Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio.
Speaker 1: The Sound of Large Madness a big business for the
Speaker 1: National College Athletic Association, bringing nearly a billion dollars in
Speaker 1: revenue last year, but zero to the players. The Supreme
Speaker 1: Court has agreed to consider the latest effort to have
Speaker 1: the n C double As amateurism rules declared a violation
Speaker 1: of the antitrust laws, something that could up end the
Speaker 1: multibillion dollar business model for college sports. Joining me is
Speaker 1: Audrey Anderson, who had the higher education practice at bass
Speaker 1: Barian Sims so Aurey. The Justices will review the Ninth
Speaker 1: Circuit decision that allowed student athletes to be compensated as
Speaker 1: long as it was tied to education. What's the n
Speaker 1: C double as argument for overturning that decision? The argument
Speaker 1: is that when you're looking at a rule that promote amateurism,
Speaker 1: the court should give the m C double A some
Speaker 1: leeway because without those rules, the products that the n
Speaker 1: C double A is putting forward college athletics won't exist.
Speaker 1: So an antitrust law, there is a doctrine that says
Speaker 1: if you have a joint venture, which is what college
Speaker 1: athletics is, all the colleges come together to put forward
Speaker 1: this product of college athletics. Because you have a joint venture,
Speaker 1: the participants in that joint venture are allowed some leeway
Speaker 1: to put together rules or agreements that allow the joint
Speaker 1: venture to exist, and the courts are supposed to give
Speaker 1: those participants some leeway. So the n C double as
Speaker 1: argument is, Hey, the Ninth Circuit was much too strict
Speaker 1: in the way it reviewed our amateurism rule in this case.
Speaker 1: Why are both sides saying there please? The court took
Speaker 1: this case at the trial court level. The Ninth Circuit
Speaker 1: neither side got everything it wanted, So both sides there
Speaker 1: pleased because the plaintiffs, the student athletes, wanted much more.
Speaker 1: They wanted full out what we call pay for play.
Speaker 1: All they got was that they could be given benefits
Speaker 1: tied to education, and even those benefits that were tied
Speaker 1: to education, if they were cash or cash like, they're
Speaker 1: limited an amount. So it's conceivable that the Supreme Court
Speaker 1: would say that the Ninth Circuit was not strict enough
Speaker 1: in the way it looked at the MP double A rules,
Speaker 1: and you can still have a collegiate market with even
Speaker 1: fewer limits on the benefits the college athletes are able
Speaker 1: to obtain. Does the courts decision in an n C
Speaker 1: double A case tell us anything about how it might
Speaker 1: decide the current case. Well, I think the two sides
Speaker 1: have very different views. I mean answer to that question June,
Speaker 1: that four case gives us very limited information and how
Speaker 1: the Court will approach this case. Because when the Court
Speaker 1: was talking about the rules around amateurism in the nineteen
Speaker 1: eighty four case, they were looking at rules about television contracts.
Speaker 1: So they were only talking about the rules about amateurism
Speaker 1: to distinguish them from rules about TV contracts. A lot
Speaker 1: of people called that language in the nineteen eight four
Speaker 1: case dicta not binding legal les. In addition to that,
Speaker 1: the facts of college athletics have changed really dramatically in
Speaker 1: the last thirty six years, and that's important when you're
Speaker 1: doing an antitrust analysis. Could a decision by the Supreme
Speaker 1: Court change the structure of college sports and the relationship
Speaker 1: between college athletes and their schools. It definitely could. If
Speaker 1: the Supreme Court held that the courts have free reign
Speaker 1: to be very intrusive in reviewing the rules. The m
Speaker 1: double A tries to put forward about what an amateur
Speaker 1: is or what kind of commercial relationships a student athlete
Speaker 1: can have with its college and still participate in college athletics.
Speaker 1: That could really change things. If the point if one
Speaker 1: full out, that is, student athletes can be paid for
Speaker 1: their participation in college athletics, and the n C Double
Speaker 1: A can't stop that, that would upend everything. I'd be
Speaker 1: really surprised if the Supreme Court went that far, But
Speaker 1: in any event, this could really change up what happens
Speaker 1: in college athletics. So minor Supreme Court decision put an
Speaker 1: end to this controversy over amateurism. Whatever happens in this case,
Speaker 1: it's only one battle front for the m C Double A.
