WEBVTT - AI Copyright Rulings, Trump Antitrust, PBMs 0:00:15.480 --> 0:00:19.520 Hello and welcome to the Votes and Verdicts podcast, hosted 0:00:19.520 --> 0:00:22.319 by the Litigation and policy team at Bloomberg Intelligence, the 0:00:22.400 --> 0:00:25.880 investment research platform of Bloomberg LP on the Bloomberg Terminal. 0:00:26.440 --> 0:00:30.560 Bloomberg Intelligence has five hundred analysts and strategists working across 0:00:30.560 --> 0:00:33.920 the globe and focused on all major markets. Our coverage 0:00:34.240 --> 0:00:36.600 includes over two thousand equities and credits, and we have 0:00:36.640 --> 0:00:40.040 outlooks on more than ninety industries and one hundred market industries, 0:00:40.120 --> 0:00:44.760 currencies and commodities. This podcast series examines the intersection of 0:00:44.800 --> 0:00:48.239 business policy and law, and today's our weekly check in 0:00:48.400 --> 0:00:51.400 on the litigation and policy catalysts that we're watching, or 0:00:51.400 --> 0:00:53.320 at least some of them, and that we think will 0:00:53.320 --> 0:00:56.840 impact companies across a number of different sectors. My name 0:00:56.880 --> 0:00:59.440 is Elliott Stein. I'm an analyst with the Bloomberg Intelligence 0:00:59.440 --> 0:01:03.720 covering litigation in the financials sector. I'm delighted today as always, 0:01:03.720 --> 0:01:06.440 to be joined by a handful of my colleagues who 0:01:06.440 --> 0:01:09.960 cover litigation and policy for BI. As always, you can 0:01:10.000 --> 0:01:12.280 find all of our research on the Bloomberg terminal at 0:01:12.280 --> 0:01:16.320 big and more specifically, you can find our litigation and 0:01:16.360 --> 0:01:20.920 policy research on the Bloomberg terminal at BI laws go. 0:01:22.080 --> 0:01:26.360 Today is June twenty sixth, twenty twenty five. It's about 0:01:26.760 --> 0:01:30.520 nine am here in New York. And with that, let's 0:01:30.520 --> 0:01:34.560 get started. I want to bring in my colleague Tamlin Basin, 0:01:34.600 --> 0:01:41.880 who covers techp issues that are being litigated or in 0:01:42.240 --> 0:01:47.160 some sort of policy development. So, Tamlin, you have been 0:01:47.240 --> 0:01:52.040 covering a bunch of cases related to AI, artificial intelligence 0:01:52.080 --> 0:01:57.480 and potential copyright infringement. Super interesting issue. Just this week, 0:01:57.560 --> 0:02:00.000 in fact, I think just yesterday we got a really 0:02:00.040 --> 0:02:02.600 big decision involving META. A couple of days before that 0:02:02.720 --> 0:02:06.080 we got another sort of groundbreaking decision. I think, why 0:02:06.080 --> 0:02:08.480 don't you come in sort of give us, you know, 0:02:08.520 --> 0:02:10.600 the layer of the lay and what the overall context 0:02:10.680 --> 0:02:12.959 is here and what these decisions mean. 0:02:13.440 --> 0:02:16.240 Yeah, sure, thank you, Ellia, And you're right. So in 0:02:16.280 --> 0:02:19.480 the US alone, there's over forty lawsuits and these are 0:02:19.520 --> 0:02:24.040 lawsuits that are being litigated by copyright owners content owners. 0:02:24.120 --> 0:02:28.639 So this is print media, authors, books, films, music recordings, 0:02:28.880 --> 0:02:32.160 and they've sued developers of large language models. Now this 0:02:32.200 --> 0:02:35.600 includes both some of those pure play large language model 0:02:35.639 --> 0:02:40.280 firms like open AI, Anthropic Perplexity Stability AI as well 0:02:40.320 --> 0:02:42.960 as some of the larger tech firms that have also 0:02:43.560 --> 0:02:47.600 tried their hand in developing large language models. So Meta, Google, 0:02:47.919 --> 0:02:50.520 Microsoft have all been sued. Now, No, I have been 0:02:50.520 --> 0:02:52.160 covering this for a while, and just a few weeks 0:02:52.200 --> 0:02:55.000 ago we put out a deep dive report that really 0:02:55.120 --> 0:02:58.520 examines in more detail all of these issues that are 0:02:58.520 --> 0:03:01.320 at play. As you mentioned this week, there was sort 0:03:01.320 --> 