Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. Turning now to
Speaker 1: antitrust law, Google and Facebook are facing intensifying scrutiny by
Speaker 1: state law enforcement officers were the authority to impose vast
Speaker 1: fines and even break up companies. Last week, it was Facebook,
Speaker 1: this week it's Google. Attorneys general from forty eight states
Speaker 1: announced on the steps of the Supreme Court that they've
Speaker 1: opened an investigation into weather Google's advertising practices violate antitrust laws.
Speaker 1: Joining me a Spencer Waller, professor at Loyola University School
Speaker 1: of Law. Spencer, do we know what aspects of Google's
Speaker 1: business the state A G s are looking into? Well,
Speaker 1: it's a little bit hard to day. I was watching
Speaker 1: the press conference earlier this morning, the one from yesterday
Speaker 1: and twelve fifteen Attorney generals spoke about different things. They
Speaker 1: spoke about Google's dominance in search, they talked about Google's
Speaker 1: dominance in advertising. Different comments mentioned things about mobile video,
Speaker 1: their ownership of YouTube, their use of data. I think
Speaker 1: all these are on the table for the coalition of states.
Speaker 1: Last week, a coalition of eight states announced it was
Speaker 1: investigating Facebook. This group includes every state except California and Alabama,
Speaker 1: so much more of a coalition. How does the sheer
Speaker 1: size affect the investigation and the ability of the investigators. Well,
Speaker 1: it's the largest coalition of state attorneys general in the
Speaker 1: nitrust area that I've ever heard of. In the Microsoft
Speaker 1: case twenty years ago, there are approximately twenty states, including
Speaker 1: the District of Columbia, UM who were part of this,
Speaker 1: and the is virtually everybody except the two states you mentioned.
Speaker 1: So some of the states have twenty thirty lawyers and
Speaker 1: PhD economists on their staff who do anti trust. Some
Speaker 1: have one person or one person who does this and
Speaker 1: perhaps other things like consumer protection. But when you put
Speaker 1: them together, you have a coalition of people. States are
Speaker 1: used to cooperating on antitrust. They can put together a
Speaker 1: team of lead lead states and then supporting states that
Speaker 1: will rival the amount of people that a private law
Speaker 1: firm would have on a matter of this size. When
Speaker 1: you compare, we know the Justice Department is investigating Google
Speaker 1: as well, and how subcommittee investigating Google. When you compare
Speaker 1: the state's investigation with the federal investigation, who has an
Speaker 1: advantage in terms of the laws they're operating under? The
Speaker 1: resources the remedies give us a general idea. Well, Um,
Speaker 1: the laws are about the same that the states will
Speaker 1: be proceeding under federal antitrust law, plus some aspects of
Speaker 1: their local state UH laws on the same subject. So
Speaker 1: the baseline is whether Google has a monopoly power dominance
Speaker 1: of a relevant market and whether they've abused that dominance
Speaker 1: or used it to exclude competitors and otherwise harm consumers.
Speaker 1: So the baseline for the laws about the same. Um.
Speaker 1: I do not know how many lawyers d o J
Speaker 1: has devoted to their investigation. I don't believe that's public. However,
Speaker 1: do o J has a large group of hundreds of
Speaker 1: lawyers and dozens of economists. However, they're doing many other cases,
Speaker 1: criminal cases, civil cases, merger cases, and the states also
Speaker 1: have other things going. They do a lot of merger
Speaker 1: work in particularly healthcare and hospitals. They are also cooperate,
Speaker 1: and they also have individual cases that relate to their
Speaker 1: local economies. So you've got to well resourced sets of
Speaker 1: people who are going down a parallel track. And I
Speaker 1: think the states and the federal government will at least
Speaker 1: be in contact with each other about publicly available information.
Speaker 1: But there's no evidence that are directly cooperating between the
Speaker 1: state and federal Yet for years, state and federal officials
Speaker 1: have basically been hands off with the big tech companies.
Speaker 1: Now it's like piling on all these different investigations going
Speaker 1: on at the same time. Is this likely to be
Speaker 1: just a flash in the pan, you know, the investigations
Speaker 1: go on, it comes to nothing, as some investigations of
Speaker 1: Google have done before, or are there likely to be
Speaker 1: something you know, substantial remedies here. Well? Uh, I think
Speaker 1: it's more than a flash in the pan. I think, uh,
Speaker 1: the times have changed and that antitrust has become an
Speaker 1: important part of our political discourse in terms of Congress,
Speaker 1: in terms of the presidential campaign. I think that matters.
Speaker 1: I think the laws go in cycles, and the times
Speaker 1: have turned to look at these firms that are dominant
Speaker 1: in various aspects of the tech sector. Now, whether these
Speaker 1: companies will be broken up is a different story. Uh.
Speaker 1: These are not criminal cases, so no one's going to jail.
Speaker 1: There are no fine on that are can be administered
Speaker 1: under the laws that these states are currently looking at enforcing. However,
Speaker 1: the courts can issue injunctions that can do one or
Speaker 1: two things. Conceivably break up the company, which is a
Speaker 1: long shot, or require them to change their business behavior,
Speaker 1: which is the more likely scenario if the states or
Speaker 1: the d O J win or there's a settlement. This question.
Speaker 1: You may not know, and it may be a little unfair,
Speaker 1: but you know, you look at the investigation, the multi
Speaker 1: state investigation against Facebook, that's eight states, and you look
Speaker 1: at this one. What do you think made the difference here?
Speaker 1: Is Google considered a worse actor? Well, you know, I
Speaker 1: don't know. Um. The states cooperate through an association called
Speaker 1: the National Association of Attorneys General. They are used to
Speaker 1: discussing which topics concern multiple states, and it's a you know,
Speaker 1: it's a it's a coalition of the willing. Whoever wants
Speaker 1: to get involved does. Some states just don't want to
Speaker 1: get involved for political reasons. Other states may not want
Speaker 1: to get involved because of resource issues. To some extent,
Speaker 1: whatever happens will go to the benefit of all states,
Speaker 1: whether they're in the coalition or not. I mean virtually
Speaker 1: everybody's in on Google, and you know, if anything happens
Speaker 1: on Facebook, for example, causing them to divest um one
Speaker 1: of the businesses like What'sapp or you know, one of
Speaker 1: the other ones that they bought over the years, then
Speaker 1: obviously a state would benefit from that, whether they were
Speaker 1: in the investigation or not. And finally, will the States
Speaker 1: or the FEDS have any benefit because of the work
Speaker 1: that was done in the EU, Well, I think I
Speaker 1: think that's part of why this is front and center
Speaker 1: right now. The US has been lacking in important monopolization
Speaker 1: enforcement for well over a decade, probably twenty years since
Speaker 1: the Microsoft case, and Europe has picked up the flag
Speaker 1: has really been the primary enforcer, has set the bar
Speaker 1: for what is legal in a world economy, and these
Speaker 1: tech companies operate all over the world, and I think
Speaker 1: to some extent, the US is finally playing catch up.
Speaker 1: Thank you so much, Spencer, It's great to have you
Speaker 1: on again. That's Spencer while he's a professor at Loyola
Speaker 1: University School of Law. Thanks for listening to the Bloomberg
Speaker 1: Law Podcast. You can subscribe and listen to the show
Speaker 1: on Apple Podcasts. SoundCloud and on bloomberg dot com slash Podcast.
Speaker 1: I'm June Brosso. This is Bloomberg