WEBVTT - US Sues Google & Taylor Swift Ticket Fiasco 0:00:03.160 --> 0:00:09.600 This is Bloomberg Law with June Brussel from Bloomberg Radio. Today, 0:00:09.840 --> 0:00:13.079 the Department of Justice, joined by eight states, file a 0:00:13.160 --> 0:00:16.799 civil antitrust lawsuit in the United States District Court for 0:00:16.880 --> 0:00:21.320 the Eastern District of Virginia against Google. Attorney General Merrick 0:00:21.360 --> 0:00:25.279 Garland announced on Tuesday that the Justice Department is suing 0:00:25.360 --> 0:00:30.040 Google for antitrust violations, accusing the search giant of using 0:00:30.080 --> 0:00:33.920 its dominant position in the online ad industry to box 0:00:33.960 --> 0:00:39.400 out competitors. Google has engaged an exclusionary conductor, severely weakened, 0:00:39.440 --> 0:00:43.880 if not destroy competition in the ad tech industry. It's 0:00:43.880 --> 0:00:47.440 a high stakes attempt to break up Google's ad tech business, 0:00:47.680 --> 0:00:50.080 one of the few times the government has called for 0:00:50.159 --> 0:00:54.240 the breakup of a major company. In response, Google said 0:00:54.280 --> 0:00:57.360 the lawsuit attempts to pick winners and losers in the 0:00:57.480 --> 0:01:02.520 highly competitive advertising technology sector. Joining me is Bloomberg Intelligence. 0:01:02.520 --> 0:01:06.320 Senior litigation analyst Jennifer ree Gent tell us a little 0:01:06.360 --> 0:01:10.479 about the government's case against Google. So, the government's case 0:01:10.600 --> 0:01:13.720 is actually very much like an ongoing case that's already 0:01:13.720 --> 0:01:16.080 been in litigation for a couple of years now, that 0:01:16.240 --> 0:01:19.160 was brought by a group of states led by Texas, 0:01:19.200 --> 0:01:21.880 and both of these losses cover what they call the 0:01:21.880 --> 0:01:24.960 ad text stack, and the ad tex stack is a 0:01:25.000 --> 0:01:29.319 series of products that are used basically by advertisers and 0:01:29.400 --> 0:01:34.200 by publishers for placing advertisements online. When somebody opens up 0:01:34.200 --> 0:01:36.479 a website, you know, we don't know what. We opened 0:01:36.480 --> 0:01:39.400 a website and we see all these advertisements, but there's 0:01:39.480 --> 0:01:43.160 this complex series of transactions that happen to place that 0:01:43.440 --> 0:01:45.760 ad there and to figure out what add to place 0:01:45.840 --> 0:01:48.920 depending on who the user is. And there are tools 0:01:48.920 --> 0:01:51.440 on the publishers side and their tools on the advertiser 0:01:51.520 --> 0:01:53.960 side that they use, and then there's an exchange where 0:01:53.960 --> 0:01:56.960 they kind of come together to auction on the space 0:01:57.080 --> 0:01:59.720 and the ads that are available. And so the allegation 0:01:59.800 --> 0:02:03.200 here is that Google has slowly bought in to each 0:02:03.240 --> 0:02:06.400 of these tools all the way across that chain and 0:02:06.480 --> 0:02:09.079 at this point have dominance, you know, all the way 0:02:09.120 --> 0:02:12.560 across from publisher to advertiser. And they did it by 0:02:12.600 --> 0:02:16.040 buying products and then also by engaging an anti competitive 0:02:16.080 --> 0:02:18.399 conduct that kind of blocked out the rivals that were 0:02:18.400 --> 0:02:20.919 out there that we're able to compete, and they now 0:02:20.960 --> 0:02:25.160 have dominance across this whole chain of products the complaints says, 0:02:25.400 --> 0:02:27.720 and this was from the words of one of Google's 0:02:27.760 --> 0:02:31.600 own advertising executives. The analogy would be of Goldman or 0:02:31.680 --> 0:02:35.640 City Bank owned the New York stock ege change. Right exactly, 0:02:35.720 --> 0:02:38.360 it looks like a very big conflict of interest on 0:02:38.440 --> 0:02:41.639 its face. You know, they have both ends. They can 0:02:41.680 --> 0:02:44.880 control everything that occurs, and they have dominance in each 0:02:44.960 --> 0:02:48.520 piece of it. Right, so they can affect where these 0:02:48.560 --> 0:02:52.239 ads go. They can preference in themselves because they themselves 0:02:52.280 --> 0:02:55.000 have ad space and our advertisers, and then they can 0:02:55.040 --> 0:02:57.840 also extract a lot of money out of advertisers and 0:02:57.880 --> 0:03:01.400 publishers because they don't really have of competition. And if 0:03:01.400 --> 0:03:04.200 these publishers and advertisers want to meet up and place 0:03:04.280 --> 0:03:06.799 these ads in the best places, and the publishers want 0:03:06.800 --> 0:03:09.200 to sell their space, they have to use these Google tools. 