 00:06:07,960 Speaker 1: college athletes to more directly benefit. That's Audrey Anderson of 93 00:06:08,040 --> 00:06:12,960 Speaker 1: Bassbarian SIMS. If there were any lingering doubts about the 94 00:06:12,960 --> 00:06:16,600 Speaker 1: government's inclination to go after the tech giants, that's been 95 00:06:16,680 --> 00:06:21,159 Speaker 1: resoundingly settled, with antitrust actions escalating the final weeks of 96 00:06:21,160 --> 00:06:25,400 Speaker 1: the year. Google is facing three antitrust lawsuits and Facebook 97 00:06:25,480 --> 00:06:29,400 Speaker 1: to lawsuits. And the lawsuits against Facebook by the Federal 98 00:06:29,440 --> 00:06:32,479 Speaker 1: Trade Commission and a group of forty six states seek 99 00:06:32,600 --> 00:06:36,240 Speaker 1: to break up the social media giant, alleging that Facebook 100 00:06:36,320 --> 00:06:40,480 Speaker 1: thwarted competition to protect its monopoly. Here's New York Attorney 101 00:06:40,480 --> 00:06:43,960 Speaker 1: General Leticia James. No company should have this much unchecked 102 00:06:44,000 --> 00:06:49,680 Speaker 1: power over our personal information and our social interactions. Joining 103 00:06:49,680 --> 00:06:52,680 Speaker 1: me is antitrust expert Harry First, a professor at n 104 00:06:52,800 --> 00:06:55,760 Speaker 1: y U Law School. Harry tell us the basics of 105 00:06:55,839 --> 00:06:59,800 Speaker 1: the government suits. There are two cases files, and their 106 00:07:00,000 --> 00:07:02,880 Speaker 1: pretty much the same, although not completely the same, one 107 00:07:02,920 --> 00:07:05,240 Speaker 1: by the Federal Trade Commission and the other by a 108 00:07:05,279 --> 00:07:10,040 Speaker 1: group of states, And the basics are of two parts. 109 00:07:10,120 --> 00:07:15,520 Speaker 1: It looks at al Facebook has maintained its monopoly position 110 00:07:15,720 --> 00:07:21,800 Speaker 1: in the personal social network market by first of all, 111 00:07:21,840 --> 00:07:27,680 Speaker 1: acquiring aggressive startup competitors that might challenge it in one 112 00:07:27,680 --> 00:07:32,680 Speaker 1: way or another, and second by conduct which says will 113 00:07:32,720 --> 00:07:36,360 Speaker 1: allow you developers to work with us on our platform 114 00:07:37,000 --> 00:07:40,120 Speaker 1: and interoperate with us, as long as you don't challenge 115 00:07:40,120 --> 00:07:43,360 Speaker 1: our what they call core functionality. You know, get too 116 00:07:43,360 --> 00:07:47,240 Speaker 1: close to being a real competitor rather than an addition 117 00:07:47,600 --> 00:07:50,640 Speaker 1: to what we offer. So those are the two basic 118 00:07:50,840 --> 00:07:54,920 Speaker 1: aspects on the first. With regard to acquisitions, as I 119 00:07:54,960 --> 00:07:57,920 Speaker 1: think is well known, the focus has been on two 120 00:07:57,960 --> 00:08:01,040 Speaker 1: major acquisitions for which face Book paid a lot of 121 00:08:01,080 --> 00:08:06,600 Speaker 1: money Instagram and what's that The state complaints adds a 122 00:08:06,720 --> 00:08:11,120 Speaker 1: bunch of other acquisitions to the list. Facebook has acquired 123 00:08:11,160 --> 00:08:14,000 Speaker 1: a lot of companies over time, I guess, but the 124 00:08:14,040 --> 00:08:18,960 Speaker 1: basic focus has been on those two, and for somewhat 125 00:08:19,040 --> 00:08:23,800 Speaker 1: different reasons. Zookerberg particularly, but others of Facebook were concerned 126 00:08:24,360 --> 00:08:29,040 Speaker 1: that they posed a direct competitive challenge to the dominance 127 00:08:29,120 --> 00:08:33,160 Speaker 1: that Facebook had already achieved, and it was easier to 128 00:08:33,320 --> 00:08:36,320 Speaker 1: buy them than compete with them. Those are the basic 129 00:08:36,480 --> 00:08:39,880 Speaker 1: aspects of both complaints. Does the government have to prove 130 00:08:40,040 --> 00:08:44,840 Speaker 1: that Facebook bought the companies bought What's Happen Instagram to 131 00:08:44,960 --> 00:08:50,040 Speaker 1: kill competition? That is their theory. Yes, so the theory 132 00:08:50,320 --> 00:08:54,400 Speaker 1: realize a lot on internal documents at this point, at 133 00:08:54,480 --> 00:08:58,000 Speaker 1: least the complaints that presented um a lot of emails, 134 00:08:58,240 --> 00:09:02,480 Speaker 1: presumably will also be uh interviews, depositions, and at some 135 00:09:02,600 --> 00:09:05,680 Speaker 1: point perhaps at the trial um as to what the 136 00:09:05,720 --> 00:09:10,520 Speaker 1: purpose was of these acquisitions. And also presumably they'll have 137 00:09:10,559 --> 00:09:15,079 Speaker 1: some outside experts which verifies that this wasn't paranoia. By 138 00:09:15,080 --> 00:09:20,320 Speaker 1: the legitimate concern that these upstarts might challenge what they're doing, 139 00:09:20,800 --> 00:09:23,520 Speaker 1: they are making out a case that these weren't just 140 00:09:24,040 --> 00:09:28,440 Speaker 1: um sort of neutral acquisitions to advance their business, but 141 00:09:28,559 --> 00:09:33,440 Speaker 1: we're really done to suppress a competitor that could be PETI. 142 00:09:34,160 --> 00:09:38,880 Speaker 1: The state's complaint also quotes from former Instagram CEO Kevin 143 00:09:39,000 --> 00:09:42,880 Speaker 1: Sistram asking an Instagram investor if Zuckerberg was likely to 144 00:09:42,880 --> 00:09:46,840 Speaker 1: go into destroy mode if he was turned down. Sistrom said, 145 00:09:46,920 --> 00:09:50,520 Speaker 1: quote bottom line, I don't think we'll ever escape the 146 00:09:50,520 --> 00:09:53,880 Speaker 1: wrath of Mark in the government trying to paint a 147 00:09:53,920 --> 00:09:57,520 Speaker 1: picture of Zuckerberg here and why. I think there's a 148 00:09:57,520 --> 00:10:02,880 Speaker 1: degree of personalization, you know, Zuckerberg's personality as as there 149 00:10:03,000 --> 00:10:06,880 Speaker 1: