1
00:00:02,800 --> 00:00:06,760
Speaker 1: Back in April last year, Facebook CEO Mark Zuckerberg got

2
00:00:06,800 --> 00:00:10,360
Speaker 1: hauled in front of Congress for two brutal days of questioning.

3
00:00:11,160 --> 00:00:18,320
Speaker 1: We welcome everyone today's hearing on Facebook social media privacy

4
00:00:18,440 --> 00:00:22,799
Speaker 1: and the use and abuse of data. I think you

5
00:00:22,880 --> 00:00:26,200
Speaker 1: remember it a pale, kind of robotic Zuckerberg in an

6
00:00:26,320 --> 00:00:31,240
Speaker 1: uncharacteristic suit, getting grilled by one lawmaker after another about

7
00:00:31,240 --> 00:00:35,320
Speaker 1: the Cambridge Analytical scandal. The questions were mostly about the

8
00:00:35,320 --> 00:00:39,680
Speaker 1: company's privacy lapses, but there was this one moment when

9
00:00:39,720 --> 00:00:43,640
Speaker 1: the conversation turned to something a little different. Center Gram's

10
00:00:43,680 --> 00:00:47,920
Speaker 1: up next, Thank you. This you here is a senior

11
00:00:47,960 --> 00:00:52,400
Speaker 1: Republican senator from South Carolina, Lindsay Graham. If I buy

12
00:00:52,400 --> 00:00:54,840
Speaker 1: a Forward and it doesn't work well and I don't

13
00:00:54,880 --> 00:00:57,680
Speaker 1: like it, I can buy a Chevvy. If I'm upset

14
00:00:57,720 --> 00:01:01,080
Speaker 1: with Facebook, what's the equivalent product that I can go

15
00:01:01,800 --> 00:01:05,480
Speaker 1: sign up for? Well, there's the second category that I

16
00:01:05,480 --> 00:01:07,760
Speaker 1: was going to talk about. Something at categories I'm talking

17
00:01:07,800 --> 00:01:11,360
Speaker 1: about is a real competition you face because car companies

18
00:01:11,400 --> 00:01:13,920
Speaker 1: face a lot of competition. If they make a defective car,

19
00:01:14,360 --> 00:01:16,720
Speaker 1: it gets out in the world. People stop buying that car.

20
00:01:16,800 --> 00:01:19,959
Speaker 1: There By, Another one is an alternative to Facebook in

21
00:01:20,000 --> 00:01:24,280
Speaker 1: the private sector. Yes, Senator, the average American uses eight

22
00:01:24,319 --> 00:01:29,119
Speaker 1: different apps, ranging from texts, email service. You provide, well,

23
00:01:29,160 --> 00:01:31,560
Speaker 1: we provide a number of differencess Twitter the same as

24
00:01:31,640 --> 00:01:34,280
Speaker 1: what you do. It overlaps with the portion don't think

25
00:01:34,319 --> 00:01:38,440
Speaker 1: you have a monopoly. It certainly doesn't feel like that

26
00:01:38,520 --> 00:01:44,480
Speaker 1: to me. Okay, that moment turned out to be a

27
00:01:44,520 --> 00:01:48,560
Speaker 1: harbinger for the next eighteen months, not just for Facebook,

28
00:01:48,680 --> 00:01:52,000
Speaker 1: but also for its biggest piers in the industry. And

29
00:01:52,040 --> 00:01:55,480
Speaker 1: it's all come down to the same question, stated in

30
00:01:55,560 --> 00:01:59,480
Speaker 1: different ways, where in this very serious monopoly moment, Google

31
00:01:59,560 --> 00:02:04,240
Speaker 1: is a culminating in a storm of antitrust investigations and

32
00:02:04,720 --> 00:02:06,800
Speaker 1: a sweeping proposal from who is now one of the

33
00:02:06,880 --> 00:02:19,440
Speaker 1: leading candidates in the Democratic presidential primatis. It's time and

34
00:02:22,160 --> 00:02:25,080
Speaker 1: today in the show, reporter Eric Newcomer will brief us

35
00:02:25,080 --> 00:02:27,880
Speaker 1: on the current state of play in Washington and how

36
00:02:27,880 --> 00:02:30,840
Speaker 1: a Democrat in the White House could take it even further.

37
00:02:31,760 --> 00:02:34,840
Speaker 1: So stay with us, Amaki Ito, and you're listening to

38
00:02:34,880 --> 00:02:54,239
Speaker 1: Decrypted Eric. How's it going great? Great? How are you doing?

