Speaker 1: This is Bloomberg Law with June Brussel from Bloomberg Radio. Today,
Speaker 1: the Department of Justice, joined by eight states, file a
Speaker 1: civil antitrust lawsuit in the United States District Court for
Speaker 1: the Eastern District of Virginia against Google. Attorney General Merrick
Speaker 1: Garland announced on Tuesday that the Justice Department is suing
Speaker 1: Google for antitrust violations, accusing the search giant of using
Speaker 1: its dominant position in the online ad industry to box
Speaker 1: out competitors. Google has engaged an exclusionary conductor, severely weakened,
Speaker 1: if not destroy competition in the ad tech industry. It's
Speaker 1: a high stakes attempt to break up Google's ad tech business,
Speaker 1: one of the few times the government has called for
Speaker 1: the breakup of a major company. In response, Google said
Speaker 1: the lawsuit attempts to pick winners and losers in the
Speaker 1: highly competitive advertising technology sector. Joining me is Bloomberg Intelligence.
Speaker 1: Senior litigation analyst Jennifer ree Gent tell us a little
Speaker 1: about the government's case against Google. So, the government's case
Speaker 1: is actually very much like an ongoing case that's already
Speaker 1: been in litigation for a couple of years now, that
Speaker 1: was brought by a group of states led by Texas,
Speaker 1: and both of these losses cover what they call the
Speaker 1: ad text stack, and the ad tex stack is a
Speaker 1: series of products that are used basically by advertisers and
Speaker 1: by publishers for placing advertisements online. When somebody opens up
Speaker 1: a website, you know, we don't know what. We opened
Speaker 1: a website and we see all these advertisements, but there's
Speaker 1: this complex series of transactions that happen to place that
Speaker 1: ad there and to figure out what add to place
Speaker 1: depending on who the user is. And there are tools
Speaker 1: on the publishers side and their tools on the advertiser
Speaker 1: side that they use, and then there's an exchange where
Speaker 1: they kind of come together to auction on the space
Speaker 1: and the ads that are available. And so the allegation
Speaker 1: here is that Google has slowly bought in to each
Speaker 1: of these tools all the way across that chain and
Speaker 1: at this point have dominance, you know, all the way
Speaker 1: across from publisher to advertiser. And they did it by
Speaker 1: buying products and then also by engaging an anti competitive
Speaker 1: conduct that kind of blocked out the rivals that were
Speaker 1: out there that we're able to compete, and they now
Speaker 1: have dominance across this whole chain of products the complaints says,
Speaker 1: and this was from the words of one of Google's
Speaker 1: own advertising executives. The analogy would be of Goldman or
Speaker 1: City Bank owned the New York stock ege change. Right exactly,
Speaker 1: it looks like a very big conflict of interest on
Speaker 1: its face. You know, they have both ends. They can
Speaker 1: control everything that occurs, and they have dominance in each
Speaker 1: piece of it. Right, so they can affect where these
Speaker 1: ads go. They can preference in themselves because they themselves
Speaker 1: have ad space and our advertisers, and then they can
Speaker 1: also extract a lot of money out of advertisers and
Speaker 1: publishers because they don't really have of competition. And if
Speaker 1: these publishers and advertisers want to meet up and place
Speaker 1: these ads in the best places, and the publishers want
Speaker 1: to sell their space, they have to use these Google tools.
Speaker 1: Have no choice but to pay these high fees. Essentially,
Speaker 1: so Google has argued different times that its ad business
Speaker 1: is not a monopoly because it has to compete with Meta, Amazon,
Speaker 1: Comcast and others, and its share of the digital ad
Speaker 1: revenue market has dropped from thirty six point seven percent
Speaker 1: in sixteen to eight point eight percent last year, according
Speaker 1: to Insider intelligence. So does that show that there is
Speaker 1: some competition? Well, that is Google sort of characterizing things
Speaker 1: differently than the Department of Justices and the States are.
Speaker 1: You know, they're looking generally and broadly at advertising on
Speaker 1: the Internet, but what the Department of Justice is looking
Speaker 1: at is something that's much more narrow you know, they're
Speaker 1: looking specifically at each tool that's you by advertisers and
Speaker 1: publishers to place advertisements on space on websites. And so
Speaker 1: you have to take out, let's say, a Facebook, because
Speaker 1: Facebook operates its own wall system. So in other words,
Speaker 1: if there's an ad exchange tool that auctions on ads
Speaker 1: that Facebook is not involved in, that Facebook isn't a
Speaker 1: competitor there. Facebook is negotiating itself with advertisers for placement
Speaker 1: on its own website, et cetera. So it's not in there.
