Speaker 1: Also media, I get on their ass. Somebody's got to
Speaker 1: do it. This is better offly and I'm d Zetron.
Speaker 1: Today I'm joined by the wonderful Jason Kint, who has
Speaker 1: been at the Google ads trial and multiple other FDC
Speaker 1: and DOJ related trials as well. Now, last week we
Speaker 1: have wonderful news the Department of Justice won their ant
Speaker 1: trust trial against Google saying they have a monopoly of
Speaker 1: our ad tech. This is a wonderful time. And Jason,
Speaker 1: of course last year was here for multiple episodes with
Speaker 1: us to walk us through the trial. He was there
Speaker 1: in person. Jason, how are you doing.
Speaker 2: I'm good, thank you. It's good to see decisions starting
Speaker 2: to come in from the courts on what we've been
Speaker 2: talking about.
Speaker 1: And just to be clear, Jason as the CEO of
Speaker 1: Digital Content Next, I did not say that The Top
Speaker 1: the professional podcast run by a professional, but soll us
Speaker 1: through what the verdict was.
Speaker 2: This is the ad tech case against Google that was
Speaker 2: in Virginia, to remind the listeners, and it was around
Speaker 2: Google having market power and monopoly power on the buy side,
Speaker 2: the cell side and in the exchange and then illegally
Speaker 2: using that monopoly power. The decision from the judge was
Speaker 2: that mostly in agreement with the plaintiffs, and it was
Speaker 2: a big win for the Justice Department, who worked really
Speaker 2: hard on this case. That they have monopoly power in
Speaker 2: the exchange, so where the auctions actually happen, and then
Speaker 2: on the publisher side with the ads server marketplace that
Speaker 2: determines what ads land on the page, and that they
Speaker 2: illegally tied those two products together. So the only part
Speaker 2: of the decision, which I think Google's trying to make
Speaker 2: to be a bigger deal than it probably is, is
Speaker 2: that they the judge did not agree that there was
Speaker 2: this market on the buy side the way it was defined.
Speaker 1: And so what does that mean in simple in.
Speaker 2: Simpler terms, it could affect where remedies go because there
Speaker 2: is not a finding that they illegally use monopoly power
Speaker 2: on the buy side with advertisers buying ads, and so.
Speaker 1: Just they owned the technology to sell the ads and
Speaker 1: the ways in which it was like, I guess.
Speaker 2: Yeah, they still it's true that they have significant influence
Speaker 2: because they have they're the largest player on the buy
Speaker 2: side of ads, so where advertisers are actually buying the ads,
Speaker 2: but not that they She didn't find that they that
Speaker 2: there was a form legal market there that they abused,
Speaker 2: and so as we go through remedies discussions, I think
Speaker 2: it's probably it might be less likely that there's some
Speaker 2: sort of structural separation where they need to divest the
Speaker 2: buy side too, although all this stuff's frankly going to
Speaker 2: get tangled together and it will be a whole new
Speaker 2: ball game with remedies, especially with search meedies going on
Speaker 2: this week too.
Speaker 3: So go ahead.
Speaker 1: I was going to say, so, what are the remedies
Speaker 1: that the Department of Justice is actually seeking.
Speaker 2: Here on the ad tech case? On this case, it's
Speaker 2: a structural separation of their roles in the ad tech marketplace,
Speaker 2: and so that was very clear coming into the into
Speaker 2: the trial.
Speaker 1: So just break it down for me, though, what they
Speaker 1: How would they break up Google in its current form?
Speaker 1: Is that even possible?
Speaker 2: I mean yes, absolutely in the in the simplest way
Speaker 2: would be forcing Google to divest, which probably would mean
Speaker 2: spinning off to its shareholders rather than selling because it's
Speaker 2: going to be such a valuable asset.
Speaker 3: But actually a separate company.
Speaker 2: A separate company that is the ad server marketplace. Yeah,
Speaker 2: and in the exchange itself too.
Speaker 1: So so dumb guy question for you, what is an
Speaker 1: AD server in this case? Like, how how does this
Speaker 1: actually break down?
Speaker 2: It's the you know, it's the technology that sits on
Speaker 2: the web pages or on the public sure side, that
Speaker 2: actually makes the decision on what ad to serve on
Speaker 2: the page. So when you're browsing a web page or
Speaker 2: on an app, it's what's deciding to serve the ad.
