Speaker 1: Hello, and welcome to the Votes in Verdicts podcast hosted
Speaker 1: by Bloomberg Intelligence. We are the investment research platform of
Speaker 1: Bloomberg LP. In this podcast series, we talk about the
Speaker 1: intersection of business policy and law. My name is Jennifer
Speaker 1: Ree and I'm a senior analyst with Bloomberg Intelligence and
Speaker 1: I cover US anti trust litigation and policy. So this
Speaker 1: is the fourth of the Votes in Verdicts podcast series
Speaker 1: focused on anti trust issues, and for this episode, I'm
Speaker 1: really excited to be joined by Ira Gorski, Managing director
Speaker 1: of Edelman Smithfield, which is a financial communications boutique within
Speaker 1: the largest communications firm in the world. In this role,
Speaker 1: Ira works on special situations and investor relations such as
Speaker 1: m and A, act activism, defense, and investor narratives. Prior
Speaker 1: to his current role at Edelman, Ira worked as a
Speaker 1: risk GARB trader. Ira, thanks so much for joining me
Speaker 1: at this podcast.
Speaker 2: Thanks for having me. I'm really excited to be here.
Speaker 3: Yeah, it's going to be fun.
Speaker 1: It'll be fun for all the anti trust nerds out there, Yes,
Speaker 1: like me and me too. All Right, So Ira and
Speaker 1: I are going to be talking about new merger guidelines
Speaker 1: issued by the Federal Trade Commission and the Department of Justice.
Speaker 1: So let me just start to set the stage for
Speaker 1: the discussion with laying out exactly what they are and
Speaker 1: what their function is, because not all of the listeners
Speaker 1: of this podcast are anti trust nerds like us. So
Speaker 1: these guidelines essentially lay out the factors and the framework
Speaker 1: utilized by the agencies in reviewing transactions and determining whether
Speaker 1: a transaction has the potential to result in harm to
Speaker 1: a marketer markets and therefore it would violate the anti
Speaker 1: trust laws. So when we talk about harm to markets,
Speaker 1: it's primarily thought about as increased prices, reduced output, reduced innovation,
Speaker 1: reduced quality. And what these guidelines do is outline the
Speaker 1: step by step approach the agencies take to make the
Speaker 1: determination if a deal could impact markets in those ways,
Speaker 1: and they also outlines the factors they will or won't
Speaker 1: consider to assess whether a transaction is unlawful or not.
Speaker 1: The guidelines are really out there intended to be transparent
Speaker 1: for the public and others as to how the DOJ
Speaker 1: and FDC are reviewing deals and reaching their conclusions, But
Speaker 1: in particular they're really important to provide guidance to companies
Speaker 1: that are engaging in transactions. And that's particularly why we
Speaker 1: have IRA here today because this is what he thinks
Speaker 1: about a lot is the guidance to the companies that
Speaker 1: are thinking about proposing a deal, and particularly a deal
Speaker 1: that might have antitrust issues, because it tells us what
Speaker 1: the FTC and DOJ are going to look at in
Speaker 1: their investigation, what they're going to be thinking about if
Speaker 1: they decide to challenge the deal. Now, the very first
Speaker 1: is version of the guidelines was in nineteen sixty eight.
Speaker 1: It's the first time they were published. The most recent
Speaker 1: update before the current one was in twenty ten. So
Speaker 1: why did the FTC and DOJ decide to update them
Speaker 1: now in two thousand end of twenty three really to
Speaker 1: be implemented in twenty four Well, they say that it's
Speaker 1: to better reflect current market realities, advances since twenty ten
Speaker 1: in economics and law, and experiences of market participants that
Speaker 1: provided feedback. When they put out a draft version of
Speaker 1: the guidelines last year, they took in a lot of
Speaker 1: comments from all sorts of market participants and took those
Speaker 1: into account for the final The most important thing I
Speaker 1: would say is that they're really meant to be guidance.
Speaker 1: They're not binding on the courts, though the judges do
Speaker 1: tend to follow them and have called them persuasive. Now,
Speaker 1: Ira and I have discussed the guidelines a bit and
Speaker 1: we decided we're going to talk about some specific ones.