Speaker 1: It may be a place where an advertiser can go
Speaker 1: right online to advertise and it has space for those advertisements,
Speaker 1: but it's not competing with the Google products that are
Speaker 1: at issue in the complaints. So, you know, while Google
Speaker 1: may not be wrong about those assertions, they're just looking
Speaker 1: at the market differently than the Department of Justices. This
Speaker 1: was mentioned that the press conference, the a G was asked,
Speaker 1: why are you duplicating this lawsuit by the Texas a
Speaker 1: Journey General and other states? So why are they duplicating
Speaker 1: that happens a lot, doesn't it. It does, yeah, And
Speaker 1: I would say there are a couple of different reasons
Speaker 1: for it. I mean, the first reason is that they
Speaker 1: are an anti trust enforcer, and it doesn't mean they're
Speaker 1: going to sit back and rely on some other plaintiff
Speaker 1: to bring their case when they think that there's been
Speaker 1: anti competitive conduct. They're going to bring their own case.
Speaker 1: They have their own evidence, they've done a long investigation,
Speaker 1: and they want to pursue that enforcement and not rely
Speaker 1: on somebody else. But I actually think there also might
Speaker 1: be another reason. The states, unlike the Department of Justice,
Speaker 1: are subject to consolidation of lawsuits where there are other
Speaker 1: similar lawsuits. And in the case of the the suit
Speaker 1: that was brought by Texas, they were consolidated with other
Speaker 1: lawsuits over the exact same thing that are broad as
Speaker 1: consumer class actions, one by advertisers and one by publishers,
Speaker 1: and they got consolidated and moved to a New York court,
Speaker 1: and by virtue of that, they were slowed down immensely.
Speaker 1: I mean even for litigation June. That litigation is going
Speaker 1: at a glacial pace. It's complex, there are lot of
Speaker 1: issues there, the judges taking it in tranches and in stages,
Speaker 1: and you're looking at a matter that probably I doubt
Speaker 1: would get to trial any time before two thousand twenty five.
Speaker 1: On the other hand, the Department of Justice doesn't have
Speaker 1: to consolidate. It can stay where it brought it suit
Speaker 1: in Virginia, and I suspect could probably get to trial
Speaker 1: on this before that other case gets to trial. This
Speaker 1: is one of the few times that the Justice Department
Speaker 1: has called for the breakup of a major company since
Speaker 1: it dismantled Bell in the nine eighties. Why do you
Speaker 1: think they're doing that here? Well, I think if they
Speaker 1: view anti competitive conduct to start at anti competitive purchases.
Speaker 1: In other words, Google tried to compete and couldn't and
Speaker 1: instead went out and started buying up competitors and sort
Speaker 1: of hoovering up all of the different products that were
Speaker 1: in the space in order to dominate it. That that
Speaker 1: in itself, that the acquisition activity in and of its
Speaker 1: health is part of the anti competitive conduct here. And
Speaker 1: if that is the case, then the remedy to seek
Speaker 1: is to sell off some of these illegally acquired technologies.
Speaker 1: You know, it would be different if if a company
Speaker 1: was bought for pro competitive reasons, let's say, but once
Speaker 1: it was bought, the company developed into a monopoly which
Speaker 1: wouldn't be illegal, but then behave badly and engaged in
Speaker 1: an exclusionary tactics with that monopoly to then keep out rivals.
Speaker 1: I think that's a little bit different. But here they
Speaker 1: say just buying Double Click, let's say, and add mobs
Speaker 1: and some of the other pieces of this puzzle that
Speaker 1: they bought. Those in itself were anti competitive, maybe should
Speaker 1: have been stopped by the agency at the time of
Speaker 1: the acquisition, but wererant, and now we need to seek
Speaker 1: to have them sold off. It's it's very much like
Speaker 1: the FTC's lawsuit against Facebook right now, where it's seeking
Speaker 1: the divestiture of either WhatsApp or Instagram or both. This
Speaker 1: represents the Biden administration's first major case challenging one of
Speaker 1: the largest tech companies, and Attorney General Garland said, no
Speaker 1: matter the industry, no matter the company, the Justice Department
Speaker 1: will vigorously enforce our antitrust laws. How important is this
Speaker 1: lawsuit to the Justice Department. I think it's quite important.