Speaker 1: And so Google ran that themselves. They like, they ran
Speaker 1: that themselves, So they ended up prioritizing their own ads.
Speaker 2: I'm guessing yes, that's that's the case. And so and
Speaker 2: you know, in the findings, what's really interesting is that
Speaker 2: the judge very much agreed with and understood that Google's
Speaker 2: illegal conduct in terms of how they were able to
Speaker 2: manipulate auctions in ways that probably favored them and certainly
Speaker 2: harmed the publishers was a part of the finding.
Speaker 1: So, yeah, when they when you say they harmed the publishers,
Speaker 1: is it just the it wasn't possible to compete with
Speaker 1: Google on ads because Google both made ads and then
Speaker 1: had the platform that showed the ads to people.
Speaker 2: You know, she she hit on a number of things
Speaker 2: that I think are gonna be super interesting in the remedies.
Speaker 2: She hit on that Google was able to keep charging
Speaker 2: twenty percent of the exchange market, so they could take
Speaker 2: twenty percent of every single transaction, and that that price
Speaker 2: never moved from twenty percent for the most part because
Speaker 2: of their monopoly power. But she also hit on all
Speaker 2: the ways that they could manipulate the auctions, which could
Speaker 2: end up being that's a bigger issue when you start
Speaker 2: thinking about the private lawsuits they're out there too. You
Speaker 2: get into, you know, literally tens of tens of billions
Speaker 2: of dollars of potential harm to publishers from auction manipulations.
Speaker 1: And how were they manipulating your auctions?
Speaker 2: Just so we understand, well, the allegations were that and
Speaker 2: this in what she addressed in the opinion were things
Speaker 2: like first look and last look where they actually were
Speaker 2: able to see the prices ahead of time or at
Speaker 2: the end of the auction and make decisions based on
Speaker 2: the bids that they uniquely were able to.
Speaker 3: Do, which is.
Speaker 1: Which is so insane that they were able to like
Speaker 1: they basically set prices like get to everyone to bid
Speaker 1: and then just immediately beat them. Like it's it's shocking,
Speaker 1: that's the thing.
Speaker 3: It's kind of flagrant.
Speaker 2: So with last Look, I think, you know, I think
Speaker 2: I've hit on two things here. One of the last look,
Speaker 2: which I think the judge very much understood because I
Speaker 2: can remember her, you know, who was completely new to
Speaker 2: this marketplace. She totally got why that was an issue
Speaker 2: when she you know, last look. If you take to
Speaker 2: like a silent auction where you put your little bids
Speaker 2: down in an envelope and everybody has kind of their
Speaker 2: secret bid, this would be like Google. Then at the
Speaker 2: end was able to look at everybody's bid, see what
Speaker 2: the highest bid was, and then bid higher if they wanted.
Speaker 2: That was last Look, And there were a bunch of
Speaker 2: other things that stemmed from that, and she really seemed
Speaker 2: to understand it, which is what is it's you know,
Speaker 2: it's nice to.
Speaker 1: See so kind of impressive to see a judge just
Speaker 1: pick up an entire subject.
Speaker 3: Matt to like that.
Speaker 2: Yeah, I totally agree. You know what, who I'd be
Speaker 2: should be most scared, frankly by this opinion, is if
Speaker 2: I'm Facebook or Meta, who is like counting on this
Speaker 2: idea that the judge in their case doesn't know or
Speaker 2: use social media and TikTok and Instagram, et cetera. It
Speaker 2: tells you once again that a judge that understands the
Speaker 2: law and sits there for four weeks plus all the
Speaker 2: pre trial stuff and listens to the evidence can understand
Speaker 2: these issues. And the most important greening I think was
Speaker 2: the Justice Department who really understood the case in a
Speaker 2: way that they could dive deep and then explain it
Speaker 2: to the judge. And they succeeded to do that.
Speaker 1: So it kind of reminds me so during some of
Speaker 1: the Google ads trial things you talked about the spaghetti thing,
Speaker 1: when they are trying to do this kind of slight
Speaker 1: of hand thing and like, ah, it's too impossible to understand,
Speaker 1: it's too complex, and they turned it into that ridiculous thing.
Speaker 2: That's right, they did, And yeah, and that tells you
Speaker 2: that that is not going to be a successful defense.