Speaker 1: There are eleven, to be precise, but we're just going
Speaker 1: to talk about three, and we're going to talk about
Speaker 1: their impact on deal making and what companies need to
Speaker 1: be thinking about. But before we get into those specific three, Ira,
Speaker 1: just tell me what is your overall impression of the
Speaker 1: guidelines just in general.
Speaker 2: So just to set the stage a little bit, I'm
Speaker 2: not an antitrust practitioner. I'm not an attorney that advises
Speaker 2: companies on what to do how to structure their deals.
Speaker 2: What I do is I tell companies how they should
Speaker 2: communicate during the pendency of a transaction. And what's happened
Speaker 2: with these transactions and the new guidelines is that companies
Speaker 2: are under subject of the DOJ and FTC's criticism for
Speaker 2: a longer length of time. And when you have a transaction,
Speaker 2: it affects the entire organization, affects how they do business,
Speaker 2: affects their employees. And so what this does is it
Speaker 2: causes issues for the companies, and now, given these guidelines
Speaker 2: are touching upon areas that they haven't touched upon in
Speaker 2: the past, we've got to be a lot more thoughtful
Speaker 2: in giving guidance to companies of how they communicate because
Speaker 2: it's going to have a severe impact on their business
Speaker 2: before they even get to a court if they're challenged.
Speaker 3: Yeah.
Speaker 1: Interestingly, what you're talking about is almost become kind of
Speaker 1: a tool of the agencies, right because knowing that this
Speaker 1: pendency of a long investigation and scrutiny of a merger
Speaker 1: and all the news that comes with it can have
Speaker 1: a serious impact on a company. I think in a
Speaker 1: way there's a hope or an intention by the agencies
Speaker 1: to actually just get them to walk away and abandon
Speaker 1: a deal if the agencies don't like the deal. Not
Speaker 1: all deals are anti competitive, so like that is almost
Speaker 1: a tool.
Speaker 2: Right, absolutely, And there's an irony to that as well,
Speaker 2: in that companies that are not the largest competitors in
Speaker 2: the space, ones that want to get scale to compete
Speaker 2: against the largest competitors in the space, are the ones
Speaker 2: that want to merge and get bigger so they have scale. However,
Speaker 2: they may not be quite big enough to have the
Speaker 2: ability to sustain to sustain a long attack from the
Speaker 2: anti trust regulators. So if you look at the largest
Speaker 2: competitors in the space, with literally billions of cash on
Speaker 2: their balance sheet, they're going to fight this. And what
Speaker 2: happens is, as you said, for the ones that are smaller,
Speaker 2: they're going to be under pressure to abandon it because
Speaker 2: every day that a transaction goes on, they're not making
Speaker 2: key decisions on their technology, they're not hiring key people,
Speaker 2: they could be losing some of their best employees. Their
Speaker 2: go to market strategy is also stymied by this. And
Speaker 2: then the regulators who said their goal is to block
Speaker 2: the transaction, whether it's in court or abandonment, and they'll
Speaker 2: take the victory either way.
Speaker 3: It's interesting.
Speaker 1: I mean, that's an interesting point because it's almost a
Speaker 1: perverse result, right because now essentially, because the investigations become
Speaker 1: so difficult, it really is supporting the big, huge incumbents
Speaker 1: and not promoting up and coming competition against those big incumbents,
Speaker 1: which is really what we need, what the.
Speaker 2: Agencies exactly, because the ones that can slug it out
Speaker 2: with the government and stand up to the full weight
Speaker 2: and resources are the biggest and the strongest right, and
Speaker 2: the ones that are a tier below that could potentially
Speaker 2: be competition for the biggest and the strongest will fold
Speaker 2: under that pressure. So yes, it is a perverse incentive.
Speaker 1: So let's move on. You wrote a short article I
Speaker 1: saw it on LinkedIn. Everybody should look for it on LinkedIn.
Speaker 1: A quick interesting read published a few weeks ago, called
Speaker 1: and you called it less visibility and a more complex narrative.
Speaker 3: Why that title? What did you mean by that?