Speaker 1: Even if they were to win this case and the
Speaker 1: Court were to say yes as an antitrust matter, the
Speaker 1: m C Double A gets to define what amateurism means.
Speaker 1: The state legislatures are making laws saying that college athletes
Speaker 1: can get unlimited amounts of money from third parties for
Speaker 1: selling their name, image, and likeness, and that changes the
Speaker 1: way that college sports looks quite a bit, and the
Speaker 1: Supreme Court's decision isn't going to do anything to change
Speaker 1: those efforts. Is already in the process of changing its
Speaker 1: rules to allow athletes to be compensated for the use
Speaker 1: of their names, images, and likenesses. Yes, they have proposed
Speaker 1: some changed rules to allow student athletes to get some
Speaker 1: limited compensation for name, image and likeness rights. But I
Speaker 1: don't think that the rule changes will satisfy the state
Speaker 1: legislatures who have already passed laws. They're just not enough.
Speaker 1: As long as there's so much money in college athletics
Speaker 1: that's going to the coaches and the universities and not
Speaker 1: to the student athletes, the n C double A is
Speaker 1: gonna have to withstand the pressure and of courts and
Speaker 1: from the state legislatures to do something more to allow
Speaker 1: college athletes to more directly benefit. That's Audrey Anderson of
Speaker 1: Bassbarian SIMS. If there were any lingering doubts about the
Speaker 1: government's inclination to go after the tech giants, that's been
Speaker 1: resoundingly settled, with antitrust actions escalating the final weeks of
Speaker 1: the year. Google is facing three antitrust lawsuits and Facebook
Speaker 1: to lawsuits. And the lawsuits against Facebook by the Federal
Speaker 1: Trade Commission and a group of forty six states seek
Speaker 1: to break up the social media giant, alleging that Facebook
Speaker 1: thwarted competition to protect its monopoly. Here's New York Attorney
Speaker 1: General Leticia James. No company should have this much unchecked
Speaker 1: power over our personal information and our social interactions. Joining
Speaker 1: me is antitrust expert Harry First, a professor at n
Speaker 1: y U Law School. Harry tell us the basics of
Speaker 1: the government suits. There are two cases files, and their
Speaker 1: pretty much the same, although not completely the same, one
Speaker 1: by the Federal Trade Commission and the other by a
Speaker 1: group of states, And the basics are of two parts.
Speaker 1: It looks at al Facebook has maintained its monopoly position
Speaker 1: in the personal social network market by first of all,
Speaker 1: acquiring aggressive startup competitors that might challenge it in one
Speaker 1: way or another, and second by conduct which says will
Speaker 1: allow you developers to work with us on our platform
Speaker 1: and interoperate with us, as long as you don't challenge
Speaker 1: our what they call core functionality. You know, get too
Speaker 1: close to being a real competitor rather than an addition
Speaker 1: to what we offer. So those are the two basic
Speaker 1: aspects on the first. With regard to acquisitions, as I
Speaker 1: think is well known, the focus has been on two
Speaker 1: major acquisitions for which face Book paid a lot of
Speaker 1: money Instagram and what's that The state complaints adds a
Speaker 1: bunch of other acquisitions to the list. Facebook has acquired
Speaker 1: a lot of companies over time, I guess, but the
Speaker 1: basic focus has been on those two, and for somewhat
Speaker 1: different reasons. Zookerberg particularly, but others of Facebook were concerned
Speaker 1: that they posed a direct competitive challenge to the dominance
Speaker 1: that Facebook had already achieved, and it was easier to
Speaker 1: buy them than compete with them. Those are the basic
Speaker 1: aspects of both complaints. Does the government have to prove
Speaker 1: that Facebook bought the companies bought What's Happen Instagram to
Speaker 1: kill competition? That is their theory. Yes, so the theory
Speaker 1: realize a lot on internal documents at this point, at
Speaker 1: least the complaints that presented um a lot of emails,
Speaker 1: presumably will also be uh interviews, depositions, and at some
Speaker 1: point perhaps at the trial um as to what the
Speaker 1: purpose was of these acquisitions. And also presumably they'll have
Speaker 1: some outside experts which verifies that this wasn't paranoia. By
Speaker 1: the legitimate concern that these upstarts might challenge what they're doing,
Speaker 1: they are making out a case that these weren't just
Speaker 1: um sort of neutral acquisitions to advance their business, but
Speaker 1: we're really done to suppress a competitor that could be PETI.
