1 00:00:02,400 --> 00:00:10,680 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Law. 2 00:00:10,800 --> 00:00:13,560 Speaker 2: What does a prosecutor have to prove in order to 3 00:00:13,600 --> 00:00:16,720 Speaker 2: get a Rico conviction? Tell us why this Solicitor General 4 00:00:16,800 --> 00:00:19,040 Speaker 2: is sometimes referred to as the tenth Justice. 5 00:00:19,040 --> 00:00:22,200 Speaker 1: Interviews with prominent attorneys in Bloomberg Legal Experts. 6 00:00:22,239 --> 00:00:24,959 Speaker 2: That's Jennifer k for Bloomberg Law. Joining me is former 7 00:00:24,960 --> 00:00:26,840 Speaker 2: of federal prosecutor Robert Mins. 8 00:00:26,600 --> 00:00:29,880 Speaker 1: And analysis of important legal issues cases in headlines is 9 00:00:29,880 --> 00:00:32,879 Speaker 1: the toughest hurdle for prosecutors. Proving Trump's intent. 10 00:00:33,040 --> 00:00:36,360 Speaker 2: Alito took on Congress, saying Congress has no power to 11 00:00:36,440 --> 00:00:37,720 Speaker 2: regulate the Supreme Court. 12 00:00:37,880 --> 00:00:44,680 Speaker 1: Bloomberg Law with June Grosso from Bloomberg Radio. Welcome to 13 00:00:44,720 --> 00:00:47,440 Speaker 1: a special edition of Bloomberg Law. I'm Ami Morris in 14 00:00:47,520 --> 00:00:50,320 Speaker 1: for June Grosso. This year saw a number of high 15 00:00:50,400 --> 00:00:53,720 Speaker 1: profile antitrust cases, so ahead on this show, we're going 16 00:00:53,760 --> 00:00:55,800 Speaker 1: to take a look back at some of the big ones, 17 00:00:56,160 --> 00:00:59,800 Speaker 1: including the blocked merger between Albertson and Kroger and the 18 00:00:59,800 --> 00:01:03,600 Speaker 1: fan tie up between luxury brands Capri and Tapestry. We'll 19 00:01:03,600 --> 00:01:06,280 Speaker 1: also look ahead to what President elect Donald Trump re 20 00:01:06,520 --> 00:01:09,440 Speaker 1: entering the White House could mean for anti trust regulation 21 00:01:09,560 --> 00:01:12,360 Speaker 1: moving forward. All that on the way on this special 22 00:01:12,480 --> 00:01:15,319 Speaker 1: edition of Bloomberg Law. Now, what we're going to start 23 00:01:15,319 --> 00:01:19,840 Speaker 1: with is non compete employment agreements. For decades, they've prevented 24 00:01:19,840 --> 00:01:23,640 Speaker 1: all sorts of workers, doctors, engineers, hairstylists, and journalists from 25 00:01:23,800 --> 00:01:27,360 Speaker 1: easily just switching jobs. The Federal Trade Commission approved a 26 00:01:27,400 --> 00:01:30,920 Speaker 1: near total ban on these non compete clauses, but then 27 00:01:30,920 --> 00:01:33,240 Speaker 1: that got blocked by a federal judge back in August. 28 00:01:33,640 --> 00:01:36,080 Speaker 1: The judge said the FTC did not have the authority 29 00:01:36,080 --> 00:01:39,160 Speaker 1: to do this. Professor Spencer Weber Waller is director of 30 00:01:39,200 --> 00:01:42,360 Speaker 1: the Institute of the Consumer Anti Trust Studies at Loyola 31 00:01:42,520 --> 00:01:45,360 Speaker 1: University Chicago School of Law, and joins us now to 32 00:01:45,360 --> 00:01:48,240 Speaker 1: bring us up to speed on what this means. Professor, 33 00:01:48,320 --> 00:01:51,360 Speaker 1: want to thank you for your time and explain about 34 00:01:51,400 --> 00:01:55,000 Speaker 1: this block of what the FTC's proposed rule was. The 35 00:01:55,440 --> 00:01:59,000 Speaker 1: judge called it arbitrary and capricious. But supporters say that 36 00:01:59,040 --> 00:02:01,320 Speaker 1: if you force workers to sign and on compete that 37 00:02:01,400 --> 00:02:02,240 Speaker 1: does harmed them. 38 00:02:02,800 --> 00:02:06,440 Speaker 3: Well, sure, I'm chrilled to talk about this. I can't 39 00:02:06,440 --> 00:02:08,520 Speaker 3: get into how the sausage was made. This was one 40 00:02:08,520 --> 00:02:11,000 Speaker 3: of the projects that they worked on in twenty twenty 41 00:02:11,000 --> 00:02:13,519 Speaker 3: two as a senior advisor for the Federal Trade Commission. 42 00:02:13,960 --> 00:02:16,800 Speaker 3: But the idea is that these are very harmful for workers, 43 00:02:16,840 --> 00:02:20,240 Speaker 3: and particularly in low salary workers, where there's really no 44 00:02:20,440 --> 00:02:23,560 Speaker 3: serious question for a sandwich maker or a security guard 45 00:02:23,639 --> 00:02:27,000 Speaker 3: or home healthcare worker about know how or technology or 46 00:02:27,480 --> 00:02:30,000 Speaker 3: that sort of thing. And so the FTC was engaged 47 00:02:30,000 --> 00:02:34,639 Speaker 3: in a long term project, research reports, conferences, and eventually 48 00:02:34,680 --> 00:02:37,400 Speaker 3: the writing of an administrative rule that was released to 49 00:02:37,480 --> 00:02:40,239 Speaker 3: the public for comments and revised and kind of toned down. 50 00:02:40,120 --> 00:02:40,560 Speaker 4: A little bit. 51 00:02:40,800 --> 00:02:45,720 Speaker 3: Final rule was issued. This is earlier this year, and 52 00:02:45,720 --> 00:02:49,160 Speaker 3: there was some litigation and it's a little more complicated. 53 00:02:49,200 --> 00:02:51,920 Speaker 3: There are three different cases. The FTC won one of 54 00:02:51,960 --> 00:02:55,040 Speaker 3: those in Pennsylvania and lost to in the Deep South, 55 00:02:55,160 --> 00:02:57,360 Speaker 3: one of which it resulted in an injunction. So the 56 00:02:57,400 --> 00:02:59,840 Speaker 3: rule hasn't gone into effect. I don't think this is 57 00:02:59,840 --> 00:03:01,480 Speaker 3: a I think it's going to go to the Court 58 00:03:01,480 --> 00:03:05,840 Speaker 3: of Appeals and conceivably the US Supreme Court. At the 59 00:03:05,880 --> 00:03:09,000 Speaker 3: same time, the FTC has also brought cases where it 60 00:03:09,000 --> 00:03:11,760 Speaker 3: has the power to prohibit an unfair method of competition, 61 00:03:12,240 --> 00:03:16,000 Speaker 3: either in litigation or in rule making. These cases only 62 00:03:16,040 --> 00:03:18,600 Speaker 3: deal with the rulemaking. There have been at least three 63 00:03:18,600 --> 00:03:20,960 Speaker 3: cases that I know of where the STC has challenged 64 00:03:21,600 --> 00:03:26,440 Speaker 3: companies behavior in the particular industry as just unfair in 65 00:03:26,600 --> 00:03:29,760 Speaker 3: keeping workers' wages and mobility down, and the courts have 66 00:03:30,000 --> 00:03:32,680 Speaker 3: in each case the defendants have settled, and those are 67 00:03:32,680 --> 00:03:37,040 Speaker 3: binding rulings now on those defendants. But the rule is 68 00:03:37,120 --> 00:03:40,880 Speaker 3: the bigger deal because it would apply nationwide to most 69 00:03:40,920 --> 00:03:42,680 Speaker 3: industries and most non competes. 70 00:03:43,200 --> 00:03:45,800 Speaker 1: Now, this is under the FDC's purview, is it not. 71 00:03:46,120 --> 00:03:48,240 Speaker 1: If they can't come up with this rule, then who would. 72 00:03:48,960 --> 00:03:52,240 Speaker 3: Well, there's any there's a turny number of industries that 73 00:03:52,280 --> 00:03:55,600 Speaker 3: are just not subject to the FDC's jurisdiction, things like 74 00:03:55,680 --> 00:03:59,160 Speaker 3: airlines and other other regulated industries. But the FDC is 75 00:03:59,240 --> 00:04:03,840 Speaker 3: the main, but not the only, consumer protection and antitrust agency. 76 00:04:04,040 --> 00:04:07,000 Speaker 3: The Department of Justice litigates, but the FTC has the 77 00:04:07,040 --> 00:04:10,160 Speaker 3: power to do both litigation and rulemaking, and this is 78 00:04:10,160 --> 00:04:14,320 Speaker 3: what the rule making power. It is not the only, 79 00:04:14,480 --> 00:04:16,200 Speaker 3: but it is one of the rare times the FTC 80 00:04:16,320 --> 00:04:19,400 Speaker 3: has issued a rule relating to their antitrust not their 81 00:04:19,440 --> 00:04:21,000 Speaker 3: consumer protection powers. 82 00:04:21,200 --> 00:04:23,680 Speaker 1: I wanted to ask about that this doesn't happen very 83 00:04:23,720 --> 00:04:26,800 Speaker 1: often with the FTC, and these noncompete clauses have been 84 00:04:26,800 --> 00:04:30,800 Speaker 1: in effect for decades. Where's the FTC been on this before? 