Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcast. Anti trust law
Speaker 1: seems to be all the rage lately, from Senator Elizabeth
Speaker 1: Warren suggesting a breakup of the tech giants to the
Speaker 1: aggressive move by the European Union's anti competition Authority, and
Speaker 1: we'll muse e streaming be the next high profile anti
Speaker 1: trust battle. Here to tell us all, and I'm going
Speaker 1: to call this an antitrust roundup. Is Bloomberg Intelligence Senior
Speaker 1: litigation analyst Jennifer ree So Jen. This week, EU Competition
Speaker 1: Commissioner margrethe f Sayer played down reports that they're poised
Speaker 1: to open a formal investigation into Apple. Tell us about
Speaker 1: what's happening. Well, you know, I think before they make
Speaker 1: an official announcement, she has to do that right because
Speaker 1: what they're doing, in what they plan on doing, is confidential.
Speaker 1: But if they do open a formal investigation, she will
Speaker 1: say something or the commission will say something. Spotify has
Speaker 1: complained to them. They did this in March. And what
Speaker 1: they really object to is that they call Apple a
Speaker 1: player and a referee, and they say it's not fair.
Speaker 1: They have market power, they claim, in the app Store,
Speaker 1: and they participate in the App Store and in particular
Speaker 1: competing with Spotify with streaming music. Right, you can have
Speaker 1: a subscription to Spotify to stream music. You can have
Speaker 1: a subscription to Apple Music to stream music. And what
Speaker 1: Spotify says is since they started that business, they have
Speaker 1: been taking measures to disadvantage Spotify and discriminate against Spotify
Speaker 1: to their own benefit. And that's what they object to.
Speaker 1: And does it seem as if the EU is going
Speaker 1: to look into it? I would suspect they will. And
Speaker 1: I say, you know, this is very much like the
Speaker 1: Amazon shopping case. They find Amazon a few years I'm
Speaker 1: sorry Google, What am I saying? Amazon's next? That's coming
Speaker 1: the Google? When they find Google because they were moving
Speaker 1: their own shopping comparison services up in a in a
Speaker 1: search above their competitors, and Google that in trouble for
Speaker 1: that they find them a few years ago. This is
Speaker 1: very similar, right, where a company is providing the platform
Speaker 1: and then also participating in that platform against its rivals
Speaker 1: and disadvantaging its rivals. So I think they will have
Speaker 1: a lot of interest in looking into this and a
Speaker 1: very serious in the EU, and she is very serious,
Speaker 1: she is. So Now, from music to pharmacy is not
Speaker 1: a great segue, but the Justice Department had agreed to
Speaker 1: approve the merger of CVS, one of the nation's largest
Speaker 1: pharmacy service providers, and health insurance giant Etna, and the
Speaker 1: deal closed in November. It was approved by Justice. That's right.
Speaker 1: So what's happening now? You know, this in the antitrust
Speaker 1: world has so much buzz because what is happening is
Speaker 1: so odd and unprecedented. When the Department of Justice settles
Speaker 1: a merger investigation like they did with CVS Etna, which
Speaker 1: was requiring the companies to divest a Medicare part D
Speaker 1: business of Etna because they had an overlap of horizontal
Speaker 1: overlap there, they sign what's called the consent order, and
Speaker 1: that consent order, by law, needs to be signed off
Speaker 1: on by a judge. It's called a Tunny Act procedure.
Speaker 1: And in the past this has really been kind of
Speaker 1: proform of the judge takes it. They may ask some
Speaker 1: questions about the settlement, about whether the remedy will fix
Speaker 1: the harm that the DJ is alleged could have occurred,
Speaker 1: and then they sign off will Lo and beholder before
Speaker 1: Judge Leon, the same judge that oversaw the A. T
Speaker 1: and T Time Warner merger trial, and he said, well,
Speaker 1: hold on a minute, now, I'm not just signing this.
Speaker 1: I'm not just signing on the dotted line. My job
Speaker 1: is to look at this and make sure that this
Speaker 1: is appropriate. Now that's where the disagreement lies. The d
Speaker 1: o J would say, yes, you're just meant to look
Speaker 1: at it and ask whether our settlement fixes the harm
Speaker 1: we allege and our complaint. And he's kind of second
Speaker 1: second guessing the whole entire thing, whether the determination of
Speaker 1: harm was the proper determination to begin with, and whether
Speaker 1: or not they ignored other harms that might occur from
Speaker 1: this deal. So it's unusual. And the d o J
Speaker 1: also says that having this kind of testimony from different
Speaker 1: people before the judge could hurt its ability to settle
Speaker 1: future cases, because who is going to believe, oh, this
Speaker 1: is done. No, maybe a judge might intervene in this. Well,
Speaker 1: that's exactly right. He's going to have hearing and he
Speaker 1: maybe there's some you know, it's not clear yet hearing
Speaker 1: testimony about this deal from outside from interested parties in
Speaker 1: the American Medal Association, American Interest Institute. And that's the point.