Speaker 1: I would say also that it's existing lawsuit against Alphabet
Speaker 1: related to Google Search, which it brought a few years
Speaker 1: ago and will go to trial in September of this year,
Speaker 1: at least it's set to at this moment. It's also
Speaker 1: very important. I mean, they very much mirror the really
Speaker 1: huge sort of seminal antitrust monopolization antitrust case against Microsoft,
Speaker 1: which was generally successful. And I think they're very important
Speaker 1: cases because since Microsoft, there has been very few big
Speaker 1: monopolization suits brought either by the SEC or the Department
Speaker 1: of Justice. I think critics would say that they pretty
Speaker 1: much just dropped that kind of enforcement. And we have
Speaker 1: a problem now because for the last ten years, the
Speaker 1: FTC and d OJ have sat around and allowed these
Speaker 1: big tech platforms just to buy up the industries that
Speaker 1: they're in, just buy up small competitors right and left,
Speaker 1: to rise to a position of dominance and now need
Speaker 1: to do something about it. And I think that's what
Speaker 1: they're trying to do here now with this Google case
Speaker 1: and also the one that they're pursuing over Google Search,
Speaker 1: and I think they're very important cases for them. Yeah,
Speaker 1: I think they really tried to pump up this case
Speaker 1: at the press conference called it a landmark case, and
Speaker 1: also Vanita Gupta, the Associated Tourney General, went through a
Speaker 1: list of the different accomplishments in antitrust that the Justice
Speaker 1: Department has their you know, the Biden administrations, So right right, yeah,
Speaker 1: And I think that's somewhat in response to a July
Speaker 1: I guess it was now in two thousand twenty one
Speaker 1: executive order by President Biden that basically encouraged all of
Speaker 1: the agencies in the federal government to sort of ramp
Speaker 1: up to try to in prease competition in the marketplace.
Speaker 1: And so they're basically saying, look, that's what we've done.
Speaker 1: We're responding to your executive order. We're working really hard.
Speaker 1: We've accomplished a lot to try to you know, follow
Speaker 1: our mission and ramp up competition in the marketplace, and
Speaker 1: this is a big piece of it. And I think
Speaker 1: this is an important case too, because it will be
Speaker 1: incredibly difficult for them to actually win and achieve a
Speaker 1: breakup order here. You know, they came close to it
Speaker 1: with Microsoft, but that was overturned on appeal, and the
Speaker 1: Department of Justice ultimately settled. Pieces of the liability portion
Speaker 1: were overturned on appeal, and then the appellate court urged
Speaker 1: them to rethink what the remedy was because the disrecord
Speaker 1: did say the breakup was the appropriate remedy, and then
Speaker 1: the Department of Justice ended up settling with Microsoft. But
Speaker 1: many think that the settlement was actually quite useful and
Speaker 1: did increase competition in the marketplace, and so this is
Speaker 1: a big risk. They are taking a stab, they're trying again.
Speaker 1: I think their goal will be to try to force
Speaker 1: Google to type into some of these products. Do you
Speaker 1: think that this will actually go to trial or there'll
Speaker 1: be a settlement? You know, it's so early to predict
Speaker 1: something like that because oftentimes settlements come about because of
Speaker 1: the direction that the litigation is going in, you know,
Speaker 1: reading the chord, reading some of the conferences, And we
Speaker 1: haven't gotten anywhere near there yet with just a complaint.
Speaker 1: You know. My guess is that the Department of Justice
Speaker 1: is very interested in trying this case, and I think
Speaker 1: at least for now, unless they see they get a
Speaker 1: very hostile judge. For now, it would be hard to
Speaker 1: see how they'd reach a settlement because I'm not sure
Speaker 1: that DJ would want any kind of a settlement that's
Speaker 1: short of some divestment, and I really doubt Google would
Speaker 1: agree to that. Jen. Let's turn now to another antitrust
Speaker 1: issue that online ticket buyers shouldn't be able to relate to.
Speaker 1: That's such a fast Taylor Swift fans known as Swifties
Speaker 1: rallied outside the US capital on Tuesday as the Senate
Speaker 1: Judiciary Committee held a hearing about what went wrong during
Speaker 1: the pre sale for Swift tickets late less year. Millions
Speaker 1: of fans were left in virtual queues or denied tickets altogether,
Speaker 1: and Ticketmaster had to shut down the pre sale. There
Speaker 1: were complaints that the murder of Live Nation and events
Speaker 1: company with Ticketmaster means that it controls event production as
Speaker 1: well as ticket sales. Here's Jack Rotzinger, the CEO of
Speaker 1: seat geek Arrival ticket platform. It is no mystery why
Speaker 1: no other company has significantly penetrated the primary ticketing market.
Speaker 1: Major venues in the US know that if they move
Speaker 1: their primary ticketing business from Ticketmaster, they risk losing revenue
Speaker 1: they earned from Live Nation concerts. But the president and
Speaker 1: CFO of Live Nation, Joe Burke, told blamed bots who
Speaker 1: buy up tickets in large quantities for the pre sale fiasco.