Speaker 2: Because historically the level of antitrust enforcement has to do
Speaker 2: with which the which parties in power. But it was
Speaker 2: the general framework was the same. It was it was
Speaker 2: a level of enforcement, but the guidelines were the same
Speaker 2: of where they would be now. I think with the
Speaker 2: new guidelines it has changed substantially. You're introducing new elements
Speaker 2: that weren't there before. You and I have spoken offline about,
Speaker 2: you know, the difference in the consumer harm standard where
Speaker 2: the consumer harm, if you could think about it, was
Speaker 2: more broadly, and even these new guidelines are still keeping
Speaker 2: the new the consumer in mind. I have a slightly
Speaker 2: different view. I think that the consumer or harm standard
Speaker 2: is very specific to price an output, and that the
Speaker 2: other elements that are now being included, such as labor
Speaker 2: and suppliers, really upend the whole narrative. The less visibility
Speaker 2: part is because if in a merger, as an ARB,
Speaker 2: I would see the press release, one of the things
Speaker 2: you look for immediately is the synergy number. Because the
Speaker 2: synergy number is especially cost energies. It's captured in perpetuity,
Speaker 2: so it's really valuable if you can extract a lot
Speaker 2: of synergies both from labor in terms of layoffs and delayering,
Speaker 2: as well as your supply chain. However, in the guidelines
Speaker 2: now the antitrust enforcers are specifically targeting that, and then
Speaker 2: that really upends the visibility with how companies should be communicating.
Speaker 1: Yeah, it's interesting because I practiced a long time ago,
Speaker 1: and you know, when we would do our presentations to
Speaker 1: the FDC or DOJ as to why the deal had
Speaker 1: lots of efficiencies and have all sorts of pro competitive benefits,
Speaker 1: you would proudly put that bullet point about all you know,
Speaker 1: the redundancies and employment and all the layoffs that would
Speaker 1: come that would save these companies' money. And now that's
Speaker 1: moved from the pro side to the conside.
Speaker 3: You know, which is a big shift.
Speaker 2: Right, And because the premise used to be if I
Speaker 2: can extract these cost savings, then I will pass that
Speaker 2: savings along to the consumer because it makes me more competitive,
Speaker 2: and with the savings, I can keep my margins and
Speaker 2: capture share. But now that's upended.
Speaker 3: It's upended.
Speaker 1: Yeah, the agencies don't necessarily think that way anymore. I
Speaker 1: think they don't really see those benefits being passed on
Speaker 1: to consumers. Yeah, I can keep my margin, maybe I
Speaker 1: can increase my margin, is what they're thinking, rather than
Speaker 1: pass those benefits on. And you know that's why they've
Speaker 1: taken a different change of heart here.
Speaker 2: Completely agree. And so there's a confluence of factors work
Speaker 2: into pricing strategy and how you go to market, and
Speaker 2: it's going to be incredibly difficult, even with the best
Speaker 2: of intentions and full transparency to specifically say how much
Speaker 2: of your current pricing strategy is related to synergies or
Speaker 2: the shift in the market. But the regulators have taken
Speaker 2: a more skeptical view, and now they're including other things
Speaker 2: like the supply chain and labor, which I think is
Speaker 2: very problematic for the communications of the deal itself.
Speaker 1: Right now and now we're veering off into what into
Speaker 1: the topics we wanted to get into. You know, the
Speaker 1: thing is, there have been a lot of webinars by
Speaker 1: law firms and other entities about these new guidelines. They're
Speaker 1: a big deal, right, they are a big change, and
Speaker 1: as I said before, it's the first time we've had
Speaker 1: an update since twenty ten, and so what I wanted
Speaker 1: to do was take a bit of a different approach,
Speaker 1: I think than some of the other webinars they focus.
Speaker 1: They have focused a lot on the fact that the
Speaker 1: agency's reduced thresholds by which they presume a deal to
Speaker 1: be anti competitive, which means it'll more deal will be
Speaker 1: captured as potentially violating antidrus law. But instead, what we're
Speaker 1: going to do is focus on three specific guidelines. There
Speaker 1: are eleven in total, and we're going to focus on
Speaker 1: three that IRA thinks really are important for companies from
Speaker 1: a communications perspective, and I think they're really important too,
Speaker 1: because the three we're going to focus on our really
Speaker 1: brand new concepts for merger review and for guidelines. So
Speaker 1: let me just when I talk about the eleven guidelines
Speaker 1: and the three we're going to talk about, let me
Speaker 1: just sort of explain what the FTC and DJ did
Speaker 1: in the guidelines one through six are different from seven
Speaker 1: through eleven. They describe distinct frameworks that they're going to
Speaker 1: use in the very first instance, to decide whether a
Speaker 1: merger raises antitrust concerns. And so I saw most of those,
Speaker 1: most of them, not all of them, as a restatement
Speaker 1: of the standard way that we think about, or used
Speaker 1: to think about deals that may violate the antidrust laws,
Speaker 1: though they've been refined and the standards have been tightened.