85 00:04:32,240 --> 00:04:34,279 Speaker 3: Well, the FTC is one of a number of actors 86 00:04:34,320 --> 00:04:36,680 Speaker 3: that has looked at this. State attorney generals and state 87 00:04:36,760 --> 00:04:39,600 Speaker 3: legislatures in the US Congress have looked at these. There 88 00:04:39,600 --> 00:04:43,600 Speaker 3: are seventeen states or so that either prohibit them outright, 89 00:04:43,640 --> 00:04:48,080 Speaker 3: like California, or imposed conditions. When you can have the 90 00:04:48,120 --> 00:04:50,800 Speaker 3: non compete in Illinois, there's a salary cap of about 91 00:04:50,800 --> 00:04:54,920 Speaker 3: one hundred thousand dollars, where anything below that the noncompete 92 00:04:54,920 --> 00:04:58,640 Speaker 3: would be illegal. And what the evidence is showing is 93 00:04:58,640 --> 00:05:04,760 Speaker 3: that even having these state rules just isn't enough. And 94 00:05:04,800 --> 00:05:08,200 Speaker 3: if you want a uniform national treatment of this issue, 95 00:05:08,360 --> 00:05:10,680 Speaker 3: the FTC is the logical place. Whether they have the 96 00:05:10,720 --> 00:05:13,159 Speaker 3: powers to do so is what's being litigated in the 97 00:05:13,160 --> 00:05:14,239 Speaker 3: federal courts right now. 98 00:05:15,760 --> 00:05:20,360 Speaker 1: Is this another example of sort of reigning in power 99 00:05:20,680 --> 00:05:24,040 Speaker 1: from federal agencies resting that from them. 100 00:05:25,120 --> 00:05:27,479 Speaker 3: That's hard to say. You know, you're absolutely correct that 101 00:05:27,560 --> 00:05:30,919 Speaker 3: the FTC has not issued a lot of antitrust unfair 102 00:05:31,040 --> 00:05:34,560 Speaker 3: methods of competition rules, but that doesn't mean they don't 103 00:05:34,560 --> 00:05:36,280 Speaker 3: have the power but that is one of the issues 104 00:05:36,279 --> 00:05:38,560 Speaker 3: that the federal courts have to wrestle with, and looking 105 00:05:38,560 --> 00:05:41,000 Speaker 3: at this particular rule, I don't know the history of 106 00:05:41,040 --> 00:05:44,320 Speaker 3: why past administrations didn't do it. I think perhaps they 107 00:05:44,360 --> 00:05:46,200 Speaker 3: thought that it was better to proceed just on a 108 00:05:46,200 --> 00:05:49,039 Speaker 3: case by case basis in general, rather than getting into 109 00:05:49,080 --> 00:05:52,360 Speaker 3: a rulemaking proceeding. But I thought it was necessary and 110 00:05:52,560 --> 00:05:54,520 Speaker 3: quite a good thing that the FTC did, and I 111 00:05:54,560 --> 00:05:56,640 Speaker 3: hope it'll hold up in court. But you know, I 112 00:05:56,640 --> 00:05:58,440 Speaker 3: don't have a crystal ball that's any better than anybody 113 00:05:58,480 --> 00:05:59,239 Speaker 3: else at this point. 114 00:05:59,400 --> 00:06:02,200 Speaker 1: And it is interesting how you say how complicated this is, 115 00:06:02,360 --> 00:06:04,160 Speaker 1: because it also put companies in a bit of an 116 00:06:04,160 --> 00:06:06,720 Speaker 1: odd position. For a while. It wasn't really clear if 117 00:06:06,760 --> 00:06:08,760 Speaker 1: the FDC was able to do this, if this was 118 00:06:08,800 --> 00:06:10,960 Speaker 1: going to pass muster, if there was going to have 119 00:06:11,000 --> 00:06:13,279 Speaker 1: to be shelved. For a while, employers were kind of 120 00:06:13,279 --> 00:06:15,760 Speaker 1: in this mezzanine level where they didn't know if they 121 00:06:15,760 --> 00:06:17,720 Speaker 1: were able to tell their workers that the non compete 122 00:06:17,760 --> 00:06:19,640 Speaker 1: was no and void, or if it was something that 123 00:06:19,640 --> 00:06:21,960 Speaker 1: they could enforce, and so everything was in limbo for 124 00:06:22,000 --> 00:06:22,359 Speaker 1: a while. 125 00:06:23,120 --> 00:06:25,000 Speaker 3: Well, and it is still in limbo, you know, as 126 00:06:25,000 --> 00:06:27,919 Speaker 3: this gets resolved. And so you know what I understand. 127 00:06:28,200 --> 00:06:30,039 Speaker 3: I'm not a labor and employment expert. I'm an anti 128 00:06:30,080 --> 00:06:33,000 Speaker 3: trusted the consumer law person. But my friends in that 129 00:06:33,120 --> 00:06:35,720 Speaker 3: minor work are telling companies to be very cautious and 130 00:06:35,760 --> 00:06:38,520 Speaker 3: not to use these unless they have a strong reason 131 00:06:38,600 --> 00:06:41,720 Speaker 3: to do so. Do them more selectively rather than across 132 00:06:41,760 --> 00:06:43,719 Speaker 3: the board, and be aware that there's some states that 133 00:06:43,760 --> 00:06:47,320 Speaker 3: they're simply flat out forbidden, like California, and also that 134 00:06:47,400 --> 00:06:50,800 Speaker 3: there's legislation coming in other states that's cracking down on this. 135 00:06:50,880 --> 00:06:55,960 Speaker 3: So state companies are on notice. And you know, the 136 00:06:56,600 --> 00:06:58,920 Speaker 3: rule is just one aspect of how this is going 137 00:06:58,960 --> 00:07:00,280 Speaker 3: to be regulated in the future. 138 00:07:00,520 --> 00:07:02,280 Speaker 1: I know you don't have a crystal ball, you said 139 00:07:02,279 --> 00:07:04,839 Speaker 1: so yourself, But what does this say then about the 140 00:07:04,880 --> 00:07:06,479 Speaker 1: future of work? How far can this go? 141 00:07:08,240 --> 00:07:11,040 Speaker 3: Well, you know what's likely to tee this up for 142 00:07:11,120 --> 00:07:13,160 Speaker 3: Supreme Court review is if you get a split in 143 00:07:13,200 --> 00:07:15,800 Speaker 3: the circuits. If you get, say, for example, the case 144 00:07:15,840 --> 00:07:18,720 Speaker 3: in Pennsylvania where the FTC won, if the third circuit 145 00:07:18,760 --> 00:07:21,520 Speaker 3: were to uphold that point of view, and let's say 146 00:07:21,520 --> 00:07:23,440 Speaker 3: one of the circuit courts in the South were to 147 00:07:23,680 --> 00:07:25,800 Speaker 3: find it's unlawful, and that's the kind of thing where 148 00:07:25,800 --> 00:07:28,960 Speaker 3: the Supreme Court offer often ways in and yes, you're 149 00:07:29,040 --> 00:07:33,520 Speaker 3: absolutely correct. They're not a fan of independent agency regulatory power, 150 00:07:33,600 --> 00:07:38,280 Speaker 3: and the FDC faces a number of constitutional administrative wat challenges. 151 00:07:38,880 --> 00:07:41,320 Speaker 3: The narrow list is that you know, the agency is 152 00:07:41,360 --> 00:07:44,560 Speaker 3: fine for methods of competition are fine. They're even fine 153 00:07:44,560 --> 00:07:47,600 Speaker 3: if you use them in a particular case against noncompete clauses. 154 00:07:47,880 --> 00:07:49,680 Speaker 3: But there's a narrow path where they could say, you 155 00:07:49,680 --> 00:07:52,000 Speaker 3: don't have the rulemaking authority to do this, but you 156 00:07:52,040 --> 00:07:55,480 Speaker 3: do have the power to seek an individual case against 157 00:07:55,480 --> 00:07:59,720 Speaker 3: an individual of the Senate. Problem with that is that's 158 00:07:59,760 --> 00:08:03,080 Speaker 3: like lack of mole really in all fairness to business 159 00:08:03,080 --> 00:08:06,960 Speaker 3: and to consumers and to employers employees, a nationwide uniform 160 00:08:07,000 --> 00:08:08,760 Speaker 3: orle is the best way to tackle this in my view. 161 00:08:09,200 --> 00:08:11,160 Speaker 1: Okay, we're going to continue to watch that as it 162 00:08:11,200 --> 00:08:13,440 Speaker 1: makes its way through the courts. Meanwhile, we're going to 163 00:08:13,560 --> 00:08:15,880 Speaker 1: shift gears now and talk about big tech and Google 164 00:08:16,120 --> 00:08:19,520 Speaker 1: antitrust enforcing, wanting the search giant Google to make some 165 00:08:19,600 --> 00:08:24,280 Speaker 1: big changes, including potentially selling its Chrome browser now. Professor 166 00:08:24,320 --> 00:08:28,160 Speaker 1: Google says any remedy would allow competing browsers like Apple 167 00:08:28,200 --> 00:08:30,840 Speaker 1: Safari to actually have the freedom to do the deals 168 00:08:31,000 --> 00:08:33,120 Speaker 1: with whatever search engine that they think is best for 169 00:08:33,160 --> 00:08:35,560 Speaker 1: their users. That's what they want to see happen. That's 170 00:08:35,559 --> 00:08:37,960 Speaker 1: what they say should happen. The judges said that it's 171 00:08:37,960 --> 00:08:40,920 Speaker 1: illegal for Google to pay Apple to use Google's browser 172 00:08:40,960 --> 00:08:44,200 Speaker 1: as their default. Does Google have a point here, you know, 173 00:08:44,240 --> 00:08:46,079 Speaker 1: market freedom, free enterprise, that sort of thing. 