0:03:09.520 --> 0:03:12.200 Have no choice but to pay these high fees. Essentially, 0:03:13.240 --> 0:03:16.360 so Google has argued different times that its ad business 0:03:16.480 --> 0:03:20.919 is not a monopoly because it has to compete with Meta, Amazon, 0:03:21.520 --> 0:03:25.840 Comcast and others, and its share of the digital ad 0:03:25.880 --> 0:03:30.240 revenue market has dropped from thirty six point seven percent 0:03:30.360 --> 0:03:34.920 in sixteen to eight point eight percent last year, according 0:03:34.960 --> 0:03:38.840 to Insider intelligence. So does that show that there is 0:03:38.880 --> 0:03:43.840 some competition? Well, that is Google sort of characterizing things 0:03:44.000 --> 0:03:47.560 differently than the Department of Justices and the States are. 0:03:47.840 --> 0:03:51.600 You know, they're looking generally and broadly at advertising on 0:03:51.680 --> 0:03:54.920 the Internet, but what the Department of Justice is looking 0:03:54.920 --> 0:03:57.560 at is something that's much more narrow you know, they're 0:03:57.600 --> 0:04:01.640 looking specifically at each tool that's you by advertisers and 0:04:01.680 --> 0:04:05.920 publishers to place advertisements on space on websites. And so 0:04:06.040 --> 0:04:08.800 you have to take out, let's say, a Facebook, because 0:04:08.840 --> 0:04:12.280 Facebook operates its own wall system. So in other words, 0:04:12.320 --> 0:04:16.480 if there's an ad exchange tool that auctions on ads 0:04:16.480 --> 0:04:19.120 that Facebook is not involved in, that Facebook isn't a 0:04:19.120 --> 0:04:24.080 competitor there. Facebook is negotiating itself with advertisers for placement 0:04:24.440 --> 0:04:28.440 on its own website, et cetera. So it's not in there. 0:04:28.560 --> 0:04:31.320 It may be a place where an advertiser can go 0:04:31.880 --> 0:04:37.000 right online to advertise and it has space for those advertisements, 0:04:37.000 --> 0:04:40.080 but it's not competing with the Google products that are 0:04:40.200 --> 0:04:43.000 at issue in the complaints. So, you know, while Google 0:04:43.080 --> 0:04:45.800 may not be wrong about those assertions, they're just looking 0:04:45.800 --> 0:04:49.440 at the market differently than the Department of Justices. This 0:04:49.600 --> 0:04:53.279 was mentioned that the press conference, the a G was asked, 0:04:53.320 --> 0:04:56.240 why are you duplicating this lawsuit by the Texas a 0:04:56.320 --> 0:04:59.320 Journey General and other states? So why are they duplicating 0:04:59.560 --> 0:05:02.200 that happens a lot, doesn't it. It does, yeah, And 0:05:02.240 --> 0:05:04.000 I would say there are a couple of different reasons 0:05:04.000 --> 0:05:05.720 for it. I mean, the first reason is that they 0:05:05.720 --> 0:05:08.360 are an anti trust enforcer, and it doesn't mean they're 0:05:08.400 --> 0:05:11.240 going to sit back and rely on some other plaintiff 0:05:11.279 --> 0:05:13.360 to bring their case when they think that there's been 0:05:13.520 --> 0:05:16.479 anti competitive conduct. They're going to bring their own case. 0:05:16.800 --> 0:05:19.680 They have their own evidence, they've done a long investigation, 0:05:19.839 --> 0:05:22.719 and they want to pursue that enforcement and not rely 0:05:22.839 --> 0:05:25.360 on somebody else. But I actually think there also might 0:05:25.400 --> 0:05:29.000 be another reason. The states, unlike the Department of Justice, 0:05:29.040 --> 0:05:32.840 are subject to consolidation of lawsuits where there are other 0:05:32.920 --> 0:05:36.360 similar lawsuits. And in the case of the the suit 0:05:36.440 --> 0:05:39.599 that was brought by Texas, they were consolidated with other 0:05:39.720 --> 0:05:42.480 lawsuits over the exact same thing that are broad as 0:05:42.520 --> 0:05:46.080 consumer class actions, one by advertisers and one by publishers, 0:05:46.360 --> 0:05:49.000 and they got consolidated and moved to a New York court, 0:05:49.279 --> 0:05:52.720 and by virtue of that, they were slowed down immensely. 