0:03:05.519 of an acceleration moving this legal forward. And so first 0:03:05.600 --> 0:03:08.480 what we had was Anthropic. This was a case that 0:03:08.639 --> 0:03:12.560 was brought by a group of authors claiming that by 0:03:12.639 --> 0:03:17.720 training Anthropics large language model claud on these publications, that 0:03:17.720 --> 0:03:21.160 that was copyright infringement. Now, there was a summary judgment 0:03:21.240 --> 0:03:25.120 hearing that was held in the spring, and on I 0:03:25.120 --> 0:03:27.720 believe it was Monday night, the judge in that case 0:03:28.000 --> 0:03:31.400 came out and found in favor of Anthropic. 0:03:31.040 --> 0:03:31.639 On fair use. 0:03:31.880 --> 0:03:33.360 Now, I think it's important to note that there are 0:03:33.440 --> 0:03:36.120 four fair use factors. Really, what courts are looking at 0:03:36.360 --> 0:03:38.960 are sort of factors, one which is looking at whether 0:03:39.000 --> 0:03:41.840 this was a transformative use. In factor four, which is 0:03:41.880 --> 0:03:45.320 whether or not the way that the defendant used the 0:03:45.920 --> 0:03:50.920 content impacted the market for the original. So the judge 0:03:50.960 --> 0:03:54.360 in that case found in anthropics favor on both of 0:03:54.360 --> 0:03:57.560 those issues, but really focusing more on the transformative use side, 0:03:57.600 --> 0:04:01.040 saying this was highly transformative and sort of waved away 0:04:01.080 --> 0:04:03.840 the market harm issue. Then we had last night in 0:04:03.880 --> 0:04:05.640 the Meta case, and this was also a case it 0:04:05.680 --> 0:04:09.040 was brought by another group of authors challenging Meta's development 0:04:09.080 --> 0:04:12.720 of its own large language model Lama now Here. Although 0:04:12.720 --> 0:04:16.200 the court did again find in favor of Meta, he 0:04:16.320 --> 0:04:19.640 focused really a lot of attention on this potential market 0:04:19.680 --> 0:04:23.520 harm aspect, on the fourth factor, and he made it 0:04:23.640 --> 0:04:26.320 very clear that this was a ruling in metas favor, 0:04:26.360 --> 0:04:30.160 not necessarily because the overall law the landscape for use 0:04:30.160 --> 0:04:32.880 it self dictates that, like he said, the evidentiary record 0:04:32.920 --> 0:04:37.159 before him was not showing any impacts of mark harm. However, 0:04:37.200 --> 0:04:38.800 he sort of went to grow the great lengths to 0:04:38.839 --> 0:04:41.760 say that this might be an outlier overall in terms 0:04:41.800 --> 0:04:44.800 of these AI copyright cases, and if there had been 0:04:44.839 --> 0:04:47.560 a better record of market harm that this would go differently. 0:04:47.880 --> 0:04:50.120 So I think the broad takeaway is that this is 0:04:50.160 --> 0:04:53.159 a positive development for AI firms, at least in terms 0:04:53.160 --> 0:04:58.520 of whether inputs used to train large language models were infringing. However, 0:04:58.560 --> 0:05:01.320 I don't think it was quite a resounding victory that 0:05:01.360 --> 0:05:02.720 those firms would have been looking. 0:05:02.480 --> 0:05:06.080 For somewhat of a victory for this, and that it 0:05:06.400 --> 0:05:08.360 sounds like the judge in the medic case sort of 0:05:08.920 --> 0:05:14.080 gave a like a playbook for future plaintiffs to potentially prevail. 0:05:14.720 --> 0:05:17.000 Yeah, he really did, and it was quite interesting to 0:05:17.040 --> 0:05:19.760 see him do that. He really took quite a bit 0:05:19.760 --> 0:05:21.880 of issue with sort of the lack of evidence on 0:05:21.920 --> 0:05:25.280 this in this case about potential market harm, and I 0:05:25.320 --> 0:05:28.240 think what he was really concerned about was whether or 0:05:28.279 --> 0:05:32.920 not the proliferation of AI generator materials could down the 0:05:32.960 --> 0:05:38.360 line be rode demand for those original content works. And 0:05:38.440 --> 0:05:40.720 he sort of explicitly said that maybe you're not going 0:05:40.760 --> 0:05:43.800 to see that in something like fiction works, where