Speaker 1: We knew bots would attack that on sale and planned accordingly.
Speaker 1: We were then hit with three times the amount of
Speaker 1: bot traffic that we'd ever experienced, and for the first
Speaker 1: time in four hundred verified fan on sales, they came
Speaker 1: after our verified fan pass password servers as wealth Jen
Speaker 1: give us the background here. You know, there have been
Speaker 1: complaints about Live Nation for years, I mean essentially ever
Speaker 1: since Live Nation acquired Ticketmaster, which vertically integrated the company.
Speaker 1: It was a promoter and now was also a ticket
Speaker 1: seller and across the board, there have been complaints about
Speaker 1: abuse of that position. And at the time that Live
Speaker 1: Nation acquire Ticketmaster, it did enter into a consent order
Speaker 1: basically promising to behave barely and not to discriminate against
Speaker 1: other ticket sellers that are selling tickets for concerts and
Speaker 1: events that it's promoting. Well, the Department of Justice loan
Speaker 1: Behold found a bit it wasn't abiding by those terms,
Speaker 1: and when after Live Nation just a couple of years ago,
Speaker 1: again saying hey, you violated these terms, and what they
Speaker 1: did is they extended a consent order and they kind
Speaker 1: of beefed up some of the terms, and now people
Speaker 1: are saying, hey, they're still not abiding by these terms.
Speaker 1: And the problem at the core of it was you
Speaker 1: the determat of Justice allowed Live Nation to buy Ticketmaster,
Speaker 1: and that's just a big conflict of interest and it's
Speaker 1: really harms and forecloses other bival ticket sellers, and that's
Speaker 1: a problem. And there was this big snap who was
Speaker 1: selling Taylor Swift tickets for her upcoming tour, and a
Speaker 1: lot of people say, hey, that's because there's no competition
Speaker 1: and the systems aren't good enough. Because Live Nation they
Speaker 1: have no incentive to innovate, they have no incentive to
Speaker 1: try to keep thoughts out, they have no incentive to
Speaker 1: have the best quality technology here, so this process can
Speaker 1: go smoothly. So this is just an example of why
Speaker 1: their dominance is a bad thing. Is the Justice Department
Speaker 1: doing anything about this? Now? We do understand from news
Speaker 1: that the d o J has still another investigation at
Speaker 1: this point of Live Nation ongoing, and that that had
Speaker 1: started before the whole Taylor Swift fiasco. But you know,
Speaker 1: Congress is upset about this too. So the Senate Judiciary
Speaker 1: Committee at hearing and brought in quite a few people
Speaker 1: to testify one from Live Nation, as the rest were
Speaker 1: all various people involved in the industry, promoters, actually somebody
Speaker 1: from a band was there speaking about the troubles the
Speaker 1: they have in the small piece of the ticket price
Speaker 1: that they actually get, because I think they want to
Speaker 1: draw attention to this. What can Congress do besides the
Speaker 1: whole hearings? I mean, Congress can't really do very much,
Speaker 1: but at least what these hearings do is bring out
Speaker 1: information that's useful for the Department of Justice and then
Speaker 1: also um validates what the Department of Justice is doing
Speaker 1: if they continue to pursue the investigation and then ultimately
Speaker 1: decided to bring a lawsuit because June, I think at
Speaker 1: this point they have already failed to abide by the
Speaker 1: consent order one. If it's found that they failed to
Speaker 1: abide by those terms a second time, I don't think
Speaker 1: there's going to be a third chance. The third chance
Speaker 1: will be a lawsuit, and that lawsuit, given this Department
Speaker 1: of Justice, could be yet another one where they seek
Speaker 1: the breakup of a company. They could seek to force
Speaker 1: them to sell ticket Master. I think anyone who's tried
Speaker 1: to buy tickets online and get stuck in one of
Speaker 1: those cues can relate to this absolutely. Thanks so much, Jen.
Speaker 1: That's Bloomberg Intelligence seen you litigate Ation analyst Jennifer Ree
Speaker 1: coming up next on the Bloomberg Law Show. The Supreme
Speaker 1: Court's first decision of the term is a blow to veterans.
Speaker 1: I'm June Grosso and you're listening to Bloomberg. Texas is
Speaker 1: leading another lawsuit against the Biden administration over immigration policy.