39
00:02:55,120 --> 00:02:58,360
Speaker 1: You know, our longtime listeners will recognize you as our

40
00:02:58,480 --> 00:03:03,440
Speaker 1: uber reporter, but you've recently changed beats. Yeah, in February,

41
00:03:03,480 --> 00:03:07,560
Speaker 1: I defected from San Francisco, moved to New York, followed

42
00:03:07,639 --> 00:03:10,520
Speaker 1: Uber through the I p O, and now I'm diving

43
00:03:10,560 --> 00:03:14,720
Speaker 1: into the hot story of the day, anti trust. You know,

44
00:03:14,760 --> 00:03:17,640
Speaker 1: I want to start our conversation today with how we

45
00:03:17,760 --> 00:03:20,920
Speaker 1: got here in the first place, which is maybe another

46
00:03:20,960 --> 00:03:24,240
Speaker 1: way of talking about how your beat has become so

47
00:03:24,360 --> 00:03:27,800
Speaker 1: interesting and so timely right now, So here's how I'm

48
00:03:27,800 --> 00:03:30,079
Speaker 1: going to set it up. Just a few years ago,

49
00:03:30,639 --> 00:03:33,600
Speaker 1: no one talked about technology and monopolies, right, it was

50
00:03:33,680 --> 00:03:37,520
Speaker 1: the last thing on Washington's agenda, And it's really over

51
00:03:37,640 --> 00:03:40,480
Speaker 1: maybe the last year two that we started hearing the

52
00:03:40,560 --> 00:03:44,400
Speaker 1: steady drumbeat of how these companies have gotten too big.

53
00:03:45,080 --> 00:03:48,160
Speaker 1: So set the context for us. Yeah, so we I mean,

54
00:03:48,200 --> 00:03:50,480
Speaker 1: we talked about anti trust, but I think where this

55
00:03:50,560 --> 00:03:53,520
Speaker 1: really started is just with a lot of anger towards

56
00:03:53,560 --> 00:03:59,480
Speaker 1: technology companies. I love this country, thank you, thank you

57
00:03:59,600 --> 00:04:03,040
Speaker 1: very much. Probably the biggest force in that is the

58
00:04:03,080 --> 00:04:06,080
Speaker 1: election of Donald Trump and the role that Russian interference

59
00:04:06,680 --> 00:04:09,520
Speaker 1: might have played in getting him elected. They allowed the

60
00:04:09,560 --> 00:04:13,840
Speaker 1: private information of fifty million Americans to be harvested by

61
00:04:13,840 --> 00:04:17,680
Speaker 1: the Trump campaign's consulting firm, and the role that Facebook

62
00:04:17,680 --> 00:04:21,680
Speaker 1: played through the Cambridge Analytica scandal and advertising and just

63
00:04:21,760 --> 00:04:24,680
Speaker 1: sort of the rise of bots, and just like that

64
00:04:24,760 --> 00:04:28,159
Speaker 1: force I think has animated some of this which created

65
00:04:28,200 --> 00:04:31,719
Speaker 1: all these spill on effects. My problem is with Facebook.

66
00:04:32,080 --> 00:04:36,200
Speaker 1: So they're all these forces of frustration with tech that

67
00:04:36,320 --> 00:04:40,480
Speaker 1: are now I think manifesting in this anti trust furor

68
00:04:41,120 --> 00:04:45,279
Speaker 1: in different parts of the government. On a really basic level,

69
00:04:45,640 --> 00:04:50,320
Speaker 1: what is antitrust. They're the rules to protect capitalism, right

70
00:04:50,520 --> 00:04:54,800
Speaker 1: to stop price fixing, to block cartels. You know, it's

71
00:04:54,839 --> 00:04:58,360
Speaker 1: what makes competition work. And you know, it really dates

72
00:04:58,360 --> 00:05:04,680
Speaker 1: back in the United States to the eighteen hundreds. There

73
00:05:04,680 --> 00:05:09,159
Speaker 1: were these small railroad companies that all consolidated and formed

74
00:05:09,160 --> 00:05:12,400
Speaker 1: this giant conglomerate. And so then the government looked at that.

75
00:05:12,440 --> 00:05:15,840
Speaker 1: They created the Sherman Antitrust Act, and there was this

76
00:05:15,880 --> 00:05:18,680
Speaker 1: whole push, you know, we think about trust busting to

77
00:05:18,839 --> 00:05:22,840
Speaker 1: crack down on big conglomerates. And then Standard Oil is

78
00:05:22,880 --> 00:05:27,040
Speaker 1: perhaps the most famous historic example where all these oil

79
00:05:27,080 --> 00:05:31,640
Speaker 1: companies were cobbled together to create this huge oil company

80
00:05:31,680 --> 00:05:34,520
Speaker 1: that used its power to control the market, and the

81
00:05:34,560 --> 00:05:37,680
Speaker 1: government cracked down on that and then in more recent

82
00:05:37,720 --> 00:05:40,200
Speaker 1: history we have the breakup of A T and T,

83
00:05:41,240 --> 00:05:45,200
Speaker 1: and then probably in very recent memory, the fight against

84
00:05:45,200 --> 00:05:50,200
Speaker 1: Microsoft and the attempted breakup of that company, which ultimately failed.

