1 00:00:04,400 --> 00:00:07,800 Speaker 1: Welcome to Tech Stuff, a production from I Heart Radio. 2 00:00:12,080 --> 00:00:14,800 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host, 3 00:00:14,960 --> 00:00:17,920 Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio 4 00:00:17,960 --> 00:00:20,760 Speaker 1: and a love of all things tech. And in the 5 00:00:20,880 --> 00:00:24,000 Speaker 1: last few years, there have been an increasing number of 6 00:00:24,000 --> 00:00:28,840 Speaker 1: discussions around the world really regarding the reach and practices 7 00:00:29,480 --> 00:00:34,040 Speaker 1: of certain big tech companies, you know, the ones like 8 00:00:34,280 --> 00:00:39,199 Speaker 1: Google and Facebook and Amazon Apple, And this has been 9 00:00:39,280 --> 00:00:42,960 Speaker 1: leading to allegations that companies like these are using their 10 00:00:43,000 --> 00:00:48,240 Speaker 1: size and influence to suppress competition from others. And anti 11 00:00:48,240 --> 00:00:53,159 Speaker 1: competitiveness is a big no no, particularly for large companies, 12 00:00:53,200 --> 00:00:56,080 Speaker 1: and it puts these companies in danger of being deemed 13 00:00:56,160 --> 00:01:01,160 Speaker 1: a monopoly, which is an even bigger no no. So 14 00:01:01,880 --> 00:01:04,479 Speaker 1: Google and Facebook have been on alert for a few 15 00:01:04,560 --> 00:01:09,680 Speaker 1: years now, but more so and increasingly so in recent years. 16 00:01:10,240 --> 00:01:13,600 Speaker 1: And today I thought I would talk about antitrust issues, 17 00:01:14,040 --> 00:01:17,160 Speaker 1: explain where those ideas kind of come from, talk a 18 00:01:17,240 --> 00:01:21,000 Speaker 1: bit about an earlier case involving Microsoft from a couple 19 00:01:21,080 --> 00:01:24,200 Speaker 1: of decades ago, and then chat a bit about the 20 00:01:24,240 --> 00:01:27,480 Speaker 1: current situation. So this episode is less about the actual 21 00:01:27,560 --> 00:01:32,280 Speaker 1: technology and more about how corporations can dominate an industry. 22 00:01:32,400 --> 00:01:37,200 Speaker 1: So thoroughly that they become the center of scrutiny. So 23 00:01:37,280 --> 00:01:41,759 Speaker 1: to start off, let's learn about monopolies and antitrust laws. 24 00:01:41,880 --> 00:01:45,320 Speaker 1: And I'll warn you learning about antitrust laws on its 25 00:01:45,319 --> 00:01:48,400 Speaker 1: own is not enough, because interpretations of the law have 26 00:01:48,520 --> 00:01:51,600 Speaker 1: shifted over the more than a century since they were 27 00:01:51,640 --> 00:01:55,240 Speaker 1: first drafted in the United States. The courts might interpret 28 00:01:55,360 --> 00:01:59,240 Speaker 1: laws one way in one generation and a very different 29 00:01:59,240 --> 00:02:02,760 Speaker 1: way later on, which makes this a lot less straightforward 30 00:02:02,800 --> 00:02:06,280 Speaker 1: of a topic than technology tends to be. Before I 31 00:02:06,360 --> 00:02:09,440 Speaker 1: dive in too far into this whole thing, I have 32 00:02:09,520 --> 00:02:12,560 Speaker 1: to give a shout out to Laura Phillips Sawyer, who 33 00:02:12,560 --> 00:02:17,520 Speaker 1: wrote a great paper titled US Antitrust Policy in Historical 34 00:02:17,600 --> 00:02:21,480 Speaker 1: Perspective for the Harvard Business School. The paper is available 35 00:02:21,520 --> 00:02:24,520 Speaker 1: to read for free online and it goes into great 36 00:02:24,560 --> 00:02:30,200 Speaker 1: detail about how antitrust legislation and its enforcement have evolved 37 00:02:30,240 --> 00:02:33,520 Speaker 1: in the United States over the years. I highly recommend it, 38 00:02:33,720 --> 00:02:36,200 Speaker 1: and most of what I have to say in this 39 00:02:36,360 --> 00:02:39,320 Speaker 1: section of the episode is kind of a high level 40 00:02:39,480 --> 00:02:44,040 Speaker 1: overview of what Sawyer has to say. Our story begins 41 00:02:44,280 --> 00:02:46,880 Speaker 1: in the United States in the latter half of the 42 00:02:46,960 --> 00:02:51,280 Speaker 1: nineteenth century. Throughout the eighteen hundreds. Certain industries in the 43 00:02:51,400 --> 00:02:54,840 Speaker 1: US came to be dominated by a small handful of 44 00:02:54,919 --> 00:03:00,239 Speaker 1: increasingly large businesses. Some of these businesses banded to other 45 00:03:00,400 --> 00:03:05,880 Speaker 1: with one another, combining their interests into a single entity. Now, 46 00:03:05,919 --> 00:03:10,359 Speaker 1: these entities were called trusts. The idea is that multiple 47 00:03:10,440 --> 00:03:13,720 Speaker 1: property owners create a trust in an effort to build 48 00:03:13,760 --> 00:03:18,000 Speaker 1: a unified management structure. The owners appoint one or more 49 00:03:18,120 --> 00:03:22,560 Speaker 1: trustees to serve as a manager of the owner's interests, 50 00:03:22,600 --> 00:03:26,520 Speaker 1: and each owner retains shares in the trust. From a 51 00:03:26,560 --> 00:03:31,240 Speaker 1: structural standpoint, a trust could either be a single unified company, 52 00:03:31,440 --> 00:03:34,040 Speaker 1: or it could be set up as a conglomeration of 53 00:03:34,120 --> 00:03:38,680 Speaker 1: multiple firms or even a cartel. Now, on the face 54 00:03:38,760 --> 00:03:42,160 Speaker 1: of it, there's not a lot here that immediately jumps 55 00:03:42,200 --> 00:03:46,720 Speaker 1: out as being an enormous problem. Just at at casual glance, 56 00:03:46,720 --> 00:03:51,160 Speaker 1: we're talking mainly about the organizational and leadership structure of 57 00:03:51,240 --> 00:03:55,720 Speaker 1: a business. But some particularly enterprising business owners were forming 58 00:03:55,760 --> 00:03:59,880 Speaker 1: trusts in an effort to dominate an industry and fix 59 00:04:00,120 --> 00:04:04,120 Speaker 1: prices without fear of any competition. Because they were already 60 00:04:04,200 --> 00:04:08,880 Speaker 1: so big they could out compete everyone else. They could 61 00:04:09,120 --> 00:04:12,360 Speaker 1: suppress competition. There will be no external forces in the 62 00:04:12,360 --> 00:04:16,560 Speaker 1: market to affect the business owner's decisions, and so they 63 00:04:16,560 --> 00:04:21,839 Speaker 1: could practice predatory and unethical price fixing strategies with impunity. Now, 64 00:04:21,880 --> 00:04:25,600 Speaker 1: to use a simple analogy, let's say you grow up 65 00:04:25,640 --> 00:04:29,359 Speaker 1: in a small town and it has a single candy 66 00:04:29,440 --> 00:04:32,840 Speaker 1: shop in the entire town. There's no other place in 67 00:04:32,960 --> 00:04:36,960 Speaker 1: town that sells candy. The next closest candy store is 68 00:04:37,560 --> 00:04:40,160 Speaker 1: a hundred miles away. So if you want candy, you 69 00:04:40,279 --> 00:04:43,640 Speaker 1: got one place you can go to. The candy shop owner, 70 00:04:44,360 --> 00:04:47,960 Speaker 1: let's call him slug Worth, realizes that he has a 71 00:04:48,000 --> 00:04:52,240 Speaker 1: monopoly on candies in this town, and so he marks 72 00:04:52,320 --> 00:04:55,080 Speaker 1: up the price of every candy to five times what 73 00:04:55,200 --> 00:04:59,160 Speaker 1: it would normally cost in a competitive market. But there's 74 00:04:59,200 --> 00:05:01,920 Speaker 1: no alternative for you in this small town. You either 75 00:05:02,040 --> 00:05:05,279 Speaker 1: pay five times what you should pay if you were 76 00:05:05,320 --> 00:05:09,919 Speaker 1: somewhere else, or you just go without. That would stink. Now, 77 00:05:10,120 --> 00:05:15,400 Speaker 1: candy is arguably anyway a frivolous and an important concern, 78 00:05:15,520 --> 00:05:18,800 Speaker 1: But in the late eighteen hundreds, the United States was 79 00:05:18,960 --> 00:05:23,240 Speaker 1: seeing industries that were far more critical consolidate under this 80 00:05:23,440 --> 00:05:27,320 Speaker 1: trust strategy. And just to be clear, concerned about anti 81 00:05:27,320 --> 00:05:31,280 Speaker 1: competitive business practices dates back much further, but the late 82 00:05:31,279 --> 00:05:34,760 Speaker 1: eighteen hundreds is where it became a crisis, and there 83 00:05:34,800 --> 00:05:38,440 Speaker 1: were many contributing factors that made this possible. For one thing, 84 00:05:38,760 --> 00:05:43,000 Speaker 1: the United States was enjoying the benefits of the Industrial Revolution, 85 00:05:43,080 --> 00:05:47,680 Speaker 1: which had taken place earlier that century. Transportation and communication 86 00:05:47,720 --> 00:05:50,600 Speaker 1: networks were connecting the various parts of the country together. 87 00:05:51,120 --> 00:05:54,160 Speaker 1: In addition, in the eighteen seventies, the United States went 88 00:05:54,160 --> 00:05:57,719 Speaker 1: through an economic recession on the market side, with a 89 00:05:57,760 --> 00:06:03,120 Speaker 1: deflationary spiral that lowered demand and thus lowered prices, and 90 00:06:03,160 --> 00:06:06,920 Speaker 1: this forced several smaller companies in various industries out of business. 