WEBVTT - Dismantling Big Tech: A User's Manual

0:00:02.800 --> 0:00:06.760
<v Speaker 1>Back in April last year, Facebook CEO Mark Zuckerberg got

0:00:06.800 --> 0:00:10.360
<v Speaker 1>hauled in front of Congress for two brutal days of questioning.

0:00:11.160 --> 0:00:18.320
<v Speaker 1>We welcome everyone today's hearing on Facebook social media privacy

0:00:18.440 --> 0:00:22.799
<v Speaker 1>and the use and abuse of data. I think you

0:00:22.880 --> 0:00:26.200
<v Speaker 1>remember it a pale, kind of robotic Zuckerberg in an

0:00:26.320 --> 0:00:31.240
<v Speaker 1>uncharacteristic suit, getting grilled by one lawmaker after another about

0:00:31.240 --> 0:00:35.320
<v Speaker 1>the Cambridge Analytical scandal. The questions were mostly about the

0:00:35.320 --> 0:00:39.680
<v Speaker 1>company's privacy lapses, but there was this one moment when

0:00:39.720 --> 0:00:43.640
<v Speaker 1>the conversation turned to something a little different. Center Gram's

0:00:43.680 --> 0:00:47.920
<v Speaker 1>up next, Thank you. This you here is a senior

0:00:47.960 --> 0:00:52.400
<v Speaker 1>Republican senator from South Carolina, Lindsay Graham. If I buy

0:00:52.400 --> 0:00:54.840
<v Speaker 1>a Forward and it doesn't work well and I don't

0:00:54.880 --> 0:00:57.680
<v Speaker 1>like it, I can buy a Chevvy. If I'm upset

0:00:57.720 --> 0:01:01.080
<v Speaker 1>with Facebook, what's the equivalent product that I can go

0:01:01.800 --> 0:01:05.480
<v Speaker 1>sign up for? Well, there's the second category that I

0:01:05.480 --> 0:01:07.760
<v Speaker 1>was going to talk about. Something at categories I'm talking

0:01:07.800 --> 0:01:11.360
<v Speaker 1>about is a real competition you face because car companies

0:01:11.400 --> 0:01:13.920
<v Speaker 1>face a lot of competition. If they make a defective car,

0:01:14.360 --> 0:01:16.720
<v Speaker 1>it gets out in the world. People stop buying that car.

0:01:16.800 --> 0:01:19.959
<v Speaker 1>There By, Another one is an alternative to Facebook in

0:01:20.000 --> 0:01:24.280
<v Speaker 1>the private sector. Yes, Senator, the average American uses eight

0:01:24.319 --> 0:01:29.119
<v Speaker 1>different apps, ranging from texts, email service. You provide, well,

0:01:29.160 --> 0:01:31.560
<v Speaker 1>we provide a number of differencess Twitter the same as

0:01:31.640 --> 0:01:34.280
<v Speaker 1>what you do. It overlaps with the portion don't think

0:01:34.319 --> 0:01:38.440
<v Speaker 1>you have a monopoly. It certainly doesn't feel like that

0:01:38.520 --> 0:01:44.480
<v Speaker 1>to me. Okay, that moment turned out to be a

0:01:44.520 --> 0:01:48.560
<v Speaker 1>harbinger for the next eighteen months, not just for Facebook,

0:01:48.680 --> 0:01:52.000
<v Speaker 1>but also for its biggest piers in the industry. And

0:01:52.040 --> 0:01:55.480
<v Speaker 1>it's all come down to the same question, stated in

0:01:55.560 --> 0:01:59.480
<v Speaker 1>different ways, where in this very serious monopoly moment, Google

0:01:59.560 --> 0:02:04.240
<v Speaker 1>is a culminating in a storm of antitrust investigations and

0:02:04.720 --> 0:02:06.800
<v Speaker 1>a sweeping proposal from who is now one of the

0:02:06.880 --> 0:02:19.440
<v Speaker 1>leading candidates in the Democratic presidential primatis. It's time and

0:02:22.160 --> 0:02:25.080
<v Speaker 1>today in the show, reporter Eric Newcomer will brief us

0:02:25.080 --> 0:02:27.880
<v Speaker 1>on the current state of play in Washington and how

0:02:27.880 --> 0:02:30.840
<v Speaker 1>a Democrat in the White House could take it even further.

0:02:31.760 --> 0:02:34.840
<v Speaker 1>So stay with us, Amaki Ito, and you're listening to

0:02:34.880 --> 0:02:54.239
<v Speaker 1>Decrypted Eric. How's it going great? Great? How are you doing?