85
00:05:50,400 --> 00:05:53,720
Speaker 1: You know, Microsoft had a few rules imposed against it,

86
00:05:54,120 --> 00:05:57,039
Speaker 1: had to open up some of its data to third parties,

87
00:05:57,600 --> 00:06:00,320
Speaker 1: but you know it wasn't broken up. So let's the

88
00:06:00,400 --> 00:06:05,080
Speaker 1: rule of thumb that tells us when companies violate these

89
00:06:05,160 --> 00:06:10,279
Speaker 1: antitrust anti monopoly laws is very complicated and evolving. So

90
00:06:10,640 --> 00:06:14,120
Speaker 1: I think, really, if you want to understand what happened

91
00:06:14,279 --> 00:06:19,680
Speaker 1: from the nineties seventies today is this focus on consumer

92
00:06:19,839 --> 00:06:24,960
Speaker 1: harm and the worry that antitrust should mostly be concerned

93
00:06:25,080 --> 00:06:31,480
Speaker 1: with whether monopolistic behavior hurts consumers, whether it drives up prices,

94
00:06:31,560 --> 00:06:36,760
Speaker 1: and much less oriented around whether consolidation makes it impossible

95
00:06:36,800 --> 00:06:40,280
Speaker 1: for other businesses to compete or has some other harm,

96
00:06:40,320 --> 00:06:44,640
Speaker 1: more focused on the competitive environment. What's happening today is

97
00:06:44,680 --> 00:06:48,839
Speaker 1: a reconsideration in sort of the academic world, and then

98
00:06:48,880 --> 00:06:52,960
Speaker 1: that's trickling over to the enforcement agencies that says, okay,

99
00:06:53,000 --> 00:06:56,320
Speaker 1: it's not just about consumer harm. There are even if

100
00:06:56,320 --> 00:06:59,080
Speaker 1: your Facebook right and you give your product away for free,

101
00:06:59,360 --> 00:07:02,159
Speaker 1: there can be a problem. There are other harms there

102
00:07:02,200 --> 00:07:05,520
Speaker 1: besides an obvious I have to pay more, you know,

103
00:07:05,720 --> 00:07:09,120
Speaker 1: eric On a really broad level, Facebook and Google and Amazon,

104
00:07:09,760 --> 00:07:12,200
Speaker 1: and maybe to throw an Apple there too, They're all

105
00:07:12,280 --> 00:07:15,560
Speaker 1: really different business models, which I think makes it a

106
00:07:15,600 --> 00:07:19,320
Speaker 1: little bit confusing. But what if our colleagues Ali was

107
00:07:19,360 --> 00:07:22,320
Speaker 1: explaining to me recently that if you really abstracted out,

108
00:07:22,920 --> 00:07:26,520
Speaker 1: you can think of them as all having created services

109
00:07:26,600 --> 00:07:29,720
Speaker 1: that attract a lot of consumers, and then they use

110
00:07:29,800 --> 00:07:33,800
Speaker 1: that pool of consumers to charge businesses access to those consumers,

111
00:07:33,800 --> 00:07:36,840
Speaker 1: which I thought was really interesting. And you know, maybe

112
00:07:36,840 --> 00:07:39,640
Speaker 1: in Facebook and Google's case, they make this free service

113
00:07:39,760 --> 00:07:43,920
Speaker 1: that attracts billions of people and then they charge advertisers

114
00:07:43,960 --> 00:07:47,559
Speaker 1: for access to these consumers. In Amazon's case, they charge

115
00:07:47,600 --> 00:07:51,840
Speaker 1: sellers on the site access to Amazon's customers. And in

116
00:07:51,920 --> 00:07:54,360
Speaker 1: Apple's case it feels a little different, but they're still

117
00:07:54,440 --> 00:07:59,000
Speaker 1: charging app developers access to iPhone users through the app store.

118
00:07:59,640 --> 00:08:01,280
Speaker 1: So I guess the way to think about it is

119
00:08:01,320 --> 00:08:04,920
Speaker 1: that the victims here in this case are not the

120
00:08:04,960 --> 00:08:10,120
Speaker 1: consumers like us, but they're actually the advertisers, the Amazon sellers,

121
00:08:10,200 --> 00:08:13,760
Speaker 1: the app developers, right. I mean, the only caveat that

122
00:08:13,760 --> 00:08:17,520
Speaker 1: I would give to that is, you know, even if

123
00:08:17,560 --> 00:08:21,080
Speaker 1: consumers get something for free, competition might mean that they

124
00:08:21,080 --> 00:08:25,080
Speaker 1: could choose between services with different values. You know, people

125
00:08:25,080 --> 00:08:28,480
Speaker 1: talk a lot about it more privacy oriented social network.

126
00:08:29,120 --> 00:08:40,200
Speaker 1: That would be my only caveat. So let's walk through

127
00:08:40,240 --> 00:08:44,520
Speaker 1: the thing that each company did to attract regulator scrutiny.