91 00:06:07,000 --> 00:06:12,200 Speaker 1: They couldn't cover operating expenses and stay viable. Arguably, forming 92 00:06:12,279 --> 00:06:15,800 Speaker 1: trusts was a necessity in that kind of economy, as 93 00:06:15,880 --> 00:06:20,039 Speaker 1: individually companies were finding it difficult to stay afloat. Banding 94 00:06:20,080 --> 00:06:23,159 Speaker 1: together increasing the scale and scope of the business was 95 00:06:23,200 --> 00:06:26,880 Speaker 1: a potential solution to this problem. For American consumers, things 96 00:06:27,040 --> 00:06:30,599 Speaker 1: weren't nearly so bleak because wages were on the rise, 97 00:06:30,800 --> 00:06:33,599 Speaker 1: prices were low, and there was an abundance of goods 98 00:06:33,640 --> 00:06:36,640 Speaker 1: on the market. There was a general feeling that big 99 00:06:36,680 --> 00:06:40,039 Speaker 1: business could be a potential problem down the road, but 100 00:06:40,320 --> 00:06:42,960 Speaker 1: there was a lot of disagreement regarding how to protect 101 00:06:43,000 --> 00:06:49,039 Speaker 1: citizens and politics from that outcome. One particularly important industry 102 00:06:49,040 --> 00:06:50,880 Speaker 1: in the United States at this time and still to 103 00:06:50,920 --> 00:06:55,359 Speaker 1: this day, was oil. John D. Rockefeller founded the Standard 104 00:06:55,400 --> 00:06:58,920 Speaker 1: Oil Company in the eighteen seventies and his business was, 105 00:06:59,440 --> 00:07:04,839 Speaker 1: to put it lightly, phenomenally successful, and in eight two, 106 00:07:04,960 --> 00:07:09,800 Speaker 1: an attorney for the company named SCT Dodd created a 107 00:07:09,880 --> 00:07:13,960 Speaker 1: trust of oil refiners. The goal was to set prices 108 00:07:14,080 --> 00:07:17,480 Speaker 1: and to control supply and at the same time find 109 00:07:17,520 --> 00:07:22,640 Speaker 1: ways around pesky tax laws and regulations. Other trusts and 110 00:07:22,720 --> 00:07:26,400 Speaker 1: other industries started to follow suit, and the United States 111 00:07:26,400 --> 00:07:31,200 Speaker 1: saw a trend of large companies consolidating economic power. Now, 112 00:07:31,240 --> 00:07:35,320 Speaker 1: generally speaking, this can be a bad thing. Consolidating economic 113 00:07:35,320 --> 00:07:37,960 Speaker 1: power means that more of that economic power goes to 114 00:07:38,080 --> 00:07:41,920 Speaker 1: a smaller number of entities, and it leaves many others 115 00:07:42,160 --> 00:07:45,200 Speaker 1: without very much power. And companies do not tend to 116 00:07:45,240 --> 00:07:48,960 Speaker 1: be the most egalitarian with their profits or their power. 117 00:07:49,440 --> 00:07:52,640 Speaker 1: A company's purpose ultimately is to make money for the 118 00:07:52,680 --> 00:07:56,400 Speaker 1: company's owners, whether it's a private company or a publicly 119 00:07:56,440 --> 00:08:00,680 Speaker 1: traded one. On top of that, the consolidated hour would 120 00:08:00,720 --> 00:08:03,320 Speaker 1: mean that these companies would be able to push around 121 00:08:03,640 --> 00:08:07,880 Speaker 1: smaller companies, forcing them to either follow suit or go 122 00:08:07,960 --> 00:08:11,240 Speaker 1: out of business. For example, Standard Oil might tie up 123 00:08:11,360 --> 00:08:15,760 Speaker 1: enough oil refiners with exclusive agreements that would leave smaller 124 00:08:15,760 --> 00:08:19,240 Speaker 1: oil companies no oil refiner companies to work with. They 125 00:08:19,480 --> 00:08:22,160 Speaker 1: wouldn't have anyone that they could partner with because they 126 00:08:22,200 --> 00:08:25,640 Speaker 1: were all tied up with this much bigger company. That 127 00:08:25,680 --> 00:08:29,360 Speaker 1: would be an anti competitive practice. There was also a 128 00:08:29,440 --> 00:08:33,440 Speaker 1: very real fear, and as it turns out, a justified fear, 129 00:08:33,920 --> 00:08:36,760 Speaker 1: that wealthy companies would start to pour some of that 130 00:08:36,880 --> 00:08:40,559 Speaker 1: wealth into influencing politics in an effort to make things 131 00:08:40,640 --> 00:08:45,640 Speaker 1: even more beneficial to the company and its shareholders, often 132 00:08:45,679 --> 00:08:48,640 Speaker 1: at the expense of others, like I don't know, the 133 00:08:48,679 --> 00:08:53,800 Speaker 1: average taxpayer. The sense was these companies would dedicate resources 134 00:08:53,840 --> 00:08:58,720 Speaker 1: to fight back politically against various restraints and regulations that 135 00:08:58,760 --> 00:09:02,559 Speaker 1: were meant to protect fair or trade practices. Some states 136 00:09:02,840 --> 00:09:06,400 Speaker 1: began to pass antitrust laws in an effort to reverse 137 00:09:06,800 --> 00:09:09,920 Speaker 1: or at the very least slow this trend, calling for 138 00:09:10,000 --> 00:09:13,640 Speaker 1: the need to support competition, which would prevent any one 139 00:09:13,760 --> 00:09:17,600 Speaker 1: company from controlling the price and supply of critical commodities 140 00:09:17,640 --> 00:09:22,880 Speaker 1: like oil or steel. But these were local responses. As 141 00:09:22,920 --> 00:09:26,880 Speaker 1: I mentioned, the United States had recently transformed as railroads 142 00:09:26,960 --> 00:09:31,520 Speaker 1: crossed the country and telegraph lines crossed state lines. Business 143 00:09:31,640 --> 00:09:35,600 Speaker 1: was not confined to within a state's borders, and so 144 00:09:35,720 --> 00:09:39,360 Speaker 1: responses to this threat needed to go beyond the state level. 145 00:09:39,760 --> 00:09:44,160 Speaker 1: This led to the Sherman Antitrust Act of eighteen ninety. 146 00:09:44,520 --> 00:09:47,319 Speaker 1: The United States federal government passed the Act in an 147 00:09:47,320 --> 00:09:51,360 Speaker 1: effort to put some restrictions on trusts. The Department of 148 00:09:51,480 --> 00:09:55,400 Speaker 1: Justice could pursue litigation against companies that were practicing anti 149 00:09:55,400 --> 00:10:00,840 Speaker 1: competitive strategies or attempting to monopolize markets. The Sherman Act 150 00:10:00,920 --> 00:10:05,559 Speaker 1: also allowed for private litigation cases and civil lawsuits against 151 00:10:05,600 --> 00:10:08,920 Speaker 1: these companies. As it would turn out, the Act didn't 152 00:10:09,000 --> 00:10:14,160 Speaker 1: quite go far enough and mostly restated common law and 153 00:10:14,320 --> 00:10:18,960 Speaker 1: became more of a mild inconvenience to many of the trusts. 154 00:10:19,320 --> 00:10:22,280 Speaker 1: The US government would go on to pass multiple amendments 155 00:10:22,360 --> 00:10:24,920 Speaker 1: to that law to make it more effective and robust, 156 00:10:25,360 --> 00:10:27,960 Speaker 1: and the US government would also recognize that needed an 157 00:10:28,000 --> 00:10:31,600 Speaker 1: agency with more authority to oversee trade within the country, 158 00:10:31,960 --> 00:10:35,600 Speaker 1: and the Federal Trade Commission, or FTC, would be formed 159 00:10:35,640 --> 00:10:40,040 Speaker 1: in nineteen fourteen. The US government would add more laws 160 00:10:40,080 --> 00:10:44,000 Speaker 1: to deal with trade issues like anti competitiveness and monopolies, 161 00:10:44,240 --> 00:10:46,960 Speaker 1: and on more than one occasion, the U. S Government 162 00:10:47,000 --> 00:10:51,520 Speaker 1: has forced certain companies to break apart in two separate entities. 163 00:10:51,920 --> 00:10:54,840 Speaker 1: There are numerous examples, but a really big one in 164 00:10:54,840 --> 00:10:57,719 Speaker 1: the tech sector was A T and T, which in 165 00:10:57,760 --> 00:11:01,120 Speaker 1: the nineteen eighties was forced to spin off its local 166 00:11:01,200 --> 00:11:06,520 Speaker 1: telephone service companies into seven Baby Bells, so called baby Bells, 167 00:11:06,520 --> 00:11:08,720 Speaker 1: since A T and T was also known as mob 168 00:11:08,800 --> 00:11:12,320 Speaker 1: Bell Bell because of Alexander Graham Bell, who was often 169 00:11:12,360 --> 00:11:15,800 Speaker 1: credited with inventing the telephone, though that story itself is 170 00:11:15,800 --> 00:11:19,679 Speaker 1: complicated and off topic. By the way, most of those 171 00:11:19,720 --> 00:11:24,199 Speaker 1: companies that were split off would over time, through mergers 172 00:11:24,200 --> 00:11:27,280 Speaker 1: and acquisitions, come back together with A T and T, 173 00:11:27,559 --> 00:11:30,840 Speaker 1: So I'm not I'm not really sure what good it 174 00:11:30,880 --> 00:11:34,280 Speaker 1: did in the long run. By the nineteen seventies, the 175 00:11:34,400 --> 00:11:38,920 Speaker 1: interpretation of antitrust law had changed. Like I said earlier, 176 00:11:39,240 --> 00:11:42,000 Speaker 1: the courts have taken a different approach to interpreting what 177 00:11:42,200 --> 00:11:47,520 Speaker 1: antitrust law is over the various generations, and part of 178 00:11:47,559 --> 00:11:50,520 Speaker 1: the reason for this is that the original laws were 179 00:11:50,640 --> 00:11:55,720 Speaker 1: fairly vague and thus open to multiple interpretations. For many years, 180 00:11:56,120 --> 00:11:59,640 Speaker 1: the main focus on antitrust law was that large companies 181 00:11:59,720 --> 00:12:04,120 Speaker 1: could practice anti competitive behaviors that could hurt smaller businesses, 182 00:12:04,160 --> 00:12:06,800 Speaker 1: and that's a bad thing. That's something that we should prevent. 