174 00:08:46,960 --> 00:08:49,440 Speaker 3: Well, you know, this is one of a number of 175 00:08:49,800 --> 00:08:53,240 Speaker 3: you know, probably the busiest few years in monopolization law 176 00:08:53,320 --> 00:08:57,319 Speaker 3: in my lifetime, and Google was the case that finished first, 177 00:08:57,320 --> 00:09:00,840 Speaker 3: and it was a great victory for the government. Google 178 00:09:00,920 --> 00:09:03,680 Speaker 3: was found to have monopoly power over different aspects of 179 00:09:03,720 --> 00:09:07,920 Speaker 3: search and that they violated the law by entering into 180 00:09:08,000 --> 00:09:11,480 Speaker 3: those exclusive deals, paying the huge amounts of money that 181 00:09:11,520 --> 00:09:17,360 Speaker 3: we've all read about. But they didn't obtain this monopoly unlawfully, 182 00:09:17,400 --> 00:09:19,719 Speaker 3: at least the court didn't make any findings like that. 183 00:09:20,200 --> 00:09:25,000 Speaker 3: But they did unlawfully maintain that monopoly. So you're right, 184 00:09:26,040 --> 00:09:29,680 Speaker 3: everything rests with the remedy. And this case follows in 185 00:09:29,720 --> 00:09:32,920 Speaker 3: the footsteps of Microsoft about a generation ago, where you 186 00:09:32,960 --> 00:09:35,199 Speaker 3: have a company that didn't do anything wrong but had 187 00:09:35,200 --> 00:09:38,040 Speaker 3: a monopoly and then started doing lots of things wrong 188 00:09:38,280 --> 00:09:42,040 Speaker 3: to maintain that monopoly. And the problem in the Microsoft 189 00:09:42,120 --> 00:09:44,640 Speaker 3: case was that the court kind of lost its mind 190 00:09:44,640 --> 00:09:46,760 Speaker 3: when it got to the remedy's face. It wrote a 191 00:09:46,760 --> 00:09:50,960 Speaker 3: really terrific, lengthy, detailed opinion the district court of why 192 00:09:51,000 --> 00:09:55,680 Speaker 3: Google had acted unlawfully, why I had no pro competitive 193 00:09:55,760 --> 00:09:58,960 Speaker 3: justification or business justification for what it's doing. And the 194 00:09:59,000 --> 00:10:02,240 Speaker 3: court back in in the nineties early two thousands just 195 00:10:03,120 --> 00:10:07,400 Speaker 3: rushed through a very short hearing on remedy and also 196 00:10:07,480 --> 00:10:11,160 Speaker 3: had done some other kind of outlandish procedural things. And 197 00:10:11,200 --> 00:10:14,040 Speaker 3: they had originally said you have to split essentially the 198 00:10:14,040 --> 00:10:18,520 Speaker 3: Windows operating system from the application software like Word and 199 00:10:18,600 --> 00:10:20,599 Speaker 3: Office and that kind of thing. And the Court of 200 00:10:20,600 --> 00:10:22,559 Speaker 3: Appeals you said, you rushed it, you did some other 201 00:10:22,600 --> 00:10:26,840 Speaker 3: things wrong. We're only going to prohibit the specific things 202 00:10:26,840 --> 00:10:30,559 Speaker 3: that you found were you're legal. Not that much changed 203 00:10:30,600 --> 00:10:33,400 Speaker 3: in the marketplace. And that's the issue before Judge Meta 204 00:10:33,760 --> 00:10:37,280 Speaker 3: in Google, not just what did they do wrong and 205 00:10:37,320 --> 00:10:39,520 Speaker 3: how do you stop it? But how do you deprive 206 00:10:39,600 --> 00:10:43,040 Speaker 3: them of their unlawful profits from their illegal behavior, and 207 00:10:43,080 --> 00:10:45,880 Speaker 3: how do you restore competition? And so I know in 208 00:10:46,000 --> 00:10:48,800 Speaker 3: filibustering you a little bit, but the remedy stuff is 209 00:10:48,880 --> 00:10:54,400 Speaker 3: absolutely key. And you have Microsoft as a roadmap for 210 00:10:54,840 --> 00:10:57,520 Speaker 3: how to have a government victory that doesn't change very 211 00:10:57,600 --> 00:10:59,480 Speaker 3: much in the marketplace. And I know the government and 212 00:10:59,520 --> 00:11:01,840 Speaker 3: the court said on their mind to serve deciding the 213 00:11:01,880 --> 00:11:03,120 Speaker 3: remedy stuff right now. 214 00:11:03,720 --> 00:11:06,120 Speaker 1: It does seem like this is another example of the 215 00:11:06,200 --> 00:11:10,120 Speaker 1: law trying to catch up with the technology a little bit. 216 00:11:10,240 --> 00:11:14,640 Speaker 3: You know, ant trust lagation is backward looking. In Europe 217 00:11:14,640 --> 00:11:17,360 Speaker 3: you have kind of more prospective legislation like the Digital 218 00:11:17,360 --> 00:11:21,800 Speaker 3: Markets Act and the Digital Services Act. But here court 219 00:11:21,840 --> 00:11:24,679 Speaker 3: has judged that they acted unlawfully maintain their monopoly in 220 00:11:24,720 --> 00:11:27,520 Speaker 3: a way that goes beyond competition on the merits, and 221 00:11:27,559 --> 00:11:30,600 Speaker 3: you have to stop that. And you don't want the 222 00:11:30,640 --> 00:11:33,480 Speaker 3: Microsoft situation where the government wins but not really that 223 00:11:33,640 --> 00:11:36,840 Speaker 3: much changes. And I know the government has recommended the 224 00:11:36,880 --> 00:11:40,640 Speaker 3: sale of chrome or otherwise separating kind of the search 225 00:11:40,640 --> 00:11:44,840 Speaker 3: function from the from the browser, and that's something I 226 00:11:44,840 --> 00:11:48,560 Speaker 3: hope that court considers very seriously because these behavioral remedies 227 00:11:49,440 --> 00:11:52,720 Speaker 3: often don't work. The history of Microsoft is a history 228 00:11:52,760 --> 00:11:56,360 Speaker 3: of really really long periods of time where they're under 229 00:11:56,360 --> 00:11:59,360 Speaker 3: court supervision. They did most but not all, the things 230 00:11:59,400 --> 00:12:02,000 Speaker 3: that they were ordered too, and again not much changed. 231 00:12:02,200 --> 00:12:04,600 Speaker 3: They had to share lots of technical information so that 232 00:12:05,240 --> 00:12:08,880 Speaker 3: competitors could better interoperate with him. That's going to be 233 00:12:08,880 --> 00:12:13,120 Speaker 3: part of this solution here. But when you do structural remedies, 234 00:12:13,160 --> 00:12:16,880 Speaker 3: it's cleaner, it's more painful for the company. But they're 235 00:12:16,920 --> 00:12:18,280 Speaker 3: the ones who are helped to break the law. This 236 00:12:18,360 --> 00:12:19,959 Speaker 3: is not a criminal case. No one's going to jail, 237 00:12:20,120 --> 00:12:23,520 Speaker 3: nobody's being fined. The question is what changes in structure 238 00:12:23,559 --> 00:12:27,360 Speaker 3: and behavior are going to be enough to change the 239 00:12:27,440 --> 00:12:30,400 Speaker 3: take away the fruits that there unlawful monopoly. 240 00:12:30,880 --> 00:12:32,600 Speaker 1: Professor, We're going to leave it there. Thank you so 241 00:12:32,679 --> 00:12:34,240 Speaker 1: much for your time, and it has been a pleasure. 242 00:12:35,040 --> 00:12:37,200 Speaker 3: Well, thank you. I appreciate any our. 243 00:12:37,000 --> 00:12:39,760 Speaker 1: Thanks to Professor Spencer Weber Waller. He is director of 244 00:12:39,800 --> 00:12:43,120 Speaker 1: the Institute of Consumer Anti Trust Studies at Loyal University 245 00:12:43,240 --> 00:12:45,760 Speaker 1: Chicago School of Law. Up next, we take a look 246 00:12:45,760 --> 00:12:48,200 Speaker 1: at the block deal between Kruger and Albertson and a 247 00:12:48,240 --> 00:12:50,800 Speaker 1: few other big ani trust cases in the retail space. 