Speaker 2: Is trying to confuse a judge who has never used it,
Speaker 2: we would understand add tech, that's not going to work.
Speaker 2: The just departments succeeded and explaining it. They kept it simple.
Speaker 1: So what happens next? What are the next moves with
Speaker 1: this pub Well.
Speaker 2: A reminder, this is what's called the rocket docket. The
Speaker 2: Virginia District Eastern District of Virginia. And so the judge
Speaker 2: moved really really fast. That's why they have that name.
Speaker 2: This case was filed in January of twenty twenty three,
Speaker 2: and so we got to a trial, you know, eighteen
Speaker 2: months later, in a decision that took you know, frankly,
Speaker 2: the decision took a lot longer than anyone thought it
Speaker 2: was going to take to come out. People are starting
Speaker 2: to get nervous, but you know, it just took time.
Speaker 2: And she clearly wrote a really clear opinion and it's
Speaker 2: very it's very easy to read through. So that keeping
Speaker 2: in mind, I think she'll probably move fast. They have
Speaker 2: a meeting. I think it'll be tomorrow in terms of
Speaker 2: what's the schedule going forward for remedies, and so I
Speaker 2: would expect the dates to all be in the next
Speaker 2: few months.
Speaker 3: But what would the remedies be?
Speaker 1: So they would have to break off the three parts,
Speaker 1: like the AD side, they would have to break off
Speaker 1: the cell side, Like.
Speaker 3: What are they going to have to do in theory?
Speaker 3: I realize you're just guessing.
Speaker 2: I'm just guessing. You know that the findings are clear
Speaker 2: enough that there's going to be structural separation that they're
Speaker 2: going to be pushing for you know, how the buyside
Speaker 2: gets handled, it's going to be really important because a reminder,
Speaker 2: and this doesn't come out really in the proceedings as much,
Speaker 2: but the ad tech case is downstream from the Search case,
Speaker 2: and the arguments were that the reason Google was able
Speaker 2: to dominate the buy side, the cell side, and ad
Speaker 2: tech was because of the monopoly power in search, which
Speaker 2: we also have remedies now that started on Monday, and
Speaker 2: so these things are going to start to swirl together.
Speaker 2: And when you think about Google having to divest Chrome
Speaker 2: and some of the other remedies within the search case,
Speaker 2: it's you know, it's quite possible that there will be
Speaker 2: some larger settlement that will be proposed, or a larger
Speaker 2: structural separation that needs to play out between the two decisions.
Speaker 1: So as as you've been hinting at, there was the
Speaker 1: there was the verdict last year that Google did have
Speaker 1: a monopoly over search. How do you think that these
Speaker 1: two things are going to play together? You kind of
Speaker 1: got it there, But what are the ways in which
Speaker 1: this could go?
Speaker 2: Well, the search decision was not There were two monopolies
Speaker 2: that they were found of abused. One was searched. The
Speaker 2: other was search text ads. So it's the ads that
Speaker 2: we see in search, which is Google's largest business, right
Speaker 2: And so.
Speaker 1: Just so I'm clear, you're saying that there's the monopoly
Speaker 1: over a search engine and then the advertising onset search.
Speaker 2: Engine exactly, and so and that advertising on said sir,
Speaker 2: that advertising on said search engine is is what allowed them,
Speaker 2: according to the JUST Department, to then dominate in the
Speaker 2: ad tech stack. And so I think that's the connection
Speaker 2: point between the cases and will also start to be
Speaker 2: a part of the discussion in the remedies. Both cases
Speaker 2: involve network effects. Both cases involve using data to to
Speaker 2: maintain market power and to abuse it.
Speaker 1: Right, So the potential remedies, it sounds like, could be
Speaker 1: almost breaking up Google into multiple different companies.
Speaker 2: With this case, the the baby bells, you know, idea
Speaker 2: of what happened to AT and T should be much.
Speaker 3: More happily than to several listeners.
Speaker 2: They divided AT and T up into into pieces and
Speaker 2: so so you know, not just forcing them to vest
Speaker 2: one piece of their business. And so you know, with
Speaker 2: the ad tech case, again there's you know, there's settlements
Speaker 2: that can happen, there's appeals that will happen. But the
Speaker 2: argument for you know, should Google have to divest not
Speaker 2: just its advertising ad tech business, but also you know,
Speaker 2: other areas of its business, I think becomes much stronger.