people 0:05:43.880 --> 0:05:46.960 might not be turning to a fiction book that was 0:05:47.000 --> 0:05:50.320 written by AI firm. However, he's had in other instances 0:05:50.320 --> 0:05:55.200 something like news paper reporting also sort of photographic imagery, 0:05:55.240 --> 0:05:58.640 where there might be a much stronger case for market harm. 0:05:58.960 --> 0:06:01.120 So I think we'll get the There are other cases 0:06:01.160 --> 0:06:04.120 that do alleged things closer along those lines, and I 0:06:04.160 --> 0:06:07.880 think if this judge's reasoning has followed, then those firms 0:06:08.000 --> 0:06:10.880 might have a much more difficult time getting somewhere in 0:06:10.960 --> 0:06:14.200 judgement on fair use, especially with respect to market impact. 0:06:14.400 --> 0:06:17.359 Yeah, and in this case against Meta, is that is 0:06:17.360 --> 0:06:19.479 that the case for Sarah Silverman's one of the planiffs. 0:06:19.800 --> 0:06:22.040 She is, well, she's one of the planeffs. In an interview, 0:06:22.640 --> 0:06:26.600 they've also sued I believe Google. Certainly they've sued open Ai. 0:06:27.960 --> 0:06:31.480 So yes, a lot of authors sort of had joined 0:06:31.520 --> 0:06:34.320 together on this and teamed up to follows a lot 0:06:34.320 --> 0:06:35.160 of the lms. 0:06:35.520 --> 0:06:37.440 And do you think the planeffs in the case against 0:06:37.480 --> 0:06:40.000 Mata are they gonna have another shot to bolster their record, 0:06:40.080 --> 0:06:43.240 to maybe show some of the facts that the judge 0:06:43.640 --> 0:06:44.680 said they needed to show. 0:06:45.600 --> 0:06:47.160 I'm not sure if on this they are. 0:06:47.240 --> 0:06:50.520 However, the case isn't actually over because specifically summary judgment 0:06:50.680 --> 0:06:54.200 was only on the reproduction of their works. That is, 0:06:54.240 --> 0:06:58.080 when when the Large Language Model reproduced the works to train. 0:06:58.440 --> 0:07:01.599 There's actually another issue where Meta sort of admittedly turned 0:07:01.760 --> 0:07:04.479 to BitTorrent to get a lot of these books, and 0:07:04.560 --> 0:07:07.719 is sue there was whether they subjected those books that 0:07:07.720 --> 0:07:09.160 they downloaded to BitTorrent. 0:07:09.920 --> 0:07:12.560 In doing that process, you can subject those works to 0:07:12.720 --> 0:07:15.200 other people who might be engaging in BitTorrent. 0:07:15.240 --> 0:07:17.160 So I think there's still going to be a potential 0:07:17.240 --> 0:07:21.320 distribution claim, and he's going to hold a hearing later 0:07:21.640 --> 0:07:22.560 in the summer. 0:07:22.280 --> 0:07:24.720 I believe, to decide what to do with that. I 0:07:24.760 --> 0:07:26.880 think it's relatively likely that he. 0:07:26.840 --> 0:07:29.640 May allow this to be appealed as it is, and 0:07:29.640 --> 0:07:31.680 I also think there's a potential that we might have 0:07:31.720 --> 0:07:34.200 a quick appeal of that anthropic case. Both of they're 0:07:34.200 --> 0:07:36.000 more in different courts, but both we'll go up to 0:07:36.040 --> 0:07:36.760 the Ninth Circuit. 0:07:37.160 --> 0:07:39.720 Right yeah, they're both in the Northern District of California, 0:07:39.800 --> 0:07:42.960 right yeah, yeah, yeah, And just give us a flavor, 0:07:43.160 --> 0:07:44.840 I mean, and I know you sort of quantified this 0:07:44.920 --> 0:07:48.400 in your research decks. Give us a flavor of how 0:07:48.480 --> 0:07:49.400 much does at stake here? 0:07:50.600 --> 0:07:53.680 I mean, truthfully, it's potentially trillions of dollars and the 0:07:53.720 --> 0:07:56.400 reason for that sort of eye popping number that we're 0:07:56.640 --> 0:07:59.640 highly unlikely to see, but just because statutory images under 0:07:59.640 --> 0:08:02.320 the US Copyright Act can be up to one hundred 0:08:02.360 --> 0:08:06.160 and fifty thousand dollars per copyrighted work, and in the 0:08:06.200 --> 0:08:08.960 sort of anthropic case alone, we know that they also 0:08:08.960 --> 0:08:11.200 turned a bit torrent, and