WEBVTT - Meta Connect and the FTC's Big Tech Fights 0:00:01.960 --> 0:00:06.279 From Marhart where Innovation, Money and Power Collie in Silicon 0:00:06.360 --> 0:00:10.800 Vallet Nbon. This is Bloomberg Technology with Caroline Hyde and 0:00:11.039 --> 0:00:11.640 Ed lud Love. 0:00:25.640 --> 0:00:28.639 I'm Caroline Heindel Bloomberg's World headquarters in New York, and 0:00:28.680 --> 0:00:30.080 I'm Ed Lovelo in San Francisco. 0:00:30.240 --> 0:00:31.640 This is Bloomberg Technology. 0:00:31.720 --> 0:00:34.879 Coming up, we'll preview what to expect from Meta's connect 0:00:35.159 --> 0:00:37.600 as analysts watch for the company's generator AI and v 0:00:37.720 --> 0:00:38.360 ARE plans. 0:00:39.200 --> 0:00:42.720 Plus, we'll have more reaction to the FTC's landmark antitrust 0:00:42.760 --> 0:00:45.600 suit against Amazon, and hear from Chair Lena Kahan. 0:00:45.560 --> 0:00:48.280 Herself and as Sir Altman's open AI seeks up to 0:00:48.320 --> 0:00:51.840 a ninety billion dollar valuation. Will discuss the state of AI, 0:00:52.000 --> 0:00:53.920 the regulation of it with the co chair of the 0:00:54.000 --> 0:00:57.360 UK government's AI review. All that and so much more 0:00:57.400 --> 0:00:59.440 coming up. First, we check in on these markets, which 0:00:59.440 --> 0:01:02.800 are map dictated. We're flip flopping between gains and losses 0:01:02.800 --> 0:01:04.759 on the NASAC at the moment, currently underwater by two 0:01:04.760 --> 0:01:07.320 tens percent. It seems to be being moved by this 0:01:07.360 --> 0:01:08.199 particular market. 0:01:08.200 --> 0:01:08.759 The bond market. 0:01:08.760 --> 0:01:11.360 We're seeing yields back up four basis points. Look for 0:01:11.400 --> 0:01:13.920 it sort of decade long highs at the moment four 0:01:14.240 --> 0:01:17.080 point five to seven on the tenure. At the moment 0:01:17.120 --> 0:01:19.440 we're seeing above five percent on a two year We're. 0:01:19.280 --> 0:01:21.280 Worried about the direction of travel for the Federal. 0:01:21.000 --> 0:01:23.720 Reserve and indeed a potential government start shut down here 0:01:23.760 --> 0:01:26.680 in the United States. Interesting though, then we see the dollar, 0:01:26.720 --> 0:01:28.880 of course still pushing higher. Is that as we expect 0:01:28.880 --> 0:01:31.360 the Fed to have to push back on currently where 0:01:31.440 --> 0:01:33.400 some of the inflatory pressures have been, we're seeing the 0:01:33.400 --> 0:01:35.680 Bloomberg Dollar Index are for a six straight day, longest 0:01:35.680 --> 0:01:37.760 winning street that we've seen since the beginning of the year. 0:01:37.840 --> 0:01:39.920 Let's move on and see that actually in the face 0:01:39.959 --> 0:01:44.160 of a stronger dollar, Bitcoin higher up five ten percent, 0:01:44.160 --> 0:01:46.440 we saw a sudden bount of buying in European trading. 0:01:46.480 --> 0:01:48.880 So actually managing to tread some water here, ed, But 0:01:49.160 --> 0:01:50.919 get back to the micro that's involved today. 