WEBVTT - Google’s Ad Practices Draw Bipartisan Antitrust Probe

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Turning now to

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<v Speaker 1>antitrust law, Google and Facebook are facing intensifying scrutiny by

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<v Speaker 1>state law enforcement officers were the authority to impose vast

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<v Speaker 1>fines and even break up companies. Last week, it was Facebook,

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<v Speaker 1>this week it's Google. Attorneys general from forty eight states

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<v Speaker 1>announced on the steps of the Supreme Court that they've

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<v Speaker 1>opened an investigation into weather Google's advertising practices violate antitrust laws.

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<v Speaker 1>Joining me a Spencer Waller, professor at Loyola University School

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<v Speaker 1>of Law. Spencer, do we know what aspects of Google's

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<v Speaker 1>business the state A G s are looking into? Well,

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<v Speaker 1>it's a little bit hard to day. I was watching

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<v Speaker 1>the press conference earlier this morning, the one from yesterday

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<v Speaker 1>and twelve fifteen Attorney generals spoke about different things. They

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<v Speaker 1>spoke about Google's dominance in search, they talked about Google's

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<v Speaker 1>dominance in advertising. Different comments mentioned things about mobile video,

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<v Speaker 1>their ownership of YouTube, their use of data. I think

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<v Speaker 1>all these are on the table for the coalition of states.

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<v Speaker 1>Last week, a coalition of eight states announced it was

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<v Speaker 1>investigating Facebook. This group includes every state except California and Alabama,

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<v Speaker 1>so much more of a coalition. How does the sheer

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<v Speaker 1>size affect the investigation and the ability of the investigators. Well,

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<v Speaker 1>it's the largest coalition of state attorneys general in the

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<v Speaker 1>nitrust area that I've ever heard of. In the Microsoft

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<v Speaker 1>case twenty years ago, there are approximately twenty states, including

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<v Speaker 1>the District of Columbia, UM who were part of this,

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<v Speaker 1>and the is virtually everybody except the two states you mentioned.

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<v Speaker 1>So some of the states have twenty thirty lawyers and

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<v Speaker 1>PhD economists on their staff who do anti trust. Some

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<v Speaker 1>have one person or one person who does this and

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<v Speaker 1>perhaps other things like consumer protection. But when you put

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<v Speaker 1>them together, you have a coalition of people. States are

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<v Speaker 1>used to cooperating on antitrust. They can put together a

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<v Speaker 1>team of lead lead states and then supporting states that

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<v Speaker 1>will rival the amount of people that a private law

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<v Speaker 1>firm would have on a matter of this size. When

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<v Speaker 1>you compare, we know the Justice Department is investigating Google

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<v Speaker 1>as well, and how subcommittee investigating Google. When you compare

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<v Speaker 1>the state's investigation with the federal investigation, who has an

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<v Speaker 1>advantage in terms of the laws they're operating under? The

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<v Speaker 1>resources the remedies give us a general idea. Well, Um,

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<v Speaker 1>the laws are about the same that the states will

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<v Speaker 1>be proceeding under federal antitrust law, plus some aspects of

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<v Speaker 1>their local state UH laws on the same subject. So

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<v Speaker 1>the baseline is whether Google has a monopoly power dominance

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<v Speaker 1>of a relevant market and whether they've abused that dominance

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<v Speaker 1>or used it to exclude competitors and otherwise harm consumers.

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<v Speaker 1>So the baseline for the laws about the same. Um.

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<v Speaker 1>I do not know how many lawyers d o J

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<v Speaker 1>has devoted to their investigation. I don't believe that's public. However,

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<v Speaker 1>do o J has a large group of hundreds of

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<v Speaker 1>lawyers and dozens of economists. However, they're doing many other cases,

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<v Speaker 1>criminal cases, civil cases, merger cases, and the states also

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<v Speaker 1>have other things going. They do a lot of merger

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<v Speaker 1>work in particularly healthcare and hospitals. They are also cooperate,

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<v Speaker 1>and they also have individual cases that relate to their

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<v Speaker 1>local economies. So you've got to well resourced sets of

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<v Speaker 1>people who are going down a parallel track. And I

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<v Speaker 1>think the states and the federal government will at least

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<v Speaker 1>be in contact with each other about publicly available information.