0:05:53.000 --> 0:05:56.599 I mean even for litigation June. That litigation is going 0:05:56.640 --> 0:06:00.359 at a glacial pace. It's complex, there are lot of 0:06:00.400 --> 0:06:04.120 issues there, the judges taking it in tranches and in stages, 0:06:04.160 --> 0:06:06.839 and you're looking at a matter that probably I doubt 0:06:06.880 --> 0:06:10.120 would get to trial any time before two thousand twenty five. 0:06:10.520 --> 0:06:12.640 On the other hand, the Department of Justice doesn't have 0:06:12.680 --> 0:06:14.960 to consolidate. It can stay where it brought it suit 0:06:15.000 --> 0:06:18.599 in Virginia, and I suspect could probably get to trial 0:06:18.680 --> 0:06:22.719 on this before that other case gets to trial. This 0:06:22.920 --> 0:06:26.400 is one of the few times that the Justice Department 0:06:26.400 --> 0:06:30.080 has called for the breakup of a major company since 0:06:30.080 --> 0:06:34.960 it dismantled Bell in the nine eighties. Why do you 0:06:35.000 --> 0:06:37.920 think they're doing that here? Well, I think if they 0:06:38.080 --> 0:06:43.360 view anti competitive conduct to start at anti competitive purchases. 0:06:44.040 --> 0:06:48.080 In other words, Google tried to compete and couldn't and 0:06:48.160 --> 0:06:51.880 instead went out and started buying up competitors and sort 0:06:51.880 --> 0:06:54.400 of hoovering up all of the different products that were 0:06:54.440 --> 0:06:56.680 in the space in order to dominate it. That that 0:06:56.880 --> 0:06:59.920 in itself, that the acquisition activity in and of its 0:07:00.000 --> 0:07:03.080 health is part of the anti competitive conduct here. And 0:07:03.120 --> 0:07:05.440 if that is the case, then the remedy to seek 0:07:05.640 --> 0:07:09.920 is to sell off some of these illegally acquired technologies. 0:07:10.160 --> 0:07:12.320 You know, it would be different if if a company 0:07:12.400 --> 0:07:15.880 was bought for pro competitive reasons, let's say, but once 0:07:15.920 --> 0:07:19.080 it was bought, the company developed into a monopoly which 0:07:19.080 --> 0:07:23.720 wouldn't be illegal, but then behave badly and engaged in 0:07:23.800 --> 0:07:28.000 an exclusionary tactics with that monopoly to then keep out rivals. 0:07:28.080 --> 0:07:30.880 I think that's a little bit different. But here they 0:07:30.920 --> 0:07:35.200 say just buying Double Click, let's say, and add mobs 0:07:35.200 --> 0:07:37.360 and some of the other pieces of this puzzle that 0:07:37.400 --> 0:07:41.280 they bought. Those in itself were anti competitive, maybe should 0:07:41.280 --> 0:07:43.920 have been stopped by the agency at the time of 0:07:44.000 --> 0:07:46.920 the acquisition, but wererant, and now we need to seek 0:07:46.960 --> 0:07:49.120 to have them sold off. It's it's very much like 0:07:49.520 --> 0:07:53.400 the FTC's lawsuit against Facebook right now, where it's seeking 0:07:53.600 --> 0:07:56.960 the divestiture of either WhatsApp or Instagram or both. This 0:07:57.160 --> 0:08:02.760 represents the Biden administration's first major case challenging one of 0:08:02.800 --> 0:08:06.560 the largest tech companies, and Attorney General Garland said, no 0:08:06.600 --> 0:08:09.960 matter the industry, no matter the company, the Justice Department 0:08:09.960 --> 0:08:14.800 will vigorously enforce our antitrust laws. How important is this 0:08:14.920 --> 0:08:20.480 lawsuit to the Justice Department. I think it's quite important. 