Speaker 1: So and I just want to throw this in there
Speaker 1: because I don't want to gloss over it. Right, So,
Speaker 1: for instance, mergers that raise mergers raise a presumption of
Speaker 1: illegality when they significantly increase concentration in a highly concentrated market.
Speaker 3: That's not new, you.
Speaker 1: Know, this has been the this has been the way
Speaker 1: we think about mergers that can be illegal for years
Speaker 1: and years. But what these guidelines do is lower the
Speaker 1: threshold for what is considered a highly concentrated market. And
Speaker 1: that's a pretty big deal. But that's going to be
Speaker 1: a topic for another day, because today we're going to
Speaker 1: talk about three of the guidelines in seven through eleven,
Speaker 1: and those guidelines explain how to apply the frameworks in
Speaker 1: one through six and specific settings. And what we're going
Speaker 1: to start with is Guideline nine. As I said, it
Speaker 1: introduces a new concept into merger review and it is
Speaker 1: related to multi sided platforms. IIRA, can you talk through
Speaker 1: what this guideline says about deals that involved multi sided platforms?
Speaker 2: Sure? So, before I get into that, I think this
Speaker 2: is one of the mean motivations of why we have
Speaker 2: new guidelines, because you wound up with these incredibly powerful
Speaker 2: platforms that didn't fit need lee into a horizontal merger guideline,
Speaker 2: nor did they fit into a vertical merger guideline. And
Speaker 2: even if they did fit into a vertical merger guideline,
Speaker 2: they haven't been able to be enforced. They haven't had
Speaker 2: a great success for vertical not at all. So the
Speaker 2: guideline considers competition between platforms, competition on the platform, and
Speaker 2: competition to displace the platform. Now I think this is
Speaker 2: problematic and that I don't mean that from the intention
Speaker 2: of the DOJ or the FDC. I just mean how
Speaker 2: it's going to work out and practice and how you
Speaker 2: articulate your rationale and how they view it. So, for example,
Speaker 2: it's got multiple parts to it, and where they have
Speaker 2: is a conflict of interest. And the conflict of interest
Speaker 2: I think is very subjective because you're making a platform
Speaker 2: for your own benefit almost by definition. And there are
Speaker 2: certain things that are overt where you exclude I can
Speaker 2: patitor from your platform at all, or you put them
Speaker 2: further down on the page. But there's a whole continuum
Speaker 2: of subtleties of where you could be on that. And
Speaker 2: I think it's going to be very difficult for companies
Speaker 2: to explain that something isn't a conflict of interest because
Speaker 2: if you have that accusation that it is, you have
Speaker 2: almost no evidence to refute it because it hasn't happened yet,
Speaker 2: and the anti trust agencies are loath to accept behavioral remedies,
Speaker 2: So you're being accused of something you haven't done yet.
Speaker 2: You can't promise not to do it in the future.
Speaker 2: And these are fast moving technological platforms that the FTC
Speaker 2: and DJ are making assumptions on. You know, I said
Speaker 2: to you jokingly before. These are the agencies that sue
Speaker 2: to stop Hollywood Video and Blockbuster exactly, so you know
Speaker 2: their ability to predict the future actually on fast moving
Speaker 2: technology is questionable.
Speaker 1: Yeah, and I think, I mean, merger assessment is all
Speaker 1: about trying to predict the future, and in particular in
Speaker 1: technology markets.
Speaker 3: I think that's really really difficult.