was in the Microsoft litigation in the ninety nineties when 150 00:10:06,920 --> 00:10:09,800 Speaker 1: it was Bill Gates who was in control and you know, 151 00:10:09,840 --> 00:10:13,600 Speaker 1: and what he was trying to do. So this idea 152 00:10:13,760 --> 00:10:18,839 Speaker 1: that Zuckerberg had developed a reputation, as you know, the 153 00:10:19,040 --> 00:10:23,200 Speaker 1: estate's complaints says buy or bury strategy. Either you know, 154 00:10:23,280 --> 00:10:25,120 Speaker 1: you sell out to us, or we're going to make 155 00:10:25,160 --> 00:10:30,520 Speaker 1: your competitive life miserable. And yet there's some there's some 156 00:10:30,600 --> 00:10:33,760 Speaker 1: focus on him, which is legitimate since is the head 157 00:10:33,800 --> 00:10:36,760 Speaker 1: of the company. There are other emails from other people, 158 00:10:36,840 --> 00:10:41,640 Speaker 1: of course, and um presumably there will be others, but yeah, 159 00:10:41,640 --> 00:10:44,960 Speaker 1: it's to try to show, you know, this wasn't done 160 00:10:45,000 --> 00:10:49,199 Speaker 1: to advance competition, but to suppress it correctly if I'm wrong. 161 00:10:49,240 --> 00:10:52,520 Speaker 1: But there were also emails of Bill Gates in the 162 00:10:52,600 --> 00:10:55,880 Speaker 1: Microsoft trial, weren't there? Don't they learn that they can't 163 00:10:55,880 --> 00:10:59,880 Speaker 1: put anything in emails? You know, the most wonderful thing 164 00:11:00,360 --> 00:11:06,080 Speaker 1: about anti trust litigation is how familiar it is. Writing 165 00:11:06,240 --> 00:11:10,520 Speaker 1: things that damage your case preceded the development of email. 166 00:11:10,720 --> 00:11:12,440 Speaker 1: And you know it used to be just harder to 167 00:11:12,520 --> 00:11:16,280 Speaker 1: find these documents because you had to physically search through files. 168 00:11:16,320 --> 00:11:19,360 Speaker 1: But I mean it's seriously, literally, from the beginning of 169 00:11:19,400 --> 00:11:23,559 Speaker 1: the anti trust laws, statements that business executives have made 170 00:11:23,600 --> 00:11:26,560 Speaker 1: in one way or another have been used to hang 171 00:11:26,640 --> 00:11:29,240 Speaker 1: them and to show intent. And so the courts often 172 00:11:29,360 --> 00:11:32,880 Speaker 1: say that intent isn't relevant. We look at objective facts. 173 00:11:33,080 --> 00:11:37,400 Speaker 1: But intent does help you understand what the facts mean 174 00:11:37,679 --> 00:11:41,079 Speaker 1: and has always played a role. And John D. Rockefeller 175 00:11:41,120 --> 00:11:43,760 Speaker 1: and putting together Standard Oil used the same sort of 176 00:11:43,800 --> 00:11:45,760 Speaker 1: fact that he would say, Look, if you don't sell 177 00:11:45,800 --> 00:11:48,080 Speaker 1: out to me, I'm just going to cut prices on 178 00:11:48,160 --> 00:11:50,720 Speaker 1: you completely and push you out of business. So you 179 00:11:50,760 --> 00:11:54,120 Speaker 1: really don't have a choice, and Zuckerberg didn't. Basically the 180 00:11:54,200 --> 00:11:57,360 Speaker 1: same thing, and of reviss easy you sell us to us, 181 00:11:57,440 --> 00:11:59,719 Speaker 1: or We're just going to copy all your features and 182 00:12:00,040 --> 00:12:02,840 Speaker 1: you won't be able to survive. So yeah, they keep 183 00:12:02,880 --> 00:12:07,000 Speaker 1: writing these things, thank god, and anti trustfers keep finding them. 184 00:12:07,640 --> 00:12:12,320 Speaker 1: Facebook says one of the arguments is that these apps 185 00:12:12,400 --> 00:12:17,200 Speaker 1: needed Facebook's investment to reach their current levels of success. 186 00:12:18,080 --> 00:12:21,240 Speaker 1: Is that a good argument for Facebook? I mean it 187 00:12:21,360 --> 00:12:24,679 Speaker 1: is an argument they will make. They haven't the opportunity. 188 00:12:24,679 --> 00:12:28,360 Speaker 1: I mean, obviously the one sided document, we're reading these 189 00:12:28,400 --> 00:12:32,440 Speaker 1: two complaints and so um they have a response, which is, 190 00:12:32,880 --> 00:12:36,240 Speaker 1: you know, after we acquired them, we've invested a lot 191 00:12:36,240 --> 00:12:39,199 Speaker 1: of money in making them better, money that these companies 192 00:12:39,760 --> 00:12:43,559 Speaker 1: might not have been able to get, and a degree 193 00:12:43,559 --> 00:12:46,960 Speaker 1: of interoperabilities these companies couldn't have achieved on their own. 194 00:12:47,080 --> 00:12:51,640 Speaker 1: So the bottom line for consumers is that consumers are 195 00:12:51,679 --> 00:12:55,160 Speaker 1: better off, not worth off. Um, and these companies have 196 00:12:55,240 --> 00:12:58,880 Speaker 1: been developed in in ways that are quite helpful. Now, 197 00:12:59,559 --> 00:13:02,520 Speaker 1: whether that's true or not, it will be tested in 198 00:13:02,679 --> 00:13:05,320 Speaker 1: court as well. You know, then they can they make 199 00:13:05,360 --> 00:13:07,600 Speaker 1: that argument. I do, they can make an argument that 200 00:13:07,640 --> 00:13:12,600 Speaker 1: they've invested in these companies. Um. The Instagram case may 201 00:13:12,640 --> 00:13:16,520 Speaker 1: be easier to make than what'sapp UM. I think there 202 00:13:16,559 --> 00:13:20,880 Speaker 1: was a lot of UM disagreement with the old UM 203 00:13:21,160 --> 00:13:26,280 Speaker 1: management of what's up to what that application should be UM. 204 00:13:26,360 --> 00:13:30,160 Speaker 1: But this is fodder for the trial and it is 205 00:13:30,200 --> 00:13:35,400 Speaker 1: a plausible legal argument. Like the Google case, consumers don't 206 00:13:35,440 --> 00:13:40,120 Speaker 1: pay anything to use Facebook. What kind of challenge does 207 00:13:40,160 --> 00:13:45,040 Speaker 1: that pose to the government in proving its case right, Well, 208 00:13:45,240 --> 00:13:49,320 Speaker 1: two answers. One answer