0:02:55.120 --> 0:02:58.360
<v Speaker 1>You know, our longtime listeners will recognize you as our

0:02:58.480 --> 0:03:03.440
<v Speaker 1>uber reporter, but you've recently changed beats. Yeah, in February,

0:03:03.480 --> 0:03:07.560
<v Speaker 1>I defected from San Francisco, moved to New York, followed

0:03:07.639 --> 0:03:10.520
<v Speaker 1>Uber through the I p O, and now I'm diving

0:03:10.560 --> 0:03:14.720
<v Speaker 1>into the hot story of the day, anti trust. You know,

0:03:14.760 --> 0:03:17.640
<v Speaker 1>I want to start our conversation today with how we

0:03:17.760 --> 0:03:20.920
<v Speaker 1>got here in the first place, which is maybe another

0:03:20.960 --> 0:03:24.240
<v Speaker 1>way of talking about how your beat has become so

0:03:24.360 --> 0:03:27.800
<v Speaker 1>interesting and so timely right now, So here's how I'm

0:03:27.800 --> 0:03:30.079
<v Speaker 1>going to set it up. Just a few years ago,

0:03:30.639 --> 0:03:33.600
<v Speaker 1>no one talked about technology and monopolies, right, it was

0:03:33.680 --> 0:03:37.520
<v Speaker 1>the last thing on Washington's agenda, And it's really over

0:03:37.640 --> 0:03:40.480
<v Speaker 1>maybe the last year two that we started hearing the

0:03:40.560 --> 0:03:44.400
<v Speaker 1>steady drumbeat of how these companies have gotten too big.

0:03:45.080 --> 0:03:48.160
<v Speaker 1>So set the context for us. Yeah, so we I mean,

0:03:48.200 --> 0:03:50.480
<v Speaker 1>we talked about anti trust, but I think where this

0:03:50.560 --> 0:03:53.520
<v Speaker 1>really started is just with a lot of anger towards

0:03:53.560 --> 0:03:59.480
<v Speaker 1>technology companies. I love this country, thank you, thank you

0:03:59.600 --> 0:04:03.040
<v Speaker 1>very much. Probably the biggest force in that is the

0:04:03.080 --> 0:04:06.080
<v Speaker 1>election of Donald Trump and the role that Russian interference

0:04:06.680 --> 0:04:09.520
<v Speaker 1>might have played in getting him elected. They allowed the

0:04:09.560 --> 0:04:13.840
<v Speaker 1>private information of fifty million Americans to be harvested by

0:04:13.840 --> 0:04:17.680
<v Speaker 1>the Trump campaign's consulting firm, and the role that Facebook

0:04:17.680 --> 0:04:21.680
<v Speaker 1>played through the Cambridge Analytica scandal and advertising and just

0:04:21.760 --> 0:04:24.680
<v Speaker 1>sort of the rise of bots, and just like that

0:04:24.760 --> 0:04:28.159
<v Speaker 1>force I think has animated some of this which created

0:04:28.200 --> 0:04:31.719
<v Speaker 1>all these spill on effects. My problem is with Facebook.

0:04:32.080 --> 0:04:36.200
<v Speaker 1>So they're all these forces of frustration with tech that

0:04:36.320 --> 0:04:40.480
<v Speaker 1>are now I think manifesting in this anti trust furor

0:04:41.120 --> 0:04:45.279
<v Speaker 1>in different parts of the government. On a really basic level,

0:04:45.640 --> 0:04:50.320
<v Speaker 1>what is antitrust. They're the rules to protect capitalism, right

0:04:50.520 --> 0:04:54.800
<v Speaker 1>to stop price fixing, to block cartels. You know, it's

0:04:54.839 --> 0:04:58.360
<v Speaker 1>what makes competition work. And you know, it really dates

0:04:58.360 --> 0:05:04.680
<v Speaker 1>back in the United States to the eighteen hundreds. There

0:05:04.680 --> 0:05:09.159
<v Speaker 1>were these small railroad companies that all consolidated and formed

0:05:09.160 --> 0:05:12.400
<v Speaker 1>this giant conglomerate. And so then the government looked at that.

0:05:12.440 --> 0:05:15.840
<v Speaker 1>They created the Sherman Antitrust Act, and there was this

0:05:15.880 --> 0:05:18.680
<v Speaker 1>whole push, you know, we think about trust busting to

0:05:18.839 --> 0:05:22.840
<v Speaker 1>crack down on big conglomerates. And then Standard Oil is

0:05:22.880 --> 0:05:27.040
<v Speaker 1>perhaps the most famous historic example where all these oil

0:05:27.080 --> 0:05:31.640
<v Speaker 1>companies were cobbled together to create this huge oil company

0:05:31.680 --> 0:05:34.520
<v Speaker 1>that used its power to control the market, and the

0:05:34.560 --> 0:05:37.680
<v Speaker 1>government cracked down on that and then in more recent

0:05:37.720 --> 0:05:40.200
<v Speaker 1>history we have the breakup of A T and T,

0:05:41.240 --> 0:05:45.200
<v Speaker 1>and then probably in very recent memory, the fight against

0:05:45.200 --> 0:05:50.200
<v Speaker 1>Microsoft and the attempted breakup of that company, which ultimately failed.

