1
00:00:03,480 --> 00:00:07,560
Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

2
00:00:07,640 --> 00:00:10,440
Speaker 1: day we bring you insight and analysis into the most

3
00:00:10,480 --> 00:00:13,399
Speaker 1: important legal news of the day. You can find more

4
00:00:13,480 --> 00:00:18,040
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

5
00:00:18,320 --> 00:00:21,840
Speaker 1: and on Bloomberg dot com slash podcast. Anti trust law

6
00:00:21,880 --> 00:00:24,520
Speaker 1: seems to be all the rage lately, from Senator Elizabeth

7
00:00:24,520 --> 00:00:27,400
Speaker 1: Warren suggesting a breakup of the tech giants to the

8
00:00:27,440 --> 00:00:31,840
Speaker 1: aggressive move by the European Union's anti competition Authority, and

9
00:00:31,880 --> 00:00:34,840
Speaker 1: we'll muse e streaming be the next high profile anti

10
00:00:34,920 --> 00:00:36,879
Speaker 1: trust battle. Here to tell us all, and I'm going

11
00:00:36,880 --> 00:00:40,440
Speaker 1: to call this an antitrust roundup. Is Bloomberg Intelligence Senior

12
00:00:40,479 --> 00:00:44,960
Speaker 1: litigation analyst Jennifer ree So Jen. This week, EU Competition

13
00:00:44,960 --> 00:00:49,520
Speaker 1: Commissioner margrethe f Sayer played down reports that they're poised

14
00:00:49,560 --> 00:00:53,880
Speaker 1: to open a formal investigation into Apple. Tell us about

15
00:00:53,920 --> 00:00:56,880
Speaker 1: what's happening. Well, you know, I think before they make

16
00:00:56,920 --> 00:00:59,360
Speaker 1: an official announcement, she has to do that right because

17
00:00:59,400 --> 00:01:02,080
Speaker 1: what they're doing, in what they plan on doing, is confidential.

18
00:01:02,080 --> 00:01:04,399
Speaker 1: But if they do open a formal investigation, she will

19
00:01:04,440 --> 00:01:07,800
Speaker 1: say something or the commission will say something. Spotify has

20
00:01:07,800 --> 00:01:09,800
Speaker 1: complained to them. They did this in March. And what

21
00:01:09,840 --> 00:01:12,280
Speaker 1: they really object to is that they call Apple a

22
00:01:12,360 --> 00:01:14,760
Speaker 1: player and a referee, and they say it's not fair.

23
00:01:15,160 --> 00:01:17,559
Speaker 1: They have market power, they claim, in the app Store,

24
00:01:18,000 --> 00:01:20,559
Speaker 1: and they participate in the App Store and in particular

25
00:01:20,920 --> 00:01:23,760
Speaker 1: competing with Spotify with streaming music. Right, you can have

26
00:01:23,800 --> 00:01:26,320
Speaker 1: a subscription to Spotify to stream music. You can have

27
00:01:26,400 --> 00:01:28,520
Speaker 1: a subscription to Apple Music to stream music. And what

28
00:01:28,600 --> 00:01:31,319
Speaker 1: Spotify says is since they started that business, they have

29
00:01:31,400 --> 00:01:35,160
Speaker 1: been taking measures to disadvantage Spotify and discriminate against Spotify

30
00:01:35,240 --> 00:01:37,240
Speaker 1: to their own benefit. And that's what they object to.

31
00:01:37,920 --> 00:01:41,120
Speaker 1: And does it seem as if the EU is going

32
00:01:41,160 --> 00:01:44,240
Speaker 1: to look into it? I would suspect they will. And

33
00:01:44,319 --> 00:01:46,480
Speaker 1: I say, you know, this is very much like the

34
00:01:46,520 --> 00:01:49,640
Speaker 1: Amazon shopping case. They find Amazon a few years I'm

35
00:01:49,640 --> 00:01:53,280
Speaker 1: sorry Google, What am I saying? Amazon's next? That's coming

36
00:01:53,440 --> 00:01:56,360
Speaker 1: the Google? When they find Google because they were moving

37
00:01:56,360 --> 00:01:59,480
Speaker 1: their own shopping comparison services up in a in a

38
00:01:59,520 --> 00:02:02,920
Speaker 1: search above their competitors, and Google that in trouble for