0:08:20.600 --> 0:08:24.200 I would say also that it's existing lawsuit against Alphabet 0:08:24.760 --> 0:08:27.840 related to Google Search, which it brought a few years 0:08:27.840 --> 0:08:30.800 ago and will go to trial in September of this year, 0:08:30.840 --> 0:08:33.680 at least it's set to at this moment. It's also 0:08:33.880 --> 0:08:37.319 very important. I mean, they very much mirror the really 0:08:37.400 --> 0:08:43.040 huge sort of seminal antitrust monopolization antitrust case against Microsoft, 0:08:43.120 --> 0:08:47.520 which was generally successful. And I think they're very important 0:08:47.559 --> 0:08:50.520 cases because since Microsoft, there has been very few big 0:08:50.559 --> 0:08:54.280 monopolization suits brought either by the SEC or the Department 0:08:54.280 --> 0:08:57.400 of Justice. I think critics would say that they pretty 0:08:57.480 --> 0:09:00.320 much just dropped that kind of enforcement. And we have 0:09:00.360 --> 0:09:02.880 a problem now because for the last ten years, the 0:09:03.080 --> 0:09:05.800 FTC and d OJ have sat around and allowed these 0:09:05.800 --> 0:09:08.800 big tech platforms just to buy up the industries that 0:09:08.880 --> 0:09:11.480 they're in, just buy up small competitors right and left, 0:09:11.760 --> 0:09:14.520 to rise to a position of dominance and now need 0:09:14.600 --> 0:09:16.720 to do something about it. And I think that's what 0:09:16.760 --> 0:09:18.960 they're trying to do here now with this Google case 0:09:19.000 --> 0:09:22.160 and also the one that they're pursuing over Google Search, 0:09:22.200 --> 0:09:24.520 and I think they're very important cases for them. Yeah, 0:09:24.600 --> 0:09:28.200 I think they really tried to pump up this case 0:09:28.320 --> 0:09:31.800 at the press conference called it a landmark case, and 0:09:32.000 --> 0:09:36.200 also Vanita Gupta, the Associated Tourney General, went through a 0:09:36.280 --> 0:09:40.600 list of the different accomplishments in antitrust that the Justice 0:09:40.640 --> 0:09:45.840 Department has their you know, the Biden administrations, So right right, yeah, 0:09:45.920 --> 0:09:48.400 And I think that's somewhat in response to a July 0:09:48.840 --> 0:09:50.920 I guess it was now in two thousand twenty one 0:09:50.960 --> 0:09:54.720 executive order by President Biden that basically encouraged all of 0:09:54.760 --> 0:09:58.280 the agencies in the federal government to sort of ramp 0:09:58.360 --> 0:10:02.080 up to try to in prease competition in the marketplace. 0:10:02.280 --> 0:10:04.520 And so they're basically saying, look, that's what we've done. 0:10:04.520 --> 0:10:07.920 We're responding to your executive order. We're working really hard. 0:10:08.200 --> 0:10:10.760 We've accomplished a lot to try to you know, follow 0:10:10.760 --> 0:10:13.560 our mission and ramp up competition in the marketplace, and 0:10:13.600 --> 0:10:15.600 this is a big piece of it. And I think 0:10:15.640 --> 0:10:18.280 this is an important case too, because it will be 0:10:18.320 --> 0:10:21.200 incredibly difficult for them to actually win and achieve a 0:10:21.200 --> 0:10:24.000 breakup order here. You know, they came close to it 0:10:24.040 --> 0:10:28.000 with Microsoft, but that was overturned on appeal, and the 0:10:28.040 --> 0:10:31.559 Department of Justice ultimately settled. Pieces of the liability portion 0:10:31.600 --> 0:10:34.480 were overturned on appeal, and then the appellate court urged 0:10:34.559 --> 0:10:37.480 them to rethink what the remedy was because the disrecord 0:10:37.600 --> 0:10:40.440 did say the breakup was the appropriate remedy, and then 0:10:40.480 --> 0:10:44.080 the Department of Justice ended up settling with Microsoft. But 0:10:44.320 --> 0:10:47.400 many think that the settlement was actually quite useful and 0:10:47.480 --> 0:10:51.000 did increase competition in the marketplace, and so this is 0:10:51.160 --> 0:10:54.240 a big risk. They are taking a stab, they're trying again. 0:10:54.640 --> 0:10:56.760 I think their goal will be to try to force 0:10:56.800 --> 0:10:59.320 Google to type into some of these products. Do you 0:10:59.360 --> 0:11:02.120 think that this will actually go to trial or there'll 0:11:02.160 --> 0:11:05.120 be a settlement? You know, it's so early to predict 0:11:05.160 --> 0:11:08.680 something like that because oftentimes settlements come about because of 0:11:08.760 --> 0:11:11.600 the direction that the litigation is going in, you know, 0:11:11.679 --> 0:11:14.400 reading the chord, reading some of the conferences, And we 0:11:14.440 --> 0:11:17.000 haven't gotten anywhere near there yet with just a complaint. 