is that the government complaints make 209 00:13:49,400 --> 00:13:52,960 Speaker 1: an effort to show what the consumer harm was. I mean, 210 00:13:53,360 --> 00:13:57,000 Speaker 1: obviously they cannot say the consumers are paying more than 211 00:13:57,040 --> 00:14:01,320 Speaker 1: they should. Although there's there's a staphisticate an argument that 212 00:14:02,280 --> 00:14:08,520 Speaker 1: Facebook should pay consumers because you know that you sometimes 213 00:14:08,520 --> 00:14:13,160 Speaker 1: companies actually by customers because they make money that way 214 00:14:13,160 --> 00:14:15,680 Speaker 1: by having more of them, and so that would not 215 00:14:16,040 --> 00:14:19,680 Speaker 1: you know, the price of zero maybe more than than 216 00:14:19,760 --> 00:14:24,240 Speaker 1: it should be, if you understand what I'm saying, UM. 217 00:14:24,320 --> 00:14:27,200 Speaker 1: But that is not the argument the government's banking and 218 00:14:27,240 --> 00:14:30,200 Speaker 1: wisely so, what the government is trying to do is 219 00:14:30,280 --> 00:14:35,280 Speaker 1: to say something that many people have said, and that UM, 220 00:14:35,320 --> 00:14:38,000 Speaker 1: you know, value to consumers is not just the price, 221 00:14:38,560 --> 00:14:42,960 Speaker 1: but quality and innovations, which is sort of similar, but 222 00:14:43,160 --> 00:14:46,760 Speaker 1: they're non price qualities that that are important. You know, 223 00:14:46,800 --> 00:14:51,680 Speaker 1: there was the famous Hershey bar example where Hershey didn't 224 00:14:51,960 --> 00:14:55,320 Speaker 1: change the price of the Hershey bar, they just cut 225 00:14:55,360 --> 00:14:59,520 Speaker 1: down the size of the bar. Uh. So Um, that's 226 00:14:59,560 --> 00:15:03,080 Speaker 1: basically arguments are making. The price is zero, but the 227 00:15:03,120 --> 00:15:08,040 Speaker 1: product keeps being degraded and you get, um, consumers get 228 00:15:08,120 --> 00:15:12,040 Speaker 1: less value for it, so um, you don't get as 229 00:15:12,120 --> 00:15:16,720 Speaker 1: many choices your your choices on privacy have been changed 230 00:15:16,800 --> 00:15:22,640 Speaker 1: over time to be less favorable to consumers. The States argue, interestingly, 231 00:15:22,680 --> 00:15:27,080 Speaker 1: I think that the ad load has changed so that 232 00:15:27,200 --> 00:15:30,560 Speaker 1: you get more ads now, um than you used to. 233 00:15:31,440 --> 00:15:35,560 Speaker 1: And they have apparently an email saying that this is 234 00:15:35,600 --> 00:15:41,160 Speaker 1: a tax on consumers who wants more ads. But um, 235 00:15:41,200 --> 00:15:44,600 Speaker 1: apparently they have data that show that the amounts of 236 00:15:44,640 --> 00:15:48,320 Speaker 1: ads that you have to scroll through has increased. And 237 00:15:48,360 --> 00:15:52,640 Speaker 1: that's another way of saying the prices increased. Um. And 238 00:15:53,080 --> 00:15:55,520 Speaker 1: you know, so I think a judge is gonna have 239 00:15:55,640 --> 00:15:59,160 Speaker 1: to be convinced that not to look just as price, 240 00:15:59,600 --> 00:16:05,960 Speaker 1: but other aspects non price, all the aspects of the product. 241 00:16:06,000 --> 00:16:09,400 Speaker 1: So that's that's one answer. The second answer is the 242 00:16:09,440 --> 00:16:13,240 Speaker 1: idea that you have to prove an effect on price 243 00:16:13,480 --> 00:16:19,040 Speaker 1: is actually not legally required, and um, the last major 244 00:16:19,480 --> 00:16:23,360 Speaker 1: case like this, which is Microsoft UM. There was never 245 00:16:23,400 --> 00:16:28,680 Speaker 1: any proof of effect on price. Never. It was all 246 00:16:28,760 --> 00:16:35,200 Speaker 1: about UM squashing a nascent competitor, you know, helping to 247 00:16:35,200 --> 00:16:39,760 Speaker 1: push them out of business through various UM tactics that 248 00:16:40,000 --> 00:16:44,280 Speaker 1: Microsoft pursued and UM in some ways very similar to 249 00:16:44,360 --> 00:16:48,440 Speaker 1: what the government's arguing here, but never an argument that 250 00:16:49,640 --> 00:16:52,920 Speaker 1: price was suspective. We look back now, we say the 251 00:16:53,000 --> 00:16:58,600 Speaker 1: government actually approved both the acquisition of Instagram in and 252 00:16:58,680 --> 00:17:03,320 Speaker 1: What'sapp in twenty fourteen. And Facebook is using that as 253 00:17:03,320 --> 00:17:08,080 Speaker 1: a response to the government saying, yes, this is what 254 00:17:08,160 --> 00:17:10,959 Speaker 1: they call an inconvenient Well I call it an inconvenient 255 00:17:11,080 --> 00:17:16,840 Speaker 1: half true. So legally that's actually untrue. The government did 256 00:17:16,920 --> 00:17:20,320 Speaker 1: not approve these acquisitions. What the government does when it 257 00:17:20,400 --> 00:17:24,000 Speaker 1: reviews acquisitions, what the US government does others are difference. 258 00:17:24,040 --> 00:17:27,439 Speaker 1: Actually the US government does is it decides whether to 259 00:17:27,640 --> 00:17:31,800 Speaker 1: sue or not. It doesn't approve a merger. It's very 260 00:17:31,840 --> 00:17:35,880 Speaker 1: clear that it doesn't. And the government, as Godlines says 261 00:17:35,920 --> 00:17:38,159 Speaker 1: that all they do is they decide whether it is 262 00:17:38,200 --> 00:17:41,359 Speaker 1: to so they decided not to sue. They didn't approve 263 00:17:41,400 --> 00:17:44,400 Speaker 1: the mergers. And there have been cases whereas the government 264 00:17:44,440 --> 00:17:48,840 Speaker 1: goes back after the mergers completed and bring suit because 265 00:17:49,040 --> 00:17:52,359 Speaker 1: the problem with a merger is that you're trying to 266 00:17:52,440 --> 00:17:55,760 Speaker 1: predict what competition is going to look like in the future, or, 267 00:17:55,800 --> 00:17:58,199 Speaker 1: as one recent judge