Speaker 1: The state's complaint also quotes from former Instagram CEO Kevin
Speaker 1: Sistram asking an Instagram investor if Zuckerberg was likely to
Speaker 1: go into destroy mode if he was turned down. Sistrom said,
Speaker 1: quote bottom line, I don't think we'll ever escape the
Speaker 1: wrath of Mark in the government trying to paint a
Speaker 1: picture of Zuckerberg here and why. I think there's a
Speaker 1: degree of personalization, you know, Zuckerberg's personality as as there
Speaker 1: was in the Microsoft litigation in the ninety nineties when
Speaker 1: it was Bill Gates who was in control and you know,
Speaker 1: and what he was trying to do. So this idea
Speaker 1: that Zuckerberg had developed a reputation, as you know, the
Speaker 1: estate's complaints says buy or bury strategy. Either you know,
Speaker 1: you sell out to us, or we're going to make
Speaker 1: your competitive life miserable. And yet there's some there's some
Speaker 1: focus on him, which is legitimate since is the head
Speaker 1: of the company. There are other emails from other people,
Speaker 1: of course, and um presumably there will be others, but yeah,
Speaker 1: it's to try to show, you know, this wasn't done
Speaker 1: to advance competition, but to suppress it correctly if I'm wrong.
Speaker 1: But there were also emails of Bill Gates in the
Speaker 1: Microsoft trial, weren't there? Don't they learn that they can't
Speaker 1: put anything in emails? You know, the most wonderful thing
Speaker 1: about anti trust litigation is how familiar it is. Writing
Speaker 1: things that damage your case preceded the development of email.
Speaker 1: And you know it used to be just harder to
Speaker 1: find these documents because you had to physically search through files.
Speaker 1: But I mean it's seriously, literally, from the beginning of
Speaker 1: the anti trust laws, statements that business executives have made
Speaker 1: in one way or another have been used to hang
Speaker 1: them and to show intent. And so the courts often
Speaker 1: say that intent isn't relevant. We look at objective facts.
Speaker 1: But intent does help you understand what the facts mean
Speaker 1: and has always played a role. And John D. Rockefeller
Speaker 1: and putting together Standard Oil used the same sort of
Speaker 1: fact that he would say, Look, if you don't sell
Speaker 1: out to me, I'm just going to cut prices on
Speaker 1: you completely and push you out of business. So you
Speaker 1: really don't have a choice, and Zuckerberg didn't. Basically the
Speaker 1: same thing, and of reviss easy you sell us to us,
Speaker 1: or We're just going to copy all your features and
Speaker 1: you won't be able to survive. So yeah, they keep
Speaker 1: writing these things, thank god, and anti trustfers keep finding them.
Speaker 1: Facebook says one of the arguments is that these apps
Speaker 1: needed Facebook's investment to reach their current levels of success.
Speaker 1: Is that a good argument for Facebook? I mean it
Speaker 1: is an argument they will make. They haven't the opportunity.
Speaker 1: I mean, obviously the one sided document, we're reading these
Speaker 1: two complaints and so um they have a response, which is,
Speaker 1: you know, after we acquired them, we've invested a lot
Speaker 1: of money in making them better, money that these companies
Speaker 1: might not have been able to get, and a degree
Speaker 1: of interoperabilities these companies couldn't have achieved on their own.
Speaker 1: So the bottom line for consumers is that consumers are
Speaker 1: better off, not worth off. Um, and these companies have
Speaker 1: been developed in in ways that are quite helpful. Now,
Speaker 1: whether that's true or not, it will be tested in
Speaker 1: court as well. You know, then they can they make
Speaker 1: that argument. I do, they can make an argument that
Speaker 1: they've invested in these companies. Um. The Instagram case may
Speaker 1: be easier to make than what'sapp UM. I think there
Speaker 1: was a lot of UM disagreement with the old UM
Speaker 1: management of what's up to what that application should be UM.