39
00:02:02,960 --> 00:02:04,600
Speaker 1: that they find them a few years ago. This is

40
00:02:04,680 --> 00:02:07,600
Speaker 1: very similar, right, where a company is providing the platform

41
00:02:07,680 --> 00:02:10,600
Speaker 1: and then also participating in that platform against its rivals

42
00:02:10,639 --> 00:02:13,080
Speaker 1: and disadvantaging its rivals. So I think they will have

43
00:02:13,120 --> 00:02:14,920
Speaker 1: a lot of interest in looking into this and a

44
00:02:15,080 --> 00:02:18,079
Speaker 1: very serious in the EU, and she is very serious,

45
00:02:18,320 --> 00:02:20,680
Speaker 1: she is. So Now, from music to pharmacy is not

46
00:02:20,800 --> 00:02:24,560
Speaker 1: a great segue, but the Justice Department had agreed to

47
00:02:24,600 --> 00:02:27,880
Speaker 1: approve the merger of CVS, one of the nation's largest

48
00:02:27,880 --> 00:02:31,960
Speaker 1: pharmacy service providers, and health insurance giant Etna, and the

49
00:02:32,000 --> 00:02:35,960
Speaker 1: deal closed in November. It was approved by Justice. That's right.

50
00:02:36,040 --> 00:02:39,440
Speaker 1: So what's happening now? You know, this in the antitrust

51
00:02:39,520 --> 00:02:42,160
Speaker 1: world has so much buzz because what is happening is

52
00:02:42,240 --> 00:02:46,519
Speaker 1: so odd and unprecedented. When the Department of Justice settles

53
00:02:46,560 --> 00:02:49,440
Speaker 1: a merger investigation like they did with CVS Etna, which

54
00:02:49,480 --> 00:02:52,560
Speaker 1: was requiring the companies to divest a Medicare part D

55
00:02:52,720 --> 00:02:55,960
Speaker 1: business of Etna because they had an overlap of horizontal

56
00:02:55,960 --> 00:02:58,400
Speaker 1: overlap there, they sign what's called the consent order, and

57
00:02:58,480 --> 00:03:00,840
Speaker 1: that consent order, by law, needs to be signed off

58
00:03:00,880 --> 00:03:03,200
Speaker 1: on by a judge. It's called a Tunny Act procedure.

59
00:03:03,480 --> 00:03:05,120
Speaker 1: And in the past this has really been kind of

60
00:03:05,160 --> 00:03:07,200
Speaker 1: proform of the judge takes it. They may ask some

61
00:03:07,320 --> 00:03:10,480
Speaker 1: questions about the settlement, about whether the remedy will fix

62
00:03:10,520 --> 00:03:12,880
Speaker 1: the harm that the DJ is alleged could have occurred,

63
00:03:13,040 --> 00:03:15,480
Speaker 1: and then they sign off will Lo and beholder before

64
00:03:15,560 --> 00:03:18,639
Speaker 1: Judge Leon, the same judge that oversaw the A. T

65
00:03:18,720 --> 00:03:21,120
Speaker 1: and T Time Warner merger trial, and he said, well,

66
00:03:21,160 --> 00:03:24,120
Speaker 1: hold on a minute, now, I'm not just signing this.

67
00:03:24,240 --> 00:03:26,560
Speaker 1: I'm not just signing on the dotted line. My job

68
00:03:26,720 --> 00:03:29,000
Speaker 1: is to look at this and make sure that this

69
00:03:29,520 --> 00:03:32,560
Speaker 1: is appropriate. Now that's where the disagreement lies. The d

70
00:03:32,600 --> 00:03:34,480
Speaker 1: o J would say, yes, you're just meant to look

71
00:03:34,520 --> 00:03:36,839
Speaker 1: at it and ask whether our settlement fixes the harm

72
00:03:36,880 --> 00:03:39,320
Speaker 1: we allege and our complaint. And he's kind of second

73
00:03:39,400 --> 00:03:42,560
Speaker 1: second guessing the whole entire thing, whether the determination of

74
00:03:42,600 --> 00:03:45,240
Speaker 1: harm was the proper determination to begin with, and whether

75
00:03:45,360 --> 00:03:47,960
Speaker 1: or not they ignored other harms that might occur from

76
00:03:48,000 --> 00:03:50,480
Speaker 1: this deal. So it's unusual. And the d o J

