Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com Slash podcasts. Mark Zuckerberg's two
Speaker 1: days of testimony on Capitol Hill maybe over, but scrutiny
Speaker 1: over the data leak that sparked the worst crisis in
Speaker 1: Facebook's history clearly is not. There have been increasing calls
Speaker 1: for antitrust action against Facebook. That was echoed in questions
Speaker 1: from Republican Senator Lindsey Graham about whether Facebook was a monopoly.
Speaker 1: The average American uses eight different apps, okay, communicate with
Speaker 1: their friends and stay in touch with people, ranging from
Speaker 1: texting apps, email service. You provide well, we provide a
Speaker 1: number of differences Twitter the same as what you do.
Speaker 1: It overlap the portion. Don't think you have a monopoly.
Speaker 1: It's certainly doesn't feel like that to me. Zuckerberg's answer
Speaker 1: may have gotten a laugh, but it's no laughing matter.
Speaker 1: Joining me is Gary Reback of counsel a car and Ferrell. Gary.
Speaker 1: I'm going to begin by asking what Lindsay Graham was
Speaker 1: basically asking Zuckerberg and never got a straight answer. Is
Speaker 1: Facebook a monopoly? Well, it hasn't been judged a monopoly
Speaker 1: in any case yet the way Google has. But I
Speaker 1: think all the year marks and all the hallmarks are there,
Speaker 1: of course, explain that a little more. Well, the easiest
Speaker 1: way to define a monopoly is the way the Europeans do,
Speaker 1: which is that you can set all your terms of
Speaker 1: sale and your terms of engagement with consumers without even
Speaker 1: considering what competitors might do. And I think that clearly
Speaker 1: describes Facebook, as Senator Graham indicated, Uh, the closest competitors
Speaker 1: to Facebook are now owned by Facebook. That's What's App
Speaker 1: and Instagram. So there's nothing really on the horizon that
Speaker 1: challenges Facebook's hed gemony in social networking. And the notion
Speaker 1: that email as a competitor for a social network platform
Speaker 1: really is risible. I think Zuckerberg was prepared to cite
Speaker 1: competition with China and the overall ad market if asked
Speaker 1: whether Facebook should be broken up. According to a photograph
Speaker 1: that was published by a p of a binder of
Speaker 1: internal notes he took to the hearing, Are those good responses? Uh?
Speaker 1: I think the China part is almost a joke that
Speaker 1: has been raised initially by Google in response to antitrust scrutiny.
Speaker 1: I mean, first Google would say, you don't have to
Speaker 1: worry about us. We have competition from Apple, and then
Speaker 1: they would say we have competition for Facebook from Facebook.
Speaker 1: And now they say we have competition from China. And
Speaker 1: I think sort of all these big tech companies have
Speaker 1: gotten together and decided that in students, instead of shooting
Speaker 1: at each other, they'll just shoot at China. But the
Speaker 1: real issue from an anti trust for perspective, is not China.
Speaker 1: It's having a healthy US economy and a robust competitive
Speaker 1: market and social networking. And I don't think the Chinese
Speaker 1: playing that in any respect. Graham also asked Zuckerberg about
Speaker 1: regulation in Europe, where a new General Data Protection regulation
Speaker 1: or GDP or law is about to kick in. Tell
Speaker 1: us about that. Yeah, Now, of course that's not that's
Speaker 1: a privacy issue and not really an antitrust issue. But
Speaker 1: generally speaking, the Europeans are way ahead of the United
Speaker 1: States on concerns about privacy. They've been investigating breaches by
Speaker 1: Google and by Facebook for quite some time, and there's
Speaker 1: a new law that's coming into effect that essentially requires
Speaker 1: affirmative consent by users before any use of their data
Speaker 1: might be made. And even more than that June, it
Speaker 1: prevents companies from saying take it or leave it. In
Speaker 1: other words, you can't just say, hey, you want on
Speaker 1: my side, you agree to my terms. The point is, uh,
Speaker 1: you want to use user data, You've got to get affirmative,
Speaker 1: knowledgeable consent. There's also another law on the works in
Speaker 1: Europe behind that that would go even further. And the
Speaker 1: big tech companies i am told are law being hard
Speaker 1: against that. The antitrust division of the Justice Department under
Speaker 1: Trump has seemed to be more expansive in attacking mergers.
Speaker 1: We see the trial over the A T and T
Speaker 1: Time Warner merger. Might it look at Facebook? Uh? First
Speaker 1: of all, I think you're quite right that part of
Speaker 1: the unpredictability of the Trump administration is they do seem
Speaker 1: to be enforcing the n trust laws more than the
Speaker 1: Obama administration did. Um. But is Facebook and the crosshres.