Speaker 1: Texas and twenty other Republican led states are suing over
Speaker 1: change in immigration policy that would turn away more migrants
Speaker 1: but still allow three hundred sixty thousand people to legally
Speaker 1: enter each year from Cuba, Haiti, Nicaragua, and Venezuela. The
Speaker 1: lawsuit accuses the Biden administration of arbitrarily creating recent changes
Speaker 1: and overstepping its authority. Joining me is immigration law expert
Speaker 1: Leon Fresco, a partner at Holland and Knight. Leon, We've
Speaker 1: talked about this parole program before, but why don't you
Speaker 1: give us a little recap of what it is. So
Speaker 1: the Biden administration decided recently that because the border has
Speaker 1: become very very difficult command in that they would employ
Speaker 1: a new carrots and take approach to the border. The
Speaker 1: sixth part being that if you try to enter illegally
Speaker 1: in between the ports of entry, meaning you try to
Speaker 1: cross the border illegally, what would happen to that person
Speaker 1: is they would immediately be subject to Title forty two
Speaker 1: expulsion from the United States. But because that approach was
Speaker 1: being draconian by a lot of the folks on the
Speaker 1: Democratic side of the aisle, the idea is it would
Speaker 1: be combined with carrots, which is this parole program, which
Speaker 1: was to say, look, we're going to allow about three
Speaker 1: thousand people per years, thirty thousand people per months to
Speaker 1: come in legally from the basic four countries where we're
Speaker 1: getting a lot of the traffic right now, Cuba, Nicaragua,
Speaker 1: Venezuela and eighty and that way. It's times that we're
Speaker 1: rejecting everybody, but we're asking them to come through this
Speaker 1: legal manner that lessons the burden on our courts of entry.
Speaker 1: So now the State of Texas and others are suing
Speaker 1: over this program, and they say it's you know, the
Speaker 1: administration has created a kind of visa program without approval
Speaker 1: from Congress, without legislation. Tell us more about the suit.
Speaker 1: So the lawsuit is basically saying that the way the
Speaker 1: parole authority works. And what parole is is it some
Speaker 1: authority that Congress has conferred upon the President of the
Speaker 1: United States, whoever president at that time, to admit any
Speaker 1: foreign naginal if there is what's either called a compelling
Speaker 1: humanitarian interest or a significant public benefit for letting that
Speaker 1: person in. So in the history of the United States,
Speaker 1: this program had been used many times for programmatic purposes
Speaker 1: with Cubans, with Vietnam, Cambodia, during the Vietnam War. It
Speaker 1: has been used many many times. But in the nighties,
Speaker 1: that program got substituted with what we now know as
Speaker 1: the refuge keep program. So the refugee program is the
Speaker 1: program that Congress intends the president's use on an annual
Speaker 1: plan basis to say, we're gonna take this many refugees
Speaker 1: from this place, as many from this place, etcetera. And
Speaker 1: what parole is is this a program that was changed
Speaker 1: so it would be just for one person at a time. So,
Speaker 1: for instance, somebody is having cancer treatment and the the
Speaker 1: their mother has been denied visas for you know, because
Speaker 1: they think the mother is gonna immigrate to the United States,
Speaker 1: so they can't get a visitor visa. But now they say, look,
Speaker 1: I need my mother in because I'm dying, and police
Speaker 1: letter of visiting while hunting cancer treatment or something, and
Speaker 1: you would parole the mother into the United States in
Speaker 1: that situation. Things like that. And so the point that
Speaker 1: the States are making is you have to keep that
Speaker 1: on a one on one basis that you can't create
Speaker 1: a memo that basically creates a criteria where people who
Speaker 1: meet that criteria would be able to apply for a
Speaker 1: parole program. They think that exceeds the bounds of what
Speaker 1: Congress created in this new parole framework in the center.
Speaker 1: Does it sound like they're right, because it sounds like
Speaker 1: something that Congress should be involved in. I think the
Speaker 1: issue is going to be twofold. So number one, I
Speaker 1: think ordinarily you would have a very close on this
Speaker 1: because the argument that the Biden administration is going to
Speaker 1: make is, well, this is a significant public benefit to
Speaker 1: do a program like this, because we have two million
Speaker 1: people crossing our border and if we can end that
Speaker 1: by creating a legal flows to site and this off,
Speaker 1: that's gonna be a massive victory brawl of us. So
Speaker 1: they're gonna try to make that argument. The question is
Speaker 1: going to be how differential the court will be, and
Speaker 1: the court have not been very differential in the last
Speaker 1: few years to the president. So that's gonna be one problem.