183 00:12:07,280 --> 00:12:11,800 Speaker 1: So think of a company like Walmart or more recently Amazon. 184 00:12:12,040 --> 00:12:15,760 Speaker 1: A company like that with enough scale and resources could 185 00:12:15,800 --> 00:12:18,400 Speaker 1: come into a region and offer up goods at a 186 00:12:18,480 --> 00:12:21,960 Speaker 1: lower cost to the consumer than smaller businesses in the 187 00:12:22,000 --> 00:12:26,000 Speaker 1: area which don't have the deep pockets of the bigger corporation. 188 00:12:26,600 --> 00:12:30,040 Speaker 1: The big companies might even sell certain products at cost, 189 00:12:30,440 --> 00:12:33,360 Speaker 1: or even below cost, at a loss in an effort 190 00:12:33,440 --> 00:12:37,360 Speaker 1: to get people into stores. The really big companies can 191 00:12:37,400 --> 00:12:40,480 Speaker 1: afford to do this, and the goal is to get 192 00:12:40,559 --> 00:12:43,800 Speaker 1: more folks into these big stores to not just buy 193 00:12:43,800 --> 00:12:46,760 Speaker 1: the mark down goods, but other stuff as well. And 194 00:12:46,920 --> 00:12:49,800 Speaker 1: a consequence of this is that the big companies are 195 00:12:49,920 --> 00:12:56,040 Speaker 1: luring customers away from smaller independent businesses that can't compete 196 00:12:56,040 --> 00:12:58,680 Speaker 1: on this level. And if the big companies can wait 197 00:12:58,720 --> 00:13:01,760 Speaker 1: it out long enough, those smaller businesses are likely to 198 00:13:01,840 --> 00:13:05,240 Speaker 1: fold entirely. And thus we can see the main street 199 00:13:05,360 --> 00:13:07,800 Speaker 1: of some small towns like the one I grew up 200 00:13:07,840 --> 00:13:11,720 Speaker 1: in North Georgia become ghost towns as the local businesses 201 00:13:12,000 --> 00:13:16,439 Speaker 1: shut down. But if the focus was on anti competitiveness. 202 00:13:17,160 --> 00:13:21,960 Speaker 1: How the heck did we change from that? What happened 203 00:13:22,280 --> 00:13:25,520 Speaker 1: well in the nineteen seventies the courts began to shift 204 00:13:25,760 --> 00:13:31,120 Speaker 1: the interpretation away from this anti competitive nature that can 205 00:13:31,200 --> 00:13:37,280 Speaker 1: hurt smaller businesses and more toward what affects the consumer benefit, 206 00:13:37,440 --> 00:13:41,360 Speaker 1: what what is best for the consumer, rather than what's 207 00:13:41,520 --> 00:13:45,200 Speaker 1: fair for small businesses. The general feeling was that the 208 00:13:45,280 --> 00:13:50,559 Speaker 1: US government shouldn't be so interventionist with business in general, 209 00:13:51,120 --> 00:13:54,160 Speaker 1: and this philosophy had a strong link to the University 210 00:13:54,200 --> 00:13:58,319 Speaker 1: of Chicago, so economics experts call it the Chicago School 211 00:13:58,480 --> 00:14:02,640 Speaker 1: of antitrust policy. Now I'm not saying that this is 212 00:14:02,760 --> 00:14:06,719 Speaker 1: better or worse, but it is different from a consumer perspective, 213 00:14:07,080 --> 00:14:11,480 Speaker 1: though Walmart or Amazon model doesn't, at least initially seem 214 00:14:11,600 --> 00:14:15,360 Speaker 1: bad because as a consumer, you can get the goods 215 00:14:15,400 --> 00:14:19,680 Speaker 1: you want at a lower price than elsewhere, so in 216 00:14:19,680 --> 00:14:22,560 Speaker 1: other words, you save money, which means you can actually 217 00:14:22,560 --> 00:14:26,520 Speaker 1: buy more stuff. So from the consumer standpoint, things seem 218 00:14:26,640 --> 00:14:30,000 Speaker 1: pretty okay. But in the long run this can be 219 00:14:30,080 --> 00:14:34,080 Speaker 1: a very dangerous game to play. If enough smaller businesses 220 00:14:34,120 --> 00:14:39,280 Speaker 1: go put than Amazon or Walmart or whatever becomes the 221 00:14:39,320 --> 00:14:43,600 Speaker 1: only source for goods like our candy store example, and 222 00:14:43,600 --> 00:14:47,560 Speaker 1: then there's nothing really stopping those companies from hiking up prices. 223 00:14:47,640 --> 00:14:49,800 Speaker 1: After all, it's not like you can head over to 224 00:14:49,840 --> 00:14:52,040 Speaker 1: the mom and pop store that went out of business 225 00:14:52,080 --> 00:14:56,080 Speaker 1: ten years ago. That's long gone. With this new focus 226 00:14:56,160 --> 00:15:01,040 Speaker 1: on consumer benefit rather than market competition, we saw companies 227 00:15:01,040 --> 00:15:04,800 Speaker 1: like Walmart really take advantage of the political and legal 228 00:15:04,840 --> 00:15:09,280 Speaker 1: climate of the times. They flourished in the nineteen eighties. 229 00:15:09,320 --> 00:15:12,800 Speaker 1: We also saw a new era of mergers and acquisitions 230 00:15:12,800 --> 00:15:17,240 Speaker 1: and hostile takeovers, and golly, I do not miss those 231 00:15:17,320 --> 00:15:23,160 Speaker 1: days at all, But antitrust laws and sentiment still existed. 232 00:15:23,280 --> 00:15:26,040 Speaker 1: You couldn't go too far with this stuff, or else 233 00:15:26,200 --> 00:15:28,160 Speaker 1: you would get called out for it. After all, the 234 00:15:28,200 --> 00:15:30,880 Speaker 1: breakup of a T and T was a rare example 235 00:15:30,880 --> 00:15:33,800 Speaker 1: of the courts going after a corporation like that. That 236 00:15:33,880 --> 00:15:37,240 Speaker 1: happened in the nineteen eighties kind of at the height 237 00:15:37,680 --> 00:15:41,760 Speaker 1: of this Chicago school of thought. The Chicago School dominated 238 00:15:41,760 --> 00:15:47,680 Speaker 1: antitrust policy thinking until around nineteen when economists began to 239 00:15:47,720 --> 00:15:54,080 Speaker 1: suggest that maybe it wasn't on track. The rather reckless 240 00:15:54,200 --> 00:15:57,680 Speaker 1: mergers and acquisitions of the nineteen eighties, some of which 241 00:15:57,720 --> 00:16:02,120 Speaker 1: had pretty awful consequences further down the road forced people 242 00:16:02,200 --> 00:16:04,920 Speaker 1: to think about things another way and acknowledge that the 243 00:16:05,000 --> 00:16:09,160 Speaker 1: Chicago School of thought didn't take certain variables into account 244 00:16:09,600 --> 00:16:13,479 Speaker 1: and perhaps put too much faith on market based solutions, 245 00:16:13,760 --> 00:16:17,960 Speaker 1: two problems that might require more government intervention. See from 246 00:16:17,960 --> 00:16:20,880 Speaker 1: the Chicago School. The idea is that the market itself 247 00:16:20,880 --> 00:16:23,320 Speaker 1: will sort everything out if you leave it alone enough. 248 00:16:23,400 --> 00:16:26,280 Speaker 1: It's a very kind of loss, a fair approach, but 249 00:16:26,840 --> 00:16:29,520 Speaker 1: these economists were saying, you know, that didn't take into 250 00:16:29,560 --> 00:16:35,040 Speaker 1: accounts stuff that really also are factors here that mean 251 00:16:35,160 --> 00:16:39,520 Speaker 1: that the market can't you know, account for them. And 252 00:16:39,560 --> 00:16:42,120 Speaker 1: there are still proponents of the Chicago school out there, 253 00:16:42,600 --> 00:16:45,320 Speaker 1: and even in this climate, we haven't seen the more 254 00:16:45,400 --> 00:16:48,720 Speaker 1: robust interpretation of antitrust laws that were present decades ago. 255 00:16:48,840 --> 00:16:52,360 Speaker 1: Even as more people are are kind of rejecting or 256 00:16:52,400 --> 00:16:56,560 Speaker 1: at least partially rejecting, the Chicago School, there's the potential 257 00:16:57,040 --> 00:17:00,320 Speaker 1: for a more progressive movement to take the stay age, 258 00:17:00,760 --> 00:17:02,920 Speaker 1: but that's still in the very early days. And as 259 00:17:02,960 --> 00:17:05,520 Speaker 1: I record this, the United States is going through an 260 00:17:05,520 --> 00:17:09,480 Speaker 1: election process that will largely determine how likely that will be. 261 00:17:10,359 --> 00:17:13,280 Speaker 1: And that sets the stage for our next section, where 262 00:17:13,320 --> 00:17:18,440 Speaker 1: I'll talk about a specific case, the United States versus Microsoft, 263 00:17:18,760 --> 00:17:22,000 Speaker 1: but before we get to that, let's take a quick break. 