128
00:08:44,800 --> 00:08:48,080
Speaker 1: You want to start with Facebook, all right, even before

129
00:08:48,080 --> 00:08:51,800
Speaker 1: we talk about antitrust. It's a five billion dollar settlement

130
00:08:51,880 --> 00:08:55,000
Speaker 1: with the FTC and Facebook and Facebook just settled with

131
00:08:55,040 --> 00:08:58,719
Speaker 1: the Federal Trade Commission over a five billion dollar privacy violation.

132
00:08:59,080 --> 00:09:03,640
Speaker 1: So the ft now is investigating Facebook over its acquisitions

133
00:09:03,679 --> 00:09:07,320
Speaker 1: because Facebook bought Instagram when it was then a small

134
00:09:07,360 --> 00:09:11,920
Speaker 1: but promising photo sharing app, and obviously bought What's App,

135
00:09:12,040 --> 00:09:15,880
Speaker 1: this messaging service, and that's effectively allowed it to block

136
00:09:16,000 --> 00:09:20,559
Speaker 1: the formation of new competitors. Then Facebook also faces a

137
00:09:20,640 --> 00:09:26,600
Speaker 1: new anti trust investigation coming against Facebook. Eight states are

138
00:09:26,640 --> 00:09:30,480
Speaker 1: included in this investigation, which a multi state attorneys general

139
00:09:30,480 --> 00:09:34,840
Speaker 1: investigation led by the New York Attorney General's office. They're

140
00:09:34,880 --> 00:09:40,720
Speaker 1: looking at whether their tactics limited consumer choice, and also

141
00:09:40,920 --> 00:09:43,760
Speaker 1: they're looking at whether what they did increase the cost

142
00:09:43,800 --> 00:09:49,080
Speaker 1: of advertising. So that's another one and then Congress is

143
00:09:49,280 --> 00:09:53,600
Speaker 1: also investigating in Facebook. And then the Department of Justice

144
00:09:53,600 --> 00:09:58,240
Speaker 1: is also investigating Facebook. So yeah, we've got it. Yeah,

145
00:09:58,280 --> 00:10:03,000
Speaker 1: we've got the FDC, a multi state attorneys general investigation,

146
00:10:03,720 --> 00:10:06,880
Speaker 1: the Department of Justice, and Congress. Uh yeah, they're all

147
00:10:06,920 --> 00:10:10,679
Speaker 1: looking at it. And and so for Facebook, these are

148
00:10:10,720 --> 00:10:16,319
Speaker 1: related to the acquisitions it's made, specifically What's App and Instagram. Yes,

149
00:10:16,760 --> 00:10:20,120
Speaker 1: got it, talk us through Google. So Google's already had

150
00:10:20,160 --> 00:10:23,200
Speaker 1: to fend off and paid fines in the European Union,

151
00:10:23,520 --> 00:10:25,959
Speaker 1: and now the United States is really turning its attention

152
00:10:26,000 --> 00:10:28,480
Speaker 1: to the company. We now have a clearer sense of

153
00:10:28,559 --> 00:10:32,360
Speaker 1: just how sweeping this action will be. Fifty attorney general's

154
00:10:32,440 --> 00:10:36,120
Speaker 1: forty states, plus the District of Columbia and Puerto Rico

155
00:10:36,400 --> 00:10:41,319
Speaker 1: are announcing this investigation into Google over concerns of antitrust.

156
00:10:41,679 --> 00:10:44,719
Speaker 1: In the United States, the largest investigation against Google is

157
00:10:44,760 --> 00:10:48,160
Speaker 1: being led by the Texas Attorney General's Office, who's brought

158
00:10:48,200 --> 00:10:55,240
Speaker 1: together fifty states and localities. This huge coalition of attorneys

159
00:10:55,280 --> 00:10:59,839
Speaker 1: general looking into how Google's add exchange works and what

160
00:11:00,080 --> 00:11:04,960
Speaker 1: there how it sells ads blocks other competitors from the markets.

161
00:11:05,000 --> 00:11:09,480
Speaker 1: They have very detailed questions asking about how they influence

162
00:11:09,559 --> 00:11:13,160
Speaker 1: prices potentially in an advertising market. Then the Department of

163
00:11:13,240 --> 00:11:15,840
Speaker 1: Justice is looking at Google. I think they're looking at

164
00:11:15,960 --> 00:11:20,800
Speaker 1: history of antitrust complaints and trying to get more information there.