Speaker 1: Why are these parties going to enter into these settlements
Speaker 1: with the d o J after a year a year
Speaker 1: and a half of investigation and then close a deal.
Speaker 1: If a judge can just come along and second guess
Speaker 1: that have an entire new hearing on the concepts and
Speaker 1: on the harm and and pull apart the deal, how
Speaker 1: would they undo that deal at this point? Well, this
Speaker 1: is what happened. They did close, but ETNA agreed, CBS
Speaker 1: agreed to hold those assets separate, so they're operating independently.
Speaker 1: If they had to put unwind they would. I don't
Speaker 1: think ultimately that's what's going to happen here, but you know,
Speaker 1: it remains to be seen what this judge tries to
Speaker 1: do and whether they have to go into an appellate route.
Speaker 1: Now another unusual, perhaps unprecedented move, this time by the
Speaker 1: d o J. It's shall we say, it's buddying into
Speaker 1: an FTC case over qualcom. Yes, it's another thing that
Speaker 1: has the antitrust community. Really, you know, kind of very
Speaker 1: exciting years, very exciting with Elizabeth Warren and everything else.
Speaker 1: You know, what we have as a Federal Trade Commission
Speaker 1: lawsuit alleging that a company attempted to monopolize a market,
Speaker 1: that they violated our monopolization laws, actually section five of
Speaker 1: the FTC Act. They had a trial, they did, I
Speaker 1: think very well, and now they're waiting for the judge's decision.
Speaker 1: This is Judge Lucy co in the Northern District of California.
Speaker 1: And what has happened is that Qualcom has tried to
Speaker 1: settle this case and they haven't been able to settle it.
Speaker 1: They need a majority vote of the FTC Commissioners. They
Speaker 1: only have four because Joe Simons, the chairperson, has refused himself.
Speaker 1: And it could be that what they have as a
Speaker 1: partisan block. There two Democrats and two Republicans, and when
Speaker 1: they tie, there will be no settlement. When there's a tie,
Speaker 1: they need the four to one. So what has happened
Speaker 1: is the Department of Justice has come in and weighed
Speaker 1: in with a motion to the judge asking for a
Speaker 1: separate hearing on remedy if she decides against qualk m
Speaker 1: and if so, essentially to go easy on them. It's
Speaker 1: how I'm trying to think, how would a judge react
Speaker 1: to that, because in one sense, they're saying, you know,
Speaker 1: you shouldn't do this because and she might feel, Hey,
Speaker 1: I heard the case. I know what I'm doing here.
Speaker 1: I think that's exactly right. I heard the witnesses. I'm
Speaker 1: the trier of the fact. I'm the one who saw
Speaker 1: this and was in the position to wage the credibility
Speaker 1: of the documents of the testimony, went through this long
Speaker 1: trial and has sorted through all of the exhibits that
Speaker 1: have been put in. This is my decision, and so
Speaker 1: I'm not really so sure it will sway the judge
Speaker 1: very much in what she does here. But it really
Speaker 1: is kind of an interesting quirk only about sixty seconds here.
Speaker 1: But Qualcom has benefited from the Trump administration prior for this. Yes,
Speaker 1: at one time, Broadcom tried to acquire the company, and
Speaker 1: under the Committee on Foreign Investment in the US, our
Speaker 1: Executive Office weighed in and said, no, we think that
Speaker 1: there's a national security problem here. Now they are allowed
Speaker 1: to do that. The President has the last say on
Speaker 1: syphia's decisions, and when a non US entity is going
Speaker 1: to acquire us asset. Syphias has the right to investigate
Speaker 1: and to determine whether they want to block that. And
Speaker 1: that is what has happened, what happened previously. Always a pleasure, Jen,
Speaker 1: You make antitrust law fun. All right? That's Bloomberg Intelligence
Speaker 1: Senior Litigation analyst, Jennifer. Where you can get more of
Speaker 1: Jen's analysis by going to be I go on the
Speaker 1: Bloomberg Terminal. Thanks for listening to the Bloomberg Law podcast.
Speaker 1: You can subscribe and listen to the show on Apple Podcasts, SoundCloud,
Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.
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