264 00:17:29,520 --> 00:17:33,280 Speaker 1: In the nineteen seventies, Bill Gates and Paul Allen, two 265 00:17:33,280 --> 00:17:37,440 Speaker 1: old friends, started up a company called Microsoft, named after 266 00:17:37,680 --> 00:17:41,760 Speaker 1: micro computers and software, and originally the two would develop 267 00:17:41,840 --> 00:17:46,160 Speaker 1: and sell versions of the programming language Basic for different 268 00:17:46,200 --> 00:17:48,639 Speaker 1: computer platforms, so you can think of it as different 269 00:17:48,720 --> 00:17:54,359 Speaker 1: flavors of Basic. In nineteen eighty, IBM hired Microsoft to 270 00:17:54,600 --> 00:17:57,679 Speaker 1: develop an operating system for what was to become the 271 00:17:57,760 --> 00:18:02,639 Speaker 1: IBM PC, the person Old computer, and Microsoft went and 272 00:18:02,720 --> 00:18:07,000 Speaker 1: acquired software from a different company. They took that software, 273 00:18:07,240 --> 00:18:10,040 Speaker 1: they changed it around a little bit, and they named 274 00:18:10,040 --> 00:18:13,200 Speaker 1: it MS DOSS. Now the story behind that is pretty 275 00:18:13,240 --> 00:18:16,600 Speaker 1: fascinating in its own right, and it gets really cutthroat 276 00:18:16,840 --> 00:18:19,600 Speaker 1: right off the bat, but it's outside the realm of 277 00:18:19,640 --> 00:18:24,919 Speaker 1: this episode. One thing IBM did not demand from Microsoft 278 00:18:25,040 --> 00:18:28,760 Speaker 1: was exclusive rights to the operating system that they developed, 279 00:18:29,040 --> 00:18:32,119 Speaker 1: so Microsoft would actually go on to make versions of 280 00:18:32,240 --> 00:18:37,119 Speaker 1: MS doss for other computer manufacturers. And since IBM was 281 00:18:37,200 --> 00:18:41,640 Speaker 1: relying heavily on off the shelf components for its PCs, 282 00:18:41,920 --> 00:18:44,879 Speaker 1: it meant that any other company could potentially make a 283 00:18:44,920 --> 00:18:48,080 Speaker 1: machine that works in pretty much the same way as 284 00:18:48,119 --> 00:18:52,320 Speaker 1: the official IBM PC, and moreover, they could license an 285 00:18:52,359 --> 00:18:56,600 Speaker 1: operating system from Microsoft that would allow these other machines 286 00:18:56,640 --> 00:18:59,280 Speaker 1: that were built by other companies to run the same 287 00:18:59,320 --> 00:19:03,080 Speaker 1: software that was developed for IBM PCs. This was a 288 00:19:03,119 --> 00:19:08,320 Speaker 1: move that would make the Microsoft founders insanely wealthy, pushing 289 00:19:08,359 --> 00:19:12,359 Speaker 1: the company on the path to operating system domination, and 290 00:19:12,760 --> 00:19:16,480 Speaker 1: ultimately it would also spell doom for IBMS consumer products 291 00:19:16,480 --> 00:19:21,440 Speaker 1: division many years later. Microsoft would then later develop an 292 00:19:21,440 --> 00:19:24,920 Speaker 1: operating system with a graphic user interface or g u 293 00:19:25,040 --> 00:19:28,879 Speaker 1: I or gooey. This was, of course, the Windows operating 294 00:19:28,920 --> 00:19:32,800 Speaker 1: system that you know still dominates today. It took a 295 00:19:32,800 --> 00:19:36,480 Speaker 1: couple of versions for Windows to really catch on, but 296 00:19:36,600 --> 00:19:39,919 Speaker 1: Windows over time would become the main operating system on 297 00:19:40,000 --> 00:19:44,439 Speaker 1: personal computers. There were alternatives. Apple was running a totally 298 00:19:44,440 --> 00:19:48,240 Speaker 1: different operating system for Mac computers, for example, and other 299 00:19:48,280 --> 00:19:52,879 Speaker 1: operating systems would emerge that allowed for alternatives to Windows. 300 00:19:52,920 --> 00:19:55,639 Speaker 1: But it would be disingenuous to say that Windows was 301 00:19:55,680 --> 00:19:59,439 Speaker 1: anything other than the dominant os on the market. It 302 00:19:59,480 --> 00:20:04,160 Speaker 1: absolutely really was, at least for business and personal computers. 303 00:20:04,160 --> 00:20:06,600 Speaker 1: So if you get into things like servers, well, that's 304 00:20:06,600 --> 00:20:10,119 Speaker 1: a different story. But for like personal computers and for 305 00:20:10,200 --> 00:20:12,679 Speaker 1: the stuff you would find in offices, Windows was the 306 00:20:12,760 --> 00:20:17,280 Speaker 1: dominant os. Now that position meant that software developers were 307 00:20:17,400 --> 00:20:20,399 Speaker 1: far more likely to focus on building out software for 308 00:20:20,560 --> 00:20:25,000 Speaker 1: Windows based machines. After all, if the vast majority of 309 00:20:25,040 --> 00:20:29,240 Speaker 1: computer users are relying on Windows as their operating system, 310 00:20:29,320 --> 00:20:32,840 Speaker 1: it makes sense to focus development efforts where the market is. 311 00:20:32,960 --> 00:20:36,480 Speaker 1: You go to where your customers are. You could create 312 00:20:36,520 --> 00:20:39,680 Speaker 1: software for other operating systems, but you would do that 313 00:20:39,920 --> 00:20:43,280 Speaker 1: knowing that there are fewer users that are relying on 314 00:20:43,440 --> 00:20:47,159 Speaker 1: alternatives to Windows, which means your potential consumer base is 315 00:20:47,200 --> 00:20:50,440 Speaker 1: already much smaller than it would be if you had 316 00:20:50,520 --> 00:20:53,800 Speaker 1: developed for Windows. You could argue, and I think you 317 00:20:53,840 --> 00:20:57,960 Speaker 1: could do so pretty persuasively, that the space was largely 318 00:20:58,040 --> 00:21:02,159 Speaker 1: anti competitive even early on, though some platforms like the 319 00:21:02,200 --> 00:21:05,440 Speaker 1: Mac had a decent amount of developer support behind them. 320 00:21:05,520 --> 00:21:08,399 Speaker 1: But keep in mind we're talking about the nineteen eighties 321 00:21:08,440 --> 00:21:12,160 Speaker 1: and early nineties here. This is before Apple had its renaissance. 322 00:21:12,840 --> 00:21:16,960 Speaker 1: In nineteen nine, a lawyer for the FTC named Norris 323 00:21:17,000 --> 00:21:21,880 Speaker 1: Washington had attended a computer trade show called Comdex, where 324 00:21:21,920 --> 00:21:27,360 Speaker 1: IBM and Microsoft announced a collaboration that raised his eyebrows. 325 00:21:27,720 --> 00:21:30,720 Speaker 1: The announcement sounded like it was treading a little too 326 00:21:30,720 --> 00:21:33,840 Speaker 1: close to collusion in an effort to control the PC 327 00:21:34,000 --> 00:21:38,240 Speaker 1: and operating system market. It wasn't until nineteen ninety that 328 00:21:38,359 --> 00:21:41,679 Speaker 1: the FTC would begin its official probe into the matter, 329 00:21:41,800 --> 00:21:45,600 Speaker 1: because the U S Department of Justice was initially reluctant 330 00:21:45,600 --> 00:21:50,320 Speaker 1: to authorize an investigation. At this stage, the matter revolved 331 00:21:50,359 --> 00:21:55,040 Speaker 1: around OS two, which belongs in the Doss family of 332 00:21:55,119 --> 00:22:00,320 Speaker 1: operating systems. However, in the gap between the announced meant 333 00:22:01,040 --> 00:22:04,479 Speaker 1: that IBM and Microsoft were going to work together and 334 00:22:04,560 --> 00:22:07,960 Speaker 1: the actual investigation, there had been something of a falling 335 00:22:08,000 --> 00:22:11,720 Speaker 1: out between Microsoft and IBM, and Microsoft was looking to 336 00:22:11,760 --> 00:22:15,840 Speaker 1: push its Windows operating system over OS two, which means 337 00:22:15,840 --> 00:22:19,360 Speaker 1: that it was no longer really interested in this approach 338 00:22:19,400 --> 00:22:22,639 Speaker 1: with IBM. But by that time other third parties were 339 00:22:22,680 --> 00:22:26,480 Speaker 1: coming forward to complain about Microsoft to the government. They 340 00:22:26,480 --> 00:22:30,200 Speaker 1: were saying that Microsoft was making changes to its operating 341 00:22:30,200 --> 00:22:35,159 Speaker 1: system that would make third party software incompatible with computers 342 00:22:35,160 --> 00:22:39,240 Speaker 1: that were running that operating system, among other charges. The 343 00:22:39,359 --> 00:22:43,159 Speaker 1: FTC was in a political deadlock over the matter, and 344 00:22:43,200 --> 00:22:45,360 Speaker 1: there was a great deal of pressure from the Department 345 00:22:45,359 --> 00:22:49,879 Speaker 1: of Justice to go very narrow and focused and small 346 00:22:50,119 --> 00:22:53,120 Speaker 1: with the probe. The thought being that the US software 347 00:22:53,160 --> 00:22:55,960 Speaker 1: industry was a really important one to the United States, 348 00:22:55,960 --> 00:22:59,199 Speaker 1: and so you know, maybe we could, you know, just 349 00:22:59,440 --> 00:23:04,560 Speaker 1: not break up Microsoft for some little anti competitive monopolistic behaviors. 350 00:23:04,600 --> 00:23:08,560 Speaker 1: You know, what's a little what's a little illegal behavior 351 00:23:08,600 --> 00:23:12,520 Speaker 1: among friends, I guess. In the end, the FTC and 352 00:23:12,600 --> 00:23:15,679 Speaker 1: Microsoft would come to an agreement in which the company 353 00:23:15,720 --> 00:23:20,919 Speaker 1: would sign a consent decree that was intended to limit 354 00:23:21,040 --> 00:23:25,240 Speaker 1: how Microsoft might lockout competition from the PC market. But 355 00:23:25,400 --> 00:23:28,080 Speaker 1: later on Bill Gates himself would claim that the consent 356 00:23:28,200 --> 00:23:32,159 Speaker 1: decree amounted to nothing at all, so it might as 357 00:23:32,200 --> 00:23:36,280 Speaker 1: well have been political theater. One important part of this 358 00:23:36,400 --> 00:23:40,480 Speaker 1: decree was that Microsoft agreed that it would not integrate 359 00:23:40,640 --> 00:23:45,040 Speaker 1: other Microsoft products into Windows as a tie in. So, 360 00:23:45,080 --> 00:23:49,240 Speaker 1: in other words, Microsoft shouldn't tie you know, like productivity 361 00:23:49,280 --> 00:23:53,000 Speaker 1: software like the Office Suite directly to Windows, because that 362 00:23:53,040 --> 00:23:56,600 Speaker 1: would be unfair to companies that are developing third party 363 00:23:56,680 --> 00:24:00,679 Speaker 1: productivity software as competition. The company would be allowed to 364 00:24:00,680 --> 00:24:04,840 Speaker 1: create new features in Windows, that's okay, to make Windows 365 00:24:05,040 --> 00:24:09,440 Speaker 1: more feature rich, but things that were products that were 366 00:24:09,440 --> 00:24:12,680 Speaker 1: meant to be, you know, a separate thing in addition 367 00:24:12,760 --> 00:24:16,439 Speaker 1: to Windows that was supposed to be separate. By the 368 00:24:16,480 --> 00:24:19,880 Speaker 1: time we get to the early and mid nineteen nineties, 369 00:24:19,920 --> 00:24:23,960 Speaker 1: a new complication emerged the Worldwide Web and the Internet 370 00:24:24,000 --> 00:24:27,240 Speaker 1: in general. But the web is really where our story coalesces, 371 00:24:28,040 --> 00:24:30,960 Speaker 1: is the point I'm making here. Now we all know 372 00:24:31,600 --> 00:24:34,680 Speaker 1: that to access the web you need an Internet browser. 