0:05:50.400 --> 0:05:53.720
<v Speaker 1>You know, Microsoft had a few rules imposed against it,

0:05:54.120 --> 0:05:57.039
<v Speaker 1>had to open up some of its data to third parties,

0:05:57.600 --> 0:06:00.320
<v Speaker 1>but you know it wasn't broken up. So let's the

0:06:00.400 --> 0:06:05.080
<v Speaker 1>rule of thumb that tells us when companies violate these

0:06:05.160 --> 0:06:10.279
<v Speaker 1>antitrust anti monopoly laws is very complicated and evolving. So

0:06:10.640 --> 0:06:14.120
<v Speaker 1>I think, really, if you want to understand what happened

0:06:14.279 --> 0:06:19.680
<v Speaker 1>from the nineties seventies today is this focus on consumer

0:06:19.839 --> 0:06:24.960
<v Speaker 1>harm and the worry that antitrust should mostly be concerned

0:06:25.080 --> 0:06:31.480
<v Speaker 1>with whether monopolistic behavior hurts consumers, whether it drives up prices,

0:06:31.560 --> 0:06:36.760
<v Speaker 1>and much less oriented around whether consolidation makes it impossible

0:06:36.800 --> 0:06:40.280
<v Speaker 1>for other businesses to compete or has some other harm,

0:06:40.320 --> 0:06:44.640
<v Speaker 1>more focused on the competitive environment. What's happening today is

0:06:44.680 --> 0:06:48.839
<v Speaker 1>a reconsideration in sort of the academic world, and then

0:06:48.880 --> 0:06:52.960
<v Speaker 1>that's trickling over to the enforcement agencies that says, okay,

0:06:53.000 --> 0:06:56.320
<v Speaker 1>it's not just about consumer harm. There are even if

0:06:56.320 --> 0:06:59.080
<v Speaker 1>your Facebook right and you give your product away for free,

0:06:59.360 --> 0:07:02.159
<v Speaker 1>there can be a problem. There are other harms there

0:07:02.200 --> 0:07:05.520
<v Speaker 1>besides an obvious I have to pay more, you know,

0:07:05.720 --> 0:07:09.120
<v Speaker 1>eric On a really broad level, Facebook and Google and Amazon,

0:07:09.760 --> 0:07:12.200
<v Speaker 1>and maybe to throw an Apple there too, They're all

0:07:12.280 --> 0:07:15.560
<v Speaker 1>really different business models, which I think makes it a

0:07:15.600 --> 0:07:19.320
<v Speaker 1>little bit confusing. But what if our colleagues Ali was

0:07:19.360 --> 0:07:22.320
<v Speaker 1>explaining to me recently that if you really abstracted out,

0:07:22.920 --> 0:07:26.520
<v Speaker 1>you can think of them as all having created services

0:07:26.600 --> 0:07:29.720
<v Speaker 1>that attract a lot of consumers, and then they use

0:07:29.800 --> 0:07:33.800
<v Speaker 1>that pool of consumers to charge businesses access to those consumers,

0:07:33.800 --> 0:07:36.840
<v Speaker 1>which I thought was really interesting. And you know, maybe

0:07:36.840 --> 0:07:39.640
<v Speaker 1>in Facebook and Google's case, they make this free service

0:07:39.760 --> 0:07:43.920
<v Speaker 1>that attracts billions of people and then they charge advertisers

0:07:43.960 --> 0:07:47.559
<v Speaker 1>for access to these consumers. In Amazon's case, they charge

0:07:47.600 --> 0:07:51.840
<v Speaker 1>sellers on the site access to Amazon's customers. And in

0:07:51.920 --> 0:07:54.360
<v Speaker 1>Apple's case it feels a little different, but they're still

0:07:54.440 --> 0:07:59.000
<v Speaker 1>charging app developers access to iPhone users through the app store.

0:07:59.640 --> 0:08:01.280
<v Speaker 1>So I guess the way to think about it is

0:08:01.320 --> 0:08:04.920
<v Speaker 1>that the victims here in this case are not the

0:08:04.960 --> 0:08:10.120
<v Speaker 1>consumers like us, but they're actually the advertisers, the Amazon sellers,

0:08:10.200 --> 0:08:13.760
<v Speaker 1>the app developers, right. I mean, the only caveat that

0:08:13.760 --> 0:08:17.520
<v Speaker 1>I would give to that is, you know, even if

0:08:17.560 --> 0:08:21.080
<v Speaker 1>consumers get something for free, competition might mean that they

0:08:21.080 --> 0:08:25.080
<v Speaker 1>could choose between services with different values. You know, people

0:08:25.080 --> 0:08:28.480
<v Speaker 1>talk a lot about it more privacy oriented social network.