Speaker 1: But this is fodder for the trial and it is
Speaker 1: a plausible legal argument. Like the Google case, consumers don't
Speaker 1: pay anything to use Facebook. What kind of challenge does
Speaker 1: that pose to the government in proving its case right, Well,
Speaker 1: two answers. One answer is that the government complaints make
Speaker 1: an effort to show what the consumer harm was. I mean,
Speaker 1: obviously they cannot say the consumers are paying more than
Speaker 1: they should. Although there's there's a staphisticate an argument that
Speaker 1: Facebook should pay consumers because you know that you sometimes
Speaker 1: companies actually by customers because they make money that way
Speaker 1: by having more of them, and so that would not
Speaker 1: you know, the price of zero maybe more than than
Speaker 1: it should be, if you understand what I'm saying, UM.
Speaker 1: But that is not the argument the government's banking and
Speaker 1: wisely so, what the government is trying to do is
Speaker 1: to say something that many people have said, and that UM,
Speaker 1: you know, value to consumers is not just the price,
Speaker 1: but quality and innovations, which is sort of similar, but
Speaker 1: they're non price qualities that that are important. You know,
Speaker 1: there was the famous Hershey bar example where Hershey didn't
Speaker 1: change the price of the Hershey bar, they just cut
Speaker 1: down the size of the bar. Uh. So Um, that's
Speaker 1: basically arguments are making. The price is zero, but the
Speaker 1: product keeps being degraded and you get, um, consumers get
Speaker 1: less value for it, so um, you don't get as
Speaker 1: many choices your your choices on privacy have been changed
Speaker 1: over time to be less favorable to consumers. The States argue, interestingly,
Speaker 1: I think that the ad load has changed so that
Speaker 1: you get more ads now, um than you used to.
Speaker 1: And they have apparently an email saying that this is
Speaker 1: a tax on consumers who wants more ads. But um,
Speaker 1: apparently they have data that show that the amounts of
Speaker 1: ads that you have to scroll through has increased. And
Speaker 1: that's another way of saying the prices increased. Um. And
Speaker 1: you know, so I think a judge is gonna have
Speaker 1: to be convinced that not to look just as price,
Speaker 1: but other aspects non price, all the aspects of the product.
Speaker 1: So that's that's one answer. The second answer is the
Speaker 1: idea that you have to prove an effect on price
Speaker 1: is actually not legally required, and um, the last major
Speaker 1: case like this, which is Microsoft UM. There was never
Speaker 1: any proof of effect on price. Never. It was all
Speaker 1: about UM squashing a nascent competitor, you know, helping to
Speaker 1: push them out of business through various UM tactics that
Speaker 1: Microsoft pursued and UM in some ways very similar to
Speaker 1: what the government's arguing here, but never an argument that
Speaker 1: price was suspective. We look back now, we say the
Speaker 1: government actually approved both the acquisition of Instagram in and
Speaker 1: What'sapp in twenty fourteen. And Facebook is using that as
Speaker 1: a response to the government saying, yes, this is what
Speaker 1: they call an inconvenient Well I call it an inconvenient
Speaker 1: half true. So legally that's actually untrue. The government did
Speaker 1: not approve these acquisitions. What the government does when it
Speaker 1: reviews acquisitions, what the US government does others are difference.
Speaker 1: Actually the US government does is it decides whether to
Speaker 1: sue or not. It doesn't approve a merger. It's very
Speaker 1: clear that it doesn't. And the government, as Godlines says
Speaker 1: that all they do is they decide whether it is
Speaker 1: to so they decided not to sue. They didn't approve
Speaker 1: the mergers. And there have been cases whereas the government
Speaker 1: goes back after the mergers completed and bring suit because
Speaker 1: the problem with a merger is that you're trying to
Speaker 1: predict what competition is going to look like in the future, or,
Speaker 1: as one recent judge says, you know, I've got to
Speaker 1: have a crystal ball, and that's tough. You know, it's
Speaker 1: hard to predict the future. So that's sometimes a high burden. Now,
Speaker 1: there are cases where the government is allowed to do
Speaker 1: legally to do afterwards and say, you know what, look
Speaker 1: at what's happened. We don't have to guess at what
Speaker 1: the effect was on competition. Now we know, oh my god,
Speaker 1: we better we can do something about it. So the
Speaker 1: government is legally allowed to do that. So that's why
Speaker 1: I say it's an inconvenient half truth. The government did,
Speaker 1: they have to see itself, did review both of these mergers,
Speaker 1: decide not to challenge them, as the Europeans did as well,
Speaker 1: except the Europeans actually approved under European competition. So as
Speaker 1: a tactical matter of course, Facebook is going to say,
Speaker 1: and as summary of plausibility looks, um, we make a
Speaker 1: lot of actisy, You're going to go back and just
Speaker 1: examine a few of them to say ah, we're gonna
Speaker 1: start to overturn this, overturn that. That's not the way
Speaker 1: the law is supposed to work. It's a problem with
Speaker 1: the narrative. But there are responses to that that the
Speaker 1: government plants are going to have. In particular, you know
Speaker 1: all those emails, they didn't have them, and they made
Speaker 1: the decisions on Instagram and on What's App. Facebook made
Speaker 1: some promises about what it wouldn't do and then proceeded
Speaker 1: to break the promises. So I'm not so fast. Facebook.