Speaker 1: And I think also what's notable I agree with you completely,
Speaker 1: and I think also what's really notable about this particular
Speaker 1: guideline is that it's sort of the first time the
Speaker 1: agencies come right out and say, well, we could consider
Speaker 1: a deal harmful where the companies don't compete at all horizontally,
Speaker 1: don't provide any of the same products or services, and
Speaker 1: by the way, don't even have a vertical relationship. You know,
Speaker 1: there's no connection necessarily in the marketplace. And that's really new,
Speaker 1: kind of a big departure from the way we think
Speaker 1: about mergers. Okay, our next guideline is number ten. Again
Speaker 1: a new one, but it does reflect an area the
Speaker 1: agencies have focused on a lot in the past few years,
Speaker 1: in which we already talked about a little bit earlier
Speaker 1: in this podcast, and that's the impact of deals on employees, suppliers,
Speaker 1: and other providers. This is what we think about as
Speaker 1: a monopsony concern, where they're too few buyers of a
Speaker 1: product or service rather than too few sellers. So I
Speaker 1: wrote talk about this one. I know you wrote about
Speaker 1: this in your article what is this guideline? Saying what
Speaker 1: does it mean for merging companies?
Speaker 2: I think this opens up a lot of problems for companies,
Speaker 2: especially on the labor side, because there's always a natural
Speaker 2: tension between management and labor. Everyone's fighting for the same resources.
Speaker 2: So then this becomes something that could be extracted used
Speaker 2: as a wedge issue when labor has the ability to
Speaker 2: go to the government and have them on their side,
Speaker 2: raise potential issues and use it to their benefit for
Speaker 2: labor negotiations when there really isn't an antitrust concern. This
Speaker 2: also starts falling into the realm of more political than
Speaker 2: empirical with respect to evidence, because you have a certain
Speaker 2: difference with respect to the parties and their view of labor.
Speaker 2: And then that creates an issue as well, because the
Speaker 2: economics will hold regardless of who's in power. So if
Speaker 2: you force companies into an uneconomic arrangement where you wind
Speaker 2: up killing pro competitive deals for a political choice on labor,
Speaker 2: you're going to wind up harming the economy. And so
Speaker 2: it becomes very difficult from a communications standpoint. Companies will
Speaker 2: now have to think through these issues because they have
Speaker 2: to deal with labor. The employees are a very very
Speaker 2: important part of all mergers. So for example, when we
Speaker 2: have a merger communications package, one of the key stakeholders
Speaker 2: is the employees talking to them what it means, what
Speaker 2: your role is, why this is important, how this benefits everyone.
Speaker 2: You know, other stakeholders like investors and vendors, etc. But
Speaker 2: you don't have a company without the employees. And my
Speaker 2: big concern is that it opens the door for bad
Speaker 2: actors for using a tool that wasn't available to them
Speaker 2: previously to potentially harm the merger, which could wind up
Speaker 2: hurting the company and the interest of employees. So it
Speaker 2: becomes really tricky from a communications standpoint.
Speaker 1: Yeah, and in particular, as you mentioned, with these really
Speaker 1: long investigations, you want to hold on to your good employees,
Speaker 1: and now you risk losing them because there's a lot
Speaker 1: of uncertainty about what the final entity is going to
Speaker 1: look like at the end of this big FTC or
Speaker 1: DOJ investigation, potential challenge, et cetera. Interestingly, I raised.
Speaker 3: With you earlier.
Speaker 1: The FTC's lawsuit fouled yesterday against the Kroger and Albertson's
Speaker 1: proposed deal. And I know you haven't dug into that
Speaker 1: yet too much, but in that complaint, this we see
Speaker 1: this theory in action because in that as part of
Speaker 1: their theory of harm, in that complaint, the FTC has
Speaker 1: alleged that Kroger and Albertson's compete for labor and that
Speaker 1: this is going to reduce competition for labor and could
Speaker 1: hurt workers respect. So we're going to see how this
Speaker 1: plays out in court.
Speaker 2: Yeah, it is that again that goes to an assertion
Speaker 2: that you can't disprove how do you prove that you're
Speaker 2: limiting the availability of labor or the competition for labor
Speaker 2: when people can freely move you There is no finite
Speaker 2: set of people in a given area. There is no
Speaker 2: specific skill set that's locked you know, down that you
Speaker 2: can move right and and it makes it very difficult.
Speaker 1: But in this case, interestingly, and this really I think
Speaker 1: makes it difficult to refute in court. But the FTC
Speaker 1: they have to define a market, right, they have to
Speaker 1: say what is the sphere of the market in which
Speaker 1: competition will be harmed? And their market for labor was
Speaker 1: defined very narrowly it was in localized areas union traditional
Speaker 1: grocery store workers essentially, which is really narrow because and
Speaker 1: who's to say that somebody who's working at a grocery
Speaker 1: store couldn't go work somewhere else, you know, no, doing
Speaker 1: something different, or move from grocery to drug store.