says, you know, I've got to 268 00:17:58,200 --> 00:18:02,000 Speaker 1: have a crystal ball, and that's tough. You know, it's 269 00:18:02,000 --> 00:18:05,879 Speaker 1: hard to predict the future. So that's sometimes a high burden. Now, 270 00:18:06,080 --> 00:18:08,600 Speaker 1: there are cases where the government is allowed to do 271 00:18:08,800 --> 00:18:12,240 Speaker 1: legally to do afterwards and say, you know what, look 272 00:18:12,240 --> 00:18:14,760 Speaker 1: at what's happened. We don't have to guess at what 273 00:18:14,880 --> 00:18:18,280 Speaker 1: the effect was on competition. Now we know, oh my god, 274 00:18:18,320 --> 00:18:20,840 Speaker 1: we better we can do something about it. So the 275 00:18:20,840 --> 00:18:24,760 Speaker 1: government is legally allowed to do that. So that's why 276 00:18:24,760 --> 00:18:27,480 Speaker 1: I say it's an inconvenient half truth. The government did, 277 00:18:27,640 --> 00:18:31,480 Speaker 1: they have to see itself, did review both of these mergers, 278 00:18:31,480 --> 00:18:35,879 Speaker 1: decide not to challenge them, as the Europeans did as well, 279 00:18:36,040 --> 00:18:41,400 Speaker 1: except the Europeans actually approved under European competition. So as 280 00:18:41,480 --> 00:18:45,359 Speaker 1: a tactical matter of course, Facebook is going to say, 281 00:18:45,520 --> 00:18:49,240 Speaker 1: and as summary of plausibility looks, um, we make a 282 00:18:49,240 --> 00:18:51,040 Speaker 1: lot of actisy, You're going to go back and just 283 00:18:51,200 --> 00:18:53,680 Speaker 1: examine a few of them to say ah, we're gonna 284 00:18:53,720 --> 00:18:56,800 Speaker 1: start to overturn this, overturn that. That's not the way 285 00:18:56,800 --> 00:18:59,720 Speaker 1: the law is supposed to work. It's a problem with 286 00:18:59,800 --> 00:19:04,159 Speaker 1: the narrative. But there are responses to that that the 287 00:19:04,200 --> 00:19:07,040 Speaker 1: government plants are going to have. In particular, you know 288 00:19:07,160 --> 00:19:10,840 Speaker 1: all those emails, they didn't have them, and they made 289 00:19:10,840 --> 00:19:14,920 Speaker 1: the decisions on Instagram and on What's App. Facebook made 290 00:19:14,960 --> 00:19:18,000 Speaker 1: some promises about what it wouldn't do and then proceeded 291 00:19:18,040 --> 00:19:21,760 Speaker 1: to break the promises. So I'm not so fast. Facebook. 292 00:19:21,880 --> 00:19:25,000 Speaker 1: You weren't straight with us when we reviewed the mergers 293 00:19:25,119 --> 00:19:28,760 Speaker 1: and now we know their effects. This is always the headline. 294 00:19:28,800 --> 00:19:33,360 Speaker 1: The government is asking for a breakup of Facebook by 295 00:19:33,400 --> 00:19:37,040 Speaker 1: spinning off Instagram and What's App. How big a hurdle 296 00:19:37,119 --> 00:19:41,439 Speaker 1: is that for the government reorganizing or breaking them up? 297 00:19:42,000 --> 00:19:44,560 Speaker 1: It depends on whether you like the polite or their 298 00:19:44,600 --> 00:19:50,800 Speaker 1: colloquial is always are hurdle for the government. Now past 299 00:19:50,960 --> 00:19:54,680 Speaker 1: history in monopoly cases, which is what this position does, 300 00:19:54,960 --> 00:19:58,639 Speaker 1: mostly is that when there are break up, if you 301 00:19:58,760 --> 00:20:04,120 Speaker 1: can break up accompanied by the divisions that it has acquired, 302 00:20:04,359 --> 00:20:07,119 Speaker 1: so that in effect you're just sort of unbreaking them 303 00:20:07,119 --> 00:20:11,960 Speaker 1: but not completely reorganizing them. That considered more likely easier 304 00:20:12,000 --> 00:20:14,199 Speaker 1: to do, sort of thinks of the lego set. I 305 00:20:14,240 --> 00:20:17,320 Speaker 1: can't you know you can take the blocks apart and 306 00:20:17,480 --> 00:20:21,399 Speaker 1: you know there were blocks together. That's more plausible. Now 307 00:20:21,560 --> 00:20:24,800 Speaker 1: Facebook has made efforts of the recent path, maybe the 308 00:20:24,880 --> 00:20:28,679 Speaker 1: last year or so, to integrate both companies more fully. 309 00:20:28,720 --> 00:20:33,120 Speaker 1: Whatever exactly that means. I'm not sure into Facebook as 310 00:20:33,119 --> 00:20:38,160 Speaker 1: a unitary company. I think anticipating laws and so they're 311 00:20:38,160 --> 00:20:41,320 Speaker 1: going to say that technically you can say, we can 312 00:20:41,359 --> 00:20:45,639 Speaker 1: invest these companies, but this is tremendously disruptive and costly 313 00:20:45,960 --> 00:20:49,280 Speaker 1: and will end up harming consumers by giving us, you know, 314 00:20:49,400 --> 00:20:54,160 Speaker 1: a less valuable Facebook or less valuable Instagram analyss valuable. 315 00:20:54,200 --> 00:20:57,840 Speaker 1: What's that? So, judge, even if you find we violated 316 00:20:58,160 --> 00:21:01,399 Speaker 1: the law, this is not an appropriate remedy. It's a 317 00:21:01,400 --> 00:21:04,240 Speaker 1: harmful remedy. And what you should do is just enter 318 00:21:04,280 --> 00:21:07,600 Speaker 1: in order stopping us from whatever bad conduct you found, 319 00:21:07,920 --> 00:21:10,560 Speaker 1: and that should cure the problems. So I think that's 320 00:21:10,680 --> 00:21:13,359 Speaker 1: roughly how the arguments might go. But the government is 321 00:21:13,400 --> 00:21:17,920 Speaker 1: not committed to reorganizing Facebook this way. They might learn 322 00:21:18,000 --> 00:21:21,080 Speaker 1: that there's a better way to break Facebook up into 323 00:21:21,640 --> 00:21:25,560 Speaker 1: smaller companies that should compete with each other. But that's 324 00:21:25,640 --> 00:21:28,439 Speaker 1: the future. Yet, as we talked about, the government is 325 00:21:28,520 --> 00:21:32,480 Speaker 1: also filed an anti trust suit against Google, which case 326 00:21:32,600 --> 00:21:37,640 Speaker 1: has a better