Speaker 1: You weren't straight with us when we reviewed the mergers
Speaker 1: and now we know their effects. This is always the headline.
Speaker 1: The government is asking for a breakup of Facebook by
Speaker 1: spinning off Instagram and What's App. How big a hurdle
Speaker 1: is that for the government reorganizing or breaking them up?
Speaker 1: It depends on whether you like the polite or their
Speaker 1: colloquial is always are hurdle for the government. Now past
Speaker 1: history in monopoly cases, which is what this position does,
Speaker 1: mostly is that when there are break up, if you
Speaker 1: can break up accompanied by the divisions that it has acquired,
Speaker 1: so that in effect you're just sort of unbreaking them
Speaker 1: but not completely reorganizing them. That considered more likely easier
Speaker 1: to do, sort of thinks of the lego set. I
Speaker 1: can't you know you can take the blocks apart and
Speaker 1: you know there were blocks together. That's more plausible. Now
Speaker 1: Facebook has made efforts of the recent path, maybe the
Speaker 1: last year or so, to integrate both companies more fully.
Speaker 1: Whatever exactly that means. I'm not sure into Facebook as
Speaker 1: a unitary company. I think anticipating laws and so they're
Speaker 1: going to say that technically you can say, we can
Speaker 1: invest these companies, but this is tremendously disruptive and costly
Speaker 1: and will end up harming consumers by giving us, you know,
Speaker 1: a less valuable Facebook or less valuable Instagram analyss valuable.
Speaker 1: What's that? So, judge, even if you find we violated
Speaker 1: the law, this is not an appropriate remedy. It's a
Speaker 1: harmful remedy. And what you should do is just enter
Speaker 1: in order stopping us from whatever bad conduct you found,
Speaker 1: and that should cure the problems. So I think that's
Speaker 1: roughly how the arguments might go. But the government is
Speaker 1: not committed to reorganizing Facebook this way. They might learn
Speaker 1: that there's a better way to break Facebook up into
Speaker 1: smaller companies that should compete with each other. But that's
Speaker 1: the future. Yet, as we talked about, the government is
Speaker 1: also filed an anti trust suit against Google, which case
Speaker 1: has a better chance in court? Google or Facebook, they
Speaker 1: both faced similar issues the free goods the consumers side,
Speaker 1: so that's similar. They are different business practices. I think Google,
Speaker 1: as we discussed, is sort of more straight forward legally
Speaker 1: because these were contractual agreements for the Android operating system,
Speaker 1: and in that sense sort of is even closer to
Speaker 1: the Microsoft facts and litigations. Facebook is similar to Microsoft too,
Speaker 1: because it's also an effort to suppress the nation competitor,
Speaker 1: but instead of one tactic, you know the question that
Speaker 1: people raised as well as to post Facebook has decided
Speaker 1: to acquire the upstart brows or Netscape instead of just
Speaker 1: trying to push them out of business, then we look
Speaker 1: just like Facebook. So they both have similarities to the
Speaker 1: Microsoft case, and each of them are a little different.