165
00:11:21,480 --> 00:11:25,360
Speaker 1: And then what about Amazon. With Amazon, it's really a

166
00:11:25,480 --> 00:11:30,280
Speaker 1: question of how they use their market power to manipulate

167
00:11:30,400 --> 00:11:34,679
Speaker 1: or control sellers on their platform. The Federal Trade Commission

168
00:11:35,320 --> 00:11:39,560
Speaker 1: is looking at, you know, how much revenue do these

169
00:11:39,559 --> 00:11:43,320
Speaker 1: sellers get just from Amazon? Are they dependent on Amazon

170
00:11:43,440 --> 00:11:45,560
Speaker 1: or they really able to go to eBay and other

171
00:11:45,640 --> 00:11:50,400
Speaker 1: companies to make enough revenue. And we should know that Apple,

172
00:11:50,960 --> 00:11:54,720
Speaker 1: even though it's an older company than Facebook and Amazon

173
00:11:54,920 --> 00:11:58,840
Speaker 1: and Google, is somewhat of a target to I think

174
00:11:58,840 --> 00:12:01,760
Speaker 1: it's the key, the key to understand Apples, the app

175
00:12:01,840 --> 00:12:05,760
Speaker 1: store issues, and just the amount of control that running

176
00:12:05,760 --> 00:12:10,440
Speaker 1: this app store could give the company. Is it hurting

177
00:12:10,559 --> 00:12:16,240
Speaker 1: Spotify by placing Apple's own products way above and it's

178
00:12:16,280 --> 00:12:19,120
Speaker 1: app store listing? So a lot of these inquiries are

179
00:12:19,160 --> 00:12:22,839
Speaker 1: about the Apple App Store and how it throws around

180
00:12:22,840 --> 00:12:33,640
Speaker 1: its weight and controls that store to its advantage. Presumably

181
00:12:33,880 --> 00:12:37,280
Speaker 1: it'll take a while for these investigations to conclude. But

182
00:12:37,880 --> 00:12:42,199
Speaker 1: you know, let's say any one of these agencies finds that,

183
00:12:43,040 --> 00:12:45,360
Speaker 1: you know, one of these companies did engage in anti

184
00:12:45,360 --> 00:12:50,520
Speaker 1: competitive behavior. What happens then? You know, there are all

185
00:12:50,559 --> 00:12:53,400
Speaker 1: sorts of remedies. I think the one everyone thinks about

186
00:12:53,559 --> 00:12:56,839
Speaker 1: is breaking them up, and that's something that Elizabeth Warren

187
00:12:56,880 --> 00:12:58,400
Speaker 1: has talked a lot about and I think is on

188
00:12:58,480 --> 00:13:02,000
Speaker 1: people's minds and would solve of or attempt to solve

189
00:13:02,040 --> 00:13:04,680
Speaker 1: this sort of just they're too big and politically powerful

190
00:13:04,720 --> 00:13:07,480
Speaker 1: and influential, so breaking them up as one. But then

191
00:13:07,480 --> 00:13:11,839
Speaker 1: they're all sorts of remedies that that could be constructed.

192
00:13:12,240 --> 00:13:15,079
Speaker 1: I was talking to a professor who suggested the data

193
00:13:15,160 --> 00:13:19,160
Speaker 1: portability would be a potential remedy for Facebook, because the

194
00:13:19,280 --> 00:13:21,880
Speaker 1: idea was, you know, if I split up Facebook into

195
00:13:21,960 --> 00:13:25,600
Speaker 1: three or four different companies, the network is still a

196
00:13:25,600 --> 00:13:28,640
Speaker 1: powerful force. So maybe one of those companies then just

197
00:13:28,720 --> 00:13:31,000
Speaker 1: becomes the new monopoly. Because I want to go where

198
00:13:31,000 --> 00:13:33,920
Speaker 1: my friends are, we all sort of migrate to to

199
00:13:34,040 --> 00:13:37,480
Speaker 1: one of the four new companies, And does that really

200
00:13:37,480 --> 00:13:40,439
Speaker 1: solve the problem. On the other hand, if the requirement

201
00:13:40,480 --> 00:13:42,240
Speaker 1: is that I need to be able to easily move

202
00:13:42,320 --> 00:13:45,360
Speaker 1: my data from Facebook to another company, then I could

203
00:13:45,440 --> 00:13:50,280
Speaker 1: simultaneously use different social networks and would foster more competition.

204
00:13:53,800 --> 00:14:03,959
Speaker 1: We'll be right back. So before the break, Eric, you

205
00:14:04,000 --> 00:14:07,960
Speaker 1: walked us through the various investigations into the big tech companies.

206
00:14:08,480 --> 00:14:11,920
Speaker 1: These are ongoing, but things could change a lot if

207
00:14:12,280 --> 00:14:15,760
Speaker 1: a Democrat wins the White House. In uh, We're not

208
00:14:15,800 --> 00:14:18,560
Speaker 1: going to go through all ten plus candidates who are

209
00:14:18,600 --> 00:14:21,400
Speaker 1: running right now in the Democratic primary, but I do

210
00:14:21,480 --> 00:14:24,760
Speaker 1: want to focus on a few of the top contenders

211
00:14:24,760 --> 00:14:27,120
Speaker 1: who've talked about what they want to do with this issue.