chance in court? Google or Facebook, they 327 00:21:37,880 --> 00:21:41,560 Speaker 1: both faced similar issues the free goods the consumers side, 328 00:21:41,960 --> 00:21:47,280 Speaker 1: so that's similar. They are different business practices. I think Google, 329 00:21:47,320 --> 00:21:51,320 Speaker 1: as we discussed, is sort of more straight forward legally 330 00:21:51,440 --> 00:21:55,639 Speaker 1: because these were contractual agreements for the Android operating system, 331 00:21:56,119 --> 00:21:59,080 Speaker 1: and in that sense sort of is even closer to 332 00:21:59,240 --> 00:22:04,000 Speaker 1: the Microsoft facts and litigations. Facebook is similar to Microsoft too, 333 00:22:04,040 --> 00:22:07,600 Speaker 1: because it's also an effort to suppress the nation competitor, 334 00:22:07,960 --> 00:22:11,119 Speaker 1: but instead of one tactic, you know the question that 335 00:22:11,160 --> 00:22:13,720 Speaker 1: people raised as well as to post Facebook has decided 336 00:22:13,760 --> 00:22:17,159 Speaker 1: to acquire the upstart brows or Netscape instead of just 337 00:22:17,160 --> 00:22:19,120 Speaker 1: trying to push them out of business, then we look 338 00:22:19,200 --> 00:22:23,359 Speaker 1: just like Facebook. So they both have similarities to the 339 00:22:23,480 --> 00:22:27,080 Speaker 1: Microsoft case, and each of them are a little different. 340 00:22:27,359 --> 00:22:29,600 Speaker 1: So I'm not quite sure how to answer that. I 341 00:22:29,640 --> 00:22:32,840 Speaker 1: think they're both plausible cases, and we'll just have to 342 00:22:32,840 --> 00:22:35,240 Speaker 1: see what the strength of the facts are when these 343 00:22:35,440 --> 00:22:38,320 Speaker 1: cases or if these cases go to trial. Thanks for 344 00:22:38,359 --> 00:22:41,159 Speaker 1: being on the Bloomberg Laws Show, Harry. That's Professor Harry 345 00:22:41,240 --> 00:22:45,119 Speaker 1: First of n y U Law School. TikTok is one 346 00:22:45,119 --> 00:22:47,440 Speaker 1: of the most popular apps in the world, with more 347 00:22:47,440 --> 00:22:51,439 Speaker 1: than one hundred million US users. A panel of judges 348 00:22:51,520 --> 00:22:54,600 Speaker 1: on the DC Court of Appeals has signal skepticism of 349 00:22:54,640 --> 00:22:58,760 Speaker 1: the Trump administration's continuing efforts to ban new downloads of 350 00:22:58,800 --> 00:23:02,520 Speaker 1: the Chinese owned video sharing app, making it unlikely that 351 00:23:02,640 --> 00:23:06,159 Speaker 1: any TikTok ban will go into effect. Joining me is 352 00:23:06,160 --> 00:23:10,480 Speaker 1: a nat Alambeck, Assistant professor at Case Western Reserve University 353 00:23:10,600 --> 00:23:15,320 Speaker 1: School of Law. Any insight into why TikTok has not 354 00:23:15,440 --> 00:23:18,720 Speaker 1: been able to close a deal with an American buyer, Well, 355 00:23:19,119 --> 00:23:21,920 Speaker 1: I mean, I'm just speculating, but I would think that 356 00:23:21,960 --> 00:23:24,840 Speaker 1: these are a few things that are going on. One 357 00:23:25,200 --> 00:23:29,199 Speaker 1: could be that they're waiting for a different administration. I 358 00:23:29,280 --> 00:23:33,359 Speaker 1: doubt that, but maybe they're stalling. Another one could be 359 00:23:33,480 --> 00:23:36,240 Speaker 1: that the deal has to go through and there's a 360 00:23:36,280 --> 00:23:39,280 Speaker 1: lot that's involved. Is there going to be divestment of 361 00:23:39,320 --> 00:23:41,480 Speaker 1: the ownership, how is that going to be? How is 362 00:23:42,040 --> 00:23:45,880 Speaker 1: um information of investors going to protect it? Who's gonna 363 00:23:45,920 --> 00:23:50,040 Speaker 1: know what? How do they make sure that, you know, 364 00:23:50,119 --> 00:23:53,520 Speaker 1: if they stay involved, they don't have access to that information? 365 00:23:53,560 --> 00:23:56,880 Speaker 1: That the government wants to protect. I'm just assuming that 366 00:23:56,880 --> 00:23:59,720 Speaker 1: that's why it's taking a lot of time. It needs 367 00:23:59,760 --> 00:24:03,800 Speaker 1: to be approved. They need to figure all that information out. 368 00:24:04,640 --> 00:24:07,680 Speaker 1: The deadline set by the Trump administration for requiring byte 369 00:24:07,760 --> 00:24:11,560 Speaker 1: Dance to sell TikTok has passed. What does it signal 370 00:24:11,960 --> 00:24:14,600 Speaker 1: that the government hasn't gone to court to force a 371 00:24:14,640 --> 00:24:19,680 Speaker 1: divestiture to meet means that the government for now, Again 372 00:24:19,800 --> 00:24:23,119 Speaker 1: we could be surprised, right, but for now, it means 373 00:24:23,160 --> 00:24:26,719 Speaker 1: that the government is not pressing on this. But again, 374 00:24:26,840 --> 00:24:29,720 Speaker 1: like I said, it could mean that there's a deal 375 00:24:29,760 --> 00:24:32,440 Speaker 1: in the work that we don't know about. It could 376 00:24:32,520 --> 00:24:35,560 Speaker 1: mean that the governments decided not to continue to take 377 00:24:35,600 --> 00:24:38,439 Speaker 1: actions on this and they're waiting for the next administration. 378 00:24:39,440 --> 00:24:42,480 Speaker 1: It could mean that there's other actions that the government's 379 00:24:42,480 --> 00:24:44,480 Speaker 1: going to take. For example, I don't know if you saw, 380 00:24:44,560 --> 00:24:47,720 Speaker 1: but recently the sec as I asked TikTok and other 381 00:24:47,760 --> 00:24:52,639 Speaker 1: companies to ask for information on how are they protecting 382 00:24:52,680 --> 00:24:56,120 Speaker 1: the users privacy? What are they doing with information they're 383 00:24:56,119 --> 00:25:00,640 Speaker 1: aggregating on users. There could be several things, but one 384 00:25:00,680 --> 00:25:03,840 Speaker 1: thing is clear and that the government you know, has 385 00:25:03,920 --> 00:25:07,480 Speaker 1: this deadline. They extended the deadline. The deadline has passed, 386 00:25:08,040 --> 00:25:13,160 Speaker 1: but they haven't done anything since. Explain why two federal judges, 387 00:25:13,840 --> 00:25:17,760 Speaker 1: one in Washington, d C. And one in Pennsylvania, blocked 388 00:25:17,920 --> 00:25:24,640 Speaker 1: the Commerce Department from prohibiting new downloads of TikTok, right, 389 00:25:24,720 --> 00:25:27,200 Speaker 1: And and that's very good that you said that, because 390 00:25:27,240 --> 00:25:30,360 Speaker 1: we really need to separate the things. We need to separate. 