248 00:12:51,000 --> 00:12:54,160 Speaker 1: You're listening to a special year end edition of Bloomberg Law. 249 00:12:54,440 --> 00:13:05,280 Speaker 1: I'm Amy Morris and this is Bloomberg. This is Bloomberg 250 00:13:05,400 --> 00:13:09,920 Speaker 1: Law with June Grosso from Bloomberg Radio. This is a 251 00:13:09,920 --> 00:13:12,560 Speaker 1: special edition of Bloomberg Law as we look at some 252 00:13:12,600 --> 00:13:15,640 Speaker 1: of the big antitrust cases from this past year. I'm 253 00:13:15,679 --> 00:13:19,000 Speaker 1: Amy Morris in for June Grosso. Now, we saw several 254 00:13:19,040 --> 00:13:22,160 Speaker 1: big merger deals blocked, including one that would have created 255 00:13:22,200 --> 00:13:26,280 Speaker 1: a grocery behemoth. A federal judge blocked Kroger's nearly twenty 256 00:13:26,280 --> 00:13:30,160 Speaker 1: five billion dollar acquisition of Albertson, saying that proposed tie 257 00:13:30,240 --> 00:13:33,480 Speaker 1: up would create a competition problem for shoppers. To take 258 00:13:33,480 --> 00:13:35,200 Speaker 1: it close to look at the failed deal and the 259 00:13:35,240 --> 00:13:37,880 Speaker 1: fallout for both grocers, plus a look at some other 260 00:13:37,960 --> 00:13:41,720 Speaker 1: big cases in the retail space. We welcome Professor Peter Carstenson, 261 00:13:42,000 --> 00:13:46,520 Speaker 1: Professor of Law Emeritus at University of Wisconsin Law School. Professor, 262 00:13:46,559 --> 00:13:47,960 Speaker 1: thank you so much for taking the time. 263 00:13:48,720 --> 00:13:49,840 Speaker 4: It's a pleasure to be here. 264 00:13:50,559 --> 00:13:55,079 Speaker 1: Let's talk about this particular merger. The FTC blocked the deal, 265 00:13:55,640 --> 00:13:59,320 Speaker 1: arguing that it would violate antitrust law. That was seen 266 00:13:59,360 --> 00:14:02,479 Speaker 1: as an ft SE win, of course, but then Albertsons 267 00:14:02,559 --> 00:14:06,439 Speaker 1: sued Kroger. Walk us through how this worked well. 268 00:14:07,760 --> 00:14:12,240 Speaker 4: Albertson's got looted before it was sold. They gave up 269 00:14:12,600 --> 00:14:18,200 Speaker 4: several billion dollars to their shareholders, so they're already impoverished 270 00:14:18,600 --> 00:14:21,640 Speaker 4: expecting that this deal with Kroger was going to go through. 271 00:14:22,840 --> 00:14:28,080 Speaker 4: They now claim that Kroger did not really do the 272 00:14:28,120 --> 00:14:32,120 Speaker 4: best job it could have in defending and justifying the merger, 273 00:14:33,000 --> 00:14:38,240 Speaker 4: inadequate proposed divestiture, et cetera, and that that obviously has 274 00:14:38,320 --> 00:14:44,200 Speaker 4: harmed Albertson's enormously, And so they're seeking huge damages as 275 00:14:44,240 --> 00:14:46,720 Speaker 4: a way of trying to get some funding back in 276 00:14:46,800 --> 00:14:50,119 Speaker 4: place to restore themselves as a competitor, even. 277 00:14:49,840 --> 00:14:51,720 Speaker 1: Though it was the FTC that blocked it. 278 00:14:52,720 --> 00:14:58,960 Speaker 4: Right right well up until this case, the FTC, best 279 00:14:59,000 --> 00:15:05,600 Speaker 4: of my present recollection, never actually stopped a grocery merger totally. 280 00:15:06,160 --> 00:15:08,480 Speaker 4: It would say, you've got to give up these grocery stores, 281 00:15:08,560 --> 00:15:11,200 Speaker 4: or those grocery stores. You proposed to give up one 282 00:15:11,240 --> 00:15:13,720 Speaker 4: hundred and twenty grocery stores. We want you to give 283 00:15:13,760 --> 00:15:16,400 Speaker 4: up two hundred and twelve grocery stores. But they let 284 00:15:16,480 --> 00:15:20,800 Speaker 4: the mergers go through. This time they finally got the 285 00:15:20,840 --> 00:15:26,080 Speaker 4: courage of my convictions and said, no, well, they've made 286 00:15:26,080 --> 00:15:30,120 Speaker 4: a really stupid settlement actually with Albertson's. A few years 287 00:15:30,160 --> 00:15:33,720 Speaker 4: ago they divested the one hundred and fifty something like 288 00:15:33,800 --> 00:15:37,440 Speaker 4: that stores to a company that almost immediately went bankrupt, 289 00:15:39,160 --> 00:15:43,360 Speaker 4: and partly because the stores that were divested were the 290 00:15:43,440 --> 00:15:49,800 Speaker 4: dogs in part of the of the Safeway empire, so 291 00:15:49,920 --> 00:15:53,600 Speaker 4: that this time the Trade Commission said, no, we're just 292 00:15:53,680 --> 00:15:55,680 Speaker 4: not going to approve the merger. There was something like 293 00:15:56,240 --> 00:16:05,040 Speaker 4: fourteen hundred local markets were Albertson's and Kroger were significant 294 00:16:05,040 --> 00:16:10,080 Speaker 4: competitors with each other. They were proposing to fix a 295 00:16:10,120 --> 00:16:13,800 Speaker 4: significant number of those overlaps, but not all of them. 296 00:16:14,360 --> 00:16:17,640 Speaker 4: And so this is sort of where the tractory said, 297 00:16:17,760 --> 00:16:20,200 Speaker 4: that's not an adequate settlement. First of all, this is 298 00:16:20,240 --> 00:16:24,840 Speaker 4: a clearly any competitive merger in terms of those overlaps, 299 00:16:25,960 --> 00:16:29,120 Speaker 4: and what you're proposing by way of a settlement simply 300 00:16:29,160 --> 00:16:32,840 Speaker 4: doesn't solve the problem. Very good opinion by the judge. 301 00:16:32,840 --> 00:16:38,400 Speaker 4: By the way, we've seen this year at least four 302 00:16:38,760 --> 00:16:43,280 Speaker 4: really good decisions, three that I can think of from 303 00:16:43,320 --> 00:16:50,200 Speaker 4: trial judges, this one, the one in the Google monopoly case, 304 00:16:50,440 --> 00:16:52,160 Speaker 4: and the. 305 00:16:54,120 --> 00:16:55,640 Speaker 2: Tapestry. 306 00:16:56,880 --> 00:17:00,920 Speaker 4: All of them the judges did really really good jobs. 307 00:17:02,200 --> 00:17:07,720 Speaker 4: And the judge said on the settlement was it would 308 00:17:08,160 --> 00:17:12,440 Speaker 4: reduce the number of markets where there are arms substantially 309 00:17:12,880 --> 00:17:17,679 Speaker 4: if and only if the company acquiring these assets is 310 00:17:17,720 --> 00:17:20,959 Speaker 4: actually one hundred percent successful, if it has any failure, 311 00:17:20,960 --> 00:17:23,800 Speaker 4: there's going to be more markets harmed. And this is 312 00:17:23,840 --> 00:17:26,920 Speaker 4: a company that in the past has bought grocery stores 313 00:17:26,960 --> 00:17:30,520 Speaker 4: and then sold them one way or another. So the 314 00:17:30,640 --> 00:17:35,280 Speaker 4: judge said, this is really not a very good settlement 315 00:17:36,119 --> 00:17:39,159 Speaker 4: proposal from Kroger. I'm not going back to Albertsons. I 316 00:17:39,200 --> 00:17:44,880 Speaker 4: think this is why Albertson's is irritated that Kroger did 317 00:17:44,920 --> 00:17:48,480 Speaker 4: not come up with a more credible buyer and did 318 00:17:48,520 --> 00:17:57,080 Speaker 4: not offer more stores by way of a settlement, which 319 00:17:57,119 --> 00:18:02,800 Speaker 4: made it harder to justify the proposed dissolution of the 320 00:18:03,280 --> 00:18:06,760 Speaker 4: our se the the M just by the merger because 321 00:18:06,800 --> 00:18:09,119 Speaker 4: of what was being sold off. U. 322 00:18:09,400 --> 00:18:12,560 Speaker 1: Well, so does albertson S d uh have a j 323 00:18:12,600 --> 00:18:14,440 Speaker 1: a shot at winning this case? 324 00:18:17,119 --> 00:18:23,440 Speaker 4: I this gets over into outside really of antitrust law, 325 00:18:23,520 --> 00:18:29,560 Speaker 4: over into corporate duties. Uh ha, did they fail to 326 00:18:29,680 --> 00:18:37,160 Speaker 4: engage in good faith? Uh? Advancement of the merger. They're 327 00:18:37,200 --> 00:18:39,480 Speaker 4: gonna be saying something on more or less along the 328 00:18:39,520 --> 00:18:43,359 Speaker 4: lines of ours was a really good proposal that judge 329 00:18:43,520 --> 00:18:46,480 Speaker 4: just didn't accept it. It was as far as we 330 00:18:46,520 --> 00:18:49,400 Speaker 4: was reasonable to go given how much we were gonna 331 00:18:49,440 --> 00:18:52,560 Speaker 4: pay for Albertson's or wards to that general effect. And 332 00:18:52,600 --> 00:18:55,399 Speaker 4: so that's gonna turn it's it's in Delaware, it's in 333 00:18:55,480 --> 00:18:59,440 Speaker 4: state court. It's gonna turn on the duties of a 334 00:18:59,560 --> 00:19:03,600 Speaker 4: buyer to a seller where there are some conditions. And 335 00:19:04,320 --> 00:19:11,520 Speaker 4: that's my pay grade to speculate. I mean, I would 336 00:19:12,040 --> 00:19:16,320 Speaker 4: guess if Albertson's has some pretty good evidence, there'll be 337 00:19:16,359 --> 00:19:20,000 Speaker 4: a settlement. Kroger will pay some more money to Albertson's. 338 00:19:20,560 --> 00:19:23,760 Speaker 1: Now, you mentioned Caprian Tapestry earlier in this interview, and 339 00:19:24,359 --> 00:19:27,439 Speaker 1: that deal wasn't blocked, but they mutually decided to end 340 00:19:27,440 --> 00:19:30,680 Speaker 1: the agreement after a court order froze them. To walk 341 00:19:30,760 --> 00:19:33,439 Speaker 1: us through that decision, it sounds like it's not quite 342 00:19:34,080 --> 00:19:36,200 Speaker 1: as contentious as the Albertson Kroger. 