Speaker 2: You can imagine Chrome, you can imagine Android, you can
Speaker 2: imagine YouTube.
Speaker 3: Yeah. Actually, here's a good question for you.
Speaker 1: I I know Chrome, and I'm sure many listeners know
Speaker 1: Chrome as a free browser, not really a business entity.
Speaker 1: How does selling off Chrome meaningfully help with the monopoly
Speaker 1: situation Chrome?
Speaker 2: You know, Google's entire advertising business is based on targeting
Speaker 2: ads based on signals that it in, data that it
Speaker 2: gathers from the various ways that it can touch the user.
Speaker 2: And so Chrome as a web browser is an incredible
Speaker 2: way to harvest data about how you're browsing the web
Speaker 2: and where you are location, search, et cetera. And so
Speaker 2: you know where Google believes it has permission to use
Speaker 2: that data to target ads and train its into its
Speaker 2: machine learning and AI training. That is very valuable.
Speaker 1: I did so, wait, so this is perhaps I'm very stupid.
Speaker 1: So Chrome collects data on your browsing habits for every user.
Speaker 2: Now, for every user, there's there's privacy, you know, settings
Speaker 2: and all sorts of things you can do. You can
Speaker 2: go into incognito mode. But if Google is acting as
Speaker 2: your browser, it has access to your browsing history and
Speaker 2: what you're doing on the web, and they can, where
Speaker 2: they believe they have the rights, they can use that data.
Speaker 2: Two help you know, provide further information on both both
Speaker 2: for search but also for you know, what content to
Speaker 2: serve up and what adds to serve up. What they're
Speaker 2: actually doing becomes a bigger question.
Speaker 1: Right, So was that established a whole trial not.
Speaker 2: It was in the search in the search case that
Speaker 2: but it was more specifically focused on the default settings
Speaker 2: for search from the browser, right. And so within Chrome,
Speaker 2: if you type in your location bar, you're always going
Speaker 2: to be doing a Google search. That's it's pretty clear
Speaker 2: that how that le then gets passed from the browser
Speaker 2: to the search engine.
Speaker 1: Yeah, and if they have billions of users, then they
Speaker 1: can think everyone is searching using Google because they have
Speaker 1: because it's the default. That's so crazy. But the thing
Speaker 1: with Chrome as well, isn't a revenue driver? Is that
Speaker 1: like a direct source of revenue for Google?
Speaker 2: You know, it's if you if you think about the
Speaker 2: search case again, I mean Google is paying Apple, you know,
Speaker 2: twenty five billion dollars. Let's say I'm estimating twenty It
Speaker 2: was twenty billion a few years ago, but let's say
Speaker 2: twenty five billion dollars. They were paying to Apple to
Speaker 2: be the default search on Safari and all of the
Speaker 2: access points on iOS. So Chrome technically is making revenue
Speaker 2: off of those search queries. It's just Google's pain itself, right,
Speaker 2: And so that's the that's the issue.
Speaker 1: Well, the reason I bring that up is one of
Speaker 1: the remedies the idea of selling Chrome off. Why would
Speaker 1: you like, what value would that be in Chrome? If
Speaker 1: the whole value of it is to just be kind
Speaker 1: of a flume towards Google, like a like a kind
Speaker 1: like a way to like almost like a marketing arm
Speaker 1: of Google. If you sold off Chrome, surely it wouldn't
Speaker 1: have as much business value.
Speaker 2: It wouldn't have as much business value to Google. The
Speaker 2: whole point would be it be an independent business that
Speaker 2: would be making decisions. I mean, technically a browser is
Speaker 2: supposed to be a user agent. It's supposed to be
Speaker 2: making decisions for the user. And what would they.
Speaker 3: Value right.
Speaker 1: As an autonomous business? Like yeah, because right now is
Speaker 1: it's not like people pay for creat It just doesn't
Speaker 1: feel like that is a practical thing to do, because
Speaker 1: if the whole value proposition of it is that it's
Speaker 1: a free product that makes Google money and it doesn't
Speaker 1: make any money for anyone else, or like it isn't
Speaker 1: you know what I mean?
Speaker 2: Yeah, so it could make a decision to point to
Speaker 2: you know, a new Amazon search site or sure that
Speaker 2: gets into search, right and so and get paid.