0:08:29.120 --> 0:08:40.200
<v Speaker 1>That would be my only caveat. So let's walk through

0:08:40.240 --> 0:08:44.520
<v Speaker 1>the thing that each company did to attract regulator scrutiny.

0:08:44.800 --> 0:08:48.080
<v Speaker 1>You want to start with Facebook, all right, even before

0:08:48.080 --> 0:08:51.800
<v Speaker 1>we talk about antitrust. It's a five billion dollar settlement

0:08:51.880 --> 0:08:55.000
<v Speaker 1>with the FTC and Facebook and Facebook just settled with

0:08:55.040 --> 0:08:58.719
<v Speaker 1>the Federal Trade Commission over a five billion dollar privacy violation.

0:08:59.080 --> 0:09:03.640
<v Speaker 1>So the ft now is investigating Facebook over its acquisitions

0:09:03.679 --> 0:09:07.320
<v Speaker 1>because Facebook bought Instagram when it was then a small

0:09:07.360 --> 0:09:11.920
<v Speaker 1>but promising photo sharing app, and obviously bought What's App,

0:09:12.040 --> 0:09:15.880
<v Speaker 1>this messaging service, and that's effectively allowed it to block

0:09:16.000 --> 0:09:20.559
<v Speaker 1>the formation of new competitors. Then Facebook also faces a

0:09:20.640 --> 0:09:26.600
<v Speaker 1>new anti trust investigation coming against Facebook. Eight states are

0:09:26.640 --> 0:09:30.480
<v Speaker 1>included in this investigation, which a multi state attorneys general

0:09:30.480 --> 0:09:34.840
<v Speaker 1>investigation led by the New York Attorney General's office. They're

0:09:34.880 --> 0:09:40.720
<v Speaker 1>looking at whether their tactics limited consumer choice, and also

0:09:40.920 --> 0:09:43.760
<v Speaker 1>they're looking at whether what they did increase the cost

0:09:43.800 --> 0:09:49.080
<v Speaker 1>of advertising. So that's another one and then Congress is

0:09:49.280 --> 0:09:53.600
<v Speaker 1>also investigating in Facebook. And then the Department of Justice

0:09:53.600 --> 0:09:58.240
<v Speaker 1>is also investigating Facebook. So yeah, we've got it. Yeah,

0:09:58.280 --> 0:10:03.000
<v Speaker 1>we've got the FDC, a multi state attorneys general investigation,

0:10:03.720 --> 0:10:06.880
<v Speaker 1>the Department of Justice, and Congress. Uh yeah, they're all

0:10:06.920 --> 0:10:10.679
<v Speaker 1>looking at it. And and so for Facebook, these are

0:10:10.720 --> 0:10:16.319
<v Speaker 1>related to the acquisitions it's made, specifically What's App and Instagram. Yes,

0:10:16.760 --> 0:10:20.120
<v Speaker 1>got it, talk us through Google. So Google's already had

0:10:20.160 --> 0:10:23.200
<v Speaker 1>to fend off and paid fines in the European Union,

0:10:23.520 --> 0:10:25.959
<v Speaker 1>and now the United States is really turning its attention

0:10:26.000 --> 0:10:28.480
<v Speaker 1>to the company. We now have a clearer sense of

0:10:28.559 --> 0:10:32.360
<v Speaker 1>just how sweeping this action will be. Fifty attorney general's

0:10:32.440 --> 0:10:36.120
<v Speaker 1>forty states, plus the District of Columbia and Puerto Rico

0:10:36.400 --> 0:10:41.319
<v Speaker 1>are announcing this investigation into Google over concerns of antitrust.

0:10:41.679 --> 0:10:44.719
<v Speaker 1>In the United States, the largest investigation against Google is

0:10:44.760 --> 0:10:48.160
<v Speaker 1>being led by the Texas Attorney General's Office, who's brought

0:10:48.200 --> 0:10:55.240
<v Speaker 1>together fifty states and localities. This huge coalition of attorneys

0:10:55.280 --> 0:10:59.839
<v Speaker 1>general looking into how Google's add exchange works and what

0:11:00.080 --> 0:11:04.960
<v Speaker 1>there how it sells ads blocks other competitors from the markets.

0:11:05.000 --> 0:11:09.480
<v Speaker 1>They have very detailed questions asking about how they influence

0:11:09.559 --> 0:11:13.160
<v Speaker 1>prices potentially in an advertising market. Then the Department of

0:11:13.240 --> 0:11:15.840
<v Speaker 1>Justice is looking at Google. I think they're looking at

0:11:15.960 --> 0:11:20.800
<v Speaker 1>history of antitrust complaints and trying to get more information there.