343 00:19:36,840 --> 00:19:40,600 Speaker 4: Oh, I think it was at least as contentious. On 344 00:19:41,000 --> 00:19:48,560 Speaker 4: what's called the market definition. These are high priced purses 345 00:19:49,200 --> 00:19:53,359 Speaker 4: that are in the popular high price or something like that. 346 00:19:53,760 --> 00:19:58,239 Speaker 4: And the argument was a purse is a purse, and 347 00:19:58,280 --> 00:20:01,240 Speaker 4: you can get a purse for twenty dollars at Walmart. 348 00:20:01,640 --> 00:20:03,720 Speaker 4: You can get a purse from one of these fancy 349 00:20:04,080 --> 00:20:06,640 Speaker 4: folks for one thousand dollars. I've been seeing some ants 350 00:20:06,720 --> 00:20:09,960 Speaker 4: recently and I keep asking myself, why would anybody pay 351 00:20:10,000 --> 00:20:14,560 Speaker 4: that much for a purse, But it's not me. So again, 352 00:20:15,280 --> 00:20:17,720 Speaker 4: this was a set they were seeking preliminary injunction as 353 00:20:17,760 --> 00:20:21,880 Speaker 4: I recall for the Trade Commission so they could proceed. 354 00:20:22,840 --> 00:20:30,000 Speaker 4: And the question was whether you could distinguish in this 355 00:20:30,400 --> 00:20:38,720 Speaker 4: purse and other accessories world a domain an an area 356 00:20:38,760 --> 00:20:45,160 Speaker 4: of competition involving this sort of middle price range from 357 00:20:45,200 --> 00:20:49,040 Speaker 4: like one hundred dollars to nine hundred dollars for a 358 00:20:49,119 --> 00:20:51,959 Speaker 4: purses as opposed to purses that were priced one thousand 359 00:20:52,040 --> 00:20:59,040 Speaker 4: dollars or under a hundred. And the Trade Commission put 360 00:20:59,119 --> 00:21:03,200 Speaker 4: in some pretty good evidence of the way in which 361 00:21:03,600 --> 00:21:08,919 Speaker 4: these two companies had specifically identified themselves as being in 362 00:21:09,119 --> 00:21:16,119 Speaker 4: that zone of perse competition accessory competition, and it identified 363 00:21:16,160 --> 00:21:21,679 Speaker 4: each other as being their most major competitor. And so 364 00:21:22,119 --> 00:21:25,959 Speaker 4: again the argument was under the antitrust law, a merger 365 00:21:26,080 --> 00:21:32,280 Speaker 4: which may underscy the word may substantially lesson competition or 366 00:21:32,320 --> 00:21:35,639 Speaker 4: tend to create a monopoly, is unlawful. So it doesn't 367 00:21:35,680 --> 00:21:40,800 Speaker 4: have to actually eliminate the harm competition, restrain competition. It 368 00:21:40,920 --> 00:21:47,760 Speaker 4: simply is something that may is reasonably likely to harm competition, 369 00:21:47,800 --> 00:21:51,879 Speaker 4: and these two firms identified themselves as each other's primary competitor. 370 00:21:52,760 --> 00:21:57,240 Speaker 4: There were other associated facts that really, in the judges 371 00:21:57,359 --> 00:22:02,240 Speaker 4: view and the Trade Commission's earlier view, really did create 372 00:22:02,400 --> 00:22:08,320 Speaker 4: this kind of competitive zone where if these firms merged, 373 00:22:08,400 --> 00:22:11,040 Speaker 4: there really would not be they had four or five 374 00:22:11,080 --> 00:22:14,840 Speaker 4: different brands as well, there really would not be another 375 00:22:16,240 --> 00:22:24,520 Speaker 4: other equally significant competitors in that band of person accessory supplies. 376 00:22:25,280 --> 00:22:32,000 Speaker 4: The high end producers brand named European outfits would be 377 00:22:32,119 --> 00:22:35,520 Speaker 4: unlikely to want to cut price to enter that area, 378 00:22:36,160 --> 00:22:41,720 Speaker 4: and that the low priced people have a very hard 379 00:22:41,800 --> 00:22:48,280 Speaker 4: time apparently raising their profile, so that if you traditionally 380 00:22:48,280 --> 00:22:51,240 Speaker 4: saw one of their purses as a ninety eighty or 381 00:22:51,320 --> 00:22:55,840 Speaker 4: ninety dollars perse, for them to convince you that it's 382 00:22:56,040 --> 00:23:01,480 Speaker 4: real that a different line but with the same brand 383 00:23:01,600 --> 00:23:04,399 Speaker 4: name is really a two hundred and fifty dollars person 384 00:23:05,119 --> 00:23:12,120 Speaker 4: is apparently a very difficult advertising promotion credibility problem. So 385 00:23:12,280 --> 00:23:15,919 Speaker 4: that the judge felt that there was good reason to 386 00:23:15,960 --> 00:23:21,880 Speaker 4: believe that this would this merger would significantly affect competition 387 00:23:22,040 --> 00:23:23,720 Speaker 4: in that domain. 388 00:23:24,359 --> 00:23:27,160 Speaker 1: Well, professor, before I let you go I'm curious about 389 00:23:27,200 --> 00:23:29,879 Speaker 1: what this could mean for future M and A type deals. 390 00:23:29,880 --> 00:23:32,480 Speaker 1: We've just talked about two really big ones that got 391 00:23:32,520 --> 00:23:35,199 Speaker 1: frozen and got dissolved. Does this have a chilling effect 392 00:23:35,240 --> 00:23:39,159 Speaker 1: on others who may be looking at mergers and acquisitions? 393 00:23:40,680 --> 00:23:43,520 Speaker 4: I would so like that to be the case. Most 394 00:23:43,560 --> 00:23:49,560 Speaker 4: of these mergers of this scale have no legitimate justification 395 00:23:49,720 --> 00:23:57,080 Speaker 4: in terms of efficiency, product promotion, innovation. I think if 396 00:23:58,560 --> 00:24:04,040 Speaker 4: the Biden Harris administered had been had been retained by 397 00:24:04,080 --> 00:24:08,680 Speaker 4: the voters, there was a reasonable probability that this would 398 00:24:08,720 --> 00:24:14,760 Speaker 4: have had an inhibiting effect. What is very uncertain is 399 00:24:15,000 --> 00:24:19,840 Speaker 4: with the new Trump administration, even though the designated heads 400 00:24:19,840 --> 00:24:23,520 Speaker 4: for the Anti Trust Division and the Trade Commission are 401 00:24:23,560 --> 00:24:30,240 Speaker 4: actually pretty pro anti trust, how active they will be 402 00:24:30,600 --> 00:24:38,080 Speaker 4: in enforcing merger law at this level. The certainly the 403 00:24:38,119 --> 00:24:43,600 Speaker 4: market and the folks who are putting deals together don't 404 00:24:43,640 --> 00:24:45,879 Speaker 4: think so. There are a whole lot of deals that 405 00:24:45,920 --> 00:24:50,520 Speaker 4: are set to come forward after January twentieth, and that 406 00:24:50,560 --> 00:24:57,639 Speaker 4: would suggest that the market, the investment bankers think that 407 00:24:57,840 --> 00:25:02,040 Speaker 4: merger rules are going to be relaxed. A number of 408 00:25:02,080 --> 00:25:09,760 Speaker 4: them were, of course, substantial contributors to the new administration's 409 00:25:09,800 --> 00:25:17,439 Speaker 4: campaign and to its, the inauguration, etc. And it is 410 00:25:18,000 --> 00:25:24,280 Speaker 4: allegedly a transactional administration, which would again suggest that they 411 00:25:24,320 --> 00:25:25,320 Speaker 4: may know something here. 412 00:25:26,359 --> 00:25:28,320 Speaker 1: Professor, we're going