Speaker 1: So I'm not quite sure how to answer that. I
Speaker 1: think they're both plausible cases, and we'll just have to
Speaker 1: see what the strength of the facts are when these
Speaker 1: cases or if these cases go to trial. Thanks for
Speaker 1: being on the Bloomberg Laws Show, Harry. That's Professor Harry
Speaker 1: First of n y U Law School. TikTok is one
Speaker 1: of the most popular apps in the world, with more
Speaker 1: than one hundred million US users. A panel of judges
Speaker 1: on the DC Court of Appeals has signal skepticism of
Speaker 1: the Trump administration's continuing efforts to ban new downloads of
Speaker 1: the Chinese owned video sharing app, making it unlikely that
Speaker 1: any TikTok ban will go into effect. Joining me is
Speaker 1: a nat Alambeck, Assistant professor at Case Western Reserve University
Speaker 1: School of Law. Any insight into why TikTok has not
Speaker 1: been able to close a deal with an American buyer, Well,
Speaker 1: I mean, I'm just speculating, but I would think that
Speaker 1: these are a few things that are going on. One
Speaker 1: could be that they're waiting for a different administration. I
Speaker 1: doubt that, but maybe they're stalling. Another one could be
Speaker 1: that the deal has to go through and there's a
Speaker 1: lot that's involved. Is there going to be divestment of
Speaker 1: the ownership, how is that going to be? How is
Speaker 1: um information of investors going to protect it? Who's gonna
Speaker 1: know what? How do they make sure that, you know,
Speaker 1: if they stay involved, they don't have access to that information?
Speaker 1: That the government wants to protect. I'm just assuming that
Speaker 1: that's why it's taking a lot of time. It needs
Speaker 1: to be approved. They need to figure all that information out.
Speaker 1: The deadline set by the Trump administration for requiring byte
Speaker 1: Dance to sell TikTok has passed. What does it signal
Speaker 1: that the government hasn't gone to court to force a
Speaker 1: divestiture to meet means that the government for now, Again
Speaker 1: we could be surprised, right, but for now, it means
Speaker 1: that the government is not pressing on this. But again,
Speaker 1: like I said, it could mean that there's a deal
Speaker 1: in the work that we don't know about. It could
Speaker 1: mean that the governments decided not to continue to take
Speaker 1: actions on this and they're waiting for the next administration.
Speaker 1: It could mean that there's other actions that the government's
Speaker 1: going to take. For example, I don't know if you saw,
Speaker 1: but recently the sec as I asked TikTok and other
Speaker 1: companies to ask for information on how are they protecting
Speaker 1: the users privacy? What are they doing with information they're
Speaker 1: aggregating on users. There could be several things, but one
Speaker 1: thing is clear and that the government you know, has
Speaker 1: this deadline. They extended the deadline. The deadline has passed,
Speaker 1: but they haven't done anything since. Explain why two federal judges,
Speaker 1: one in Washington, d C. And one in Pennsylvania, blocked
Speaker 1: the Commerce Department from prohibiting new downloads of TikTok, right,
Speaker 1: And and that's very good that you said that, because
Speaker 1: we really need to separate the things. We need to separate.
Speaker 1: On the one hand, these two orders, right, the one
Speaker 1: order was to divest and the other order was the band,
Speaker 1: and that is on on app stores and to allow
Speaker 1: new users to download the app. And the issue is
Speaker 1: really with regards to the second, and that is censorship, right,
Speaker 1: censorship of speech, censorship of social media applications. And there's
Speaker 1: a concern here of privacy of national security. Explain for
Speaker 1: us what the issue was during the oral arguments of
Speaker 1: the d C circuits. There are a few issues. One
Speaker 1: of the issues is with regard to UM the I
Speaker 1: E e P A band. And then whether there's an
Speaker 1: exception for information and communication, whether the President has or
Speaker 1: does not have authority to regulate or prohibit directly or indirectly,
Speaker 1: any personal communication doesn't involve a transfer of anything of
Speaker 1: value or any information or information materials, And really they
Speaker 1: put a lot of focus on this world indirectly, and
Speaker 1: it's very important because there could be many different kind
Speaker 1: of bands. And that's why it's interesting to see how
Speaker 1: the court's going to interpret this. They're gonna look at
Speaker 1: tick took messages on the app or on the company
Speaker 1: and whether there was authority or not to do that.
Speaker 1: And then also you know, even when the everman talks
Speaker 1: about national security, then you might ask the question national
Speaker 1: security from what and from home? And is there a
Speaker 1: privacy violation? Is this the correct way of addressing that
Speaker 1: kind of harm and also showing the harm. So there's
Speaker 1: so many different issues, um that the court is going
Speaker 1: to deal with here. One of the judges, Judith Rogers, said,
Speaker 1: Congress wrote this language, and the government's justification for the
Speaker 1: band seems to fly in the face of that. What
Speaker 1: language is she talking about? That's a great question. So
Speaker 1: now we're talking about the free speech implications of the sanctions, right,
Speaker 1: and and the question is whether these sanctions are really
Speaker 1: what congresss intendant and and and again they're looking at
Speaker 1: the interpretation of the i e e. P A and
Speaker 1: whether it gives the presidents broad authority to freeze assets
Speaker 1: or bar financial transactions or and what the president can do.