0:11:21.480 --> 0:11:25.360
<v Speaker 1>And then what about Amazon. With Amazon, it's really a

0:11:25.480 --> 0:11:30.280
<v Speaker 1>question of how they use their market power to manipulate

0:11:30.400 --> 0:11:34.679
<v Speaker 1>or control sellers on their platform. The Federal Trade Commission

0:11:35.320 --> 0:11:39.560
<v Speaker 1>is looking at, you know, how much revenue do these

0:11:39.559 --> 0:11:43.320
<v Speaker 1>sellers get just from Amazon? Are they dependent on Amazon

0:11:43.440 --> 0:11:45.560
<v Speaker 1>or they really able to go to eBay and other

0:11:45.640 --> 0:11:50.400
<v Speaker 1>companies to make enough revenue. And we should know that Apple,

0:11:50.960 --> 0:11:54.720
<v Speaker 1>even though it's an older company than Facebook and Amazon

0:11:54.920 --> 0:11:58.840
<v Speaker 1>and Google, is somewhat of a target to I think

0:11:58.840 --> 0:12:01.760
<v Speaker 1>it's the key, the key to understand Apples, the app

0:12:01.840 --> 0:12:05.760
<v Speaker 1>store issues, and just the amount of control that running

0:12:05.760 --> 0:12:10.440
<v Speaker 1>this app store could give the company. Is it hurting

0:12:10.559 --> 0:12:16.240
<v Speaker 1>Spotify by placing Apple's own products way above and it's

0:12:16.280 --> 0:12:19.120
<v Speaker 1>app store listing? So a lot of these inquiries are

0:12:19.160 --> 0:12:22.839
<v Speaker 1>about the Apple App Store and how it throws around

0:12:22.840 --> 0:12:33.640
<v Speaker 1>its weight and controls that store to its advantage. Presumably

0:12:33.880 --> 0:12:37.280
<v Speaker 1>it'll take a while for these investigations to conclude. But

0:12:37.880 --> 0:12:42.199
<v Speaker 1>you know, let's say any one of these agencies finds that,

0:12:43.040 --> 0:12:45.360
<v Speaker 1>you know, one of these companies did engage in anti

0:12:45.360 --> 0:12:50.520
<v Speaker 1>competitive behavior. What happens then? You know, there are all

0:12:50.559 --> 0:12:53.400
<v Speaker 1>sorts of remedies. I think the one everyone thinks about

0:12:53.559 --> 0:12:56.839
<v Speaker 1>is breaking them up, and that's something that Elizabeth Warren

0:12:56.880 --> 0:12:58.400
<v Speaker 1>has talked a lot about and I think is on

0:12:58.480 --> 0:13:02.000
<v Speaker 1>people's minds and would solve of or attempt to solve

0:13:02.040 --> 0:13:04.680
<v Speaker 1>this sort of just they're too big and politically powerful

0:13:04.720 --> 0:13:07.480
<v Speaker 1>and influential, so breaking them up as one. But then

0:13:07.480 --> 0:13:11.839
<v Speaker 1>they're all sorts of remedies that that could be constructed.

0:13:12.240 --> 0:13:15.079
<v Speaker 1>I was talking to a professor who suggested the data

0:13:15.160 --> 0:13:19.160
<v Speaker 1>portability would be a potential remedy for Facebook, because the

0:13:19.280 --> 0:13:21.880
<v Speaker 1>idea was, you know, if I split up Facebook into

0:13:21.960 --> 0:13:25.600
<v Speaker 1>three or four different companies, the network is still a

0:13:25.600 --> 0:13:28.640
<v Speaker 1>powerful force. So maybe one of those companies then just

0:13:28.720 --> 0:13:31.000
<v Speaker 1>becomes the new monopoly. Because I want to go where

0:13:31.000 --> 0:13:33.920
<v Speaker 1>my friends are, we all sort of migrate to to

0:13:34.040 --> 0:13:37.480
<v Speaker 1>one of the four new companies, And does that really

0:13:37.480 --> 0:13:40.439
<v Speaker 1>solve the problem. On the other hand, if the requirement

0:13:40.480 --> 0:13:42.240
<v Speaker 1>is that I need to be able to easily move

0:13:42.320 --> 0:13:45.360
<v Speaker 1>my data from Facebook to another company, then I could

0:13:45.440 --> 0:13:50.280
<v Speaker 1>simultaneously use different social networks and would foster more competition.

0:13:53.800 --> 0:14:03.959
<v Speaker 1>We'll be right back. So before the break, Eric, you

0:14:04.000 --> 0:14:07.960
<v Speaker 1>walked us through the various investigations into the big tech companies.

0:14:08.480 --> 0:14:11.920
<v Speaker 1>These are ongoing, but things could change a lot if

0:14:12.280 --> 0:14:15.760
<v Speaker 1>a Democrat wins the White House. In uh, We're not

0:14:15.800 --> 0:14:18.560
<v Speaker 1>going to go through all ten plus candidates who are

0:14:18.600 --> 0:14:21.400
<v Speaker 1>running right now in the Democratic primary, but I do

0:14:21.480 --> 0:14:24.760
<v Speaker 1>want to focus on a few of the top contenders

0:14:24.760 --> 0:14:27.120
<v Speaker 1>who've talked about what they want to do with this issue.