the allegation was that they 0:08:11.200 --> 0:08:14.800 downloaded as many as seven million books to that BitTorrent, 0:08:15.160 --> 0:08:18.000 So if you add statute or damages across all of that, 0:08:18.320 --> 0:08:23.320 you could get really eye popping numbers. These are sort 0:08:23.360 --> 0:08:25.880 of just related to inputs, and again, I think both 0:08:25.880 --> 0:08:29.040 of these cases found fair use on inputs. I think 0:08:29.080 --> 0:08:31.360 it's going to be a much more challenging issue when 0:08:31.360 --> 0:08:34.160 you're looking at outputs. This is when a generative AI 0:08:35.240 --> 0:08:38.800 producer's output that more closely mimics what it trained on. 0:08:38.920 --> 0:08:41.560 I think that might be not only a reproduction, but 0:08:41.600 --> 0:08:42.600 a potential distribution. 0:08:42.679 --> 0:08:44.560 And we have later cases that are going to test that. 0:08:45.040 --> 0:08:47.840 I think both of if you read both of these decisions, 0:08:48.040 --> 0:08:50.199 they make it clear that if outputs were alleged in 0:08:50.240 --> 0:08:52.240 these cases and they weren't, that it would have been 0:08:52.280 --> 0:08:54.200 a much different outcome on fair use. So I think 0:08:54.200 --> 0:08:56.720 we're going to be paying a lot more attention to how. 0:08:56.640 --> 0:08:57.400 That's going to develop. 0:08:57.679 --> 0:08:59.360 One of the major cases that's going to be testing 0:08:59.360 --> 0:09:02.240 that is the New York Times first Open AI and 0:09:02.320 --> 0:09:05.360 Microsoft case. It's being litigated in New York, but that's 0:09:05.400 --> 0:09:07.760 gonna be quite a bit more delayed in terms of this, 0:09:07.920 --> 0:09:10.120 just because you have so many different more parties are 0:09:10.160 --> 0:09:10.960 litigating that one. 0:09:11.360 --> 0:09:13.640 Such an interesting issue and sounds like it's going to 0:09:13.679 --> 0:09:16.520 play out for a while. I guess just given how 0:09:16.520 --> 0:09:20.040 many different cases there are, and you mentioned your deep 0:09:20.080 --> 0:09:22.080 dive earlier, I just want to plug that again for 0:09:22.160 --> 0:09:27.199 our listeners. This is Talent's really put out a comprehensive, 0:09:27.360 --> 0:09:31.360 very comprehensive report covering all these issues that he's talking about. 0:09:31.720 --> 0:09:34.400 You can get a hard copy version, just reach out 0:09:34.440 --> 0:09:37.360 to us if you're interested, and then if you're a 0:09:37.440 --> 0:09:41.280 terminal subscriber, there's a report as well on the terminal. 0:09:42.120 --> 0:09:46.120 All right, Talent, thank you so much. Speaking of deep dives, 0:09:46.160 --> 0:09:48.679 let's turn to Jen ree are one of our anti 0:09:48.679 --> 0:09:52.600 trust gurus here, because Jen is also working on a 0:09:52.600 --> 0:09:57.280 deep dive related to antitrust enforcement under the Trump administration 0:09:57.360 --> 0:10:00.000 and what that looks like. So Jen, why don't you 0:10:00.080 --> 0:10:05.000 you come in and maybe give us a sense of 0:10:06.120 --> 0:10:09.800 you know, what you are writing in your report about 0:10:09.840 --> 0:10:12.080 what we know so far in terms of anti trust 0:10:12.160 --> 0:10:15.240 enforcement under President Trump. 0:10:15.559 --> 0:10:16.480 Yeah, thanks, Elliott. 0:10:16.559 --> 0:10:18.640 I mean this has really been the subject of a 0:10:18.640 --> 0:10:23.440 lot of speculation because, you know, stepping back, you know, 0:10:23.520 --> 0:10:26.920 antitrust for many many years was really predictable I mean really, 0:10:27.200 --> 0:10:30.439 particularly with respect to how mergers and acquisitions that need 0:10:30.480 --> 0:10:32.520 to be filed with the government in reviewed, the way 0:10:32.559 --> 0:10:35.079 they would be treated. It's kind of been the same 0:10:35.559 --> 0:10:39.360 and the same changes since nineteen seventies, since the nineteen seventies, 0:10:39.600 --> 0:10:41.960 and you know, we would expect when a new administration 0:10:42.040 --> 0:10:44.760 would come