Speaker 3: For it, right Yeah.
Speaker 1: I mean it almost feels like this could lead to
Speaker 1: I don't want I'm not going to say the death
Speaker 1: of Google in the sense that Google will cease to be,
Speaker 1: but the death of modern Google as we know it.
Speaker 2: It definitely, you know, all leads towards a very different Google,
Speaker 2: whether it be structurally different or just being hamstrung by
Speaker 2: the appeals of all these cases.
Speaker 1: So, I mean, it's they. I cannot think of anyone
Speaker 1: who got more lucky than it being good Friday than
Speaker 1: Google right now, because it's good, we're recording this a
Speaker 1: good Friday. And it's like they didn't like the markets
Speaker 1: are closed, so they didn't immediately get the markets just
Speaker 1: pummeling them as they should because they've lost both now
Speaker 1: they don't like whatever appeals they may do, are not
Speaker 1: going to really, I don't think they're going to stop everything.
Speaker 2: Markets are complex, I would I would hesitate to wonder
Speaker 2: and you know, to predict why the stock did what
Speaker 2: it did yesterday, even when the announcement came out. You know,
Speaker 2: there are some arguments that having to divest, you know,
Speaker 2: divest parts of the business could actually create more value
Speaker 2: back to shareholders.
Speaker 3: What value would that be?
Speaker 2: Well, typically when you spin things off, you often see
Speaker 2: it or you sell things, often the stock you know,
Speaker 2: can go up because of that. And so you know,
Speaker 2: are the is the some of the parts worth more
Speaker 2: than than the whole? You know, those questions all come
Speaker 2: into play, But that's all. Yeah, that's all to the markets.
Speaker 2: And sometimes the markets aren't as smart as we think
Speaker 2: they are, and they take time to understand and impact things.
Speaker 1: Yeah, I agree, and I've seen the same thing with
Speaker 1: Core Weeve recently, which is a company that has driven
Speaker 1: me insane onto more sane things. Though, So when we're
Speaker 1: recording this, it's going to be next week, but the
Speaker 1: beginning of the remedies for the search trial is on
Speaker 1: the twenty first, So what can people expect there?
Speaker 2: I don't think there's gonna be as much excitement and
Speaker 2: drama as we saw with the actual liabilities trial. I think,
Speaker 2: you know, for the folks that follow the industry closely,
Speaker 2: what you should expect is all the AI companies are
Speaker 2: involved and so either through depositions, discovery, and some testifying.
Speaker 2: So you've got anthropic open AI Microsoft. So when you
Speaker 2: think about the shaping of the AI world going forward,
Speaker 2: you're going to have all the major players. Apple is
Speaker 2: Apple tried to actually intervene, and but the judge didn't
Speaker 2: allow them. So they've they've got a strong interest because
Speaker 2: they've got estimated to be I think ten to fifteen
Speaker 2: percent of their profits are tied to their Google deal.
Speaker 1: Right, and so well, because Google pays them to use
Speaker 1: just just for the listeners, so Google pays Apple billions
Speaker 1: have to be the default such, right, That's right, and.
Speaker 2: The you know, the remedies are that they can't do
Speaker 2: that anymore. And so the reason they weren't allowed to intervene,
Speaker 2: according to Judge Meta, was because he didn't see a
Speaker 2: difference in Apple's interests from Google's interests. He basically said, yeah,
Speaker 2: you have the same interest.
Speaker 1: Yeah, well, I mean the interest being the Apple needs
Speaker 1: Google to keep them and not police so that the
Speaker 1: Apple can keep getting a chunk of their revenue.
Speaker 2: That's exactly right. Yeah, so yeah, so Apple cares a lot,
Speaker 2: Microsoft cares a lot, All the big players care. The
Speaker 2: testimonies is going to be X, a lot of experts
Speaker 2: and you know, unless CEO.
Speaker 1: Who will be doing the testimonies.
Speaker 2: It'll be experts from both sides, like so academics that
Speaker 2: study these issues. It will be executives from the AI companies.
Speaker 2: I think we'll probably hear from Eddie Q again at Apple,
Speaker 2: who's one of their top executives. We'll probably hear from
Speaker 2: Suon Dharbashi again from Google as CEO. They're on the list.