Speaker 1: But the second problem is this new and I'm sure
Speaker 1: you keep talking about it on your show, People keep
Speaker 1: talking about it. That made your questions doctrine that came
Speaker 1: out recently in the Supreme Court from the climate change cases,
Speaker 1: which is basically saying, look, whatever there's any major change
Speaker 1: that don't be an administrative action. Then the question is
Speaker 1: that Congress explicitly allow you to do that, And so
Speaker 1: that's going to be sort of another issue that may
Speaker 1: come up here that may make it harder for the
Speaker 1: administration to win long serve. I do think it will
Speaker 1: be enjoined very quickly at the district court level, because
Speaker 1: you know, they filed it in a location that tends
Speaker 1: to lead towards that, and I do think the Fifth
Speaker 1: Circuit will probably keep the programming joined. And then the
Speaker 1: question is will the Supreme Court allow this program to
Speaker 1: actually get implemented. All indications are when it was used
Speaker 1: with the Ukrainians is that the program does help at
Speaker 1: the border. So is Texas suing you think just to
Speaker 1: sue or I mean, this is sort of the sixty
Speaker 1: four thousand dollar question, which is looks there are certainly
Speaker 1: some arguments that can be made on the inflammatory side
Speaker 1: about well, why did you sue when we did this
Speaker 1: for Ukrainians? Are you suggesting something about that you were
Speaker 1: okay with it with one psycho population and you're not
Speaker 1: okay with it with another type of population. There's certainly
Speaker 1: arguments that people will raise at regard and there's other
Speaker 1: arguments about, hey, look, why are the States suing? Are
Speaker 1: they cutting up their nose despite their face, Because since
Speaker 1: we know these programs of a track record of success
Speaker 1: of channeling people toward legal immigration and getting them off
Speaker 1: the border, why would they sue? Those are fair questions
Speaker 1: and criticism. You know, I'm not here to launch them
Speaker 1: or not launched them, just to introduce them to your
Speaker 1: viewers and let them make their decisions. And so it's
Speaker 1: unclear policy wise why this would be object stitutins they
Speaker 1: would relieve pressure on the Texas border. But nevertheless they're
Speaker 1: just trying to say perhaps that even if this is
Speaker 1: relieving pressure, they just object to three hundred and sixty
Speaker 1: thou people being allowed legally into the United States that
Speaker 1: wouldn't have been allowed legally, you know a few months ago.
Speaker 1: Let me ask you about one allegation. They say it
Speaker 1: unlawfully creates a de facto pathway to citizenship. Doesn't do that. Well,
Speaker 1: what happens is it could in sort of a rude
Speaker 1: gold bird imagination for a few of the people in
Speaker 1: the program. And you might say, well, what do I
Speaker 1: mean by this? Well, what happens is there's a lot
Speaker 1: of people who if they don't have an entry way
Speaker 1: into the United States, then they can't get a green card.
Speaker 1: So if you cross the border illegally, you can't get
Speaker 1: a green card, even if you marry a U S
Speaker 1: c isen or you have some other citizen relative like
Speaker 1: a sibling or a parent that could petition for you.
Speaker 1: But if there are people who need these circumstances, that
Speaker 1: they have a relative that is able to petition for
Speaker 1: them under a normal green card system, and the only
Speaker 1: barrier to entry so far has been that they can't
Speaker 1: get parolled into the United States, then this parole in
Speaker 1: that small subset of cases could lead to a past
Speaker 1: to citizenship. But it's not going to be all the
Speaker 1: three hundred and sixty thousand people, but there will be
Speaker 1: some number. I don't know what the percentage will be
Speaker 1: that would become Green card holders and eventually US citizens
Speaker 1: because of this program that wouldn't have otherwise had that.
Speaker 1: So is that number gonna be one? I think it'll
Speaker 1: be more than one. Will it be all three hundred thousand?
Speaker 1: I think it'll be much less than that, but it
Speaker 1: will be some number in between. And the question is,
Speaker 1: you know, and people are going to talk about public
Speaker 1: benefits and other things like that to try to get
Speaker 1: standing in the court. Then the question is is that
Speaker 1: all too speculative for the courts to take into a
Speaker 1: count or can the court take into account this kind
Speaker 1: of thing where there's a probability you can easily make
Speaker 1: the causal link, but you have no way to predict
Speaker 1: how many people will be in this group. I want
Speaker 1: to turn to another immigration issue, and that's there are
Speaker 1: these mass tech layoffs and it's leaving hundreds of workers
Speaker 1: or maybe more that are living in the US on
Speaker 1: the H one B visas scrambling for jobs. Explain the
Speaker 1: H one B visa. The H one B visa is
Speaker 1: the primary visa mechanism for skilled workers to enter the
Speaker 1: United States to work if they copped visa. So there's
Speaker 1: only sixty five thousand per year, plus additional twenty thousand
Speaker 1: for people with master's degree. And so there's always a
Speaker 1: lottery there, you hear, because there's about five hundred thousand
Speaker 1: people who want the visas and only about eighty five thousand,
Speaker 1: as I said, get them in total. And so what
Speaker 1: happens is that you win the off me and you
Speaker 1: get sezzas. You have to work in a skilled occupation
Speaker 1: for an employer who is giving you this kind of
Speaker 1: skilled work. And they are visas that last or two
Speaker 1: terms of three years. So the most you can be
Speaker 1: on H one B status is six years total and
Speaker 1: then you either have to go home or an employer
Speaker 1: as the petition for you for a Green card, which
Speaker 1: then extend your say until that green card adjudication continue
Speaker 1: or is decided. And so now one of the problems
Speaker 1: is that people are on the visas to work at
Speaker 1: these tech companies, and even worse, if you're from India,
Speaker 1: the problem is you could be in a backlog waiting
Speaker 1: for a green card for up to thirty forty years.