0:11:17.240 --> 0:11:19.439 You know. My guess is that the Department of Justice 0:11:19.480 --> 0:11:22.280 is very interested in trying this case, and I think 0:11:22.400 --> 0:11:25.000 at least for now, unless they see they get a 0:11:25.080 --> 0:11:27.880 very hostile judge. For now, it would be hard to 0:11:27.880 --> 0:11:30.040 see how they'd reach a settlement because I'm not sure 0:11:30.080 --> 0:11:32.320 that DJ would want any kind of a settlement that's 0:11:32.360 --> 0:11:35.040 short of some divestment, and I really doubt Google would 0:11:35.040 --> 0:11:38.199 agree to that. Jen. Let's turn now to another antitrust 0:11:38.320 --> 0:11:42.560 issue that online ticket buyers shouldn't be able to relate to. 0:11:44.200 --> 0:11:50.120 That's such a fast Taylor Swift fans known as Swifties 0:11:50.480 --> 0:11:53.839 rallied outside the US capital on Tuesday as the Senate 0:11:53.920 --> 0:11:57.559 Judiciary Committee held a hearing about what went wrong during 0:11:57.559 --> 0:12:01.240 the pre sale for Swift tickets late less year. Millions 0:12:01.240 --> 0:12:05.080 of fans were left in virtual queues or denied tickets altogether, 0:12:05.320 --> 0:12:08.240 and Ticketmaster had to shut down the pre sale. There 0:12:08.240 --> 0:12:11.360 were complaints that the murder of Live Nation and events 0:12:11.400 --> 0:12:16.000 company with Ticketmaster means that it controls event production as 0:12:16.040 --> 0:12:19.640 well as ticket sales. Here's Jack Rotzinger, the CEO of 0:12:19.679 --> 0:12:23.440 seat geek Arrival ticket platform. It is no mystery why 0:12:23.480 --> 0:12:26.600 no other company has significantly penetrated the primary ticketing market. 0:12:26.720 --> 0:12:29.839 Major venues in the US know that if they move 0:12:29.920 --> 0:12:33.400 their primary ticketing business from Ticketmaster, they risk losing revenue 0:12:33.400 --> 0:12:36.199 they earned from Live Nation concerts. But the president and 0:12:36.400 --> 0:12:40.640 CFO of Live Nation, Joe Burke, told blamed bots who 0:12:40.679 --> 0:12:44.400 buy up tickets in large quantities for the pre sale fiasco. 0:12:44.880 --> 0:12:47.600 We knew bots would attack that on sale and planned accordingly. 0:12:48.400 --> 0:12:50.800 We were then hit with three times the amount of 0:12:50.840 --> 0:12:53.920 bot traffic that we'd ever experienced, and for the first 0:12:53.960 --> 0:12:56.920 time in four hundred verified fan on sales, they came 0:12:56.960 --> 0:13:01.040 after our verified fan pass password servers as wealth Jen 0:13:01.120 --> 0:13:03.439 give us the background here. You know, there have been 0:13:03.440 --> 0:13:06.360 complaints about Live Nation for years, I mean essentially ever 0:13:06.440 --> 0:13:10.600 since Live Nation acquired Ticketmaster, which vertically integrated the company. 0:13:10.679 --> 0:13:13.040 It was a promoter and now was also a ticket 0:13:13.080 --> 0:13:16.240 seller and across the board, there have been complaints about 0:13:16.280 --> 0:13:19.760 abuse of that position. And at the time that Live 0:13:19.840 --> 0:13:22.760 Nation acquire Ticketmaster, it did enter into a consent order 0:13:23.040 --> 0:13:26.720 basically promising to behave barely and not to discriminate against 0:13:26.760 --> 0:13:29.800 other ticket sellers that are selling tickets for concerts and 0:13:29.840 --> 0:13:32.720 events that it's promoting. Well, the Department of Justice loan 0:13:32.800 --> 0:13:35.760 Behold found a bit it wasn't abiding by those terms, 0:13:35.800 --> 0:13:38.080 and when after Live Nation just a couple of years ago, 0:13:38.120 --> 0:13:41.280 again saying hey, you violated these terms, and what they 0:13:41.320 --> 0:13:43.600 did is they extended a consent order and they kind 0:13:43.640 --> 0:13:46.120 of beefed up some of the terms, and now people 0:13:46.120 --> 0:13:49.280 are saying, hey, they're still not abiding by these terms. 