Speaker 1: So and so in those two weeks, what's going to happen.
Speaker 1: So it's basically another trial to say how they will
Speaker 1: deal with their monopoly in search.
Speaker 2: That's right, And well, I mean, I guess one thing
Speaker 2: that's interesting is they're still pretty far apart. So Google's
Speaker 2: proposed remedies for itself are basically a slap on the wrist,
Speaker 2: and you know, kind of kind of embarrassing for anybody,
Speaker 2: and you know that studies they think.
Speaker 3: So when you said up on the wrist.
Speaker 1: Is it like a fine that offering.
Speaker 2: They're offering some restrictions on the way they do things,
Speaker 2: but nothing that touches on structural separation in any way,
Speaker 2: shape or form. Nothing that prevents them from doing an
Speaker 2: Apple like deal. And so it's, you know, the bare minimum.
Speaker 2: That the only way I can read it, and I'm
Speaker 2: just you know, spitballing here, but is that they're not
Speaker 2: giving it an inch right now because they think either
Speaker 2: they can do some sort of transactional deal settlement with
Speaker 2: the current administration or that they can win on appeal,
Speaker 2: and they don't want to show their cards by moving
Speaker 2: the line in any way because it's so far removed
Speaker 2: from the decision itself.
Speaker 1: Right, because if they go defensive, then they would cut
Speaker 1: they would kind of reveal their hand for when they
Speaker 1: go to appeal.
Speaker 3: You're saying that's right, that's right.
Speaker 1: And so is the Department of Justice. The Department of
Speaker 1: Justice is saying they should sell off Chrome or is
Speaker 1: that anything else they're asking for?
Speaker 2: They should sell off Chrome, and they're struck, you know,
Speaker 2: divest Chrome. They may need to divest Android, but it
Speaker 2: basically says, let's see how that goes, but we can
Speaker 2: still do that, and then very importantly, they're requiring them
Speaker 2: to share some data with other search engines that would
Speaker 2: help other search engines have a more level playing field.
Speaker 2: And as it relates to publishers, who again I do
Speaker 2: a lot of work for the work for the publishers,
Speaker 2: it requires Google to allow publishers to narrowly define what
Speaker 2: Google can crawl and use data for. And so the
Speaker 2: publisher can say, hey, you can crawl my website for
Speaker 2: the purpose of search, but you cannot then use it
Speaker 2: to train your your AI engines.
Speaker 1: So yeah, and so that the DO is pushing to
Speaker 1: make sure that's the case.
Speaker 2: The DJ is very smartly understanding that if they don't
Speaker 2: put real constraints on Google round AI, then they're only
Speaker 2: addressing past behavior, but they're not actually making sure that
Speaker 2: there's a level playing you field going forward in which
Speaker 2: people won't be able to just abuse and run over
Speaker 2: the AI marketplace too.
Speaker 1: It really feels like we're kind of on the precipice
Speaker 1: of something changing in the next few years with the web,
Speaker 1: because if Google has to even share data from search,
Speaker 1: that will change, like we will get competition in search
Speaker 1: for the first time really meaningfully in decade, like decades.
Speaker 1: I guess it's like since the lycost and old Tavista
Speaker 1: days because these two cases are so inherently intertwined.
Speaker 2: Absolutely, yeah, and don't and don't shot change Gopher or
Speaker 2: web crawler in that Yeah, but yeah, there hasn't been
Speaker 2: other search engine since the late nineties.
Speaker 1: Oh yeah, Oh no, I said, I think I said excite, like, yeah, okay,
Speaker 1: changing changing gis before we wrap up. You've been at
Speaker 1: the FTC case with Meta. How's that going? And also
Speaker 1: what is that about?
Speaker 2: So that is about whether or not when Meta and
Speaker 2: Facebook at the time acquired Instagram and WhatsApp, that they
Speaker 2: were doing that to maintain their monopoly power in a
Speaker 2: market for personal social networking services. And so that's that
Speaker 2: is actually explicitly to break up Meta, so force them
Speaker 2: to divest WhatsApp and Instagram. And the testimony I saw
Speaker 2: was Mark Zuckerberg, the CEO, who was on the stand
Speaker 2: for roughly seven or eight hours, which is a lot
Speaker 2: for any CEO. He's he's the key witness, and so
Speaker 2: now they're rolling into the other witnesses. I think it's
Speaker 2: going well to answer your question, Yeah.