212
00:14:28,000 --> 00:14:31,200
Speaker 1: Walk us through some of the moderates first, the candidates

213
00:14:31,200 --> 00:14:35,120
Speaker 1: who scare the industry a little bit less. What It's

214
00:14:35,160 --> 00:14:40,080
Speaker 1: sort of interesting. I think Joe Biden. The consensus among

215
00:14:40,600 --> 00:14:43,200
Speaker 1: people watching this issue is that what he would be

216
00:14:43,360 --> 00:14:49,920
Speaker 1: comparatively friendly to the tech companies relative to sort of

217
00:14:49,960 --> 00:14:54,120
Speaker 1: what i'll call the Bernie Warren wing. He's from Delaware,

218
00:14:54,160 --> 00:14:58,520
Speaker 1: a famously pro corporate state, and he's got this reputation

219
00:14:58,640 --> 00:15:02,120
Speaker 1: as just being a much more moderate candidate who's not

220
00:15:02,280 --> 00:15:05,240
Speaker 1: out there on the stump saying, let's, you know, destroy

221
00:15:05,360 --> 00:15:08,800
Speaker 1: all these companies and not taking on as an antagonistic

222
00:15:08,920 --> 00:15:13,480
Speaker 1: role with the CEO. So he's definitely the candidate that

223
00:15:13,520 --> 00:15:18,520
Speaker 1: if you're running Facebook's uh anti trust policy shop. You

224
00:15:18,600 --> 00:15:21,280
Speaker 1: would probably be happy if he won't because it means

225
00:15:21,280 --> 00:15:24,440
Speaker 1: you're gonna be okay. And then there's i'd say Pete

226
00:15:24,440 --> 00:15:28,400
Speaker 1: Buddhaicech who's talking about this issue in a more cooperative way,

227
00:15:28,400 --> 00:15:33,120
Speaker 1: but it's definitely surfacing the issue of antitrust. And Eric,

228
00:15:33,160 --> 00:15:36,720
Speaker 1: what about Kamala Harris. She's a California Senator, so of

229
00:15:36,760 --> 00:15:40,080
Speaker 1: course she represents Silicon Valley. Harris has been more of

230
00:15:40,120 --> 00:15:43,960
Speaker 1: a moderate generally and hasn't come out very vocally on

231
00:15:44,120 --> 00:15:47,440
Speaker 1: anti trust issues. She seems open to looking at it,

232
00:15:47,880 --> 00:15:50,680
Speaker 1: but I don't think she's going to be the hardest

233
00:15:50,760 --> 00:15:54,440
Speaker 1: driver on this set of issues. Then there's Bernie Sanders, who,

234
00:15:54,720 --> 00:15:57,920
Speaker 1: true to form, is created using the bully pulpit. He's

235
00:15:57,960 --> 00:16:01,160
Speaker 1: been pretty proud about saying that he wants to crack

236
00:16:01,200 --> 00:16:04,560
Speaker 1: down on companies that are too big and tech is

237
00:16:05,000 --> 00:16:07,600
Speaker 1: a part of that, but but it's much broader. And

238
00:16:07,640 --> 00:16:16,280
Speaker 1: then there's Elizabeth Warren. Yeah, in March, she held this

239
00:16:16,480 --> 00:16:20,240
Speaker 1: huge rally in Queens after Amazon had just given up

240
00:16:20,240 --> 00:16:25,440
Speaker 1: on its vision of coming to New York tech conies.

241
00:16:26,560 --> 00:16:34,280
Speaker 1: That is, they tell to tell city stays and pulay

242
00:16:34,520 --> 00:16:39,560
Speaker 1: everyone doing what they want. So it is this very iconic,

243
00:16:39,720 --> 00:16:44,120
Speaker 1: you know, American flag celebration of you know, the failure

244
00:16:44,280 --> 00:16:49,520
Speaker 1: basically of Amazon. And it came while she was putting

245
00:16:49,520 --> 00:16:53,880
Speaker 1: out this medium post that really documented her crusade against

246
00:16:54,160 --> 00:17:09,439
Speaker 1: big tech das time. You know, she names Facebook, Google,

247
00:17:09,480 --> 00:17:13,760
Speaker 1: Amazon and outlines exactly how she wants to break them up.