Speaker 1: And and I would just say that that was changed
Speaker 1: a few times, and that Congress specifically excluded from the
Speaker 1: president the powers of the ability to regulate directly or
Speaker 1: indirectly a range of informational materials, whether they're commercial or not.
Speaker 1: And the amendment is'sliclbly mentioned materials such as publications, films, photographs.
Speaker 1: So there's a lot of discussion on that on whether
Speaker 1: it was even allowed, because what they wanted to do
Speaker 1: is to protect free speech, okay, And so the question
Speaker 1: is whether that's violated here or not based on that
Speaker 1: interpretation to affect did it seem to you as if
Speaker 1: the judges were skeptical of the government's conduct. What I
Speaker 1: think is is really happening here is that the judges know,
Speaker 1: you know, of of the intentions of and of the
Speaker 1: laws and the protections of you know, free speech and
Speaker 1: free and the First Amendment. And what they're really pushing
Speaker 1: I think the government to do is to explain what
Speaker 1: is it that you're doing, what is the harm? Explain
Speaker 1: it to us what's going on. And I think it's
Speaker 1: very important in light of everything that's happening. And I
Speaker 1: think there's no doubt that there is, you know, and
Speaker 1: you can see what's happening right, There's no doubt that
Speaker 1: there are issues with TikTok, other countries of band TikTok.
Speaker 1: There's issues with UM. There may be issues with with
Speaker 1: regards to national security. It is just the issue is here,
Speaker 1: whether that particular action, okay, of of banning the app
Speaker 1: and the stores after you have so many millions of
Speaker 1: Americans they are already using it, whether that's the correct measure,
Speaker 1: and whether the president had authorities to take that measure.
Speaker 1: I think that's really what's going on here. Under a
Speaker 1: Biden administration. Do you think that the government will continue
Speaker 1: to press for a sale of TikTok or bands on TikTok.
Speaker 1: That's a great question, because that's a question, and I'm
Speaker 1: you know, I'm asking myself too, because I think that
Speaker 1: although you know, for example, so I write about menders
Speaker 1: and acquisitions and CPIUS that UM the committee that's reviewing UH,
Speaker 1: you know, deals with foreigners invests in um U S
Speaker 1: technologies or now emerging technologies, and how the Trump administration
Speaker 1: is actually gave Cephius more authority to look into those
Speaker 1: UM types of transactions. I think the definitely the Biden
Speaker 1: administration is also going to scrutinize those types of transactions,
Speaker 1: especially and when it comes to national security. Um. Whether
Speaker 1: it's going to have the same flare as the Trump administration,
Speaker 1: I don't know, maybe not, but I think that you know, Look,
Speaker 1: it's what's happening around the world. Look, it's what happened
Speaker 1: in the United States. You will see that they're going
Speaker 1: to step up investigations on privacy. They're gonna step up
Speaker 1: I think again, you know, and just thinking investigations on
Speaker 1: whether investments have to do with national security or do
Speaker 1: owned before the clear stern field. UM. So I still
Speaker 1: think it's it's going to be um, you know, in
Speaker 1: the background, um and especially with what's happening in that
Speaker 1: you know area, not just here in the US, but
Speaker 1: around the world. So I definitely think so how they're
Speaker 1: going to do that, you know, it's it's up to
Speaker 1: divide an administration, and I guess time will tell, but
Speaker 1: it's definitely an issue that's going to continue, UM to
Speaker 1: be relevant, I think, and I don't know, he might
Speaker 1: act differently for the people that he's gonna point are
Speaker 1: gonna act differently or going to put different emphasis. I
Speaker 1: don't know, but I will definitely think that there's it's um,
Speaker 1: there is momentum for for example, maybe for more privacy laws,
Speaker 1: right uh, for more um protections of consumers. So UM,
Speaker 1: I think it's still gonna be quite an issue because um,
Speaker 1: you know, I don't know if you know this if
Speaker 1: you read my piece. I just wrote a piece about
Speaker 1: alternative venture capital and then usun accord investors, and what
Speaker 1: I found is more and more international players are investing in,
Speaker 1: you know, in our private firms for different reasons. Sometimes
Speaker 1: for financial reasons. Sometimes they have strategic reasons, right Um.