Speaker 1: Most of the focus on Facebook. The scrutiny of Facebook
Speaker 1: heretofore has been about privacy, and conversely, most of the
Speaker 1: antitrust scrutiny and high tech has been about Google, and
Speaker 1: so there are Google cases has very far ahead, both
Speaker 1: in the United States and in Europe in terms of
Speaker 1: investigation than anything and I trust wise involving Facebook, I mean,
Speaker 1: I think the first order of business for the new
Speaker 1: Federal Trade Commission when they're confirmed, just what they're going
Speaker 1: to do about the alleged violation of the consent decree
Speaker 1: they had with Facebook. But you know, they would have
Speaker 1: to start a Facebook investigation from scratch. Might they do that?
Speaker 1: Of course they might, is something that's going to happen
Speaker 1: very soon. I doubt it. So the Senators and we're
Speaker 1: talking a lot about regulating Facebook, and you know, it
Speaker 1: looks like regulation is upon us, etcetera. They made all
Speaker 1: these big statements, but what kind of regulation would it take.
Speaker 1: And I'm talking about the monopoly aspect of Facebook as
Speaker 1: well here, what kind of regulation would it take? What
Speaker 1: would it look like if Congress actually did want to
Speaker 1: pass something. Well, I uh, if we're talking about and
Speaker 1: I trust in force spentthon, Congress doesn't really need to
Speaker 1: pass anything. I mean, Congress needs to enforce what's there.
Speaker 1: And as we've discussed in this interview, The way Facebook
Speaker 1: got its dominant market position was that the anti trust
Speaker 1: officials allowed Facebook to buy its too closest competitors. So
Speaker 1: if you were looking at this anti trust wise and
Speaker 1: you wanted to bring a case against Facebook, you'd have
Speaker 1: to point out some anti competitive behavior that that really
Speaker 1: hasn't been focused on yet. But then you would focus
Speaker 1: on what kind of remedy you could get under the
Speaker 1: anti trust laws, which would logically involve spinning off those
Speaker 1: two companies, and it would focus on data. I think
Speaker 1: the Europeans have said that data is a barrier to entry.
Speaker 1: Small companies can't get the necessary data to compete with
Speaker 1: a big company like Facebook, and so if you're going
Speaker 1: to spin off any companies from Facebook, you would spend
Speaker 1: them off with the same database that Facebook currently has,
Speaker 1: making them robust competitors from day one. We have about
Speaker 1: a minute and a half here, Gary. If you look
Speaker 1: in the future, do you see any kind of regulation
Speaker 1: of Facebook in the US on the horizon? In reality,
Speaker 1: when you look at it, you know, I'm having done
Speaker 1: this for many years now, I'm kind of cynical about
Speaker 1: what Congress can do. The the likelihood is that not
Speaker 1: a lot is going to happen. I think I have
Speaker 1: to admit that, um, if something happens, it will be
Speaker 1: the result of an administration of an initiative through the
Speaker 1: Antitrust Division of the Department of Justice or through the
Speaker 1: Federal Trade Commission, not I think through anything that Congress
Speaker 1: has done. Thanks so much, Gary, it's it's been fascinating
Speaker 1: and we will pick up with this, I'm sure again
Speaker 1: in the future. That's Gary reback of car and Beryl.
Speaker 1: President Trump discussed firing Deputy Attorney General Rod Rosenstein with
Speaker 1: White House Aids yesterday. According to a person familiar with
Speaker 1: the matter, Rosenstein is overseeing the Mall investigation, and Trump
Speaker 1: appears to be ratcheting up his personal attacks on Mueller
Speaker 1: this week as well, after an FBI raid on the
Speaker 1: home and office of Trump's personal attorney. William Banks is
Speaker 1: our guest. He's a professor at Syracuse University Law School. Bill.
Speaker 1: We have discussed Trump's threats to fire Mueller in the
Speaker 1: similarity Richard Nixon's Saturday night massacre. Would firing Rosenstein have
Speaker 1: the same basic consequences, Well, it could, June Rosen. He
Speaker 1: could order Rosenstein to to dismiss Mueller. Rosenstein would likely
Speaker 1: decline to do that, because, as we've discussed before, there's
Speaker 1: a Justice Department regulation that says that the Independent Council
Speaker 1: Special Prosecutor can only be dismissed for cause for misseeasons
Speaker 1: in an office, and certainly Mueller can't be reasonably accused
Speaker 1: of that. So but fire Rosenstein? Could he fire Rosenstein? Yes,
Speaker 1: he could do that and then try to replace him
Speaker 1: with someone more inclined to rein in what he views
Speaker 1: as as an investigation that's run off the rails. So
Speaker 1: that would not be as precipitous an action as firing
Speaker 1: Mueller or telling fire Muller. That's right, because after all,
Speaker 1: these are executive branch officials. The President appoints uh these
Speaker 1: officials with the advising consented Senate, so he generally has
Speaker 1: the legal authority to remove them, and to remove them
Speaker 1: for any reason at all, so long as the reason
Speaker 1: isn't an unlawful reason. And here, because Jeff Sessions is
Speaker 1: recused from the from the question surrounding this investigation, then
Speaker 1: it's up to the deputy Attorney general. President doesn't like
Speaker 1: the way the deputy Attorney general, he could do his job.