to have to leave it there. Thank 413 00:25:28,359 --> 00:25:30,400 Speaker 1: you so much for taking the time with us. Our 414 00:25:30,440 --> 00:25:33,679 Speaker 1: thanks to Professor Peter Carstensen for joining us, Professor of 415 00:25:33,760 --> 00:25:36,720 Speaker 1: Law Emeritus at the University of Wisconsin Law School. Now 416 00:25:36,760 --> 00:25:38,639 Speaker 1: up next, we are going to look ahead to twenty 417 00:25:38,680 --> 00:25:43,080 Speaker 1: twenty five and preview how another Trump administration could impact 418 00:25:43,119 --> 00:25:46,520 Speaker 1: the regulatory environment. You're listening to a special edition of 419 00:25:46,560 --> 00:25:49,600 Speaker 1: Bloomberg Law. I maybe Morris in for June Grosso. This 420 00:25:49,760 --> 00:26:05,560 Speaker 1: is Bloomberg. This is Bloomberg Law with June Grosso from 421 00:26:05,720 --> 00:26:09,399 Speaker 1: Bloomberg Radio. Thanks for listening to a special edition of 422 00:26:09,440 --> 00:26:12,120 Speaker 1: Bloomberg Law. I'm Abe Morris filling in for June Grosso, 423 00:26:12,359 --> 00:26:15,359 Speaker 1: and we're focusing on anti trust regulations on this show. 424 00:26:15,600 --> 00:26:18,720 Speaker 1: President elect Donald Trump ass promised to make some sweeping 425 00:26:18,800 --> 00:26:21,879 Speaker 1: changes to government at the federal level. He'll inherit a 426 00:26:21,920 --> 00:26:25,600 Speaker 1: record amount of pending antitrust cases. We get a preview 427 00:26:25,640 --> 00:26:28,480 Speaker 1: now of how a Trump White House might be handling things. 428 00:26:28,720 --> 00:26:32,720 Speaker 1: We bring in Bloomberg News Anti trust reporter Leah Nylan, Leah, 429 00:26:32,760 --> 00:26:34,960 Speaker 1: a pleasure, thanks for joining us, Thanks for having me 430 00:26:35,680 --> 00:26:39,920 Speaker 1: Assistant Attorney General for Anti Trust. Jonathan Canter leaving the agency. 431 00:26:40,000 --> 00:26:42,560 Speaker 1: Got a lot of cases pending. What's happening here? 432 00:26:42,760 --> 00:26:46,160 Speaker 5: Yes, So Jonathan Canter has officially gone. For the next 433 00:26:46,200 --> 00:26:49,600 Speaker 5: couple weeks. His number two at the agency, Doha Mechi, 434 00:26:49,760 --> 00:26:53,320 Speaker 5: is in charge, and then on January twentieth, somebody from 435 00:26:53,320 --> 00:26:56,640 Speaker 5: the Trump administration will come in. Donald Trump has nominated 436 00:26:56,680 --> 00:27:00,560 Speaker 5: Gail Slater to take over the position. She is a 437 00:27:00,600 --> 00:27:04,000 Speaker 5: long time any trust lawyer with experience at the other agency, 438 00:27:04,080 --> 00:27:06,680 Speaker 5: the FTC. For the past couple of years, she has 439 00:27:06,760 --> 00:27:10,320 Speaker 5: been working at a number of anti Google companies, including 440 00:27:10,440 --> 00:27:14,600 Speaker 5: Fox Corp and Roku, and she has recently served as 441 00:27:14,640 --> 00:27:18,280 Speaker 5: the academic advisor to Jade Vance. So she's very familiar 442 00:27:18,359 --> 00:27:23,280 Speaker 5: with these lawsuits and has, you know, lots of thoughts 443 00:27:23,320 --> 00:27:26,720 Speaker 5: about how they could go forward. At the Federal Trade Commission, 444 00:27:27,040 --> 00:27:30,600 Speaker 5: Trump has nominated one of the current GOP commissioners to 445 00:27:30,640 --> 00:27:33,720 Speaker 5: take the chairmanship from Lena Khan, who is expected to 446 00:27:33,760 --> 00:27:37,400 Speaker 5: step down after the inauguration. His name is Andrew Ferguson. 447 00:27:37,520 --> 00:27:41,280 Speaker 5: He is a former hillstaffer for former Senate Majority Leader 448 00:27:41,280 --> 00:27:44,240 Speaker 5: Mitch McConnell, and has also served as the Solicitor General 449 00:27:44,280 --> 00:27:47,760 Speaker 5: of Virginia. He has also a lot of anti big 450 00:27:47,800 --> 00:27:51,080 Speaker 5: tech views and has recently spoken about the need to 451 00:27:51,600 --> 00:27:55,840 Speaker 5: look into the tech platforms over there censorship of conservative viewpoints. 452 00:27:56,359 --> 00:27:59,280 Speaker 1: Okay, there's a lot to unpack there, but obviously people 453 00:27:59,320 --> 00:28:02,720 Speaker 1: are being moved into those positions, are getting positioned to 454 00:28:02,880 --> 00:28:07,440 Speaker 1: move in come January twentieth, the next administration is going 455 00:28:07,480 --> 00:28:09,199 Speaker 1: to have to be the ones that pick up the 456 00:28:09,200 --> 00:28:13,080 Speaker 1: baton and move this forward. From what you know about 457 00:28:13,080 --> 00:28:15,879 Speaker 1: these nominees, these people who may be taking these positions, 458 00:28:16,320 --> 00:28:18,399 Speaker 1: is that something that they are inclined to do, or 459 00:28:18,440 --> 00:28:19,720 Speaker 1: would they go a different direction? 460 00:28:20,080 --> 00:28:22,160 Speaker 5: Now, both of them have already sort of made clear 461 00:28:22,240 --> 00:28:26,239 Speaker 5: that they intend to move forward with these cases that 462 00:28:26,280 --> 00:28:30,639 Speaker 5: have already been filed, and in his nomination announcements, Donald 463 00:28:30,680 --> 00:28:34,439 Speaker 5: Trump indicated that he picked them in large part because 464 00:28:34,520 --> 00:28:39,720 Speaker 5: of their views on tech and so, yes, the Google 465 00:28:39,800 --> 00:28:42,720 Speaker 5: case is sort of the first one, the biggest one 466 00:28:42,720 --> 00:28:45,520 Speaker 5: that remains pending at the Justice Department, and there is 467 00:28:45,520 --> 00:28:48,400 Speaker 5: supposed to be a trial in that one in April 468 00:28:48,520 --> 00:28:52,880 Speaker 5: over what sort of conditions the courts made place on 469 00:28:53,000 --> 00:28:55,360 Speaker 5: the company after it was found to be an illegal monopoly. 470 00:28:56,160 --> 00:28:59,160 Speaker 5: The Trump administration will have a chance in March to 471 00:28:59,240 --> 00:29:01,880 Speaker 5: weigh in if they have any views that are slightly 472 00:29:01,960 --> 00:29:05,560 Speaker 5: different from the Biden folks. The Biden team put in 473 00:29:05,680 --> 00:29:10,080 Speaker 5: a proposal for how they think the court should make 474 00:29:10,160 --> 00:29:13,240 Speaker 5: some changes to Google's business, but as I mentioned, the 475 00:29:13,920 --> 00:29:16,240 Speaker 5: Trump team can make some changes to that before this 476 00:29:16,320 --> 00:29:20,840 Speaker 5: trial takes place in April, and then we'll go forward 477 00:29:20,920 --> 00:29:24,160 Speaker 5: with a several week hearing and the judge has promised 478 00:29:24,200 --> 00:29:27,800 Speaker 5: to issue a ruling before August of next year. 479 00:29:28,480 --> 00:29:34,200 Speaker 1: Now that's Google, but there are also other cases Ticketmaster, Apple, Visa, 480 00:29:34,400 --> 00:29:38,560 Speaker 1: all accused of illegally dominating markets and the Justice Departments 481 00:29:38,600 --> 00:29:42,600 Speaker 1: suing them, and plus there's that monopolization suit against Google 482 00:29:42,640 --> 00:29:46,480 Speaker 1: that you were talking about. Those cases are still are 483 00:29:46,520 --> 00:29:48,560 Speaker 1: still pending. They don't even have trial dates yet. 484 00:29:48,680 --> 00:29:50,400 Speaker 5: Yeah, those are our ones that are all sort of 485 00:29:50,840 --> 00:29:53,600 Speaker 5: in the early stages. They were filed by the Biden 486 00:29:53,600 --> 00:29:57,320 Speaker 5: administration in the past year, so they're very early. It's 487 00:29:57,360 --> 00:30:01,959 Speaker 5: definitely possible that folks from those companies try and persuade 488 00:30:02,080 --> 00:30:04,880 Speaker 5: the Justice Department to settle with them. That is, you know, 489 00:30:05,000 --> 00:30:08,480 Speaker 5: something that has happened in a lot of previous administrations. 