0:14:28.000 --> 0:14:31.200
<v Speaker 1>Walk us through some of the moderates first, the candidates

0:14:31.200 --> 0:14:35.120
<v Speaker 1>who scare the industry a little bit less. What It's

0:14:35.160 --> 0:14:40.080
<v Speaker 1>sort of interesting. I think Joe Biden. The consensus among

0:14:40.600 --> 0:14:43.200
<v Speaker 1>people watching this issue is that what he would be

0:14:43.360 --> 0:14:49.920
<v Speaker 1>comparatively friendly to the tech companies relative to sort of

0:14:49.960 --> 0:14:54.120
<v Speaker 1>what i'll call the Bernie Warren wing. He's from Delaware,

0:14:54.160 --> 0:14:58.520
<v Speaker 1>a famously pro corporate state, and he's got this reputation

0:14:58.640 --> 0:15:02.120
<v Speaker 1>as just being a much more moderate candidate who's not

0:15:02.280 --> 0:15:05.240
<v Speaker 1>out there on the stump saying, let's, you know, destroy

0:15:05.360 --> 0:15:08.800
<v Speaker 1>all these companies and not taking on as an antagonistic

0:15:08.920 --> 0:15:13.480
<v Speaker 1>role with the CEO. So he's definitely the candidate that

0:15:13.520 --> 0:15:18.520
<v Speaker 1>if you're running Facebook's uh anti trust policy shop. You

0:15:18.600 --> 0:15:21.280
<v Speaker 1>would probably be happy if he won't because it means

0:15:21.280 --> 0:15:24.440
<v Speaker 1>you're gonna be okay. And then there's i'd say Pete

0:15:24.440 --> 0:15:28.400
<v Speaker 1>Buddhaicech who's talking about this issue in a more cooperative way,

0:15:28.400 --> 0:15:33.120
<v Speaker 1>but it's definitely surfacing the issue of antitrust. And Eric,

0:15:33.160 --> 0:15:36.720
<v Speaker 1>what about Kamala Harris. She's a California Senator, so of

0:15:36.760 --> 0:15:40.080
<v Speaker 1>course she represents Silicon Valley. Harris has been more of

0:15:40.120 --> 0:15:43.960
<v Speaker 1>a moderate generally and hasn't come out very vocally on

0:15:44.120 --> 0:15:47.440
<v Speaker 1>anti trust issues. She seems open to looking at it,

0:15:47.880 --> 0:15:50.680
<v Speaker 1>but I don't think she's going to be the hardest

0:15:50.760 --> 0:15:54.440
<v Speaker 1>driver on this set of issues. Then there's Bernie Sanders, who,

0:15:54.720 --> 0:15:57.920
<v Speaker 1>true to form, is created using the bully pulpit. He's

0:15:57.960 --> 0:16:01.160
<v Speaker 1>been pretty proud about saying that he wants to crack

0:16:01.200 --> 0:16:04.560
<v Speaker 1>down on companies that are too big and tech is

0:16:05.000 --> 0:16:07.600
<v Speaker 1>a part of that, but but it's much broader. And

0:16:07.640 --> 0:16:16.280
<v Speaker 1>then there's Elizabeth Warren. Yeah, in March, she held this

0:16:16.480 --> 0:16:20.240
<v Speaker 1>huge rally in Queens after Amazon had just given up

0:16:20.240 --> 0:16:25.440
<v Speaker 1>on its vision of coming to New York tech conies.

0:16:26.560 --> 0:16:34.280
<v Speaker 1>That is, they tell to tell city stays and pulay

0:16:34.520 --> 0:16:39.560
<v Speaker 1>everyone doing what they want. So it is this very iconic,

0:16:39.720 --> 0:16:44.120
<v Speaker 1>you know, American flag celebration of you know, the failure

0:16:44.280 --> 0:16:49.520
<v Speaker 1>basically of Amazon. And it came while she was putting

0:16:49.520 --> 0:16:53.880
<v Speaker 1>out this medium post that really documented her crusade against

0:16:54.160 --> 0:17:09.439
<v Speaker 1>big tech das time. You know, she names Facebook, Google,

0:17:09.480 --> 0:17:13.760
<v Speaker 1>Amazon and outlines exactly how she wants to break them up.