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<v Speaker 1>But there's no evidence that are directly cooperating between the

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<v Speaker 1>state and federal Yet for years, state and federal officials

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<v Speaker 1>have basically been hands off with the big tech companies.

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<v Speaker 1>Now it's like piling on all these different investigations going

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<v Speaker 1>on at the same time. Is this likely to be

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<v Speaker 1>just a flash in the pan, you know, the investigations

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<v Speaker 1>go on, it comes to nothing, as some investigations of

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<v Speaker 1>Google have done before, or are there likely to be

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<v Speaker 1>something you know, substantial remedies here. Well? Uh, I think

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<v Speaker 1>it's more than a flash in the pan. I think, uh,

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<v Speaker 1>the times have changed and that antitrust has become an

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<v Speaker 1>important part of our political discourse in terms of Congress,

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<v Speaker 1>in terms of the presidential campaign. I think that matters.

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<v Speaker 1>I think the laws go in cycles, and the times

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<v Speaker 1>have turned to look at these firms that are dominant

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<v Speaker 1>in various aspects of the tech sector. Now, whether these

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<v Speaker 1>companies will be broken up is a different story. Uh.

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<v Speaker 1>These are not criminal cases, so no one's going to jail.

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<v Speaker 1>There are no fine on that are can be administered

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<v Speaker 1>under the laws that these states are currently looking at enforcing. However,

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<v Speaker 1>the courts can issue injunctions that can do one or

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<v Speaker 1>two things. Conceivably break up the company, which is a

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<v Speaker 1>long shot, or require them to change their business behavior,

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<v Speaker 1>which is the more likely scenario if the states or

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<v Speaker 1>the d O J win or there's a settlement. This question.

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<v Speaker 1>You may not know, and it may be a little unfair,

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<v Speaker 1>but you know, you look at the investigation, the multi

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<v Speaker 1>state investigation against Facebook, that's eight states, and you look

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<v Speaker 1>at this one. What do you think made the difference here?

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<v Speaker 1>Is Google considered a worse actor? Well, you know, I

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<v Speaker 1>don't know. Um. The states cooperate through an association called

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<v Speaker 1>the National Association of Attorneys General. They are used to

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<v Speaker 1>discussing which topics concern multiple states, and it's a you know,

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<v Speaker 1>it's a it's a coalition of the willing. Whoever wants

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<v Speaker 1>to get involved does. Some states just don't want to

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<v Speaker 1>get involved for political reasons. Other states may not want

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<v Speaker 1>to get involved because of resource issues. To some extent,

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<v Speaker 1>whatever happens will go to the benefit of all states,

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<v Speaker 1>whether they're in the coalition or not. I mean virtually

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<v Speaker 1>everybody's in on Google, and you know, if anything happens

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<v Speaker 1>on Facebook, for example, causing them to divest um one

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<v Speaker 1>of the businesses like What'sapp or you know, one of

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<v Speaker 1>the other ones that they bought over the years, then

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<v Speaker 1>obviously a state would benefit from that, whether they were

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<v Speaker 1>in the investigation or not. And finally, will the States

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<v Speaker 1>or the FEDS have any benefit because of the work

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<v Speaker 1>that was done in the EU, Well, I think I

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<v Speaker 1>think that's part of why this is front and center

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<v Speaker 1>right now. The US has been lacking in important monopolization

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<v Speaker 1>enforcement for well over a decade, probably twenty years since

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<v Speaker 1>the Microsoft case, and Europe has picked up the flag

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<v Speaker 1>has really been the primary enforcer, has set the bar

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<v Speaker 1>for what is legal in a world economy, and these

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<v Speaker 1>tech companies operate all over the world, and I think

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<v Speaker 1>to some extent, the US is finally playing catch up.

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<v Speaker 1>Thank you so much, Spencer, It's great to have you

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<v Speaker 1>on again. That's Spencer while he's a professor at Loyola

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<v Speaker 1>University School of Law. Thanks for listening to the Bloomberg

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<v Speaker 1>Law Podcast. You can subscribe and listen to the show

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<v Speaker 1>on Apple Podcasts. SoundCloud and on bloomberg dot com slash Podcast.

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<v Speaker 1>I'm June Brosso. This is Bloomberg