0:01:51.480 --> 0:01:53.320 Yeah, there's kind of some themes in the show from 0:01:53.360 --> 0:01:56.600 sort of consumer electronics to augmented reality playing out in 0:01:56.640 --> 0:01:59.000 the new cycle markets as well. So Snap up two 0:01:59.040 --> 0:02:02.440 point three percent. They're shuttering the unit of their business 0:02:02.440 --> 0:02:05.840 that does augmented reality for enterprise one hundred and seventy 0:02:06.240 --> 0:02:08.919 jobs going with that job's being cut as well, it's 0:02:09.040 --> 0:02:12.000 kind of a question about the long term commitment of 0:02:12.040 --> 0:02:14.200 Snap two org maintor reality. Later in the show, we 0:02:14.200 --> 0:02:17.120 will talk to our Bloomberg Intelligence and list about that 0:02:17.480 --> 0:02:20.880 consumer electronics hardware. Peloton now down nine ten to one percent. 0:02:21.320 --> 0:02:25.639 Tom Cortes, the last remaining founder of Peloton, is leaving 0:02:25.680 --> 0:02:28.000 the company. So of the five that started the company, 0:02:28.200 --> 0:02:30.519 he was the last DOMINODA four. He has left but 0:02:30.560 --> 0:02:32.480 will remain on as an advisor. The stock kind of 0:02:32.480 --> 0:02:35.280 traded sideways for most of the session. It is now down. 0:02:35.520 --> 0:02:37.880 The big one, as you said, is Meta Connect. Meta 0:02:37.880 --> 0:02:41.720 Connect is the company's annual developers conference. When we think 0:02:41.760 --> 0:02:44.400 about developers conferences, we do think software, but there's going 0:02:44.440 --> 0:02:46.799 to be a big hardware component. We know that quest 0:02:46.919 --> 0:02:49.440 the next generation of will be a topic of conversation. 0:02:49.480 --> 0:02:52.360 Of course, alongside AI, we are treading water on Meta 0:02:52.400 --> 0:02:55.440 the parent of Facebook. Upper tenth of one percent. How 0:02:55.520 --> 0:02:57.440 much focus is going to be on the software side, 0:02:57.480 --> 0:02:59.120 how much focus is going to be on the latest 0:02:59.120 --> 0:03:04.200 generation of hardware metaverse versus artificial intelligence? What is the priority? 0:03:04.240 --> 0:03:06.160 These are the great questions we have to ask. 0:03:06.120 --> 0:03:08.360 And indeed the ones that we've been asking day in, 0:03:08.440 --> 0:03:10.839 day out, in fact with executives of Meta. Of course, 0:03:10.919 --> 0:03:12.400 last week I got to sit down with the head 0:03:12.400 --> 0:03:16.000 of Global affairs to discuss how the company is utilizing 0:03:16.200 --> 0:03:16.920 generative AI. 0:03:17.080 --> 0:03:17.680 Just take a listen. 0:03:18.400 --> 0:03:21.760 We're announcing next Wednesday on the twenty seven new applications 0:03:21.760 --> 0:03:25.160 of generative AI in our products. Things like you'll be 0:03:25.160 --> 0:03:28.600 able to communicate with businesses on WhatsApp and Messenger, the 0:03:28.720 --> 0:03:34.080 sort of really really extraordinary aipowered bots that will transform 0:03:34.160 --> 0:03:36.560 the way that all of us as consumers interact with businesses, 0:03:36.600 --> 0:03:39.160 and many other things that will announce next Wednesday. 0:03:39.440 --> 0:03:41.520 Let's weigh up what investors want to hear. 0:03:41.680 --> 0:03:44.600 Jeffrey's seen it Internet Analyst is with us Brinville ahead 0:03:44.680 --> 0:03:48.080 of the all important Meta connect and Brent to that end, 0:03:48.240 --> 0:03:50.560 how much do you want to be hearing about generative AI? 0:03:50.680 --> 0:03:52.520 How much do you want to be hearing about chatbots? 0:03:52.520 --> 0:03:55.600 About therefore, the desire of people younger generation in particular 0:03:55.960 --> 0:03:59.360 to remain committed to instagramed Messenger, to the other offerings. 