490 00:30:08,880 --> 00:30:11,520 Speaker 5: People often point back to the Microsoft case, which was 491 00:30:11,560 --> 00:30:16,440 Speaker 5: started by the Clinton administration, and then after George W. 492 00:30:16,520 --> 00:30:19,560 Speaker 5: Bush came in in twenty eleven, his administration opted to 493 00:30:19,560 --> 00:30:23,480 Speaker 5: settle with the company. So it's pretty much guaranteed that 494 00:30:23,560 --> 00:30:26,320 Speaker 5: the companies will at least make attempts to settle. Whether 495 00:30:27,160 --> 00:30:30,080 Speaker 5: Slater and the Trump team are interested in the settlement 496 00:30:30,160 --> 00:30:33,000 Speaker 5: sort of remains to be seen, but you know, they 497 00:30:33,080 --> 00:30:35,960 Speaker 5: might be interested in seeing what the companies might be willing. 498 00:30:35,760 --> 00:30:38,120 Speaker 1: To offer up. The Trump administration is known for being 499 00:30:38,160 --> 00:30:43,040 Speaker 1: a friend of big companies, big tech, and I wonder 500 00:30:43,120 --> 00:30:45,240 Speaker 1: if that is going to play a role in how 501 00:30:45,280 --> 00:30:48,440 Speaker 1: he makes his decisions as to whether to move the 502 00:30:49,680 --> 00:30:53,800 Speaker 1: towards the anti trust type cases that are already pending. 503 00:30:54,080 --> 00:30:56,480 Speaker 1: It just there's a question as to whether would he 504 00:30:56,640 --> 00:30:57,640 Speaker 1: move forward with them. 505 00:30:57,840 --> 00:31:01,479 Speaker 5: Yeah, that's that's definitely ago question. You know, some of 506 00:31:01,520 --> 00:31:04,160 Speaker 5: the CEOs of the companies have already sort of made 507 00:31:04,280 --> 00:31:08,520 Speaker 5: overtures towards President Trump. You know, Mark Zuckerberg donated a 508 00:31:08,600 --> 00:31:11,720 Speaker 5: lot of money to Trump's inauguration fund. Tim Cook went 509 00:31:11,760 --> 00:31:14,440 Speaker 5: down to mar A Lago and had dinner with Donald Trump, 510 00:31:14,480 --> 00:31:19,880 Speaker 5: and afterwards Trump announced that any sort of trade sanctions 511 00:31:19,880 --> 00:31:23,120 Speaker 5: that are imposed on Chinese companies would not apply to Apple. 512 00:31:23,680 --> 00:31:27,400 Speaker 5: So it's definitely possible that there is going to be 513 00:31:27,560 --> 00:31:30,719 Speaker 5: like this lobbying pushed to try and persuade Donald Trump 514 00:31:30,800 --> 00:31:35,160 Speaker 5: to settle some of these cases. So that's sort of 515 00:31:35,200 --> 00:31:37,160 Speaker 5: why they're all a little bit up in the air 516 00:31:37,400 --> 00:31:40,240 Speaker 5: for you know, the next couple months. I mean, the 517 00:31:40,320 --> 00:31:43,320 Speaker 5: thing about some of these cases, like the Chicken Master 518 00:31:43,400 --> 00:31:46,480 Speaker 5: case for example, is they are like very unpopular with 519 00:31:46,560 --> 00:31:49,920 Speaker 5: the public. So if he were to sort of settle 520 00:31:49,920 --> 00:31:53,360 Speaker 5: that case, it's not going to make him a lot 521 00:31:53,360 --> 00:31:55,800 Speaker 5: of friends with the average voter. But then again, he 522 00:31:55,880 --> 00:31:56,520 Speaker 5: might not care. 523 00:31:57,360 --> 00:32:01,440 Speaker 1: I see, So where do you since you've been covering 524 00:32:01,480 --> 00:32:04,160 Speaker 1: this and you are the anti stress reporter for Bloomberg News, 525 00:32:04,360 --> 00:32:06,680 Speaker 1: where do you see this headed now? And how long 526 00:32:06,720 --> 00:32:09,240 Speaker 1: does it take to unravel these types of cases? 527 00:32:09,480 --> 00:32:12,760 Speaker 5: Yeah, if you know, they do opt to take any 528 00:32:12,840 --> 00:32:15,160 Speaker 5: kind of a settlement, we could see that by next summer. 529 00:32:15,560 --> 00:32:17,920 Speaker 5: You know, they're they're not just going to drop them. 530 00:32:17,960 --> 00:32:21,160 Speaker 5: Probably they would want something in exchange either. That's some 531 00:32:21,240 --> 00:32:23,520 Speaker 5: kind of settlement where the company agrees to change some 532 00:32:23,600 --> 00:32:26,400 Speaker 5: of its business practices, maybe pay a little bit of money. 533 00:32:26,440 --> 00:32:29,400 Speaker 5: It sort of depends, you know, in the Microsoft case 534 00:32:29,440 --> 00:32:31,200 Speaker 5: that everyone keeps putting back to you because it's our 535 00:32:31,280 --> 00:32:34,560 Speaker 5: sort of best example. You know, Microsoft agreed to be 536 00:32:35,120 --> 00:32:38,520 Speaker 5: under government supervision for the next five years. That ended 537 00:32:38,600 --> 00:32:41,560 Speaker 5: up turning into like a decade long saga. So right, 538 00:32:41,720 --> 00:32:43,840 Speaker 5: you know, right, people they want. 539 00:32:43,840 --> 00:32:46,120 Speaker 1: It takes such a long time to unravel all of this, 540 00:32:46,480 --> 00:32:48,840 Speaker 1: And also there may be more coming down the pipe. 541 00:32:48,960 --> 00:32:51,440 Speaker 5: Yes, that's certainly true. There are still a number of 542 00:32:51,480 --> 00:32:54,120 Speaker 5: cases that both the FTC and the dj have been 543 00:32:54,160 --> 00:32:57,800 Speaker 5: investigating into large companies for the past several years, some 544 00:32:57,880 --> 00:33:01,640 Speaker 5: of the health insurance companies, meat packers, all sorts of 545 00:33:01,680 --> 00:33:06,480 Speaker 5: stuff in the sort of pharmaceutical and the pharmaceutical benefit manufacturers, 546 00:33:06,520 --> 00:33:09,520 Speaker 5: the drug middleman area. So I mean, we could see 547 00:33:09,680 --> 00:33:13,520 Speaker 5: more lawsuits, you know, coming in the next year. All 548 00:33:13,560 --> 00:33:17,560 Speaker 5: of this sort of depends on how the Trump administration 549 00:33:17,640 --> 00:33:19,320 Speaker 5: really wants to play this issue. 550 00:33:19,040 --> 00:33:20,720 Speaker 1: And that's kind of a mystery at this point. 551 00:33:20,840 --> 00:33:22,760 Speaker 5: It still is a little bit of a mystery. 552 00:33:22,440 --> 00:33:24,000 Speaker 1: Because none of us have a crystal ball. 553 00:33:25,240 --> 00:33:28,600 Speaker 5: Definitely true. Someone wants to described Donald Trump's sort of 554 00:33:28,680 --> 00:33:32,720 Speaker 5: method to me as saying like he doesn't get involved 555 00:33:32,760 --> 00:33:36,800 Speaker 5: in like the policy details. He tends to delegate decision 556 00:33:36,840 --> 00:33:39,440 Speaker 5: making to a person that he trusts, and that person 557 00:33:39,480 --> 00:33:42,120 Speaker 5: is sort of allowed to run with it until sometimes 558 00:33:42,120 --> 00:33:44,840 Speaker 5: something big happens, and then he oftentimes wants to get 559 00:33:44,840 --> 00:33:46,880 Speaker 5: back involved. So if you think about the way that 560 00:33:47,000 --> 00:33:49,680 Speaker 5: the sort of TikTok band played out, you know, they 561 00:33:49,720 --> 00:33:53,240 Speaker 5: were looking at banning TikTok and that was moving along 562 00:33:53,360 --> 00:33:56,080 Speaker 5: until there was then like sort of the auctioning process 563 00:33:56,120 --> 00:33:58,440 Speaker 5: where people were involved, and Donald Trump wanted to be 564 00:33:58,520 --> 00:34:01,120 Speaker 5: very involved in that because he likes sort of making 565 00:34:01,160 --> 00:34:03,400 Speaker 5: deals and negotiating with companies in them himself. 566 00:34:04,120 --> 00:34:06,760 Speaker 1: Where do you anticipate coming up in twenty twenty five 567 00:34:06,800 --> 00:34:09,759 Speaker 1: as far as any more antitrust cases that may be 568 00:34:09,880 --> 00:34:10,720 Speaker 1: coming down the pipe. 569 00:34:10,800 --> 00:34:13,520 Speaker 5: Yeah, So, in addition to the Google case, we already mentioned, 570 00:34:14,040 --> 00:34:17,720 Speaker 5: the FTC's big case against Facebook, which is over whether 571 00:34:17,800 --> 00:34:20,480 Speaker 5: Facebook should be forced to sell off Instagram and WhatsApp, 572 00:34:20,840 --> 00:34:24,160 Speaker 5: is scheduled to go to trial starting also in April 573 00:34:24,200 --> 00:34:27,080 Speaker 5: for about ten weeks. That one should be very interesting. 