Speaker 1: So what are some of the highlights of things that
Speaker 1: Marcky Mack said.
Speaker 2: He you know, he confirmed there's a lot of emails
Speaker 2: in that case, and unlike the Google case, where there
Speaker 2: was real problems with preservation of evidence and there were
Speaker 2: emails that were in messaging that were deleted and all
Speaker 2: sorts of things that by the way, Google's Kent Walker
Speaker 2: got slammed by the judge for for not preserving evidence
Speaker 2: for like the third or fourth time.
Speaker 1: Now, and you mentioned that Jurigar interviews as well, that
Speaker 1: the judge pissed about this.
Speaker 2: The judge was pissed and it came out in her opinion. Yeah,
Speaker 2: that's abuse of attorney client privilege. She basically said. The
Speaker 2: only the way I read it was the only reason
Speaker 2: I'm not sanctioning you is because I found you liable
Speaker 2: of breaking the Sherman Act. So and that's kind of
Speaker 2: what happened in the Search case too, and it's kind
Speaker 2: of in the app Store case they did get sanctioned.
Speaker 2: So there's the third anti trust uh loss that Google
Speaker 2: has in which they've been you know, nailed by the
Speaker 2: judge and they've got more trials coming, so it's it's
Speaker 2: a problem for them. And so the difference the flip
Speaker 2: side of that is that Facebook and Meta. You know,
Speaker 2: there's a wealth of emails, and you know, Mark clearly
Speaker 2: ran the company very tightly and drove the product decisions
Speaker 2: very tightly, and he documented a lot of that in emails,
Speaker 2: and some of them are pretty damning, you know. I
Speaker 2: think the one that has always gotten the most attention
Speaker 2: is emails where he discussed why would we buy Instagram
Speaker 2: and focused in on the reasons of neutralizing a competitor
Speaker 2: and buying time. So neutralizing Instagram and buying time, and
Speaker 2: a lot of the contemporary contemporaneous evidence shows that they
Speaker 2: were very, very concerned over one year to eighteen month
Speaker 2: period where Facebook was behind and moving to mobile, Instagram
Speaker 2: was growing very very quickly, and they had screwed up
Speaker 2: by building the Facebook app for HTML five that's a
Speaker 2: technical thing, instead of their own native app, and they
Speaker 2: were freaking out. And there's a lot of emails about that.
Speaker 3: That's fascinating.
Speaker 1: So really kind of returning to what I was saying
Speaker 1: previously as well, it feels like the results of these
Speaker 1: trials could just fundamentally rebuild the web because if Instagram
Speaker 1: was competitive with Facebook, by which I mean they had
Speaker 1: to spin it off and make it its own company,
Speaker 1: and Google could no longer monopolize all the parts of
Speaker 1: the ads. It's going to change the economics of everything
Speaker 1: underlying the Internet because the Internet is mostly paidful by ads.
Speaker 2: That's right. That last parts really really important that you're
Speaker 2: making is Yeah, we're talking about a lot of the
Speaker 2: user behaviors and stuff. But there's one hundred and whatever
Speaker 2: forty billion dollars of US digital advertising that goes to
Speaker 2: those two companies I would get estimating. And so most
Speaker 2: of the growth in digital advertising over the last decade
Speaker 2: has gone to Google and Facebook in some way, shape
Speaker 2: or form. And so, how does it affect the advertising business?
Speaker 2: Becomes really really important to all.
Speaker 1: Us, and the way it would affect it is it
Speaker 1: could be cheaper for advertising, but it could also be
Speaker 1: more chaotic because especially with metas advertising products. From what
Speaker 1: I understand, it's like almost the equivalent of Google MACS
Speaker 1: in that you put you give meta money and it
Speaker 1: goes into the greater metaverse. I don't mean I mean
Speaker 1: that with a cap Yeah, damn, I can't say that shit,
Speaker 1: but goes into the data meta series of products in
Speaker 1: the same way that Google MACS. You put money in
Speaker 1: and it goes across all of Google's stuff. That being
Speaker 1: broken up would be like Google like ninety something percent
Speaker 1: of metas revenue is ads as well, Like this was
Speaker 1: right destroy the company potentially.