391 00:25:30,400 --> 00:25:33,560 Speaker 1: On the one hand, these two orders, right, the one 392 00:25:33,760 --> 00:25:37,879 Speaker 1: order was to divest and the other order was the band, 393 00:25:38,119 --> 00:25:42,439 Speaker 1: and that is on on app stores and to allow 394 00:25:42,560 --> 00:25:46,959 Speaker 1: new users to download the app. And the issue is 395 00:25:47,040 --> 00:25:51,320 Speaker 1: really with regards to the second, and that is censorship, right, 396 00:25:51,440 --> 00:25:56,520 Speaker 1: censorship of speech, censorship of social media applications. And there's 397 00:25:56,560 --> 00:26:01,520 Speaker 1: a concern here of privacy of national security. Explain for 398 00:26:01,600 --> 00:26:05,840 Speaker 1: us what the issue was during the oral arguments of 399 00:26:05,920 --> 00:26:08,600 Speaker 1: the d C circuits. There are a few issues. One 400 00:26:08,600 --> 00:26:13,320 Speaker 1: of the issues is with regard to UM the I 401 00:26:13,480 --> 00:26:18,600 Speaker 1: E e P A band. And then whether there's an 402 00:26:18,640 --> 00:26:24,679 Speaker 1: exception for information and communication, whether the President has or 403 00:26:24,720 --> 00:26:28,520 Speaker 1: does not have authority to regulate or prohibit directly or indirectly, 404 00:26:29,040 --> 00:26:32,879 Speaker 1: any personal communication doesn't involve a transfer of anything of 405 00:26:33,040 --> 00:26:37,560 Speaker 1: value or any information or information materials, And really they 406 00:26:37,640 --> 00:26:40,520 Speaker 1: put a lot of focus on this world indirectly, and 407 00:26:40,600 --> 00:26:45,160 Speaker 1: it's very important because there could be many different kind 408 00:26:45,200 --> 00:26:48,160 Speaker 1: of bands. And that's why it's interesting to see how 409 00:26:48,200 --> 00:26:50,919 Speaker 1: the court's going to interpret this. They're gonna look at 410 00:26:50,960 --> 00:26:53,880 Speaker 1: tick took messages on the app or on the company 411 00:26:54,359 --> 00:26:57,200 Speaker 1: and whether there was authority or not to do that. 412 00:26:57,560 --> 00:27:00,560 Speaker 1: And then also you know, even when the everman talks 413 00:27:00,600 --> 00:27:03,919 Speaker 1: about national security, then you might ask the question national 414 00:27:04,000 --> 00:27:07,240 Speaker 1: security from what and from home? And is there a 415 00:27:07,280 --> 00:27:10,960 Speaker 1: privacy violation? Is this the correct way of addressing that 416 00:27:11,080 --> 00:27:14,920 Speaker 1: kind of harm and also showing the harm. So there's 417 00:27:15,080 --> 00:27:20,080 Speaker 1: so many different issues, um that the court is going 418 00:27:20,119 --> 00:27:24,080 Speaker 1: to deal with here. One of the judges, Judith Rogers, said, 419 00:27:24,400 --> 00:27:28,439 Speaker 1: Congress wrote this language, and the government's justification for the 420 00:27:28,440 --> 00:27:31,160 Speaker 1: band seems to fly in the face of that. What 421 00:27:31,280 --> 00:27:35,480 Speaker 1: language is she talking about? That's a great question. So 422 00:27:35,680 --> 00:27:39,760 Speaker 1: now we're talking about the free speech implications of the sanctions, right, 423 00:27:40,600 --> 00:27:43,480 Speaker 1: and and the question is whether these sanctions are really 424 00:27:43,720 --> 00:27:47,360 Speaker 1: what congresss intendant and and and again they're looking at 425 00:27:47,359 --> 00:27:50,800 Speaker 1: the interpretation of the i e e. P A and 426 00:27:50,840 --> 00:27:54,800 Speaker 1: whether it gives the presidents broad authority to freeze assets 427 00:27:54,960 --> 00:27:59,639 Speaker 1: or bar financial transactions or and what the president can do. 428 00:27:59,760 --> 00:28:02,520 Speaker 1: And and I would just say that that was changed 429 00:28:02,560 --> 00:28:08,000 Speaker 1: a few times, and that Congress specifically excluded from the 430 00:28:08,040 --> 00:28:10,840 Speaker 1: president the powers of the ability to regulate directly or 431 00:28:10,880 --> 00:28:15,520 Speaker 1: indirectly a range of informational materials, whether they're commercial or not. 432 00:28:15,800 --> 00:28:20,920 Speaker 1: And the amendment is'sliclbly mentioned materials such as publications, films, photographs. 433 00:28:21,040 --> 00:28:23,960 Speaker 1: So there's a lot of discussion on that on whether 434 00:28:24,359 --> 00:28:27,200 Speaker 1: it was even allowed, because what they wanted to do 435 00:28:27,480 --> 00:28:30,960 Speaker 1: is to protect free speech, okay, And so the question 436 00:28:31,080 --> 00:28:34,760 Speaker 1: is whether that's violated here or not based on that 437 00:28:34,880 --> 00:28:39,040 Speaker 1: interpretation to affect did it seem to you as if 438 00:28:39,080 --> 00:28:43,920 Speaker 1: the judges were skeptical of the government's conduct. What I 439 00:28:43,960 --> 00:28:48,360 Speaker 1: think is is really happening here is that the judges know, 440 00:28:49,040 --> 00:28:53,120 Speaker 1: you know, of of the intentions of and of the 441 00:28:53,200 --> 00:28:56,280 Speaker 1: laws and the protections of you know, free speech and 442 00:28:56,360 --> 00:28:59,840 Speaker 1: free and the First Amendment. And what they're really pushing 443 00:29:00,320 --> 00:29:03,560 Speaker 1: I think the government to do is to explain what 444 00:29:03,800 --> 00:29:06,920 Speaker 1: is it that you're doing, what is the harm? Explain 445 00:29:07,000 --> 00:29:10,000 Speaker 1: it to us what's going on. And I think it's 446 00:29:10,080 --> 00:29:13,280 Speaker 1: very important in light of everything that's happening. And I 447 00:29:13,320 --> 00:29:17,200 Speaker 1: think there's no doubt that there is, you know, and 448 00:29:17,280 --> 00:29:20,440 Speaker 1: you can see what's happening right, There's no doubt that 449 00:29:20,480 --> 00:29:23,880 Speaker 1: there are issues with TikTok, other countries of band TikTok. 