373 00:24:35,000 --> 00:24:38,000 Speaker 1: You know, a program that interprets your commands, It fetches 374 00:24:38,080 --> 00:24:41,760 Speaker 1: pages from servers, it displays those pages in a way 375 00:24:41,800 --> 00:24:45,680 Speaker 1: that you can navigate and understand. And here's where things 376 00:24:45,800 --> 00:24:50,679 Speaker 1: really escalated. So an early popular web browser, the dominant 377 00:24:50,720 --> 00:24:56,320 Speaker 1: one was Netscape Navigator. It debuted in and quickly became 378 00:24:56,400 --> 00:24:59,960 Speaker 1: the most popular web browsing platform. It held about seventy 379 00:25:00,119 --> 00:25:02,920 Speaker 1: five percent of the market before the end of the year. 380 00:25:03,480 --> 00:25:06,080 Speaker 1: Now keep in mind this is in the very early 381 00:25:06,200 --> 00:25:09,399 Speaker 1: days of the web, when awareness of the web even 382 00:25:09,480 --> 00:25:13,200 Speaker 1: being a thing was largely contained to stuff like college 383 00:25:13,240 --> 00:25:17,199 Speaker 1: campuses and research centers. One thing that Netscape aimed to 384 00:25:17,280 --> 00:25:20,880 Speaker 1: do with the Navigator browser was to create a standardized 385 00:25:20,960 --> 00:25:26,239 Speaker 1: browsing experience across all operating system platforms, meaning that at 386 00:25:26,320 --> 00:25:29,760 Speaker 1: least in theory, no matter what type of computer or 387 00:25:29,800 --> 00:25:33,200 Speaker 1: what type of operating system you were, depending upon your 388 00:25:33,240 --> 00:25:37,240 Speaker 1: experience on Netscape should be the same from computer to computer, 389 00:25:37,680 --> 00:25:41,080 Speaker 1: and anyone who has used the quote unquote same software 390 00:25:41,200 --> 00:25:45,119 Speaker 1: on different operating systems knows how unusual that can be. 391 00:25:45,320 --> 00:25:48,639 Speaker 1: You know, just finding options can be a totally different 392 00:25:48,680 --> 00:25:52,800 Speaker 1: experience from one to the other. Perhaps Microsoft was worried 393 00:25:53,200 --> 00:25:58,040 Speaker 1: that more software developers would follow netscapes lead. And if 394 00:25:58,080 --> 00:26:02,800 Speaker 1: the same program works same way across every operating system 395 00:26:02,840 --> 00:26:06,400 Speaker 1: on every computer, it levels the playing field and other 396 00:26:06,480 --> 00:26:10,399 Speaker 1: operating system developers could potentially gain some ground on the 397 00:26:10,440 --> 00:26:15,480 Speaker 1: monolithic Microsoft. If Microsoft Windows is not providing a superior 398 00:26:15,560 --> 00:26:19,880 Speaker 1: experience because the software just works better on it, well 399 00:26:19,880 --> 00:26:22,440 Speaker 1: that could be a problem. So the company had its 400 00:26:22,480 --> 00:26:30,280 Speaker 1: own strategy. In Microsoft unveiled Internet Explorer, a competing Internet browser. 401 00:26:30,760 --> 00:26:34,119 Speaker 1: The original Internet Explorer was built on code developed by 402 00:26:34,160 --> 00:26:39,080 Speaker 1: an Internet software company called Spyglass, which in turn based 403 00:26:39,200 --> 00:26:44,000 Speaker 1: their code off of NCSA's Mosaic Browser. In fact, there 404 00:26:44,040 --> 00:26:47,600 Speaker 1: were two flavors of this originally, one that was essentially 405 00:26:47,720 --> 00:26:53,000 Speaker 1: Mosaic code and another that was just heavily influenced by 406 00:26:53,119 --> 00:26:57,119 Speaker 1: Mosaic Code. And the deal with Spyglass was that Microsoft 407 00:26:57,200 --> 00:27:01,320 Speaker 1: would pay a recurring licensing fee too Eyeglass for use 408 00:27:01,520 --> 00:27:06,359 Speaker 1: of the software, plus a share of any revenues that 409 00:27:06,600 --> 00:27:11,399 Speaker 1: sales would generate from this browser. But then Microsoft did 410 00:27:11,520 --> 00:27:14,480 Speaker 1: something sneaky, deaky and seriously, if you look at the 411 00:27:14,560 --> 00:27:17,960 Speaker 1: history of Microsoft's deals with other software companies, this next 412 00:27:18,040 --> 00:27:20,080 Speaker 1: bit is not going to come as a surprise to 413 00:27:20,119 --> 00:27:24,480 Speaker 1: you at all. Microsoft would end up bundling Internet Explorer 414 00:27:24,880 --> 00:27:29,560 Speaker 1: with Windows for free. At least arguably it was for 415 00:27:29,760 --> 00:27:34,600 Speaker 1: free because the company wasn't making revenue directly off Internet Explorer, 416 00:27:34,680 --> 00:27:38,360 Speaker 1: it wasn't selling Internet Explorer to users. That would mean 417 00:27:38,680 --> 00:27:42,639 Speaker 1: Microsoft would only owe Spyglass that licensing fee because there 418 00:27:42,680 --> 00:27:44,840 Speaker 1: were no revenues to share at all. They didn't have 419 00:27:45,040 --> 00:27:49,400 Speaker 1: to give any profits from Windows because that was an 420 00:27:49,440 --> 00:27:55,320 Speaker 1: Internet Explorer. Yeah, that's kind of unethical, I would argue, 421 00:27:55,960 --> 00:27:58,440 Speaker 1: or at least it was kind of low handed. The 422 00:27:58,560 --> 00:28:01,400 Speaker 1: idea of I'll give you a share of everything I sell, 423 00:28:01,720 --> 00:28:03,720 Speaker 1: and then you don't sell it. You just package it 424 00:28:03,800 --> 00:28:06,359 Speaker 1: with something else that you happen to be selling, and 425 00:28:06,440 --> 00:28:09,000 Speaker 1: then you make the argument, oh no, that didn't generate revenue, 426 00:28:09,200 --> 00:28:13,800 Speaker 1: that was just part of something bigger that did generate revenue. Meanwhile, 427 00:28:14,160 --> 00:28:17,879 Speaker 1: by making Internet Explore a part of the Windows bundle, 428 00:28:18,359 --> 00:28:20,680 Speaker 1: the company was getting a browser in front of users 429 00:28:20,800 --> 00:28:23,760 Speaker 1: before they could even consider if they wanted something else, 430 00:28:24,280 --> 00:28:26,880 Speaker 1: and that Escape saw this as a threat. Pretty much 431 00:28:27,000 --> 00:28:30,320 Speaker 1: right away. The company was selling its browser, and now 432 00:28:30,480 --> 00:28:34,359 Speaker 1: here comes the company behind the dominant operating system on 433 00:28:34,480 --> 00:28:37,720 Speaker 1: the market, offering up its own browser for free and 434 00:28:37,960 --> 00:28:41,800 Speaker 1: bundled with the operating system. Beyond that, the company strong 435 00:28:41,960 --> 00:28:47,000 Speaker 1: armed PC manufacturing companies into an agreement. The manufacturers who 436 00:28:47,120 --> 00:28:50,600 Speaker 1: wanted to load Windows onto the machines they were producing 437 00:28:50,680 --> 00:28:53,800 Speaker 1: and then selling to consumers would have to agree to 438 00:28:53,920 --> 00:28:58,640 Speaker 1: have Internet Explorer bundled on those machines. So let's say 439 00:28:59,000 --> 00:29:02,720 Speaker 1: you're in charge of a company that makes computers. We're 440 00:29:02,720 --> 00:29:06,920 Speaker 1: gonna call it Dull Dull computers. So you run Dull 441 00:29:07,000 --> 00:29:10,120 Speaker 1: computers and you build out a range of PCs both 442 00:29:10,200 --> 00:29:13,200 Speaker 1: for enterprise customers and end users like you and me, 443 00:29:14,080 --> 00:29:17,600 Speaker 1: and you want to license Windows to load onto the 444 00:29:17,720 --> 00:29:21,360 Speaker 1: machines you're building, because that's a selling factor. Right It's 445 00:29:21,400 --> 00:29:24,720 Speaker 1: the dominant operating system on the market, and most end 446 00:29:24,840 --> 00:29:28,960 Speaker 1: users wouldn't be familiar with other operating systems, and even 447 00:29:29,120 --> 00:29:31,880 Speaker 1: fewer of those people would understand how to install their 448 00:29:31,960 --> 00:29:35,800 Speaker 1: own operating system onto a machine. But if you do 449 00:29:36,160 --> 00:29:40,080 Speaker 1: enter into that licensing agreement with Microsoft, you also have 450 00:29:40,240 --> 00:29:43,760 Speaker 1: to pre install Internet Explorer on those machines. It's part 451 00:29:43,840 --> 00:29:46,720 Speaker 1: of the deal. The U. S Department of Justice took 452 00:29:46,840 --> 00:29:51,080 