248
00:17:17,400 --> 00:17:21,640
Speaker 1: Her idea sort of isn't two buckets. I'd say one

249
00:17:21,920 --> 00:17:25,080
Speaker 1: is just simply unwinding mergers that have helped make these

250
00:17:25,119 --> 00:17:37,400
Speaker 1: companies too big, the popetitions. So that's Instagram and what'sapp

251
00:17:37,680 --> 00:17:44,200
Speaker 1: for Facebook, that's Nest and ways for Google, that's Zappos

252
00:17:44,320 --> 00:17:47,240
Speaker 1: and Whole Foods for Amazon. And then the other part

253
00:17:47,800 --> 00:17:51,640
Speaker 1: is that you know, a platform company with that generates

254
00:17:51,640 --> 00:17:55,480
Speaker 1: more than billion dollars in revenue should not be allowed

255
00:17:55,800 --> 00:17:59,159
Speaker 1: to also compete on the platform it operates. And so

256
00:17:59,240 --> 00:18:02,720
Speaker 1: then she identify buys Amazon marketplace as a platform, meaning

257
00:18:02,720 --> 00:18:04,840
Speaker 1: that it shouldn't be allowed to sell its own goods

258
00:18:04,880 --> 00:18:13,920
Speaker 1: against other competitors on its marketplace. And we also want

259
00:18:13,960 --> 00:18:27,800
Speaker 1: to run, so are you you can't to go? So

260
00:18:27,800 --> 00:18:31,119
Speaker 1: those are the two real buckets, unwinding mergers that allowed

261
00:18:31,160 --> 00:18:34,800
Speaker 1: companies to get too big and then policing platforms that

262
00:18:34,840 --> 00:18:38,360
Speaker 1: are trying to compete with companies that operate on their platforms.

263
00:18:38,800 --> 00:18:42,639
Speaker 1: Could you do it just by directing the federal agencies

264
00:18:42,680 --> 00:18:45,600
Speaker 1: as president or would you actually have to push through

265
00:18:45,640 --> 00:18:50,880
Speaker 1: new legislation through Congress. That's definitely a big question that um,

266
00:18:51,040 --> 00:18:54,120
Speaker 1: the Medium Post does not answer. The Federal Trade Commission

267
00:18:54,200 --> 00:18:57,639
Speaker 1: certainly has the power to look at old mergers, so

268
00:18:57,680 --> 00:19:01,320
Speaker 1: I think that's part of the explanation for the focus there.

269
00:19:01,800 --> 00:19:05,399
Speaker 1: But ultimately, you know that authority comes from Congress and

270
00:19:05,440 --> 00:19:08,840
Speaker 1: things like the Sherman Act. But that Act is, as

271
00:19:08,880 --> 00:19:12,520
Speaker 1: we've said, pretty vague, so then the courts have a

272
00:19:12,520 --> 00:19:16,600
Speaker 1: lot of authority to interpret whether the agency really had

273
00:19:16,600 --> 00:19:18,240
Speaker 1: the power to do what they're doing. I mean, Mark

274
00:19:18,320 --> 00:19:22,520
Speaker 1: Zuckerberg in his leaked all hands meeting, like Elizabeth Warren

275
00:19:22,560 --> 00:19:25,560
Speaker 1: who thinks of the right answers to break up the companies. Um,

276
00:19:25,600 --> 00:19:27,720
Speaker 1: you know, if she gets elected presidents, then I would

277
00:19:27,800 --> 00:19:29,719
Speaker 1: I would bet that we will have a legal challenge,

278
00:19:29,720 --> 00:19:31,679
Speaker 1: and I would bet that we will win the legal challenge.

279
00:19:31,840 --> 00:19:33,119
Speaker 1: But good luck. At the end of the day. If

280
00:19:33,119 --> 00:19:35,760
Speaker 1: someone's gonna try to threaten something that existential, you go

281
00:19:35,840 --> 00:19:39,560
Speaker 1: to the act and fight. Basically says, we can challenge

282
00:19:39,600 --> 00:19:41,879
Speaker 1: these things in court. Then they're going to take years

283
00:19:41,880 --> 00:19:44,320
Speaker 1: and years to play out, could be a decade. You know,

284
00:19:44,440 --> 00:19:48,159
Speaker 1: A law would give her a lot more authority to

285
00:19:48,240 --> 00:19:51,680
Speaker 1: expand their power. And you can imagine, you know, this

286
00:19:51,760 --> 00:19:55,159
Speaker 1: is now an issue with bipartisan support. Maybe Republicans and

287
00:19:55,200 --> 00:19:59,040
Speaker 1: Democrats come together to expand antitrust law in some ways

288
00:19:59,040 --> 00:20:01,760
Speaker 1: that allows the FTC and d o J to go

289
00:20:01,800 --> 00:20:05,560
Speaker 1: after tech companies. Obviously, like you said, there's so many

290
00:20:05,640 --> 00:20:09,240
Speaker 1: ifs at this point. Right, it's if Warren wins the presidency,

291
00:20:09,480 --> 00:20:12,679
Speaker 1: if she's then potentially able to push through new legislation

292
00:20:12,760 --> 00:20:15,840
Speaker 1: that may or may not be necessary through Congress, if

293
00:20:16,320 --> 00:20:21,080
Speaker 1: whatever she decides to do survives the courts. But let's

294
00:20:21,080 --> 00:20:24,119
Speaker 1: say all of these ifs do happen. How bad would

295
00:20:24,160 --> 00:20:28,240
Speaker 1: that be for Facebook, Google, and Amazon? They wouldn't be

296
00:20:28,240 --> 00:20:31,960
Speaker 1: the iconic companies that they are today. What is Facebook

297
00:20:31,960 --> 00:20:35,760
Speaker 1: without Instagram when so much of its growth coming from Instagram?