Speaker 1: They might want to get access to the technology that
Speaker 1: the companies are working for, or they want to might
Speaker 1: want to be able to establish you know, some sort
Speaker 1: of partnerships that collaborations that maybe have a subsidiary in
Speaker 1: their own countries. So there could be you know, different
Speaker 1: reasons for why they invest or maybe for fires reasons
Speaker 1: they want to make more money. But the point is
Speaker 1: is that we're seeing more and more of these investments.
Speaker 1: Those are it's one of the players that you know, uh,
Speaker 1: definitely investing in our private markets, and they're investing in
Speaker 1: private markets for several reasons. Also, because those are private firms,
Speaker 1: there's less scrutiny versus if it was a public firm, right,
Speaker 1: and those firms are usually you know, could be under
Speaker 1: the radar. For example, unicorns are well known firm, they
Speaker 1: have a reputation, but if it's if it's a tech startup, right,
Speaker 1: it might be less visible. Um, and definitely doesn't have
Speaker 1: to disclose information to the public the way a public
Speaker 1: company would have to. So we're definitely seeing that trend.
Speaker 1: And we're seeing cps even before the Trump administration, but
Speaker 1: especially during the Trump administration looking into these deals and
Speaker 1: and they even blocked several deals. Can you give us
Speaker 1: some examples? Can give you, you know, several examples for example, um,
Speaker 1: you have a grinder and you have patients like me, right,
Speaker 1: and patients like me, for example, is a healthy startup
Speaker 1: and if it was forcing into a fire sale? Uh?
Speaker 1: And uh Grinder was uh you know, a dating app
Speaker 1: and that also collected personal data on users. And also, um,
Speaker 1: you know the government tried to stop that. And there's
Speaker 1: how we monogram and financial and many more examples. And
Speaker 1: if you look around the world, it's not just here.
Speaker 1: For example, with how we the UK recently also said
Speaker 1: that they're gonna ask um, you know, with regards to
Speaker 1: how we that um, They're not going to use that
Speaker 1: in the UK as well. Your final thoughts about this,
Speaker 1: What I think is really the issue here is privacy. Um.
Speaker 1: That's why, for example, we're seeing all these antitrust lawsuits, right,
Speaker 1: and that's why we're seeing the SBC probing into these companies. Now,
Speaker 1: maybe we should think about having more privacy protection in
Speaker 1: the United States, but I think there's true and I'm
Speaker 1: hoping that the next administryation is maybe going to push
Speaker 1: for those because I think it's important to protect consumers here.
Speaker 1: I think we're seeing those initiatives take place around the world,
Speaker 1: and it's important to do two things. One is, of
Speaker 1: course to protect consumers, but also to encourage innovation and
Speaker 1: entrepreneurship and investments in US companies. Right, So we have
Speaker 1: to be very delicate when we're balancing all these things.
Speaker 1: But definitely in terms of privacy. As a consumer myself
Speaker 1: of technology, I would like to know companies are not
Speaker 1: using my information, whether there are American companies or other
Speaker 1: companies are selling my data using AI to agreeate information
Speaker 1: on me, you know, marketing to me that way using profiles.
Speaker 1: So I really think that, um, it would be nice
Speaker 1: to see if we have more protection of consumer privacy
Speaker 1: through in the United States. Thanks for being on the show.
Speaker 1: That's Annett Alan Beck, assistant professor at Case Western Reserve
Speaker 1: University School of Law. And that's it but the edition
Speaker 1: of the Bloomberg Lawn Show. Remember you can always get
Speaker 1: the latest legal news on our Bloomberg Lawn Podcast. You
Speaker 1: can find them on Apple Podcasts, Spotify, and at www
Speaker 1: dot Bloomberg dot com slash podcast Slash Law. I'm June Grosso.
Speaker 1: Thanks so much for listening, and please tune into The
Speaker 1: Bloomberg Law Show every week night at ten pm Eastern
Speaker 1: right here on Bloomberg Radio.