0:17:17.400 --> 0:17:21.640
<v Speaker 1>Her idea sort of isn't two buckets. I'd say one

0:17:21.920 --> 0:17:25.080
<v Speaker 1>is just simply unwinding mergers that have helped make these

0:17:25.119 --> 0:17:37.400
<v Speaker 1>companies too big, the popetitions. So that's Instagram and what'sapp

0:17:37.680 --> 0:17:44.200
<v Speaker 1>for Facebook, that's Nest and ways for Google, that's Zappos

0:17:44.320 --> 0:17:47.240
<v Speaker 1>and Whole Foods for Amazon. And then the other part

0:17:47.800 --> 0:17:51.640
<v Speaker 1>is that you know, a platform company with that generates

0:17:51.640 --> 0:17:55.480
<v Speaker 1>more than billion dollars in revenue should not be allowed

0:17:55.800 --> 0:17:59.159
<v Speaker 1>to also compete on the platform it operates. And so

0:17:59.240 --> 0:18:02.720
<v Speaker 1>then she identify buys Amazon marketplace as a platform, meaning

0:18:02.720 --> 0:18:04.840
<v Speaker 1>that it shouldn't be allowed to sell its own goods

0:18:04.880 --> 0:18:13.920
<v Speaker 1>against other competitors on its marketplace. And we also want

0:18:13.960 --> 0:18:27.800
<v Speaker 1>to run, so are you you can't to go? So

0:18:27.800 --> 0:18:31.119
<v Speaker 1>those are the two real buckets, unwinding mergers that allowed

0:18:31.160 --> 0:18:34.800
<v Speaker 1>companies to get too big and then policing platforms that

0:18:34.840 --> 0:18:38.360
<v Speaker 1>are trying to compete with companies that operate on their platforms.

0:18:38.800 --> 0:18:42.639
<v Speaker 1>Could you do it just by directing the federal agencies

0:18:42.680 --> 0:18:45.600
<v Speaker 1>as president or would you actually have to push through

0:18:45.640 --> 0:18:50.880
<v Speaker 1>new legislation through Congress. That's definitely a big question that um,

0:18:51.040 --> 0:18:54.120
<v Speaker 1>the Medium Post does not answer. The Federal Trade Commission

0:18:54.200 --> 0:18:57.639
<v Speaker 1>certainly has the power to look at old mergers, so

0:18:57.680 --> 0:19:01.320
<v Speaker 1>I think that's part of the explanation for the focus there.

0:19:01.800 --> 0:19:05.399
<v Speaker 1>But ultimately, you know that authority comes from Congress and

0:19:05.440 --> 0:19:08.840
<v Speaker 1>things like the Sherman Act. But that Act is, as

0:19:08.880 --> 0:19:12.520
<v Speaker 1>we've said, pretty vague, so then the courts have a

0:19:12.520 --> 0:19:16.600
<v Speaker 1>lot of authority to interpret whether the agency really had

0:19:16.600 --> 0:19:18.240
<v Speaker 1>the power to do what they're doing. I mean, Mark

0:19:18.320 --> 0:19:22.520
<v Speaker 1>Zuckerberg in his leaked all hands meeting, like Elizabeth Warren

0:19:22.560 --> 0:19:25.560
<v Speaker 1>who thinks of the right answers to break up the companies. Um,

0:19:25.600 --> 0:19:27.720
<v Speaker 1>you know, if she gets elected presidents, then I would

0:19:27.800 --> 0:19:29.719
<v Speaker 1>I would bet that we will have a legal challenge,

0:19:29.720 --> 0:19:31.679
<v Speaker 1>and I would bet that we will win the legal challenge.

0:19:31.840 --> 0:19:33.119
<v Speaker 1>But good luck. At the end of the day. If

0:19:33.119 --> 0:19:35.760
<v Speaker 1>someone's gonna try to threaten something that existential, you go

0:19:35.840 --> 0:19:39.560
<v Speaker 1>to the act and fight. Basically says, we can challenge

0:19:39.600 --> 0:19:41.879
<v Speaker 1>these things in court. Then they're going to take years

0:19:41.880 --> 0:19:44.320
<v Speaker 1>and years to play out, could be a decade. You know,

0:19:44.440 --> 0:19:48.159
<v Speaker 1>A law would give her a lot more authority to

0:19:48.240 --> 0:19:51.680
<v Speaker 1>expand their power. And you can imagine, you know, this

0:19:51.760 --> 0:19:55.159
<v Speaker 1>is now an issue with bipartisan support. Maybe Republicans and

0:19:55.200 --> 0:19:59.040
<v Speaker 1>Democrats come together to expand antitrust law in some ways

0:19:59.040 --> 0:20:01.760
<v Speaker 1>that allows the FTC and d o J to go

0:20:01.800 --> 0:20:05.560
<v Speaker 1>after tech companies. Obviously, like you said, there's so many

0:20:05.640 --> 0:20:09.240
<v Speaker 1>ifs at this point. Right, it's if Warren wins the presidency,

0:20:09.480 --> 0:20:12.679
<v Speaker 1>if she's then potentially able to push through new legislation

0:20:12.760 --> 0:20:15.840
<v Speaker 1>that may or may not be necessary through Congress, if

0:20:16.320 --> 0:20:21.080
<v Speaker 1>whatever she decides to do survives the courts. But let's

0:20:21.080 --> 0:20:24.119
<v Speaker 1>say all of these ifs do happen. How bad would

0:20:24.160 --> 0:20:28.240
<v Speaker 1>that be for Facebook, Google, and Amazon? They wouldn't be

0:20:28.240 --> 0:20:31.960
<v Speaker 1>the iconic companies that they are today. What is Facebook

0:20:31.960 --> 0:20:35.760
<v Speaker 1>without Instagram when so much of its growth coming from Instagram?