0:04:01.280 --> 0:04:05.720 I think AI is front center for every tech company, Google, Amazon, 0:04:07.040 --> 0:04:10.440 the whole industry. This is this is the majority of 0:04:10.480 --> 0:04:12.560 the topics that we're having with our investors, So I 0:04:12.560 --> 0:04:16.200 think that's what investors want to hear. Obviously at software, 0:04:16.560 --> 0:04:19.160 they don't love the hardware side of this, so they'd 0:04:19.240 --> 0:04:21.960 like to hear more about this than the quest and 0:04:22.000 --> 0:04:24.560 the hardware side, which again I think most investors are 0:04:24.600 --> 0:04:29.560 skeptical about obviously a more expensive endeavor, higher margin building 0:04:29.640 --> 0:04:32.760 software and AI than hardware, So I think we want 0:04:32.760 --> 0:04:36.960 to hear more around that. Mark Zuckerberg, you know, did 0:04:37.200 --> 0:04:40.800 a story yesterday as Instagram about Jarvis. 0:04:40.600 --> 0:04:41.800 Back in twenty sixteen. 0:04:42.000 --> 0:04:44.559 He showed Jarvis was his AI bought at his house 0:04:44.600 --> 0:04:48.160 that could turn on the lights and do things like 0:04:48.279 --> 0:04:50.480 make his toast at home. Right, So that was back 0:04:50.520 --> 0:04:54.240 in twenty sixteen, and he kind of re posted that. 0:04:55.160 --> 0:04:57.880 So we believe, you know, this concept of Jarvis for 0:04:57.920 --> 0:05:01.159 the home comes to the mass market in AI. 0:05:01.279 --> 0:05:03.560 Obviously Microsoft and Google are. 0:05:03.400 --> 0:05:07.520 Doing this meta also as an incredible opportunity given given 0:05:07.600 --> 0:05:09.960 what they have with What's App, Messenger and the global 0:05:10.000 --> 0:05:12.880 platforms that they have that can help us, you know, 0:05:12.960 --> 0:05:16.080 find the right goods. We want help help surface ideas, 0:05:16.880 --> 0:05:19.839 maybe pass along photos or other ideas or our friends. 0:05:20.680 --> 0:05:23.320 So I think this is going to be for us, 0:05:23.400 --> 0:05:26.839 the most exciting part of it. I think the sideshow 0:05:26.880 --> 0:05:30.560 will be, you know, Meta Quest three and the price point. 0:05:30.600 --> 0:05:35.200 Everyone's all below out of the vision prow at thirty 0:05:35.200 --> 0:05:36.080 five hundred dollars. 0:05:36.080 --> 0:05:38.920 So the differentiation there and what's going to happen in 0:05:38.960 --> 0:05:42.000 the next generation of the Metaversese brand. 0:05:42.200 --> 0:05:45.560 Meta is building large language models, a heavy emphasis on 0:05:45.680 --> 0:05:49.279 open source when developing that technology, and it's kind of 0:05:49.360 --> 0:05:53.520 hinted at how that translates to generative AI tools and 0:05:53.560 --> 0:05:56.960 their existing properties. Right I think we're focusing on AI agents. 0:05:57.240 --> 0:05:59.599 Do you see a clear path to Meta ever making 0:05:59.640 --> 0:06:02.160 any money from all of the things that they are 0:06:02.480 --> 0:06:04.000 working on the R and D side? 0:06:05.400 --> 0:06:05.760 We do. 0:06:05.760 --> 0:06:08.279 They've been very clear they're not making money now or 0:06:08.320 --> 0:06:11.640 don't believe that this will be a big revenue initiative 0:06:11.880 --> 0:06:14.839 in the short term. Long term, we do believe that 0:06:14.920 --> 0:06:18.440 they can make money on Lama, and they're obviously a 0:06:18.520 --> 0:06:22.680 consumer focused company, not as much enterprise, and so this 0:06:22.720 --> 0:06:24.440 is you know, going to take them time to figure 0:06:24.440 --> 0:06:24.760 this out. 0:06:24.800 --> 0:06:28.440 But we think given the quality of the feedback. 