Speaker 1: He could dismiss him. I think that would be a
Speaker 1: politically very damaging thing for the president to do. But
Speaker 1: of course he uh, you know, he hasn't let that
Speaker 1: stop him in the past and probably won't let that
Speaker 1: stop up him in the future. So Noah Feldman, a
Speaker 1: professor at Harvard Law School and a Bloomberg View Columns,
Speaker 1: has a new column entitled what if Trump fires Muller
Speaker 1: and Mueller says no? And it talks about what might
Speaker 1: happen if Trump tries to fire Muller without rescinding those
Speaker 1: special counsel regulations you just spoke about. Muller is a
Speaker 1: stickler for the letter of the law. Do you agree
Speaker 1: that he would be within his rights and refusing to leave. Well,
Speaker 1: if if Trump attempted to dismiss Muller without following the remove,
Speaker 1: you know, without at first removing Rosenstein and then asking
Speaker 1: Rosenstein's replacement to remove Muller, then I believe yes, it's
Speaker 1: possible that if Trump tried to remove Muller directly, with
Speaker 1: Rosenstein still in place and in violation of the regulations
Speaker 1: that are still the law and the Justice Department, Muller
Speaker 1: might well choose to hold ground and say I'm still
Speaker 1: lawfully in my job and I'm going to continue to
Speaker 1: do my job. And I've seen in Feltman's column in
Speaker 1: that case, you could precipitate a crisis, a very serious
Speaker 1: crisis like the one that was nearly upon us in
Speaker 1: the Nixon administration after the Saturday Night massacre. We there
Speaker 1: are some set to. Senators Lindsey Graham and Tom Tillis
Speaker 1: have put together legislation to protect Mueller's job, but as
Speaker 1: people have pointed out, they would need sixty seven Senators
Speaker 1: and two thirds of the House to override a likely
Speaker 1: veto from President Trump. So what might it be is
Speaker 1: that why the Republicans are sort of hanging back on
Speaker 1: that legislation because it would really put the spotlight on
Speaker 1: on them. Well, they have been hanging back, as you say,
Speaker 1: but certainly the mood has changed in Congress with these
Speaker 1: recent rumblings from the from the White House. I think
Speaker 1: this legislation should have been considered seriously several months ago
Speaker 1: and was left to languish and commits. He if it
Speaker 1: does smoke through committee now in the next week or two,
Speaker 1: as it may, well they'll have a chance to pass it. Certainly,
Speaker 1: even if if it's not capable of surviving a presidential
Speaker 1: veto legislation would send a very strong signal to the
Speaker 1: White House that, you know, disobeying the will of Congress here,
Speaker 1: the majority of Congress, would put Trump in a very
Speaker 1: bad light politically and set up likely grounds for impeachment
Speaker 1: down the road. Bill. You know, we've talked so many
Speaker 1: times about about the possibility that the President might fire
Speaker 1: Muller and the different things he might do. He hasn't
Speaker 1: done any of that yet. But does it seem to
Speaker 1: you that this ratcheting up of his you know, of
Speaker 1: his tweets against Mueller, direct personal attacks, now that it
Speaker 1: might lead to something, might lead to something. I think
Speaker 1: the other road that that the President might choose to
Speaker 1: take care as the pressure increases now with Michael Cohen
Speaker 1: under investigation, is to begin issuing pardons and to try
Speaker 1: to clear the the way for himself by pardon he
Speaker 1: knows who would otherwise be inclined to provide evidence that
Speaker 1: could be used against him, if not in a court
Speaker 1: of law eventually in an impeachment inquiry. Would those pardons
Speaker 1: be looked at It's obviously he has the power to pardon,
Speaker 1: but would those pardons be looked at as an obstruction
Speaker 1: another obstruction of justice. They could they could down the road.
Speaker 1: He as you say, clearly has a constitutional power to pardon.
Speaker 1: But but if information comes out, uh, either before the
Speaker 1: issuance of those pardons or after them in some other way,
Speaker 1: then that information would be available to Congress to use
Speaker 1: for its own purposes, as a political purposes. The impeachment,
Speaker 1: of course, is a lawful process, but it's primarily driven politically,
Speaker 1: so that could happen. And it's also you know, we
Speaker 1: should remember in the case of Colin as well as
Speaker 1: others who can under investigation, there's a possibility, even after
Speaker 1: a pardon, that state governments, through their attorneys general, could
Speaker 1: pursue charges against those who've been under investigation. The pardon
Speaker 1: wouldn't affect the possible availability of state criminal prosecution, so
Speaker 1: the information could come out that way. And we know
Speaker 1: that Mueller is has already been working in concert with
Speaker 1: the New York AG, so that seems likely. Thanks so much, Bill,
Speaker 1: that's William Banks, the professor at Syracuse University Law School.
Speaker 1: Thanks for listening to the Bloomberg Law Podcast. You can
Speaker 1: subscribe and listen to the show on Apple Podcasts, SoundCloud,
Speaker 1: and on Bloomberg Dot com Slash Podcast. I'm June Brosso.
Speaker 1: This is Bloomberg