Speaker 3: Or you know what I mean.
Speaker 1: So it's a very narrow market. So it's hard to
Speaker 1: refute that there won't be harm in that narrow market.
Speaker 1: And that makes it even harder, right.
Speaker 2: Of course, And so when you make the markets incredibly narrow,
Speaker 2: they're going to be anti competitive by definition ramifications exactly.
Speaker 3: All right.
Speaker 1: Our last guideline we're going to talk about is the
Speaker 1: last guideline, and that's eleven. It's another new concept, as
Speaker 1: I mentioned, and this one is really interesting to me
Speaker 1: because I'm not really sure how it's going to get applied.
Speaker 1: But it deals with partial ownership and minority interests. So
Speaker 1: according to the guidelines the agency, they are concerned with
Speaker 1: something called cross ownership, and that refers to holding a
Speaker 1: non controlling interest in a competitor. And they're also concerned
Speaker 1: with something called common own ownership, which occurs when individual
Speaker 1: investors hold non controlling interests in firms that have a
Speaker 1: competitive relationship. What are your thoughts on this one.
Speaker 2: I think this is potentially very damaging for investment over
Speaker 2: all because generally people don't want to tangle with the government.
Speaker 2: It's a huge distraction, very expensive, high stakes, your reputations
Speaker 2: out there, and if you have opaque rules where you
Speaker 2: can't disprove where you are, you can't. You can have
Speaker 2: a passive stake, but then if you're viewed as well
Speaker 2: you have a passive stake into competitors, maybe you're using
Speaker 2: that information in an unlawful way. It's incredibly difficult to
Speaker 2: disprove that.
Speaker 3: Sure.
Speaker 2: Yeah, and then I think this is also kind of
Speaker 2: a shot against private equity.
Speaker 3: Absolutely, and so this is.
Speaker 2: A broader negative view of private equity, which certain people
Speaker 2: could argue is more political from an investment class standpoint.
Speaker 2: And then when you get into it, to solve it,
Speaker 2: the only really advice that you can give to solve
Speaker 2: it ahead of time time is you've got to think
Speaker 2: through all these potential issues. So you may have a
Speaker 2: passive investment a company that you've invested and then maybe
Speaker 2: do subsequent acquisitions that then imperil you, even though you
Speaker 2: don't control management. The only thing that I could really
Speaker 2: think through is you would do what we refer to
Speaker 2: as a vulnerability matrix. Is you go through potential issues
Speaker 2: for transactions and assess what could happen and run through
Speaker 2: those scenarios, and then you prepare potential responses what we
Speaker 2: refer to as a rebuttal matrix, so that you're prepared.
Speaker 2: Because companies, generally speaking, have difficult responding quickly to news
Speaker 2: or lawsuits or new action. So you have to have
Speaker 2: at least a decision making mechanism established ahead of time,
Speaker 2: and you've got to do your best to figure out
Speaker 2: what's around the corner, how this could be a problem.
Speaker 2: And if you're not the first one being sued or
Speaker 2: being investigated, as soon as there is an investigation, use
Speaker 2: that as a template to review all of your investments
Speaker 2: to see how that can potentially affect you.
Speaker 1: Yeah, and also, you know you're in a situation where
Speaker 1: maybe it's you know, no changes are needed. You know,
Speaker 1: this is an interesting guideline. It's a brand new guideline,
Speaker 1: and we don't know how it will be treated by
Speaker 1: the courts. I mean these, as I said, these are
Speaker 1: not binding. This is not these are not laws. These
Speaker 1: are just guidelines, and it may be that these partial
Speaker 1: ownerships or these minority investments are essentially ultimately at the
Speaker 1: end of that they consider just fine. But now there's
Speaker 1: a lot of prep work, a lot that has to
Speaker 1: go into thinking about these and understanding where you sit
Speaker 1: with respect to your investments. I think, in particular private equity,
Speaker 1: as you mentioned, because of this guideline. I mean, I
Speaker 1: just think this creates an enormous amount of uncertainty.
Speaker 2: Yeah, and from a traditional investing standpoint, your risk reward.