77
00:03:50,880 --> 00:03:54,880
Speaker 1: also says that having this kind of testimony from different

78
00:03:55,000 --> 00:03:57,640
Speaker 1: people before the judge could hurt its ability to settle

79
00:03:57,680 --> 00:04:01,440
Speaker 1: future cases, because who is going to believe, oh, this

80
00:04:01,520 --> 00:04:05,320
Speaker 1: is done. No, maybe a judge might intervene in this. Well,

81
00:04:05,360 --> 00:04:07,560
Speaker 1: that's exactly right. He's going to have hearing and he

82
00:04:07,640 --> 00:04:10,320
Speaker 1: maybe there's some you know, it's not clear yet hearing

83
00:04:10,320 --> 00:04:13,400
Speaker 1: testimony about this deal from outside from interested parties in

84
00:04:13,400 --> 00:04:17,000
Speaker 1: the American Medal Association, American Interest Institute. And that's the point.

85
00:04:17,279 --> 00:04:20,120
Speaker 1: Why are these parties going to enter into these settlements

86
00:04:20,120 --> 00:04:21,840
Speaker 1: with the d o J after a year a year

87
00:04:21,880 --> 00:04:23,840
Speaker 1: and a half of investigation and then close a deal.

88
00:04:24,040 --> 00:04:26,200
Speaker 1: If a judge can just come along and second guess

89
00:04:26,240 --> 00:04:28,640
Speaker 1: that have an entire new hearing on the concepts and

90
00:04:28,680 --> 00:04:31,440
Speaker 1: on the harm and and pull apart the deal, how

91
00:04:31,480 --> 00:04:34,840
Speaker 1: would they undo that deal at this point? Well, this

92
00:04:34,920 --> 00:04:38,200
Speaker 1: is what happened. They did close, but ETNA agreed, CBS

93
00:04:38,240 --> 00:04:41,480
Speaker 1: agreed to hold those assets separate, so they're operating independently.

94
00:04:41,800 --> 00:04:44,720
Speaker 1: If they had to put unwind they would. I don't

95
00:04:44,760 --> 00:04:47,520
Speaker 1: think ultimately that's what's going to happen here, but you know,

96
00:04:47,560 --> 00:04:49,920
Speaker 1: it remains to be seen what this judge tries to

97
00:04:49,960 --> 00:04:52,719
Speaker 1: do and whether they have to go into an appellate route.

98
00:04:53,160 --> 00:04:57,120
Speaker 1: Now another unusual, perhaps unprecedented move, this time by the

99
00:04:57,240 --> 00:05:01,039
Speaker 1: d o J. It's shall we say, it's buddying into

100
00:05:01,160 --> 00:05:05,520
Speaker 1: an FTC case over qualcom. Yes, it's another thing that

101
00:05:05,800 --> 00:05:08,720
Speaker 1: has the antitrust community. Really, you know, kind of very

102
00:05:08,760 --> 00:05:12,960
Speaker 1: exciting years, very exciting with Elizabeth Warren and everything else.

103
00:05:13,320 --> 00:05:15,640
Speaker 1: You know, what we have as a Federal Trade Commission

104
00:05:15,680 --> 00:05:19,200
Speaker 1: lawsuit alleging that a company attempted to monopolize a market,

105
00:05:19,200 --> 00:05:22,479
Speaker 1: that they violated our monopolization laws, actually section five of

106
00:05:22,520 --> 00:05:25,200
Speaker 1: the FTC Act. They had a trial, they did, I

107
00:05:25,240 --> 00:05:28,240
Speaker 1: think very well, and now they're waiting for the judge's decision.

108
00:05:28,279 --> 00:05:30,800
Speaker 1: This is Judge Lucy co in the Northern District of California.

109
00:05:31,080 --> 00:05:33,400
Speaker 1: And what has happened is that Qualcom has tried to

110
00:05:33,440 --> 00:05:35,520
Speaker 1: settle this case and they haven't been able to settle it.

111
00:05:35,560 --> 00:05:38,680
Speaker 1: They need a majority vote of the FTC Commissioners. They

112
00:05:38,680 --> 00:05:42,000
Speaker 1: only have four because Joe Simons, the chairperson, has refused himself.