in there would be slight changes a matter 0:10:44.800 --> 0:10:47.080 of degree. The Republicans tended to be a little bit 0:10:47.080 --> 0:10:49.720 more business friendly in certain ways to deal treatment, and 0:10:49.760 --> 0:10:52.400 the Democrats tended to be just slightly tougher, but again 0:10:52.440 --> 0:10:55.560 a matter of degree. Everybody kind of knew what the 0:10:56.760 --> 0:10:58.640 play of the land was and how things were going 0:10:58.679 --> 0:11:01.120 to go, and that all change changed. And that's why 0:11:01.160 --> 0:11:03.560 we've been watching so carefully what's going to happen with 0:11:03.600 --> 0:11:06.840 Trump's because it all changed when Biden was elected president 0:11:07.240 --> 0:11:09.679 and he put in place enforcers that were really on 0:11:09.720 --> 0:11:14.120 a mission. They wanted to revitalize antitrust enforcement. They really 0:11:14.120 --> 0:11:17.120 thought big was bad, they didn't like deals in combinations, 0:11:17.360 --> 0:11:19.920 and they wanted to do whatever they could to slow consolidation. 0:11:20.160 --> 0:11:23.680 And I think that after Trump was elected in the 0:11:23.679 --> 0:11:27.320 fourth quarter of twenty twenty four, there was kind of 0:11:27.320 --> 0:11:31.320 a reaction of glee for you know, those interested in 0:11:31.360 --> 0:11:33.920 deal making because of this expectation, well, everything was going 0:11:33.960 --> 0:11:36.240 to go back to the way that it was before Biden, 0:11:36.280 --> 0:11:38.280 and now we're going to get predictability again, and these 0:11:38.320 --> 0:11:41.080 deals are going to go through. And honestly, you know, 0:11:41.120 --> 0:11:43.720 we took the position here that that's probably not the case, 0:11:43.960 --> 0:11:46.280 that it's still going to be sort of heightened. There's 0:11:46.280 --> 0:11:48.600 still going to be this heightened level of aggression. And 0:11:48.720 --> 0:11:52.959 we saw that President Trump appointed people who are professed 0:11:53.640 --> 0:11:57.840 economic populists, right, so they are a little bit different 0:11:57.840 --> 0:11:59.719 than some of the Republicans of old that have run 0:11:59.760 --> 0:12:02.400 the Trade Commission and Department of Justice, and so we've 0:12:02.400 --> 0:12:04.440 been watching carefully to see what they're going to do 0:12:04.480 --> 0:12:06.360 with deal making. And now we've got a few months 0:12:06.360 --> 0:12:08.840 of track record, right, so we're watching to see what 0:12:08.880 --> 0:12:11.880 they're going to do. It's been very unclear based on 0:12:11.960 --> 0:12:14.480 their speeches and what they've said, Hey, we're going to 0:12:14.480 --> 0:12:17.800 continue to be aggressive. But I am beginning to see 0:12:17.800 --> 0:12:20.480 some of the pathways opening up to deals getting done, 0:12:20.559 --> 0:12:22.920 and I think that's going to be you know, all 0:12:22.960 --> 0:12:25.360 of those companies out there looking have a lot of money, 0:12:25.400 --> 0:12:27.120 looking to do a combination are going to be very 0:12:27.120 --> 0:12:29.960 happy about it. And what that is is a renewed 0:12:29.960 --> 0:12:33.760 acceptance of remedies to resolve otherwise problematic deals. So when 0:12:33.800 --> 0:12:37.640 I'm talking about remedies, when merging companies come together, let's 0:12:37.640 --> 0:12:40.040 say they have one product line, they each have the 0:12:40.040 --> 0:12:42.439 same product line, they compete, they're going to bring those 0:12:42.480 --> 0:12:45.320 product lines together in a concentrated market. So even for 0:12:45.400 --> 0:12:47.199 that one product line, and let's say they have thirty 0:12:47.240 --> 0:12:50.640 product lines, you're going to have a problematic anti trust issue. 0:12:50.679 --> 0:12:52.800 So what with a remedy. You can sell off that 0:12:52.840 --> 0:12:55.120 one product line, remove that overlap, and then get the 0:12:55.120 --> 0:12:58.280 bigger underlying deal closed, get rid of the bad part, 0:12:58.679 --> 0:13:00.560 hold on to what's good about the deal, and let 0:13:00.640 --> 0:13:03.560 it go forward. And likewise, if they don't compete, but 0:13:03.600 --> 0:13:08.160 they're vertically related and the merger would result in vertical integration. 