0:20:35.760 --> 0:20:39.359
<v Speaker 1>What's Google without all its exciting projects? You know, if

0:20:39.359 --> 0:20:43.760
<v Speaker 1>it doesn't have nest or ways, or if a big

0:20:43.800 --> 0:20:46.119
<v Speaker 1>part of its advertising business has split off of it

0:20:46.240 --> 0:20:49.800
<v Speaker 1>now competing with it that's a different company. And Amazon,

0:20:50.240 --> 0:20:53.520
<v Speaker 1>you know, its identity isn't just this marketplace for sellers.

0:20:53.560 --> 0:20:56.600
<v Speaker 1>It's the fact that it's buying whole foods and selling

0:20:56.640 --> 0:21:02.000
<v Speaker 1>products cheaply of its own. And for these CEOs and founders,

0:21:02.640 --> 0:21:05.199
<v Speaker 1>they wouldn't have this sort of sweeping power that they

0:21:05.240 --> 0:21:09.280
<v Speaker 1>have today. So it would just really change how these

0:21:09.400 --> 0:21:15.880
<v Speaker 1>men occupy and control aspects of our society. In the meantime,

0:21:16.320 --> 0:21:19.800
<v Speaker 1>I wonder if the scrutiny alone will make them a

0:21:19.880 --> 0:21:22.040
<v Speaker 1>little bit more cautious, Like I wonder if it will

0:21:22.119 --> 0:21:25.800
<v Speaker 1>make them think twice before they buy the next Instagram.

0:21:26.600 --> 0:21:28.960
<v Speaker 1>It's definitely possible. I mean, if you think about the

0:21:29.040 --> 0:21:32.440
<v Speaker 1>case of Microsoft, that was a company that didn't have

0:21:33.640 --> 0:21:36.560
<v Speaker 1>the most extreme end result in its antitrust battle with

0:21:36.600 --> 0:21:40.280
<v Speaker 1>the government, but it still seemed to move slower afterwards,

0:21:40.760 --> 0:21:44.440
<v Speaker 1>and it really missed, you know, the mobile era, for example.

0:21:44.880 --> 0:21:46.280
<v Speaker 1>And I think there are a lot of people who

0:21:46.400 --> 0:21:49.680
<v Speaker 1>think that the scrutiny alone made it just much more cautious,

0:21:50.200 --> 0:21:53.720
<v Speaker 1>much more legally sensitive, and that type of thinking slowed

0:21:53.760 --> 0:21:56.000
<v Speaker 1>it down. On the other hand, I think, you know,

0:21:56.080 --> 0:21:59.800
<v Speaker 1>Mark Zuckerberg at Facebook has shown, you know, a willingness

0:21:59.880 --> 0:22:03.600
<v Speaker 1>to continue to be bold even when there's a lot

0:22:03.680 --> 0:22:08.879
<v Speaker 1>of critics. You know, he proposed Libra, this cryptocurrency. His

0:22:09.000 --> 0:22:12.120
<v Speaker 1>company put that out in a time of massive government scrutiny,

0:22:12.280 --> 0:22:15.480
<v Speaker 1>so I don't think it's a company that's been bound

0:22:15.600 --> 0:22:25.520
<v Speaker 1>by pressure so far, Eric Newcomer will continue posting your

0:22:25.600 --> 0:22:29.239
<v Speaker 1>stories on Bloomberg dot com, slash tech. Where else can

0:22:29.280 --> 0:22:33.960
<v Speaker 1>our listeners follow this ongoing story. You know, I'm on

0:22:34.280 --> 0:22:37.560
<v Speaker 1>Twitter at Eric Newcomer E R I C N E

0:22:37.760 --> 0:22:40.440
<v Speaker 1>W C O M E R. And I'm sure I'll

0:22:40.480 --> 0:22:44.520
<v Speaker 1>be writing about this every week for Fully Charged, our newsletter.

0:22:44.640 --> 0:22:47.800
<v Speaker 1>There's so much to say. Thanks for making the time today.

0:22:48.080 --> 0:22:57.359
<v Speaker 1>Of course, Decrypted is produced by me and Ethan Brooks,

0:22:57.480 --> 0:23:00.239
<v Speaker 1>with helped him toil for Foreheads, and Laura Carlson. Our

0:23:00.320 --> 0:23:03.639
<v Speaker 1>story editor is Anne Vandermain. Francesco Leavie is ahead of

0:23:03.680 --> 0:23:26.800
<v Speaker 1>Bloomberg Podcasts. We'll see you next week. M