113
00:05:42,200 --> 00:05:43,920
Speaker 1: And it could be that what they have as a

114
00:05:44,000 --> 00:05:47,280
Speaker 1: partisan block. There two Democrats and two Republicans, and when

115
00:05:47,279 --> 00:05:49,960
Speaker 1: they tie, there will be no settlement. When there's a tie,

116
00:05:49,960 --> 00:05:52,880
Speaker 1: they need the four to one. So what has happened

117
00:05:52,880 --> 00:05:55,039
Speaker 1: is the Department of Justice has come in and weighed

118
00:05:55,080 --> 00:05:57,400
Speaker 1: in with a motion to the judge asking for a

119
00:05:57,480 --> 00:06:00,200
Speaker 1: separate hearing on remedy if she decides against qualk m

120
00:06:00,480 --> 00:06:04,600
Speaker 1: and if so, essentially to go easy on them. It's

121
00:06:04,600 --> 00:06:07,719
Speaker 1: how I'm trying to think, how would a judge react

122
00:06:07,720 --> 00:06:10,560
Speaker 1: to that, because in one sense, they're saying, you know,

123
00:06:10,640 --> 00:06:15,160
Speaker 1: you shouldn't do this because and she might feel, Hey,

124
00:06:15,320 --> 00:06:17,479
Speaker 1: I heard the case. I know what I'm doing here.

125
00:06:17,680 --> 00:06:20,600
Speaker 1: I think that's exactly right. I heard the witnesses. I'm

126
00:06:20,600 --> 00:06:22,840
Speaker 1: the trier of the fact. I'm the one who saw

127
00:06:22,880 --> 00:06:25,599
Speaker 1: this and was in the position to wage the credibility

128
00:06:25,600 --> 00:06:28,520
Speaker 1: of the documents of the testimony, went through this long

129
00:06:28,560 --> 00:06:31,080
Speaker 1: trial and has sorted through all of the exhibits that

130
00:06:31,080 --> 00:06:33,240
Speaker 1: have been put in. This is my decision, and so

131
00:06:33,320 --> 00:06:35,839
Speaker 1: I'm not really so sure it will sway the judge

132
00:06:35,960 --> 00:06:38,360
Speaker 1: very much in what she does here. But it really

133
00:06:38,440 --> 00:06:42,480
Speaker 1: is kind of an interesting quirk only about sixty seconds here.

134
00:06:42,480 --> 00:06:48,160
Speaker 1: But Qualcom has benefited from the Trump administration prior for this. Yes,

135
00:06:48,240 --> 00:06:50,960
Speaker 1: at one time, Broadcom tried to acquire the company, and

136
00:06:51,160 --> 00:06:55,080
Speaker 1: under the Committee on Foreign Investment in the US, our

137
00:06:55,240 --> 00:06:57,800
Speaker 1: Executive Office weighed in and said, no, we think that

138
00:06:57,839 --> 00:07:00,000
Speaker 1: there's a national security problem here. Now they are allowed

139
00:07:00,160 --> 00:07:02,320
Speaker 1: to do that. The President has the last say on

140
00:07:02,360 --> 00:07:05,600
Speaker 1: syphia's decisions, and when a non US entity is going

141
00:07:05,680 --> 00:07:08,640
Speaker 1: to acquire us asset. Syphias has the right to investigate

142
00:07:08,880 --> 00:07:11,920
Speaker 1: and to determine whether they want to block that. And

143
00:07:12,080 --> 00:07:15,680
Speaker 1: that is what has happened, what happened previously. Always a pleasure, Jen,

144
00:07:16,200 --> 00:07:20,120
Speaker 1: You make antitrust law fun. All right? That's Bloomberg Intelligence

145
00:07:20,160 --> 00:07:22,840
Speaker 1: Senior Litigation analyst, Jennifer. Where you can get more of

146
00:07:22,920 --> 00:07:25,040
Speaker 1: Jen's analysis by going to be I go on the

147
00:07:25,080 --> 00:07:30,960
Speaker 1: Bloomberg Terminal. Thanks for listening to the Bloomberg Law podcast.

148
00:07:31,280 --> 00:07:35,360
Speaker 1: You can subscribe and listen to the show on Apple Podcasts, SoundCloud,

149
00:07:35,440 --> 00:07:39,320
Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.

150
00:07:39,800 --> 00:07:41,080
Speaker 1: This is Bloomberg