574 00:34:27,160 --> 00:34:30,880 Speaker 5: Mark Zuckerberg, Sheryl Sandberg and some other very senior Facebook 575 00:34:30,920 --> 00:34:34,840 Speaker 5: executives are set to testify and it is really about 576 00:34:35,080 --> 00:34:37,800 Speaker 5: sort of fixing what a lot of the antitrust people 577 00:34:37,840 --> 00:34:43,000 Speaker 5: think is like one of the seminal mistakes of the 578 00:34:43,000 --> 00:34:46,600 Speaker 5: Internet generation, which was allowing you know, Facebook to acquire Instagram. 579 00:34:46,719 --> 00:34:48,799 Speaker 5: So it will be interesting to see what the court 580 00:34:48,840 --> 00:34:51,319 Speaker 5: does there. It's that one is sort of at the 581 00:34:51,360 --> 00:34:54,000 Speaker 5: point where it's it would be difficult for the Trump 582 00:34:54,040 --> 00:34:56,359 Speaker 5: administration to roll it back because it's already sort of 583 00:34:56,440 --> 00:34:59,920 Speaker 5: slated to had to trial very soon. But some of 584 00:35:00,120 --> 00:35:02,480 Speaker 5: the other ones that are pending, as we mentioned, the 585 00:35:02,520 --> 00:35:05,160 Speaker 5: Apple case, the Amazon case, those are sort of ones 586 00:35:05,200 --> 00:35:06,960 Speaker 5: that might potentially see settlements. 587 00:35:07,400 --> 00:35:09,120 Speaker 1: Interesting that they're mostly big tech. 588 00:35:09,960 --> 00:35:13,319 Speaker 5: Yes, you know. This all started towards the end of 589 00:35:13,360 --> 00:35:17,360 Speaker 5: the first Trump administration in twenty nineteen, the DOJ and 590 00:35:17,400 --> 00:35:20,160 Speaker 5: the FTC did this big divide where they decided that 591 00:35:20,200 --> 00:35:22,600 Speaker 5: the Justice Department would look into Google and Apple and 592 00:35:22,719 --> 00:35:26,719 Speaker 5: the FTC would look into Facebook and Amazon, and right 593 00:35:26,840 --> 00:35:29,400 Speaker 5: at the very end of the Trump administration, they sued 594 00:35:29,440 --> 00:35:33,920 Speaker 5: both Google and Facebook, and then they sort of turned 595 00:35:33,960 --> 00:35:37,520 Speaker 5: their attention to the other tech giants, Apple and Amazon 596 00:35:37,600 --> 00:35:40,480 Speaker 5: and ended up bringing cases against them in twenty twenty 597 00:35:40,480 --> 00:35:44,120 Speaker 5: three and then earlier this year. But though that has 598 00:35:44,200 --> 00:35:47,040 Speaker 5: taken a lot of agency resources, because you know, these 599 00:35:47,080 --> 00:35:50,319 Speaker 5: are not that's large agencies. They only have about like 600 00:35:50,320 --> 00:35:52,279 Speaker 5: eight hundred to twelve hundred people. And when you're talking 601 00:35:52,320 --> 00:35:55,000 Speaker 5: about some of the largest companies in the world, it 602 00:35:55,080 --> 00:35:58,080 Speaker 5: certainly takes a lot of resources to go up against them. 603 00:35:58,280 --> 00:36:01,719 Speaker 5: So they have these major cases and sort of the 604 00:36:01,760 --> 00:36:04,400 Speaker 5: outcome is still very much in doubt. 605 00:36:05,080 --> 00:36:05,360 Speaker 4: Andy. 606 00:36:05,360 --> 00:36:07,399 Speaker 5: Trust cases also tend to take a very long time. 607 00:36:07,480 --> 00:36:11,560 Speaker 5: So even though the cases we're originally the Google and 608 00:36:11,600 --> 00:36:14,839 Speaker 5: Facebook cases were filed in twenty twenty, we're still here 609 00:36:14,920 --> 00:36:17,080 Speaker 5: in twenty twenty four going into twenty twenty five, and 610 00:36:17,120 --> 00:36:21,280 Speaker 5: we don't have them resolved. So I wouldn't I wouldn't 611 00:36:21,280 --> 00:36:23,800 Speaker 5: expect a quick resolution to anything. Really. 612 00:36:24,239 --> 00:36:26,640 Speaker 1: Wow, but it's going to be very interesting to watch, 613 00:36:26,719 --> 00:36:29,239 Speaker 1: that's certainly true. We're gonna watch it right along with you. 614 00:36:29,800 --> 00:36:31,839 Speaker 5: Keeps me employed, so I don't mind too much. 615 00:36:31,880 --> 00:36:34,600 Speaker 1: Well, there's nothing wrong with that either. Well, let's shift 616 00:36:34,600 --> 00:36:36,480 Speaker 1: gears for a second and move to the FTC. You 617 00:36:36,520 --> 00:36:39,360 Speaker 1: had mentioned that Donald Trump has already got somebody in 618 00:36:39,480 --> 00:36:42,440 Speaker 1: line ready to take over and to move into the 619 00:36:42,680 --> 00:36:45,799 Speaker 1: one of the FTC positions. There's been a lot of 620 00:36:45,840 --> 00:36:48,640 Speaker 1: there have been a lot of questions about one of 621 00:36:48,680 --> 00:36:51,440 Speaker 1: the roles of the FTC. They had tried to do 622 00:36:51,480 --> 00:36:53,279 Speaker 1: the non compete clause, you know, put a ban on 623 00:36:53,320 --> 00:36:57,040 Speaker 1: the non compete clause that got squashed. Where is that 624 00:36:57,080 --> 00:36:58,960 Speaker 1: going to be going now under a Trump administration. 625 00:36:59,200 --> 00:37:01,960 Speaker 5: Yeah, So the chair of the FTC right now is 626 00:37:02,040 --> 00:37:05,440 Speaker 5: Lena Khan. She is expected to step down once Trump 627 00:37:05,480 --> 00:37:07,839 Speaker 5: is inaugurated, sort of to open up the space for 628 00:37:07,960 --> 00:37:10,759 Speaker 5: him to nominate a third Republican so that they have 629 00:37:10,800 --> 00:37:14,880 Speaker 5: a majority. But that oftentimes that process takes several months. 630 00:37:14,960 --> 00:37:17,480 Speaker 5: So as soon as she leaves, the agency is going 631 00:37:17,520 --> 00:37:20,520 Speaker 5: to be deadlocked two to two. Because they have two 632 00:37:20,600 --> 00:37:24,160 Speaker 5: Republicans and two Democrats in office right now, that sort 633 00:37:24,200 --> 00:37:28,399 Speaker 5: of prevents any like really major shifts because you know, 634 00:37:28,480 --> 00:37:31,040 Speaker 5: if the agency, for example, wanted to withdraw any of 635 00:37:31,080 --> 00:37:33,600 Speaker 5: these rules, it can't do it without a vote. But 636 00:37:33,920 --> 00:37:37,080 Speaker 5: these proposals are probably going to end up being pulled back. 637 00:37:37,440 --> 00:37:39,920 Speaker 5: Both of the Republicans who are on the commission right 638 00:37:39,960 --> 00:37:42,759 Speaker 5: now voted against nearly all of the rules that have 639 00:37:42,800 --> 00:37:47,200 Speaker 5: been put in place, including the noncompete piany. One of 640 00:37:47,200 --> 00:37:50,080 Speaker 5: the Republicans voted in favor of the more recent junk 641 00:37:50,080 --> 00:37:52,800 Speaker 5: few rules so that one might be able to stay, 642 00:37:52,920 --> 00:37:55,759 Speaker 5: but some of the major ones are probably going to 643 00:37:55,800 --> 00:37:58,080 Speaker 5: be pulled back, though not until they have their third 644 00:37:58,200 --> 00:38:01,879 Speaker 5: Republican in place later in the year. That third Republican 645 00:38:02,239 --> 00:38:07,040 Speaker 5: is has been nominated as Mark Metter. He is the 646 00:38:07,120 --> 00:38:11,640 Speaker 5: longtime chat staffer for Senator Mike Lee. Very well known 647 00:38:11,719 --> 00:38:14,840 Speaker 5: in anti trust circles. He has made a name for 648 00:38:14,960 --> 00:38:19,239 Speaker 5: himself representing some of the conservative platforms in cases that 649 00:38:19,280 --> 00:38:23,480 Speaker 5: they've brought against the tech platforms, including Rumble, which has 650 00:38:23,480 --> 00:38:27,799 Speaker 5: sued Google over some of the alleged d platforming that 651 00:38:27,840 --> 00:38:30,560 Speaker 5: has taken place. That's when they're removed from app stores 652 00:38:30,600 --> 00:38:34,359 Speaker 5: and things like that. So that is probably going to 653 00:38:34,360 --> 00:38:37,399 Speaker 5: be like a major focus of the next FTC. 654 00:38:37,840 --> 00:38:40,080 Speaker 1: Or Thanks to Leah Nylan. Thank you Leah for taking 655 00:38:40,120 --> 00:38:43,040 Speaker 1: the time, Thank you for having me. She covers antitrust 656 00:38:43,080 --> 00:38:45,640 Speaker 1: for Bloomberg News, and thank you for joining us on 657 00:38:45,680 --> 00:38:48,520 Speaker 1: this special edition of Bloomberg Law. I'm Abe Morris and 658 00:38:48,600 --> 00:38:51,719 Speaker 1: for June Grosso. Stay with us. Today's top stories in 659 00:38:51,760 --> 00:38:54,279 Speaker 1: global business. Headlines are coming up right now.