Speaker 1: issue with this, and the antitrust attention against Microsoft hit 453 00:29:51,240 --> 00:29:55,200 Speaker 1: a new peak. Bill Gates would argue in the trial 454 00:29:55,360 --> 00:29:59,560 Speaker 1: in video depositions that Internet Explorer was not its own product, 455 00:29:59,640 --> 00:30:03,800 Speaker 1: it was just a feature of Windows, which again, according 456 00:30:03,840 --> 00:30:07,240 Speaker 1: to the consent decree was tots oki doki. That was 457 00:30:07,320 --> 00:30:09,640 Speaker 1: fine as long as it was a feature of Windows, 458 00:30:10,320 --> 00:30:14,200 Speaker 1: then that that was allowable. What was not allowed is 459 00:30:14,280 --> 00:30:17,960 Speaker 1: to bundle a product with Windows. But the Department of 460 00:30:18,080 --> 00:30:21,280 Speaker 1: Justice said, no, wait a minute. You also offer Internet 461 00:30:21,360 --> 00:30:25,320 Speaker 1: Explorer for Mac computers, for the Mac operating system, and 462 00:30:25,440 --> 00:30:28,720 Speaker 1: Microsoft does not have anything to do with the Mac 463 00:30:28,800 --> 00:30:32,480 Speaker 1: operating system. That means the Internet Explorer has to be 464 00:30:32,560 --> 00:30:34,920 Speaker 1: a product. It's not a feature because you sell it 465 00:30:35,720 --> 00:30:40,520 Speaker 1: for the Mac, and that means that it should be 466 00:30:40,720 --> 00:30:43,440 Speaker 1: separate from Windows. It should not be bundled with it. 467 00:30:43,760 --> 00:30:47,680 Speaker 1: The antitrust trial stretched on for many, many months, with 468 00:30:47,800 --> 00:30:51,400 Speaker 1: more than seventy days of testimony, the judge presiding over 469 00:30:51,440 --> 00:30:55,560 Speaker 1: the case found Microsoft guilty of anti competitive behaviors and 470 00:30:55,680 --> 00:30:59,479 Speaker 1: attempting to gain a monopolistic hold on the OS market 471 00:30:59,560 --> 00:31:03,480 Speaker 1: and the browser market, and initially the judge ordered Microsoft 472 00:31:03,600 --> 00:31:07,840 Speaker 1: to split into two companies nicknamed baby Bills after Bill 473 00:31:07,960 --> 00:31:10,720 Speaker 1: Gates and a little throwback to the baby bells of 474 00:31:10,800 --> 00:31:15,000 Speaker 1: a T and T that decision. The judge's decision got 475 00:31:15,160 --> 00:31:20,240 Speaker 1: overturned by an appeals court, and ultimately Microsoft would settle 476 00:31:20,480 --> 00:31:23,560 Speaker 1: with the Department of Justice out of court, and the 477 00:31:23,640 --> 00:31:27,240 Speaker 1: whole story is a total chaotic mess. The Department of 478 00:31:27,360 --> 00:31:31,240 Speaker 1: Justice's case against Microsoft had a lot of problems, some 479 00:31:31,400 --> 00:31:33,280 Speaker 1: of which seemed to indicate that the government had a 480 00:31:33,360 --> 00:31:36,760 Speaker 1: distinct lack of understanding when it comes to software. But 481 00:31:36,920 --> 00:31:42,000 Speaker 1: Microsoft also had some really awful mistakes and just bad 482 00:31:42,080 --> 00:31:45,120 Speaker 1: decisions during that trial as well, including a moment where 483 00:31:45,160 --> 00:31:48,360 Speaker 1: they presented a videotape as evidence to show how easy 484 00:31:48,400 --> 00:31:52,000 Speaker 1: it was to uninstall Internet Explorer, and later it was 485 00:31:52,080 --> 00:31:56,480 Speaker 1: discovered and proven that that videotape had been edited. Not great, 486 00:31:56,760 --> 00:32:00,360 Speaker 1: nobody came out of this looking particularly rosie, but in 487 00:32:00,440 --> 00:32:03,920 Speaker 1: the end, Microsoft was not forced to break up into 488 00:32:04,040 --> 00:32:07,920 Speaker 1: different companies. The trial did force Microsoft to back off 489 00:32:08,000 --> 00:32:11,840 Speaker 1: a little bit from its practices Netscape Navigator, which was 490 00:32:11,960 --> 00:32:16,000 Speaker 1: not a plaintiff in this case. Although executives from Netscape 491 00:32:16,080 --> 00:32:19,400 Speaker 1: would be subpoena to speak during the trial, they would 492 00:32:19,480 --> 00:32:23,280 Speaker 1: see their market share continued to decline until the company 493 00:32:23,400 --> 00:32:26,040 Speaker 1: just pulled the plug on the browser in two thousand eight. 494 00:32:26,720 --> 00:32:30,200 Speaker 1: As for Internet Explorer, it would be the dominant browser 495 00:32:30,320 --> 00:32:35,600 Speaker 1: until late when Mozilla Firefox overtook Internet Explorer as the 496 00:32:35,720 --> 00:32:39,440 Speaker 1: dominant browser on the market. Two interesting things about this 497 00:32:39,960 --> 00:32:43,720 Speaker 1: One is that Microsoft had gone back to bundling Internet 498 00:32:43,760 --> 00:32:47,680 Speaker 1: Explorer with Windows at that point, but also the company 499 00:32:47,760 --> 00:32:51,560 Speaker 1: had ended support for Internet Explorer on platforms like the 500 00:32:51,640 --> 00:32:54,800 Speaker 1: Mac operating system, so they were once again arguing that 501 00:32:55,360 --> 00:32:59,040 Speaker 1: Internet Explorer was really a feature of Windows and was 502 00:32:59,160 --> 00:33:02,960 Speaker 1: tightly integrate it into Windows and wasn't its own separate program. 503 00:33:03,840 --> 00:33:08,200 Speaker 1: And the second interesting thing is that Mozilla Firefox was 504 00:33:08,320 --> 00:33:12,960 Speaker 1: a spiritual successor to Netscape Navigator. Netscape had created the 505 00:33:13,040 --> 00:33:17,760 Speaker 1: Mozilla Foundation just before Netscape itself got acquired by a 506 00:33:17,960 --> 00:33:22,120 Speaker 1: O L. And in case you're wondering, according to stat Counter, 507 00:33:22,600 --> 00:33:27,840 Speaker 1: Internet Explorer now makes up about one point five percent 508 00:33:28,080 --> 00:33:32,280 Speaker 1: of the global browser market share, not a huge surprise. Obviously, 509 00:33:32,400 --> 00:33:37,920 Speaker 1: Microsoft no longer supports Internet Explorer. The newer Microsoft Browser 510 00:33:38,320 --> 00:33:42,000 Speaker 1: Edge has just two point eight five percent market share. 511 00:33:42,440 --> 00:33:45,160 Speaker 1: At the other end of the spectrum is Google Chrome, 512 00:33:45,440 --> 00:33:48,640 Speaker 1: which accounts for more than sixty six percent of the 513 00:33:48,720 --> 00:33:53,120 Speaker 1: market share. Now, granted, this is across all platforms, and 514 00:33:53,240 --> 00:33:56,400 Speaker 1: back in the two thousand's we were only talking about computers, 515 00:33:56,840 --> 00:34:00,240 Speaker 1: mainly desktops and a few laptops. But to a you 516 00:34:00,320 --> 00:34:03,280 Speaker 1: also have to include smartphones and tablets in there, and 517 00:34:03,360 --> 00:34:06,080 Speaker 1: that's really where Google is running away with things in 518 00:34:06,160 --> 00:34:09,520 Speaker 1: the smartphone category. And that brings us up to our 519 00:34:09,600 --> 00:34:11,680 Speaker 1: next section, where we'll take a look at some of 520 00:34:11,719 --> 00:34:15,759 Speaker 1: the current issues around antitrust concerns with big tech. But 521 00:34:15,880 --> 00:34:26,600 Speaker 1: first let's take another quick break. Okay, Now we're up 522 00:34:26,640 --> 00:34:30,400 Speaker 1: to the most recent antitrust report in the United States, 523 00:34:30,680 --> 00:34:35,680 Speaker 1: which focuses on Amazon, Apple, Facebook, and Google. Now, as 524 00:34:35,719 --> 00:34:39,160 Speaker 1: I'm sure has become obvious during the course of this episode, 525 00:34:39,760 --> 00:34:43,880 Speaker 1: it is impossible to separate these issues from politics in general. 526 00:34:44,239 --> 00:34:47,320 Speaker 1: The report is the product of the Democratic members of 527 00:34:47,360 --> 00:34:52,239 Speaker 1: the House Judiciary Subcommittee on Antitrust. The investigation leading up 528 00:34:52,400 --> 00:34:56,000 Speaker 1: to The report lasted more than a year. During the investigation, 529 00:34:56,080 --> 00:34:59,560 Speaker 1: there were seven Congressional hearings, and the full report is 530 00:34:59,600 --> 00:35:04,840 Speaker 1: about four hundred fifty pages long. Yikes. Now, I'm going 531 00:35:04,880 --> 00:35:07,719 Speaker 1: to be straight with you, guys, I did not read 532 00:35:07,880 --> 00:35:13,600 Speaker 1: the whole report, which is incidentally available online in its entirety. 533 00:35:13,880 --> 00:35:17,760 Speaker 1: If you want to read it, go to Judiciary dot House, 534 00:35:18,120 --> 00:35:27,640 Speaker 1: dot gov, slash uploaded files, slash Competition, Underscore in Underscore Digital, 535 00:35:28,040 --> 00:35:32,800 Speaker 1: Underscore Markets dot pdf, just in case you find yourself 536 00:35:32,880 --> 00:35:35,640 Speaker 1: with some time on your hands and an itch to 537 00:35:35,760 --> 00:35:38,960 Speaker 1: learn more about this sort of thing. Thankfully, the report 538 00:35:39,120 --> 00:35:44,360 Speaker 1: opens with the chairs forward, followed by executive Summary and findings, 539 00:35:44,920 --> 00:35:46,920 Speaker 1: and that gives us a lot to talk about just 540 00:35:47,200 --> 00:35:50,160 Speaker 1: right there without having to read the full report. The 541 00:35:50,239 --> 00:35:52,800 Speaker 1: full report does have more information on how the committee 542 00:35:52,880 --> 00:35:57,000 Speaker 1: came to its conclusions, and so the whole report is important. 