0:13:08.559 --> 0:13:11.360 And if the deal raises a concern that companies that 0:13:11.480 --> 0:13:14.400 come together like that could foreclose their rivals because they 0:13:14.440 --> 0:13:17.240 secure a needed input for their rivals, so long as 0:13:17.240 --> 0:13:19.760 they made a commitment that they'd make that input available 0:13:19.760 --> 0:13:22.840 on a non discriminatory, fair and reasonable basis, they could 0:13:22.880 --> 0:13:26.520 usually get the deals closed. So the vast majority of 0:13:26.600 --> 0:13:29.240 deals that raised antitrust problems for many, many many years 0:13:29.240 --> 0:13:33.640 closed during the Biden administration, though instead the vast majority 0:13:33.760 --> 0:13:36.920 either got student court or were abandoned or this is 0:13:36.920 --> 0:13:39.240 what they really wanted. Deals didn't get signed to begin 0:13:39.280 --> 0:13:41.000 with because the companies realized this is going to be 0:13:41.000 --> 0:13:42.720 a tough road. We don't have the time, we can't 0:13:42.720 --> 0:13:45.440 do it. Deals can't really last the long road of 0:13:45.480 --> 0:13:49.480 litigation in most cases. So we had this huge spike 0:13:49.520 --> 0:13:53.200 and abandoned deals. But what we've seen now is that 0:13:53.720 --> 0:13:58.040 President Trump's FDC and DJ have cleared with remedies for 0:13:58.240 --> 0:14:00.920 deals in the last two months. That is more than 0:14:00.960 --> 0:14:03.600 occurred under the Biden administration in his last two years. 0:14:03.679 --> 0:14:06.800 And for three of those deals there were divestitures. 0:14:07.080 --> 0:14:10.880 That was Synopsis Ansis Key Sites Byront and Saffron, which 0:14:10.920 --> 0:14:14.120 acquired some assets from RTX formerly Raytheon. 0:14:13.960 --> 0:14:17.640 After litigation has already been commenced. This is in lieu 0:14:17.679 --> 0:14:18.319 of litigation. 0:14:18.840 --> 0:14:20.120 So it's in lieu of litigation. 0:14:20.200 --> 0:14:22.560 I think sometimes there's confusion, to be honest, because a 0:14:22.680 --> 0:14:24.480 complaint has to be filed in order for it to 0:14:24.480 --> 0:14:25.000 be settled. 0:14:25.720 --> 0:14:27.040 There's a settlement. 0:14:27.280 --> 0:14:29.520 So what happens is the agencies file a complaint, but 0:14:29.560 --> 0:14:33.280 simultaneously with that complaint, they file a settlement what's called 0:14:33.280 --> 0:14:35.840 a consent agreement, which shows what the companies agreed to 0:14:35.880 --> 0:14:40.600 do that allowed them to settle this complaint. It's interesting 0:14:40.600 --> 0:14:42.840 that you say that because the ones that were settled 0:14:42.880 --> 0:14:46.000 under Biden actually went into litigation. They've got sued, they 0:14:46.040 --> 0:14:48.640 started the litigation, they might have even gotten into trial. 0:14:48.880 --> 0:14:51.760 I think the FDC or DJ whoever it was that 0:14:51.880 --> 0:14:54.520 was responsible was reading the tea leaps seeing they probably 0:14:54.560 --> 0:14:56.960 weren't going to win, and ended up settling mid litigation. 0:14:57.240 --> 0:15:01.280 But these are pre litigation settlements simultaneous is with the complaint. 0:15:01.720 --> 0:15:04.320 And the interesting thing too, is that there was one 0:15:04.400 --> 0:15:06.880 other deal that was cleared with the behavioral commitment. That 0:15:06.920 --> 0:15:11.280 was Omnicom, Interpublic, two huge ad agencies, which was a 0:15:11.280 --> 0:15:16.400 particular interesting circumstance because these enforcers have said that they 0:15:16.400 --> 0:15:19.480 don't like behavioral commitments, but they went ahead and accepted 0:15:19.480 --> 0:15:22.680 that one. So we're getting to it's a pretty significant rollback, 0:15:22.760 --> 0:15:26.040 in my mind, slightly back to that more conventional approach, 