298
00:20:35,760 --> 00:20:39,359
Speaker 1: What's Google without all its exciting projects? You know, if

299
00:20:39,359 --> 00:20:43,760
Speaker 1: it doesn't have nest or ways, or if a big

300
00:20:43,800 --> 00:20:46,119
Speaker 1: part of its advertising business has split off of it

301
00:20:46,240 --> 00:20:49,800
Speaker 1: now competing with it that's a different company. And Amazon,

302
00:20:50,240 --> 00:20:53,520
Speaker 1: you know, its identity isn't just this marketplace for sellers.

303
00:20:53,560 --> 00:20:56,600
Speaker 1: It's the fact that it's buying whole foods and selling

304
00:20:56,640 --> 00:21:02,000
Speaker 1: products cheaply of its own. And for these CEOs and founders,

305
00:21:02,640 --> 00:21:05,199
Speaker 1: they wouldn't have this sort of sweeping power that they

306
00:21:05,240 --> 00:21:09,280
Speaker 1: have today. So it would just really change how these

307
00:21:09,400 --> 00:21:15,880
Speaker 1: men occupy and control aspects of our society. In the meantime,

308
00:21:16,320 --> 00:21:19,800
Speaker 1: I wonder if the scrutiny alone will make them a

309
00:21:19,880 --> 00:21:22,040
Speaker 1: little bit more cautious, Like I wonder if it will

310
00:21:22,119 --> 00:21:25,800
Speaker 1: make them think twice before they buy the next Instagram.

311
00:21:26,600 --> 00:21:28,960
Speaker 1: It's definitely possible. I mean, if you think about the

312
00:21:29,040 --> 00:21:32,440
Speaker 1: case of Microsoft, that was a company that didn't have

313
00:21:33,640 --> 00:21:36,560
Speaker 1: the most extreme end result in its antitrust battle with

314
00:21:36,600 --> 00:21:40,280
Speaker 1: the government, but it still seemed to move slower afterwards,

315
00:21:40,760 --> 00:21:44,440
Speaker 1: and it really missed, you know, the mobile era, for example.

316
00:21:44,880 --> 00:21:46,280
Speaker 1: And I think there are a lot of people who

317
00:21:46,400 --> 00:21:49,680
Speaker 1: think that the scrutiny alone made it just much more cautious,

318
00:21:50,200 --> 00:21:53,720
Speaker 1: much more legally sensitive, and that type of thinking slowed

319
00:21:53,760 --> 00:21:56,000
Speaker 1: it down. On the other hand, I think, you know,

320
00:21:56,080 --> 00:21:59,800
Speaker 1: Mark Zuckerberg at Facebook has shown, you know, a willingness

321
00:21:59,880 --> 00:22:03,600
Speaker 1: to continue to be bold even when there's a lot

322
00:22:03,680 --> 00:22:08,879
Speaker 1: of critics. You know, he proposed Libra, this cryptocurrency. His

323
00:22:09,000 --> 00:22:12,120
Speaker 1: company put that out in a time of massive government scrutiny,

324
00:22:12,280 --> 00:22:15,480
Speaker 1: so I don't think it's a company that's been bound

325
00:22:15,600 --> 00:22:25,520
Speaker 1: by pressure so far, Eric Newcomer will continue posting your

326
00:22:25,600 --> 00:22:29,239
Speaker 1: stories on Bloomberg dot com, slash tech. Where else can

327
00:22:29,280 --> 00:22:33,960
Speaker 1: our listeners follow this ongoing story. You know, I'm on

328
00:22:34,280 --> 00:22:37,560
Speaker 1: Twitter at Eric Newcomer E R I C N E

329
00:22:37,760 --> 00:22:40,440
Speaker 1: W C O M E R. And I'm sure I'll

330
00:22:40,480 --> 00:22:44,520
Speaker 1: be writing about this every week for Fully Charged, our newsletter.

331
00:22:44,640 --> 00:22:47,800
Speaker 1: There's so much to say. Thanks for making the time today.

332
00:22:48,080 --> 00:22:57,359
Speaker 1: Of course, Decrypted is produced by me and Ethan Brooks,

333
00:22:57,480 --> 00:23:00,239
Speaker 1: with helped him toil for Foreheads, and Laura Carlson. Our

334
00:23:00,320 --> 00:23:03,639
Speaker 1: story editor is Anne Vandermain. Francesco Leavie is ahead of

335
00:23:03,680 --> 00:23:26,800
Speaker 1: Bloomberg Podcasts. We'll see you next week. M