543 00:35:57,200 --> 00:36:02,960 Speaker 1: It's just exhaustive and exhaust staying as well, the report opens, 544 00:36:03,040 --> 00:36:06,080 Speaker 1: as I said, with the chairs forward, and that includes 545 00:36:06,160 --> 00:36:10,239 Speaker 1: some you know, semi harsh words for the CEOs of 546 00:36:10,320 --> 00:36:13,680 Speaker 1: the four companies that are involved, stating that the answers 547 00:36:13,800 --> 00:36:17,160 Speaker 1: that the leaders gave to Congress were frequently evasive, or 548 00:36:17,400 --> 00:36:21,280 Speaker 1: non responsive. The chair also states that the four companies 549 00:36:21,320 --> 00:36:25,920 Speaker 1: have become quote a gatekeeper over a key channel of distribution. 550 00:36:26,120 --> 00:36:29,840 Speaker 1: By controlling access to markets, these giants can pick winners 551 00:36:29,960 --> 00:36:34,200 Speaker 1: and losers throughout our economy end quote. So, like the 552 00:36:34,280 --> 00:36:37,760 Speaker 1: antitrust cases of old, the chair asserts that these companies 553 00:36:37,840 --> 00:36:40,840 Speaker 1: have made it a practice to consolidate power, both in 554 00:36:40,960 --> 00:36:44,920 Speaker 1: the market and beyond. The chair goes on to state, quote, 555 00:36:45,440 --> 00:36:49,120 Speaker 1: they not only wield tremendous power, but they also abuse 556 00:36:49,200 --> 00:36:54,040 Speaker 1: it by charging exorbitant fees, imposing oppressive contract terms, and 557 00:36:54,160 --> 00:36:58,200 Speaker 1: extracting valuable data from the people and businesses that rely 558 00:36:58,320 --> 00:37:01,480 Speaker 1: on them. End quote. It goes on to state that 559 00:37:01,600 --> 00:37:05,120 Speaker 1: the companies use their vast influence to maintain a market 560 00:37:05,200 --> 00:37:10,719 Speaker 1: advantage over other companies, suppressing competition, either through buying out 561 00:37:10,840 --> 00:37:15,000 Speaker 1: competitors or copying what those competitors are doing in an 562 00:37:15,040 --> 00:37:18,600 Speaker 1: effort to undermine them. Facebook leaps to mind when I 563 00:37:18,719 --> 00:37:21,400 Speaker 1: hear this, because the company had done things like they 564 00:37:21,440 --> 00:37:25,680 Speaker 1: acquired Instagram because Instagram was doing better in the photo 565 00:37:25,840 --> 00:37:29,920 Speaker 1: sharing space than Facebook was, And they've also spent a 566 00:37:30,000 --> 00:37:34,160 Speaker 1: lot of time recently copying other platforms like Snapchat and TikTok, 567 00:37:34,640 --> 00:37:40,000 Speaker 1: largely through their Instagram division. Moving on to the findings 568 00:37:40,040 --> 00:37:42,760 Speaker 1: of the report itself, it states that the combined value 569 00:37:42,840 --> 00:37:47,120 Speaker 1: of the four companies is more than five trillion dollars, 570 00:37:47,200 --> 00:37:50,960 Speaker 1: which goes beyond a princely some it moves into like 571 00:37:51,920 --> 00:37:57,440 Speaker 1: Grand puba territory. The conclusions found that these companies represented 572 00:37:57,480 --> 00:38:03,240 Speaker 1: a monopoly in several markets, including social networking, online advertising, 573 00:38:03,400 --> 00:38:07,880 Speaker 1: and online search. The finding state that, quote, in interviews 574 00:38:07,960 --> 00:38:13,440 Speaker 1: with subcommittee staff, numerous businesses described how dominant platforms exploit 575 00:38:13,520 --> 00:38:17,719 Speaker 1: their gatekeeping power to dictate terms and extract concessions that 576 00:38:17,920 --> 00:38:21,200 Speaker 1: no one would reasonably consent to in a competitive market. 577 00:38:21,680 --> 00:38:24,640 Speaker 1: End quote. It goes on to say, the various market 578 00:38:24,719 --> 00:38:28,719 Speaker 1: players state they are dependent on these larger companies, and 579 00:38:28,840 --> 00:38:32,440 Speaker 1: as a consequence, they have no recourse but to agree 580 00:38:32,480 --> 00:38:35,479 Speaker 1: to those concessions. So, in other words, if you don't 581 00:38:35,520 --> 00:38:38,879 Speaker 1: play by these companies rules, you don't get to play 582 00:38:38,960 --> 00:38:42,440 Speaker 1: at all. The subcommittee also lays some blame at the 583 00:38:42,520 --> 00:38:45,960 Speaker 1: feet of the Federal Trade Commission, stating that the FTC 584 00:38:46,239 --> 00:38:50,240 Speaker 1: declined to investigate most of the acquisitions that these companies 585 00:38:50,320 --> 00:38:53,960 Speaker 1: had pursued over the years, pointing out that Facebook acquired 586 00:38:54,360 --> 00:38:57,719 Speaker 1: dozens of companies, nearly one hundred of them, but the 587 00:38:57,840 --> 00:39:01,480 Speaker 1: FTC only chose to invest eight one of those, and 588 00:39:01,640 --> 00:39:06,760 Speaker 1: that was Instagram. In the subcommittee concludes that the FTC 589 00:39:07,200 --> 00:39:10,719 Speaker 1: essentially turned a blind eye towards mergers and acquisitions that 590 00:39:10,840 --> 00:39:15,320 Speaker 1: have since, at least by the Subcommittee's estimation, proven to 591 00:39:15,480 --> 00:39:20,080 Speaker 1: have reduced competition in the market. This, the Subcommittee says, 592 00:39:20,400 --> 00:39:25,359 Speaker 1: has reduced consumer choice, it's hurt innovation and entrepreneurship, as 593 00:39:25,440 --> 00:39:28,279 Speaker 1: good ideas can be smothered if they're not coming from 594 00:39:28,360 --> 00:39:32,040 Speaker 1: within one of these four companies, and has caused greater 595 00:39:32,160 --> 00:39:36,760 Speaker 1: harm by extension by reducing americans privacy and also hurting 596 00:39:36,840 --> 00:39:41,240 Speaker 1: the free press. Uh. Those shots seemed fired primarily at Facebook, 597 00:39:41,280 --> 00:39:44,120 Speaker 1: though I'm sure Google takes some heat for that as well. 598 00:39:44,800 --> 00:39:49,480 Speaker 1: The report lays out a fairly extensive argument against each company, 599 00:39:49,920 --> 00:39:53,880 Speaker 1: providing evidence supporting the allegations. It also goes on to 600 00:39:54,000 --> 00:39:58,759 Speaker 1: explain the consequences of the anti competitive and monopolistic strategies 601 00:39:59,200 --> 00:40:02,200 Speaker 1: that are playing out in the real world, from shutting 602 00:40:02,239 --> 00:40:07,239 Speaker 1: down potential competitors to impacting the democratic process itself. But 603 00:40:07,360 --> 00:40:10,360 Speaker 1: I feel like most of us have at least a 604 00:40:10,560 --> 00:40:14,080 Speaker 1: grasp on this stuff already. I think it's pretty obvious 605 00:40:14,360 --> 00:40:18,759 Speaker 1: that Facebook dominates social networking, and even more obvious that 606 00:40:18,840 --> 00:40:22,720 Speaker 1: Google has the lockdown on search. And we know about 607 00:40:22,840 --> 00:40:25,879 Speaker 1: the ways that companies like Facebook and Google make money 608 00:40:26,160 --> 00:40:29,440 Speaker 1: through ads, which is then boosted because the companies have 609 00:40:29,640 --> 00:40:33,319 Speaker 1: vast amount of information about us, you know, the consumers 610 00:40:33,360 --> 00:40:36,440 Speaker 1: who are using these products. Turns out we are the product, 611 00:40:36,520 --> 00:40:39,040 Speaker 1: We're the ones being bought and sold, and we know 612 00:40:39,160 --> 00:40:41,600 Speaker 1: about Amazon and Apple on top of that. So the 613 00:40:41,680 --> 00:40:45,120 Speaker 1: question remains, what, if anything, is there to be done 614 00:40:45,160 --> 00:40:49,200 Speaker 1: about it here in the United States. The subcommittee concluded 615 00:40:49,280 --> 00:40:53,560 Speaker 1: that a multi pronged approach is needed to address the 616 00:40:53,640 --> 00:40:57,600 Speaker 1: problems that were uncovered in the investigation. One of those 617 00:40:57,840 --> 00:41:00,320 Speaker 1: starts with the role of Congress when it comes to 618 00:41:00,400 --> 00:41:05,959 Speaker 1: providing oversight into antitrust matters. The subcommittee concluded that there 619 00:41:06,280 --> 00:41:10,120 Speaker 1: is a need to examine antitrust laws to make sure 620 00:41:10,160 --> 00:41:13,719 Speaker 1: they're working properly and that they're being enforced, and in 621 00:41:13,840 --> 00:41:18,120 Speaker 1: cases where the law isn't doing enough, that Congress drafts 622 00:41:18,320 --> 00:41:22,320 Speaker 1: new amendments or even new laws to fix this. To 623 00:41:22,480 --> 00:41:28,040 Speaker 1: that end, the subcommittee identified various reforms for consideration, including 624 00:41:28,120 --> 00:41:32,799 Speaker 1: several intended to restore competition in the digital economy. Among those, 625 00:41:32,920 --> 00:41:37,280 Speaker 1: the Subcommittee suggests reforms that would prevent companies from operating 626 00:41:37,360 --> 00:41:40,759 Speaker 1: within adjacent lines of business. So, in other words, if 627 00:41:40,800 --> 00:41:43,960 Speaker 1: a company is focused on a specific business within the 628 00:41:44,080 --> 00:41:47,080 Speaker 1: digital economy, then the company would not be allowed to 629 00:41:47,160 --> 00:41:52,080 Speaker 1: make moves to expand into related but distinct minds of business. 