Speaker 1: Because the way our green card system works is that
Speaker 1: we don't have a first come, first served green card system.
Speaker 1: We divide it up for country, and so we say,
Speaker 1: of all the green card plots, people from one country
Speaker 1: can only get seven person and of the plot. And
Speaker 1: so India, which has one point four billion people, is
Speaker 1: limited to the same fourteen thousand green cards employment plots
Speaker 1: that Monaco is limited too. And so from that same point,
Speaker 1: the Indians have long, long line. And so if they
Speaker 1: get laid off anywhere in this forty year line, suddenly
Speaker 1: they lose their sadus, their spouse loses their sabbus, their kids,
Speaker 1: blues their status and it becomes this humanitarian nightmare. So
Speaker 1: they have only sixty days to find another job. Is
Speaker 1: that a firm? Sixty days? So here's what happens. When
Speaker 1: you are an eight one B visa and you lose
Speaker 1: your job, another employer can position for you if you
Speaker 1: meet the criteria to also have h one sabbus as
Speaker 1: bad employer. Now it has to get approved at the
Speaker 1: end of the day. In order for you to say so,
Speaker 1: they'll have to show that this is a legitimate employer
Speaker 1: giving you legitimate skills, work at or on. And so
Speaker 1: if it gets approved, then you're fine. Then your problem
Speaker 1: has been solved. If it does not get approved, then
Speaker 1: the question is, well, what is the administration gonna do.
Speaker 1: Is it going to just allow people to remain here illegally?
Speaker 1: Is it gonna get people some other status, like the
Speaker 1: third action for them to remain here, and then perhaps
Speaker 1: if they can find an eighth one B job later
Speaker 1: retroactively approve it's called nuke pro tunk approval, so that
Speaker 1: the approval goes back to where if it had been
Speaker 1: approved prior to that, they could have kept their status.
Speaker 1: They have that discretion to do that, and so all
Speaker 1: of those decisions are being debated in the administration. But
Speaker 1: that's the issue. And then you know, people may decide,
Speaker 1: because this is a totally different group than the group
Speaker 1: that comes without status, that they don't want to live
Speaker 1: in the United States without status. But that's too scary,
Speaker 1: too uncertain. They don't want to drive it out a
Speaker 1: driver's license, because that's not what the folk for doing,
Speaker 1: you folk for making hundreds of thousands of dollars. They
Speaker 1: had drivers licenses, they had you know, bank accounts and
Speaker 1: houses and things like this. And that group may not
Speaker 1: want to live even one day undocumented in the United States.
Speaker 1: And so what happened there is you could see a
Speaker 1: lot of people selling their house or moving to Canada,
Speaker 1: or you know, doing something like that in that situation.
Speaker 1: And so if this problem becomes a protracted problem where
Speaker 1: people really can't change employers, you might start seeing some
Speaker 1: of that behavior. Just to take the personal element out
Speaker 1: of it for a moment. The reason for these visas
Speaker 1: are that it's supposed to be a program that fills
Speaker 1: an area where there's a shortage of Americans to work
Speaker 1: science technology. But now that there have been all these
Speaker 1: layoffs and a lot of Americans are laid off, should
Speaker 1: this program be an effect at the numbers that it is. Well, so,
Speaker 1: this is a very interesting point about which VISA does want.