0:15:26.120 --> 0:15:29.040 because it does allow a way for deals that might 0:15:29.120 --> 0:15:32.200 raise some minor problems or problems with pieces of their 0:15:32.240 --> 0:15:35.560 business to actually have a way to convince the agencies 0:15:35.720 --> 0:15:37.880 to let them get the deal closed. And I think 0:15:37.920 --> 0:15:41.080 that there are many factors in the economy that caused 0:15:41.120 --> 0:15:44.800 deal making to pause, such as inflation and tariffs and 0:15:44.840 --> 0:15:47.880 interest rates and things like that, but antitrust has also 0:15:47.920 --> 0:15:49.960 been a contributor, and I think that's going to sort 0:15:50.000 --> 0:15:53.840 of fall to the wayside Aside from that, you know, 0:15:53.880 --> 0:15:56.000 we're still reading the tea leaves with respect to how 0:15:56.000 --> 0:15:58.680 aggressive they're going to be, And we have a bunch 0:15:58.680 --> 0:16:02.400 of pretty interesting deals that are pending, like Google Whiz, 0:16:02.680 --> 0:16:04.680 which will be a really good one to watch because 0:16:04.720 --> 0:16:06.640 these agencies have said we're going to be really tough 0:16:06.640 --> 0:16:09.400 on big tech platforms. But I really don't think the 0:16:09.440 --> 0:16:12.160 facts in that case support any theory of harm that 0:16:12.240 --> 0:16:14.240 would hold up in court. So we'll have to see 0:16:14.240 --> 0:16:14.920 what happens there. 0:16:15.040 --> 0:16:16.800 Remind us what Whiz is. 0:16:17.080 --> 0:16:21.760 So Whiz is cloud security, cybersecurity and the cloud. So 0:16:22.080 --> 0:16:25.280 you have a Google which has a cloud, have cloud business, 0:16:25.280 --> 0:16:27.880 and then you have their buying cybersecurity for that cloud, 0:16:28.160 --> 0:16:30.960 and Whiz right now is free to be used by 0:16:31.000 --> 0:16:33.480 any cloud company, any. 0:16:33.000 --> 0:16:34.400 Company that has a cloud business. 0:16:34.400 --> 0:16:37.160 But then they will be again, it's, as I said, 0:16:37.200 --> 0:16:40.040 Google is going to be taking on the ownership of 0:16:40.240 --> 0:16:42.720 an input needed by some of its competitors, and so 0:16:42.760 --> 0:16:45.560 there's always that possibility of foreclosure. But the reason I 0:16:45.560 --> 0:16:47.560 say there's not really a good theory here is because 0:16:47.640 --> 0:16:50.800 usually that kind of harm can only occur when the 0:16:50.840 --> 0:16:53.720 company has market power in one or in both of 0:16:53.760 --> 0:16:56.640 the markets that we're talking about. And Google is third 0:16:56.800 --> 0:16:59.680 buy and has a less than twenty percent share in 0:16:59.680 --> 0:17:01.880 the cloud market, and wiz has a lot of big 0:17:01.920 --> 0:17:04.159 competitors in cybersecurity, and so when there are a lot 0:17:04.160 --> 0:17:06.639 of other options out there in the market, they usually 0:17:06.640 --> 0:17:08.760 don't have the ability to do something that would harm 0:17:08.800 --> 0:17:09.200 the market. 0:17:09.520 --> 0:17:11.480 Interesting at Google's thurn, who are the top two? 0:17:11.880 --> 0:17:13.760 Amazon and Microsoft? 0:17:14.480 --> 0:17:15.440 Yeah, yeah, that makes sense. 0:17:16.160 --> 0:17:19.359 And okay, what other interesting deals are you watching? 0:17:19.520 --> 0:17:19.639 Right? 0:17:19.680 --> 0:17:22.160 So you mentioned well the other the other deals really 0:17:22.200 --> 0:17:23.800 interesting Dick's foot locker. 0:17:23.960 --> 0:17:25.879 Which is you know, Weekend. 