630 00:41:52,840 --> 00:41:56,920 Speaker 1: Another reform suggestion is that Congress should create restrictions to 631 00:41:57,000 --> 00:42:01,040 Speaker 1: eliminate the ability of a digital platform to us self 632 00:42:01,120 --> 00:42:05,279 Speaker 1: preferential approaches. So, in other words, a company shouldn't be 633 00:42:05,320 --> 00:42:09,560 Speaker 1: allowed to design a platform that then gives advantages to 634 00:42:10,280 --> 00:42:16,279 Speaker 1: that company's designed programs and disadvantages to programs that are 635 00:42:16,320 --> 00:42:20,319 Speaker 1: made by third parties. So the Microsoft Windows example from 636 00:42:20,360 --> 00:42:22,920 Speaker 1: earlier in this episode falls into this kind of category. 637 00:42:23,040 --> 00:42:27,279 Speaker 1: Microsoft was giving preferential treatment to Internet Explorer at the 638 00:42:27,360 --> 00:42:31,360 Speaker 1: expense of competitors like Netscape. You could argue that you 639 00:42:31,480 --> 00:42:34,080 Speaker 1: could look at Apple and say, all right, as Apple 640 00:42:34,200 --> 00:42:39,920 Speaker 1: giving preferential treatment to Apple developed apps and giving and 641 00:42:40,160 --> 00:42:45,240 Speaker 1: gate keeping other companies that are attempting to make competitive apps. 642 00:42:45,600 --> 00:42:48,440 Speaker 1: And you can make a decent argument about that, especially 643 00:42:48,520 --> 00:42:51,759 Speaker 1: since Apple is so very careful about which apps are 644 00:42:51,800 --> 00:42:56,000 Speaker 1: allowed into the app store. The subcommittee also suggested that 645 00:42:56,160 --> 00:42:59,919 Speaker 1: platforms format data in such a way that the data 646 00:43:00,200 --> 00:43:04,120 Speaker 1: becomes easily portable. So, in other words, the data should 647 00:43:04,160 --> 00:43:08,160 Speaker 1: be platform agnostic. Now why would this matter, Well, one 648 00:43:08,239 --> 00:43:11,399 Speaker 1: of the big challenges that we see with these these 649 00:43:11,520 --> 00:43:14,680 Speaker 1: consolidated tech companies is that a lot of us as 650 00:43:14,840 --> 00:43:18,960 Speaker 1: users have a ton of stuff stored within these various 651 00:43:19,040 --> 00:43:24,160 Speaker 1: companies platforms. So, for example, I've got thousands of photos 652 00:43:24,280 --> 00:43:27,400 Speaker 1: and posts up on Facebook that creates a sort of 653 00:43:27,520 --> 00:43:31,719 Speaker 1: anchor to me for Facebook, Like I am stuck there. 654 00:43:32,160 --> 00:43:33,920 Speaker 1: It would not be easy for me to port that 655 00:43:34,000 --> 00:43:37,400 Speaker 1: stuff over to some other platform, even if there were 656 00:43:37,520 --> 00:43:39,600 Speaker 1: a platform out there that I felt was up to 657 00:43:39,680 --> 00:43:43,839 Speaker 1: the task of doing that. Making data portable would at least, 658 00:43:43,880 --> 00:43:46,920 Speaker 1: in theory, make it easier for users to move their 659 00:43:46,960 --> 00:43:50,440 Speaker 1: stuff from one platform to another if they really wanted to. 660 00:43:51,320 --> 00:43:55,800 Speaker 1: And this isn't really important, but I actually recently deactivated 661 00:43:55,880 --> 00:43:59,279 Speaker 1: my Facebook account. I've been conflicted about even being on 662 00:43:59,440 --> 00:44:02,360 Speaker 1: the platform for a few years now, but I stuck 663 00:44:02,400 --> 00:44:05,160 Speaker 1: with it because that's where all my friends and family 664 00:44:05,239 --> 00:44:07,279 Speaker 1: had a presence. But I kind of reached a point 665 00:44:07,320 --> 00:44:12,439 Speaker 1: where that just isn't enough, however, that's really tangential. Other 666 00:44:12,520 --> 00:44:17,000 Speaker 1: proposed reforms include more scrutiny for future mergers and acquisitions, 667 00:44:17,680 --> 00:44:21,719 Speaker 1: reaffirming the practice of safe harbor, which tells us that 668 00:44:21,960 --> 00:44:25,520 Speaker 1: a platform should not be held accountable for stuff that 669 00:44:25,680 --> 00:44:29,239 Speaker 1: other people have put up on that platform. If I 670 00:44:29,320 --> 00:44:32,759 Speaker 1: were to build a box on the street corner for 671 00:44:32,800 --> 00:44:35,680 Speaker 1: people to stand on, I would not be held responsible 672 00:44:35,840 --> 00:44:38,279 Speaker 1: if someone stood on there and said truly terrible things. 673 00:44:38,560 --> 00:44:40,439 Speaker 1: I just made the box. I didn't make the person 674 00:44:40,520 --> 00:44:43,960 Speaker 1: say the terrible things. That's safe harbor kind of, and 675 00:44:44,200 --> 00:44:47,520 Speaker 1: also placing more restrictions on using corporate power to coerce 676 00:44:47,600 --> 00:44:52,160 Speaker 1: companies into unfavorable business concessions because of a dominant market position. 677 00:44:52,760 --> 00:44:55,560 Speaker 1: The report also calls for strengthening of antitrust laws in 678 00:44:55,600 --> 00:44:58,680 Speaker 1: the United States, as well as a call for antitrust 679 00:44:58,840 --> 00:45:01,640 Speaker 1: enforcement in general, not just that we have the laws, 680 00:45:01,719 --> 00:45:04,440 Speaker 1: but we actually enforce them. After all, if you have 681 00:45:04,520 --> 00:45:07,240 Speaker 1: a law but you never enforce it, then it doesn't 682 00:45:07,400 --> 00:45:11,560 Speaker 1: really mean anything. It's just words on a page. The 683 00:45:11,680 --> 00:45:16,280 Speaker 1: report itself will not have any direct impact on those companies. 684 00:45:16,360 --> 00:45:19,719 Speaker 1: It does not carry with it any actions or punishments 685 00:45:19,760 --> 00:45:24,160 Speaker 1: beyond recommending that Congress take further steps that would allow 686 00:45:24,200 --> 00:45:29,080 Speaker 1: the government to intervene with companies like these. Those interventions 687 00:45:29,160 --> 00:45:33,400 Speaker 1: could potentially include really big actions, like an attempt to 688 00:45:33,600 --> 00:45:36,960 Speaker 1: break up those companies into smaller entities that focus on 689 00:45:37,080 --> 00:45:40,560 Speaker 1: specific lines of business, but that's something that will have 690 00:45:40,719 --> 00:45:44,080 Speaker 1: to wait for further action in the future. In the meantime, 691 00:45:44,239 --> 00:45:46,800 Speaker 1: the report is really just a call for more action, 692 00:45:46,960 --> 00:45:50,919 Speaker 1: not an action unto itself. Now, that's just a quick 693 00:45:51,080 --> 00:45:55,360 Speaker 1: glipse into the situation with antitrust legislation and technology in 694 00:45:55,440 --> 00:45:58,800 Speaker 1: the United States. Where the story goes next will depend 695 00:45:58,880 --> 00:46:01,080 Speaker 1: heavily on who is a charge of the government in 696 00:46:01,160 --> 00:46:04,200 Speaker 1: the future months and years. As I record this, we 697 00:46:04,280 --> 00:46:06,960 Speaker 1: don't know for sure who that's gonna be. And of course, 698 00:46:07,360 --> 00:46:10,799 Speaker 1: this episode focused solely on the United States. There are 699 00:46:10,920 --> 00:46:13,439 Speaker 1: other parts of the world, such as in Europe, where 700 00:46:13,480 --> 00:46:15,760 Speaker 1: fights like these have been going on for many years, 701 00:46:16,120 --> 00:46:20,920 Speaker 1: frequently resulting in large fines being placed against these companies 702 00:46:20,960 --> 00:46:24,600 Speaker 1: and other penalties. Will we see the monumental companies and 703 00:46:24,640 --> 00:46:28,960 Speaker 1: technology gets split up into smaller components. Will those components 704 00:46:29,080 --> 00:46:31,960 Speaker 1: just coalesce again in the future, much like a T 705 00:46:32,120 --> 00:46:34,920 Speaker 1: and T did over time, or will we see a 706 00:46:35,000 --> 00:46:40,000 Speaker 1: completely different tactic that leaves companies intact but places finds 707 00:46:40,040 --> 00:46:42,400 Speaker 1: and other penalties on them should they be found to 708 00:46:42,520 --> 00:46:46,719 Speaker 1: engage in anti competitive practices, or maybe nothing happens at all. 709 00:46:47,120 --> 00:46:49,880 Speaker 1: All of those are possibilities, and then there are others 710 00:46:49,920 --> 00:46:52,200 Speaker 1: on top of that. I don't have the answers to 711 00:46:52,280 --> 00:46:57,320 Speaker 1: these questions. I'm not entirely certain anyone in government does either, 712 00:46:57,880 --> 00:47:00,600 Speaker 1: but we'll have to wait and see. In the meantime, 713 00:47:01,000 --> 00:47:03,960 Speaker 1: If you have any questions or suggestions for topics I 714 00:47:03,960 --> 00:47:06,520 Speaker 1: should cover here on this show, reach out to me 715 00:47:06,880 --> 00:47:11,040 Speaker 1: on Twitter. The handle is text stuff h s W. 716 00:47:11,960 --> 00:47:20,120 Speaker 1: I'll talk to you again really soon. Y. Text Stuff 717 00:47:20,280 --> 00:47:23,400 Speaker 1: is an I Heart Radio production. For more podcasts from 718 00:47:23,440 --> 00:47:27,160 Speaker 1: my Heart Radio, visit the I heart Radio app, Apple Podcasts, 719 00:47:27,320 --> 00:47:29,320 Speaker 1: or wherever you listen to your favorite shows.