0:13:49.320 --> 0:13:51.599 And the problem at the core of it was you 0:13:51.800 --> 0:13:55.000 the determat of Justice allowed Live Nation to buy Ticketmaster, 0:13:55.160 --> 0:13:57.640 and that's just a big conflict of interest and it's 0:13:57.800 --> 0:14:01.800 really harms and forecloses other bival ticket sellers, and that's 0:14:01.800 --> 0:14:04.520 a problem. And there was this big snap who was 0:14:04.640 --> 0:14:08.240 selling Taylor Swift tickets for her upcoming tour, and a 0:14:08.240 --> 0:14:11.280 lot of people say, hey, that's because there's no competition 0:14:11.640 --> 0:14:14.319 and the systems aren't good enough. Because Live Nation they 0:14:14.360 --> 0:14:16.800 have no incentive to innovate, they have no incentive to 0:14:16.800 --> 0:14:19.280 try to keep thoughts out, they have no incentive to 0:14:19.320 --> 0:14:22.960 have the best quality technology here, so this process can 0:14:23.000 --> 0:14:26.440 go smoothly. So this is just an example of why 0:14:26.480 --> 0:14:29.680 their dominance is a bad thing. Is the Justice Department 0:14:29.680 --> 0:14:33.160 doing anything about this? Now? We do understand from news 0:14:33.320 --> 0:14:36.800 that the d o J has still another investigation at 0:14:36.840 --> 0:14:39.920 this point of Live Nation ongoing, and that that had 0:14:39.960 --> 0:14:43.160 started before the whole Taylor Swift fiasco. But you know, 0:14:43.360 --> 0:14:46.400 Congress is upset about this too. So the Senate Judiciary 0:14:46.400 --> 0:14:49.360 Committee at hearing and brought in quite a few people 0:14:49.400 --> 0:14:52.720 to testify one from Live Nation, as the rest were 0:14:52.760 --> 0:14:57.240 all various people involved in the industry, promoters, actually somebody 0:14:57.240 --> 0:15:00.080 from a band was there speaking about the troubles the 0:15:00.080 --> 0:15:02.360 they have in the small piece of the ticket price 0:15:02.400 --> 0:15:04.640 that they actually get, because I think they want to 0:15:04.680 --> 0:15:07.920 draw attention to this. What can Congress do besides the 0:15:08.040 --> 0:15:11.560 whole hearings? I mean, Congress can't really do very much, 0:15:12.080 --> 0:15:14.440 but at least what these hearings do is bring out 0:15:14.520 --> 0:15:17.520 information that's useful for the Department of Justice and then 0:15:17.560 --> 0:15:21.040 also um validates what the Department of Justice is doing 0:15:21.080 --> 0:15:24.880 if they continue to pursue the investigation and then ultimately 0:15:24.920 --> 0:15:27.640 decided to bring a lawsuit because June, I think at 0:15:27.640 --> 0:15:30.880 this point they have already failed to abide by the 0:15:30.920 --> 0:15:33.880 consent order one. If it's found that they failed to 0:15:33.920 --> 0:15:36.280 abide by those terms a second time, I don't think 0:15:36.320 --> 0:15:38.480 there's going to be a third chance. The third chance 0:15:38.520 --> 0:15:41.800 will be a lawsuit, and that lawsuit, given this Department 0:15:41.800 --> 0:15:44.920 of Justice, could be yet another one where they seek 0:15:44.960 --> 0:15:47.200 the breakup of a company. They could seek to force 0:15:47.200 --> 0:15:49.920 them to sell ticket Master. I think anyone who's tried 0:15:49.960 --> 0:15:52.440 to buy tickets online and get stuck in one of 0:15:52.480 --> 0:15:57.400 those cues can relate to this absolutely. Thanks so much, Jen. 0:15:58.000 --> 0:16:01.800 That's Bloomberg Intelligence seen you litigate Ation analyst Jennifer Ree 0:16:01.840 --> 0:16:04.760 coming up next on the Bloomberg Law Show. The Supreme 0:16:04.800 --> 0:16:08.320 Court's first decision of the term is a blow to veterans. 0:16:08.560 --> 0:16:12.600 I'm June Grosso and you're listening to Bloomberg. Texas is 0:16:12.680 --> 0:16:17.680 leading another lawsuit against the Biden administration over immigration policy. 0:16:17.840 --> 0:16:21.200 Texas and twenty other Republican led states are suing over 0:16:21.400 --> 0:16:25.119 change in immigration policy that would turn away more migrants 0:16:25.200 --> 0:16:29.000 but still allow three hundred sixty thousand people to legally 0:16:29.240 --> 0:16:33.640 enter each year from Cuba, Haiti, Nicaragua, and Venezuela. The 0:16:33.720 --> 0:16:38.800 lawsuit accuses the Biden administration of arbitrarily creating recent changes 0:16:39.080 --> 0:16:43.200 and overstepping its authority. Joining me is immigration law expert 0:16:43.320 --> 0:16:46.880 Leon Fresco, a partner at Holland and Knight. Leon, We've 0:16:46.920 --> 0:16:50.280 talked about this parole program before, but why don't you 0:16:50.280 --> 0:16:53.120 give us a little recap of what it is. So 0:16:53.240 --> 0:16:57.280 the Biden administration decided recently