Speaker 2: Yeah, they you know, they're ninety six ninety seven percent
Speaker 2: of their business is advertising, and so you imagine a
Speaker 2: world where advertisers are buying through a different buy platform
Speaker 2: or a neutral one. Let's call it a neutral one
Speaker 2: that actually can buy ads on Instagram versus the Facebook
Speaker 2: app and actually make decisions on that in real time
Speaker 2: of what's best for the advertiser.
Speaker 1: I feel like they're also have to compete for business
Speaker 1: in the way they've never had to, like justify their
Speaker 1: business and provide analytics that they don't already.
Speaker 2: I've always asked a question of like when Facebook started
Speaker 2: to you know, really getscribed as a toxic waste jump
Speaker 2: in like put like twenty eighteen, twenty nineteen, where they
Speaker 2: started to just run into some real difficulties like Instagram.
Speaker 2: If I were Instagram, I would act differently if I
Speaker 2: wasn't part of the of the larger corporation, right, and
Speaker 2: they probably Instagram would have put the screws to Facebook
Speaker 2: at that time and vice versa, you know, and so
Speaker 2: it really changes the dynamic of those two platforms where
Speaker 2: they're actually having to compete with each other, both for
Speaker 2: users and for ads. The parent company, the brand is
Speaker 2: you know, one of the least you know, according to
Speaker 2: like the Axios Reputation survey, it's like number ninety nine
Speaker 2: or something like that in the hundred brands. So like,
Speaker 2: the brand is significantly challenged despite the success of the company.
Speaker 1: So so as we wrap up it almost I know
Speaker 1: that we like this show is not necessarily the most optimistic,
Speaker 1: but I kind of feel a little optimistic seeing all
Speaker 1: of this stuff. It feels like there could be a
Speaker 1: better Internet that comes out of it.
Speaker 2: I agree with that, and I also, you know, make
Speaker 2: a broader point that it does make me optimistic to
Speaker 2: see courts doing what they're supposed to be doing, judges
Speaker 2: actually understanding the complexity of technology, having you know, attorneys
Speaker 2: that can describe it to the courts in a way
Speaker 2: that that you know, can be applied to anti trust
Speaker 2: law that's been around for more than a century. And
Speaker 2: by the way, it should be said too that these
Speaker 2: cases were brought by the Trump administration through a Biden
Speaker 2: administration administration. Now they're being enforced and we're getting decisions
Speaker 2: under a Trump administration again. So they're incredibly bipartisan. And
Speaker 2: I had a chance to testify a few weeks ago
Speaker 2: in front of the Anti Trust Committee and that was
Speaker 2: incredibly bipartisan too. And so these are these are issues
Speaker 2: that stretch across the parties, that are pretty unique in
Speaker 2: this in this current moment, and it.
Speaker 1: Kind of feels like that the Dumerists out there are saying, oh,
Speaker 1: he'll they'll just pay off Trump. But and it doesn't
Speaker 1: even feel it feels like the administrations, both of them
Speaker 1: kind of have the same willingness to.
Speaker 3: Do this, that's right. I mean the Wall Street Journal
Speaker 3: report basically we don't know.
Speaker 2: Well, yeah, but the Wall Street General reported that that
Speaker 2: Mark Zuckerberg met with the Trump with Trump administration or
Speaker 2: Trump himself I think three times in the last few
Speaker 2: months and offered to settle for four hundred and fifty
Speaker 2: million dollars and the FCC wanted thirty billion dollars. And
Speaker 2: so you can see that there's a pretty pretty big
Speaker 2: delta between the two. And I think the Trump administration
Speaker 2: understands why these issues are issues regardless of party in
Speaker 2: politics and too much power in the hands of you know,
Speaker 2: too little people is always.
Speaker 1: A problem, so can the greenlaw. All right, Jason, where
Speaker 1: can people find you?
Speaker 2: They could buy me on Twitter, Jason Underscore kids on
Speaker 2: Blue Sky. They can always email me at dcn's website.
Speaker 2: I'm around, I'm always looking to engage, so.
Speaker 3: Thank you very much.
Speaker 1: Such a pleasure to have you, sir. And you can
Speaker 1: of course find me on the internet at Google the
Speaker 1: man who killed Google Search. That's how you find me.
Speaker 1: This has been Better Offline. I'm at Zitron.
Speaker 3: Thank you.
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