Speaker 2: Right now, you're introducing an element of risk that you
Speaker 2: weren't previously assessing, and it could have substantial harm with
Speaker 2: respect to fines, penalty.
Speaker 1: Exactly, reputations and reputation.
Speaker 2: Your inability to invest in subsequent transactions. And by the
Speaker 2: time any of this is proved out in court, it's
Speaker 2: already decided. In the capital markets, it's already done, because
Speaker 2: no one wants to withstand the scrutiny and the pain
Speaker 2: from this point till they're till it's decided.
Speaker 1: Yeah, I think maybe this guideline is intended very much
Speaker 1: to be a preventative, right in that respect, just you
Speaker 1: we're not going to challenge necessarily these investments, but we
Speaker 1: just want to stop them at the outset, right.
Speaker 2: And so one could argue that's government overreach as opposed
Speaker 2: to being based off of the facts that they're chilling
Speaker 2: it for the specter of the government's interference and it's
Speaker 2: real and it'll work, yeah, and this will certainly dissuade
Speaker 2: people from making certain investments.
Speaker 3: Well, we have to wrap up pretty soon.
Speaker 1: I have one last anti trust question before a silly one,
Speaker 1: and that is, given all of this and what we've
Speaker 1: talked about, just generally, how are you advising clients in general,
Speaker 1: like your first approach with respect to these guidelines in
Speaker 1: future transaction activity.
Speaker 2: I think this is really a new area for our clients.
Speaker 2: So we're incredibly deferential to anti trust counsel. That's what
Speaker 2: they do, they're they're practitioners. The big change is what's
Speaker 2: happening in the public domain. The anti trust practitioners are
Speaker 2: focused on their dealings with the agency and even potentially
Speaker 2: in court, but the companies have to endure everything before
Speaker 2: that gets sorted out. And I think the weight of
Speaker 2: that is so much more now and there's so much
Speaker 2: more at stake in terms of executive reputation, company reputation,
Speaker 2: the ability to conduct business that they've got to through
Speaker 2: the they've got to think through the communications strategy with
Speaker 2: an antitrust timeline much much more, and think about how
Speaker 2: it's going to play out in the media. And also
Speaker 2: that these type of guidelines can create new antagonists and
Speaker 2: you could be funded by competition, you could be funded
Speaker 2: by adversarial groups within your organization, and you've really got
Speaker 2: to gameplay this. You've got to write out scenarios, how
Speaker 2: are we going to respond, who's responsible for it, and
Speaker 2: figure it out.
Speaker 1: Yeah, it's a lot, it's a lot to think about,
Speaker 1: and you know, we don't know what the lasting power
Speaker 1: of these particular guidelines are going to be. So it's
Speaker 1: a topic for today. We don't know if it's going
Speaker 1: to be a topic in a year from now, but
Speaker 1: you know, we'll have to see. So, as I said,
Speaker 1: that's our last substance of anti trust question.
Speaker 3: But now we're going to have a little fun.
Speaker 1: So and we do this with every single one of
Speaker 1: our guests on votes and verdicts. We have a last
Speaker 1: question for you, and that is, if you were stranded
Speaker 1: on a desert island, what music would you want to
Speaker 1: have with you, and I'm not putting pressure on you
Speaker 1: to be a colectic here. But our very first guest
Speaker 1: was Mick Malvaaney and I want to tell you what
Speaker 1: he said because it's an interesting group Dire Straits, the Beatles,
Speaker 1: White Album, Mozart and pet Chop Boys. So I wrote,
Speaker 1: what do you think.
Speaker 2: Okay for me? Given that I love music and I'm
Speaker 2: incurably toned off, I would I would probably pick eminem
Speaker 2: because good choice. I can't rap. I like the music,
Speaker 2: and if I'm stranded and I have nothing else to do,
Speaker 2: maybe I can master rap.
Speaker 3: God, I think that's a good reason.
Speaker 1: You know what, It's as good as any right anyway,
Speaker 1: I think that's a rap for this Votes and Verdicts podcast.
Speaker 3: Thanks again, Iira.
Speaker 2: For joining us, pleasure being here very
Speaker 1: Interesting, and thanks to everyone who listens in or listened in,
Speaker 1: and as usual, feel free to reach out to me
Speaker 1: at Bloomberg Intelligence with any thoughts, questions, or comments, and
Speaker 1: have a great day.