that because the border has 0:16:57.320 --> 0:17:00.440 become very very difficult command in that they would employ 0:17:00.520 --> 0:17:04.480 a new carrots and take approach to the border. The 0:17:04.640 --> 0:17:09.000 sixth part being that if you try to enter illegally 0:17:09.320 --> 0:17:11.680 in between the ports of entry, meaning you try to 0:17:11.720 --> 0:17:15.399 cross the border illegally, what would happen to that person 0:17:16.040 --> 0:17:18.800 is they would immediately be subject to Title forty two 0:17:18.800 --> 0:17:25.000 expulsion from the United States. But because that approach was 0:17:25.160 --> 0:17:28.800 being draconian by a lot of the folks on the 0:17:28.840 --> 0:17:31.280 Democratic side of the aisle, the idea is it would 0:17:31.280 --> 0:17:34.879 be combined with carrots, which is this parole program, which 0:17:34.960 --> 0:17:38.000 was to say, look, we're going to allow about three 0:17:38.760 --> 0:17:41.760 thousand people per years, thirty thousand people per months to 0:17:41.880 --> 0:17:45.199 come in legally from the basic four countries where we're 0:17:45.200 --> 0:17:48.320 getting a lot of the traffic right now, Cuba, Nicaragua, 0:17:48.440 --> 0:17:52.400 Venezuela and eighty and that way. It's times that we're 0:17:52.400 --> 0:17:55.119 rejecting everybody, but we're asking them to come through this 0:17:55.240 --> 0:17:59.200 legal manner that lessons the burden on our courts of entry. 0:17:59.520 --> 0:18:04.320 So now the State of Texas and others are suing 0:18:04.440 --> 0:18:07.159 over this program, and they say it's you know, the 0:18:07.200 --> 0:18:11.440 administration has created a kind of visa program without approval 0:18:11.480 --> 0:18:14.960 from Congress, without legislation. Tell us more about the suit. 0:18:15.600 --> 0:18:19.080 So the lawsuit is basically saying that the way the 0:18:19.240 --> 0:18:22.600 parole authority works. And what parole is is it some 0:18:22.680 --> 0:18:27.040 authority that Congress has conferred upon the President of the 0:18:27.119 --> 0:18:30.800 United States, whoever president at that time, to admit any 0:18:30.880 --> 0:18:35.200 foreign naginal if there is what's either called a compelling 0:18:35.320 --> 0:18:40.000 humanitarian interest or a significant public benefit for letting that 0:18:40.080 --> 0:18:43.840 person in. So in the history of the United States, 0:18:44.200 --> 0:18:47.760 this program had been used many times for programmatic purposes 0:18:47.760 --> 0:18:52.480 with Cubans, with Vietnam, Cambodia, during the Vietnam War. It 0:18:52.560 --> 0:18:55.560 has been used many many times. But in the nighties, 0:18:56.280 --> 0:18:59.360 that program got substituted with what we now know as 0:18:59.400 --> 0:19:03.399 the refuge keep program. So the refugee program is the 0:19:03.480 --> 0:19:07.880 program that Congress intends the president's use on an annual 0:19:08.040 --> 0:19:11.639 plan basis to say, we're gonna take this many refugees 0:19:11.640 --> 0:19:14.520 from this place, as many from this place, etcetera. And 0:19:14.560 --> 0:19:18.199 what parole is is this a program that was changed 0:19:18.480 --> 0:19:21.840 so it would be just for one person at a time. So, 0:19:21.960 --> 0:19:28.760 for instance, somebody is having cancer treatment and the the 0:19:28.760 --> 0:19:32.200 their mother has been denied visas for you know, because 0:19:32.200 --> 0:19:34.840 they think the mother is gonna immigrate to the United States, 0:19:34.840 --> 0:19:37.400 so they can't get a visitor visa. But now they say, look, 0:19:37.400 --> 0:19:39.560 I need my mother in because I'm dying, and police 0:19:39.600 --> 0:19:42.560 letter of visiting while hunting cancer treatment or something, and 0:19:42.760 --> 0:19:45.199 you would parole the mother into the United States in 0:19:45.200 --> 0:19:49.000 that situation. Things like that. And so the point that 0:19:49.080 --> 0:19:52.040 the States are making is you have to keep that 0:19:52.160 --> 0:19:54.399 on a one on one basis that you can't create 0:19:54.440 --> 0:19:58.400 a memo that basically creates a criteria where people who 0:19:58.440 --> 0:20:01.320 meet that criteria would be able to apply for a 0:20:01.320 --> 0:20:05.560 parole program. They think that exceeds the bounds of what 0:20:05.720 --> 0:20:09.680 Congress created in this new parole framework in the center. 