0:17:25.960 --> 0:17:30.000 Yeah, everybody knows those companies, So not for myself, that's 0:17:30.040 --> 0:17:31.720 going to be an interesting one. I do think they're 0:17:31.760 --> 0:17:34.120 probably going to have to divest some stores, but as 0:17:34.119 --> 0:17:36.720 I said, under Biden, that wouldn't have been an option 0:17:36.800 --> 0:17:39.359 for them. But under Trumpet looks like that will be 0:17:39.400 --> 0:17:41.320 an option. So, you know, this is one of those 0:17:41.359 --> 0:17:43.399 things where if this deal had been struck during the 0:17:43.400 --> 0:17:45.520 Biden administration, I would have said, I don't think it 0:17:45.520 --> 0:17:48.199 can get closed without litigation. But today I'm saying I 0:17:48.200 --> 0:17:49.879 do think it can get closed if they're willing to 0:17:49.880 --> 0:17:51.840 invest the stores that need to be sold. 0:17:52.280 --> 0:17:55.080 Charter Cox cable companies. That's another big one. 0:17:55.640 --> 0:17:58.080 It's going to be interesting to see if the agencies 0:17:58.600 --> 0:18:01.840 acknowledge the way the industry changed with respect to how 0:18:01.920 --> 0:18:05.680 people view view content, video content and the way they 0:18:05.680 --> 0:18:07.520 can access it. You know, we have five G now, 0:18:07.520 --> 0:18:10.720 which we didn't have in the past when broadband companies 0:18:10.720 --> 0:18:14.919 came together. We have Getty Images, shutter Stock they supply 0:18:15.119 --> 0:18:19.560 stock photographs, but they're the two really Biggies and Disney Fubo. 0:18:19.280 --> 0:18:20.320 Which is really interesting. 0:18:20.440 --> 0:18:23.040 So, and we had mars Kelenova, which I've been writing 0:18:23.080 --> 0:18:26.320 about in the FTC cleared that last night. Oh really yeah, 0:18:26.440 --> 0:18:31.320 chocolate company buying prinkles. 0:18:32.240 --> 0:18:32.600 I know. 0:18:33.040 --> 0:18:35.560 The European Union actually just opened up an in depth 0:18:35.560 --> 0:18:39.160 investigation for that one. The Commission is concerned about something 0:18:39.160 --> 0:18:43.040 called portfolio effects, which we do not think is a 0:18:43.080 --> 0:18:45.800 viable theory here in the US. But they're worried that 0:18:45.840 --> 0:18:47.560 the company is going to have too many must have 0:18:47.680 --> 0:18:50.199 products and it will give them leverage because they'll have 0:18:50.240 --> 0:18:52.600 that big bundle and they can engage in like full 0:18:52.640 --> 0:18:55.919 line forcing for the supermarkets that buy the products. But 0:18:55.960 --> 0:18:58.000 it's interesting to me that they think that, you know, 0:18:58.080 --> 0:19:01.119 Pringles is a must have product or grain bars or 0:19:01.920 --> 0:19:04.360 kind bars, which are the products that these companies own. 0:19:04.560 --> 0:19:06.720 Obviously Mars, we all know owns a lot of chocolate 0:19:06.760 --> 0:19:07.240 and candy. 0:19:07.880 --> 0:19:10.919 And just one last question, are you I know, like 0:19:10.960 --> 0:19:15.520 in the monopolization cases, there are some differences between the 0:19:15.560 --> 0:19:17.960 industries and it seems like they're more aggressive against tech, 0:19:18.000 --> 0:19:21.080 but maybe less AGGRESSI against other industries. Are you seeing 0:19:21.119 --> 0:19:23.960 anything some like that in the M and A space, 0:19:24.440 --> 0:19:25.160 Well not yet. 0:19:25.240 --> 0:19:27.639 I mean I sort of suspect that we will, but 0:19:27.760 --> 0:19:30.080 we haven't yet. And I say that because I do 0:19:30.119 --> 0:19:33.000 think that there could be some political influence, more so 0:19:33.160 --> 0:19:36.520 than in the past, on the outcome of these deals. 0:19:37.080 --> 0:19:39.440 I say that because we saw it during Trump's first 0:19:39.480 --> 0:19:41.879 term where it seemed that it deals he took a 0:19:41.920 --> 0:19:44.480 particular interest in that he wanted to get cleared. He 0:19:44.560 --> 0:19:46.879 pushed his regulators to clear them, and the deals that 0:19:46.920 --> 0:19:51.600 he wanted to have blocked, he pushed the officials to 0:19:51.640 --> 0:19:54.240 try to block them. And so I think if you 0:19:54.320 --> 0:19:58.119 have companies that he are his favorites or donated a 0:19:58.119 --> 0:20:00.520 lot of money or something, and he wants their deal cleared, 0:20:00.520 --> 0:20:03.040 you'll push for that. And if we see companies that 0:20:03.119 --> 0:20:06.800 are engaging in M and A that are not his 0:20:06.920 --> 0:20:10.119 favored industries or companies, then maybe he'll push them to 0:20:10.160 --> 0:20:10.560