450 00:29:23,960 --> 00:29:28,800 Speaker 1: There's issues with UM. There may be issues with with 451 00:29:28,840 --> 00:29:32,080 Speaker 1: regards to national security. It is just the issue is here, 452 00:29:32,200 --> 00:29:39,080 Speaker 1: whether that particular action, okay, of of banning the app 453 00:29:39,120 --> 00:29:41,240 Speaker 1: and the stores after you have so many millions of 454 00:29:41,240 --> 00:29:44,880 Speaker 1: Americans they are already using it, whether that's the correct measure, 455 00:29:44,880 --> 00:29:47,520 Speaker 1: and whether the president had authorities to take that measure. 456 00:29:47,520 --> 00:29:50,120 Speaker 1: I think that's really what's going on here. Under a 457 00:29:50,160 --> 00:29:53,880 Speaker 1: Biden administration. Do you think that the government will continue 458 00:29:53,920 --> 00:29:57,560 Speaker 1: to press for a sale of TikTok or bands on TikTok. 459 00:29:58,000 --> 00:30:00,320 Speaker 1: That's a great question, because that's a question, and I'm 460 00:30:00,440 --> 00:30:04,120 Speaker 1: you know, I'm asking myself too, because I think that 461 00:30:04,360 --> 00:30:07,600 Speaker 1: although you know, for example, so I write about menders 462 00:30:07,640 --> 00:30:14,640 Speaker 1: and acquisitions and CPIUS that UM the committee that's reviewing UH, 463 00:30:14,840 --> 00:30:19,800 Speaker 1: you know, deals with foreigners invests in um U S 464 00:30:19,800 --> 00:30:23,840 Speaker 1: technologies or now emerging technologies, and how the Trump administration 465 00:30:24,000 --> 00:30:28,040 Speaker 1: is actually gave Cephius more authority to look into those 466 00:30:28,200 --> 00:30:33,400 Speaker 1: UM types of transactions. I think the definitely the Biden 467 00:30:33,400 --> 00:30:37,920 Speaker 1: administration is also going to scrutinize those types of transactions, 468 00:30:38,040 --> 00:30:42,240 Speaker 1: especially and when it comes to national security. Um. Whether 469 00:30:42,280 --> 00:30:45,040 Speaker 1: it's going to have the same flare as the Trump administration, 470 00:30:45,160 --> 00:30:49,960 Speaker 1: I don't know, maybe not, but I think that you know, Look, 471 00:30:50,000 --> 00:30:52,400 Speaker 1: it's what's happening around the world. Look, it's what happened 472 00:30:52,440 --> 00:30:55,600 Speaker 1: in the United States. You will see that they're going 473 00:30:55,680 --> 00:31:00,240 Speaker 1: to step up investigations on privacy. They're gonna step up 474 00:31:00,680 --> 00:31:04,920 Speaker 1: I think again, you know, and just thinking investigations on 475 00:31:05,040 --> 00:31:09,280 Speaker 1: whether investments have to do with national security or do 476 00:31:09,400 --> 00:31:13,480 Speaker 1: owned before the clear stern field. UM. So I still 477 00:31:13,560 --> 00:31:17,680 Speaker 1: think it's it's going to be um, you know, in 478 00:31:17,720 --> 00:31:23,080 Speaker 1: the background, um and especially with what's happening in that 479 00:31:23,800 --> 00:31:27,280 Speaker 1: you know area, not just here in the US, but 480 00:31:27,360 --> 00:31:30,960 Speaker 1: around the world. So I definitely think so how they're 481 00:31:30,960 --> 00:31:33,160 Speaker 1: going to do that, you know, it's it's up to 482 00:31:33,240 --> 00:31:36,120 Speaker 1: divide an administration, and I guess time will tell, but 483 00:31:36,800 --> 00:31:41,120 Speaker 1: it's definitely an issue that's going to continue, UM to 484 00:31:41,240 --> 00:31:44,440 Speaker 1: be relevant, I think, and I don't know, he might 485 00:31:45,000 --> 00:31:47,640 Speaker 1: act differently for the people that he's gonna point are 486 00:31:47,640 --> 00:31:49,880 Speaker 1: gonna act differently or going to put different emphasis. I 487 00:31:49,880 --> 00:31:54,640 Speaker 1: don't know, but I will definitely think that there's it's um, 488 00:31:54,720 --> 00:31:59,440 Speaker 1: there is momentum for for example, maybe for more privacy laws, 489 00:31:59,600 --> 00:32:05,880 Speaker 1: right uh, for more um protections of consumers. So UM, 490 00:32:05,920 --> 00:32:11,760 Speaker 1: I think it's still gonna be quite an issue because um, 491 00:32:11,800 --> 00:32:13,440 Speaker 1: you know, I don't know if you know this if 492 00:32:13,480 --> 00:32:15,560 Speaker 1: you read my piece. I just wrote a piece about 493 00:32:15,840 --> 00:32:19,200 Speaker 1: alternative venture capital and then usun accord investors, and what 494 00:32:19,320 --> 00:32:24,040 Speaker 1: I found is more and more international players are investing in, 495 00:32:24,320 --> 00:32:27,440 Speaker 1: you know, in our private firms for different reasons. Sometimes 496 00:32:27,440 --> 00:32:31,600 Speaker 1: for financial reasons. Sometimes they have strategic reasons, right Um. 497 00:32:31,800 --> 00:32:35,320 Speaker 1: They might want to get access to the technology that 498 00:32:35,360 --> 00:32:37,600 Speaker 1: the companies are working for, or they want to might 499 00:32:37,720 --> 00:32:41,080 Speaker 1: want to be able to establish you know, some sort 500 00:32:41,080 --> 00:32:44,560 Speaker 1: of partnerships that collaborations that maybe have a subsidiary in 501 00:32:44,600 --> 00:32:47,520 Speaker 1: their own countries. So there could be you know, different 502 00:32:47,560 --> 00:32:51,000 Speaker 1: reasons for why they invest or maybe for fires reasons 503 00:32:51,000 --> 00:32:54,200 Speaker 1: they want to make more money. But the point is 504 00:32:54,200 --> 00:32:56,560 Speaker 1: is that we're seeing more and more of these investments. 