0:20:10.440 --> 0:20:13.480 Does it sound like they're right, because it sounds like 0:20:14.040 --> 0:20:17.800 something that Congress should be involved in. I think the 0:20:17.920 --> 0:20:21.560 issue is going to be twofold. So number one, I 0:20:21.600 --> 0:20:25.919 think ordinarily you would have a very close on this 0:20:26.520 --> 0:20:29.280 because the argument that the Biden administration is going to 0:20:29.400 --> 0:20:33.040 make is, well, this is a significant public benefit to 0:20:33.040 --> 0:20:35.200 do a program like this, because we have two million 0:20:35.240 --> 0:20:38.159 people crossing our border and if we can end that 0:20:38.320 --> 0:20:41.200 by creating a legal flows to site and this off, 0:20:41.760 --> 0:20:44.480 that's gonna be a massive victory brawl of us. So 0:20:44.520 --> 0:20:47.159 they're gonna try to make that argument. The question is 0:20:47.160 --> 0:20:49.800 going to be how differential the court will be, and 0:20:49.880 --> 0:20:52.280 the court have not been very differential in the last 0:20:52.320 --> 0:20:56.440 few years to the president. So that's gonna be one problem. 0:20:56.760 --> 0:20:59.440 But the second problem is this new and I'm sure 0:20:59.720 --> 0:21:02.000 you keep talking about it on your show, People keep 0:21:02.040 --> 0:21:05.920 talking about it. That made your questions doctrine that came 0:21:05.920 --> 0:21:10.880 out recently in the Supreme Court from the climate change cases, 0:21:11.080 --> 0:21:14.359 which is basically saying, look, whatever there's any major change 0:21:14.960 --> 0:21:18.720 that don't be an administrative action. Then the question is 0:21:18.760 --> 0:21:22.760 that Congress explicitly allow you to do that, And so 0:21:22.840 --> 0:21:25.320 that's going to be sort of another issue that may 0:21:25.359 --> 0:21:27.520 come up here that may make it harder for the 0:21:27.560 --> 0:21:29.920 administration to win long serve. I do think it will 0:21:29.920 --> 0:21:33.640 be enjoined very quickly at the district court level, because 0:21:34.040 --> 0:21:36.320 you know, they filed it in a location that tends 0:21:36.359 --> 0:21:38.879 to lead towards that, and I do think the Fifth 0:21:38.880 --> 0:21:42.240 Circuit will probably keep the programming joined. And then the 0:21:42.320 --> 0:21:46.080 question is will the Supreme Court allow this program to 0:21:46.160 --> 0:21:51.280 actually get implemented. All indications are when it was used 0:21:51.280 --> 0:21:54.280 with the Ukrainians is that the program does help at 0:21:54.320 --> 0:21:58.320 the border. So is Texas suing you think just to 0:21:58.520 --> 0:22:05.480 sue or I mean, this is sort of the sixty 0:22:05.520 --> 0:22:09.120 four thousand dollar question, which is looks there are certainly 0:22:09.200 --> 0:22:13.760 some arguments that can be made on the inflammatory side 0:22:13.800 --> 0:22:15.760 about well, why did you sue when we did this 0:22:15.840 --> 0:22:20.240 for Ukrainians? Are you suggesting something about that you were 0:22:20.280 --> 0:22:23.000 okay with it with one psycho population and you're not 0:22:23.119 --> 0:22:26.480 okay with it with another type of population. There's certainly 0:22:26.600 --> 0:22:30.520 arguments that people will raise at regard and there's other 0:22:30.640 --> 0:22:33.360 arguments about, hey, look, why are the States suing? Are 0:22:33.359 --> 0:22:37.399 they cutting up their nose despite their face, Because since 0:22:37.480 --> 0:22:40.840 we know these programs of a track record of success 0:22:40.880 --> 0:22:44.200 of channeling people toward legal immigration and getting them off 0:22:44.240 --> 0:22:48.280 the border, why would they sue? Those are fair questions 0:22:48.280 --> 0:22:51.200 and criticism. You know, I'm not here to launch them 0:22:51.240 --> 0:22:53.199 or not launched them, just to introduce them to your 0:22:53.280 --> 0:22:56.680 viewers and let them make their decisions. And so it's 0:22:56.760 --> 0:23:00.679 unclear policy wise why this would be object stitutins they 0:23:00.720 --> 0:23:05.440