Speaker 1: So the ployment based green card has a test where
Speaker 1: you have to show an American worker is not available
Speaker 1: in order to get that green card. The H one
Speaker 1: dvs are actually doesn't have that test. The employer is
Speaker 1: not required to prove that American worker couldn't be found
Speaker 1: before they hire a foreign worker. They just have to
Speaker 1: prove that the foreign worker is getting all of the
Speaker 1: same weight as a benefit that an American would be
Speaker 1: paid for that job. The other interesting point is that
Speaker 1: even though these layoffs are occurring, they're occurring within a
Speaker 1: backdrop of relatively low unemployment for skill docupations. And so
Speaker 1: at the end of the day, right now, at least
Speaker 1: anecdotally from my world of clients, but also for the
Speaker 1: people I talkt to a a lot of the layoffs
Speaker 1: that are occurring are this first much more toward the
Speaker 1: group that's not really the eighth one beholding group. There
Speaker 1: are some people being laid off, but not in large number.
Speaker 1: But even to the those folks are being laid off
Speaker 1: at the moment, there are other places for them to
Speaker 1: go because of the low unemployment rate in the skilled workforce.
Speaker 1: If this problem were to start to pick up where
Speaker 1: if actually we're seeing an inversion from what we have now.
Speaker 1: Right now we have more job openings and unemployed people
Speaker 1: in these skill in sectors. But if it inverts where
Speaker 1: you start having more unemployment and less job opening and
Speaker 1: the skills suctors, then the kinds of concerns you're talking
Speaker 1: about certainly can be raised. And look, that's why during
Speaker 1: the Trump administration, he actually during the COVID period said
Speaker 1: this and put a travel ban on H one B
Speaker 1: holders and said no more h want to be visa
Speaker 1: to be issued there in COVID because we ate COVID,
Speaker 1: but be we're worried about the economic loss of jobs
Speaker 1: that now set the signs to let people in. Would
Speaker 1: god Biden administration ever do this? Probably not, but it's
Speaker 1: certainly a tool that now President Trump has used. It
Speaker 1: has raised the possibility that any president could use it
Speaker 1: in a situation like this. And employers who want to
Speaker 1: hire an H one B VISA holder it costs more
Speaker 1: than hiring a US citizen for the job. Well, so
Speaker 1: here's the question. There's a lot of criticism on that end. Well,
Speaker 1: maybe employers are only hiring for IT workers to save wages,
Speaker 1: but forgetting about what it costs right now. But right
Speaker 1: now it costs in fees. It costs about five thousand
Speaker 1: dollars just in government to filing fees who hire an
Speaker 1: H one B worker. And that's not even paying a
Speaker 1: lawyer yet, So you know, it could be between sixteen
Speaker 1: and twenty thousand dollars right now. U s c i
Speaker 1: s is basically doubling that amount upcoming with their new
Speaker 1: fee rules. So if they end up big thirty thousand
Speaker 1: dollars to bring in an h one B worker into
Speaker 1: the United States. When this is all said and done,
Speaker 1: you know, when this new fee schedule gets put in
Speaker 1: very so and so the idea that you'd hire an
Speaker 1: ant to be to undercut an American starts to become
Speaker 1: much more unsubstantiated at that kind of feed level. And
Speaker 1: what you really see happening is employers basically doing what
Speaker 1: the National Basketball Association or the National Hockey League is doing,
Speaker 1: which is what they're just saying is, look, we don't
Speaker 1: view this marketplace as America or global or anything else.
Speaker 1: Just we want the best people. And if we've determined
Speaker 1: that X person is the best person, but they don't
Speaker 1: happen to be a US citizen, we just want to
Speaker 1: bring them in, period. And it's not really viewed by
Speaker 1: the way didsue. It's more viewed by them just deciding
Speaker 1: that they want to bring in X or Y person
Speaker 1: because that's the person they want on their feet. And
Speaker 1: some of these workers are making a hundred thousand, two
Speaker 1: hundred thousand dollars. There are some people making six hundred
Speaker 1: thousand dollars on h mbps. It just depends what type
Speaker 1: of work they're doing and then what type of companies,
Speaker 1: and there's a lot of folks that were making even
Speaker 1: that kind of money. That's not the average, but but
Speaker 1: I certainly know of some clients making that amount of money.
Speaker 1: And what it just comes down to is the marketplace
Speaker 1: and employers in a lot of these markets, they've become
Speaker 1: very talent sensitive, just like affortunately give. So you want
Speaker 1: that top level of talent because it could actually makes
Speaker 1: the difference between a product being more successful and less successful.
Speaker 1: Thanks so much for being on the show. Leon. That's
Speaker 1: immigration law expert Leon Fresco, a partner at Hollanden Knight.
Speaker 1: And that's it for this edition of The Bloomberg Law Show.
Speaker 1: Remember you can always get the latest legal news, honor
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Speaker 1: week night at ten BM Wall Street Time. I'm June
Speaker 1: Grosso and you're listening to Bloomberg One