505 00:32:56,600 --> 00:33:00,360 Speaker 1: Those are it's one of the players that you know, uh, 506 00:33:00,480 --> 00:33:03,440 Speaker 1: definitely investing in our private markets, and they're investing in 507 00:33:03,480 --> 00:33:07,360 Speaker 1: private markets for several reasons. Also, because those are private firms, 508 00:33:07,560 --> 00:33:11,080 Speaker 1: there's less scrutiny versus if it was a public firm, right, 509 00:33:12,000 --> 00:33:15,080 Speaker 1: and those firms are usually you know, could be under 510 00:33:15,080 --> 00:33:18,840 Speaker 1: the radar. For example, unicorns are well known firm, they 511 00:33:18,880 --> 00:33:23,160 Speaker 1: have a reputation, but if it's if it's a tech startup, right, 512 00:33:23,280 --> 00:33:28,080 Speaker 1: it might be less visible. Um, and definitely doesn't have 513 00:33:28,160 --> 00:33:30,720 Speaker 1: to disclose information to the public the way a public 514 00:33:30,760 --> 00:33:34,080 Speaker 1: company would have to. So we're definitely seeing that trend. 515 00:33:34,880 --> 00:33:39,440 Speaker 1: And we're seeing cps even before the Trump administration, but 516 00:33:39,600 --> 00:33:44,240 Speaker 1: especially during the Trump administration looking into these deals and 517 00:33:44,240 --> 00:33:46,719 Speaker 1: and they even blocked several deals. Can you give us 518 00:33:46,720 --> 00:33:52,000 Speaker 1: some examples? Can give you, you know, several examples for example, um, 519 00:33:52,120 --> 00:33:55,960 Speaker 1: you have a grinder and you have patients like me, right, 520 00:33:56,440 --> 00:33:59,320 Speaker 1: and patients like me, for example, is a healthy startup 521 00:33:59,400 --> 00:34:03,640 Speaker 1: and if it was forcing into a fire sale? Uh? 522 00:34:03,640 --> 00:34:07,640 Speaker 1: And uh Grinder was uh you know, a dating app 523 00:34:07,960 --> 00:34:14,480 Speaker 1: and that also collected personal data on users. And also, um, 524 00:34:14,520 --> 00:34:17,000 Speaker 1: you know the government tried to stop that. And there's 525 00:34:17,120 --> 00:34:21,120 Speaker 1: how we monogram and financial and many more examples. And 526 00:34:21,160 --> 00:34:23,719 Speaker 1: if you look around the world, it's not just here. 527 00:34:23,760 --> 00:34:26,840 Speaker 1: For example, with how we the UK recently also said 528 00:34:26,880 --> 00:34:30,880 Speaker 1: that they're gonna ask um, you know, with regards to 529 00:34:30,920 --> 00:34:34,600 Speaker 1: how we that um, They're not going to use that 530 00:34:34,719 --> 00:34:37,480 Speaker 1: in the UK as well. Your final thoughts about this, 531 00:34:38,480 --> 00:34:42,400 Speaker 1: What I think is really the issue here is privacy. Um. 532 00:34:42,440 --> 00:34:46,759 Speaker 1: That's why, for example, we're seeing all these antitrust lawsuits, right, 533 00:34:47,080 --> 00:34:51,440 Speaker 1: and that's why we're seeing the SBC probing into these companies. Now, 534 00:34:52,000 --> 00:34:56,279 Speaker 1: maybe we should think about having more privacy protection in 535 00:34:56,280 --> 00:34:58,440 Speaker 1: the United States, but I think there's true and I'm 536 00:34:58,480 --> 00:35:01,440 Speaker 1: hoping that the next administryation is maybe going to push 537 00:35:01,480 --> 00:35:04,640 Speaker 1: for those because I think it's important to protect consumers here. 538 00:35:04,960 --> 00:35:08,360 Speaker 1: I think we're seeing those initiatives take place around the world, 539 00:35:08,920 --> 00:35:11,560 Speaker 1: and it's important to do two things. One is, of 540 00:35:11,600 --> 00:35:15,920 Speaker 1: course to protect consumers, but also to encourage innovation and 541 00:35:16,080 --> 00:35:19,680 Speaker 1: entrepreneurship and investments in US companies. Right, So we have 542 00:35:19,800 --> 00:35:22,880 Speaker 1: to be very delicate when we're balancing all these things. 543 00:35:22,960 --> 00:35:26,280 Speaker 1: But definitely in terms of privacy. As a consumer myself 544 00:35:26,280 --> 00:35:29,400 Speaker 1: of technology, I would like to know companies are not 545 00:35:29,560 --> 00:35:32,480 Speaker 1: using my information, whether there are American companies or other 546 00:35:32,480 --> 00:35:36,719 Speaker 1: companies are selling my data using AI to agreeate information 547 00:35:36,800 --> 00:35:41,400 Speaker 1: on me, you know, marketing to me that way using profiles. 548 00:35:41,680 --> 00:35:46,360 Speaker 1: So I really think that, um, it would be nice 549 00:35:46,400 --> 00:35:50,200 Speaker 1: to see if we have more protection of consumer privacy 550 00:35:50,239 --> 00:35:52,960 Speaker 1: through in the United States. Thanks for being on the show. 551 00:35:53,400 --> 00:35:57,120 Speaker 1: That's Annett Alan Beck, assistant professor at Case Western Reserve 552 00:35:57,280 --> 00:36:00,359 Speaker 1: University School of Law. And that's it but the edition 553 00:36:00,400 --> 00:36:03,239 Speaker 1: of the Bloomberg Lawn Show. Remember you can always get 554 00:36:03,239 --> 00:36:06,200 Speaker 1: the latest legal news on our Bloomberg Lawn Podcast. You 555 00:36:06,239 --> 00:36:10,360 Speaker 1: can find them on Apple Podcasts, Spotify, and at www 556 00:36:10,680 --> 00:36:15,360 Speaker 1: dot Bloomberg dot com slash podcast Slash Law. I'm June Grosso. 557 00:36:15,520 --> 00:36:17,840 Speaker 1: Thanks so much for listening, and please tune into The 558 00:36:17,840 --> 00:36:20,600 Speaker 1: Bloomberg Law Show every week night at ten pm Eastern 559 00:36:20,800 --> 00:36:22,200 Speaker 1: right here on Bloomberg Radio.