0:06:28.000 --> 0:06:30.599 From the channel about Lama and how they're using it, 0:06:30.760 --> 0:06:34.799 how they're the the open source community loving what they're doing. 0:06:35.560 --> 0:06:38.440 There's no doubt there's an opportunity to monetize that this. 0:06:38.440 --> 0:06:40.920 This isn't in the numbers. Uh, this isn't in the 0:06:41.000 --> 0:06:43.080 valuation today. 0:06:43.440 --> 0:06:45.960 So two three, four years from now, could this could 0:06:46.000 --> 0:06:48.280 we have a discussion around you know, is this going 0:06:48.360 --> 0:06:50.800 to be a material revenue engine where they could they 0:06:50.800 --> 0:06:54.600 could potentially license this model to companies to use and 0:06:54.640 --> 0:06:57.719 they would get a royalty for the answer is yes, 0:06:57.800 --> 0:07:00.640 one hundred percent. What the details look like, they're still 0:07:00.640 --> 0:07:02.880 trying to iron those out. Those aren't in our model, 0:07:03.200 --> 0:07:05.839 but certainly we do believe that they can monetize it 0:07:05.880 --> 0:07:06.400 going forward. 0:07:07.640 --> 0:07:10.240 Brent, quickly, it sounds to me like you're not that 0:07:10.400 --> 0:07:14.160 excited about augmented in virtual reality. 0:07:14.320 --> 0:07:15.120 Is that fair? 0:07:15.960 --> 0:07:16.920 Yes, that's fair. 0:07:17.080 --> 0:07:17.720 Okay, Okay. 0:07:18.560 --> 0:07:22.720 Here's the thing that it's either a metaverse story or 0:07:22.760 --> 0:07:25.400 it's an AI story. Do you see a world in 0:07:25.440 --> 0:07:28.760 which meta can convince investors that we can have both. 0:07:31.000 --> 0:07:33.120 I think we can have both, but I think that 0:07:33.480 --> 0:07:36.120 is the lass they've talked about the metaverse. The higher 0:07:36.160 --> 0:07:40.480 the stock is gone, so form an investor perspective, they 0:07:40.880 --> 0:07:42.920 if they keep talking about the software world and what's 0:07:42.960 --> 0:07:45.680 going on the social networking side. That's great. This is 0:07:45.680 --> 0:07:48.440 an advertising driven story, right. The majority of the revenue 0:07:48.440 --> 0:07:51.200 is driven off for advertising. So at this point, I 0:07:51.200 --> 0:07:54.240 think everyone the jury is out whether the metaverse is 0:07:54.240 --> 0:07:56.600 going to be exciting or not. I think most people 0:07:56.600 --> 0:07:59.520 are saying it's not going to be as exciting and 0:08:00.320 --> 0:08:03.320 taking the height because there's real world productivity measures that 0:08:03.360 --> 0:08:06.040 we can see and how it's impacting our lives, Like 0:08:06.240 --> 0:08:09.280 putting a headset on and being claustrophobic and playing a 0:08:09.320 --> 0:08:11.160 game with my kids for ten minutes is not going 0:08:11.200 --> 0:08:14.920 to change my life, right, So I'm I think right 0:08:14.960 --> 0:08:19.000 now we're not We're probably the biggest bear on the metaverse. 0:08:19.720 --> 0:08:22.160 We're very foolish about the position and what they can 0:08:22.240 --> 0:08:26.520 do with the other side of their franchise, and so 0:08:26.720 --> 0:08:29.880 we're very clear about what we like we don't like. 0:08:30.600 --> 0:08:33.679 Interestingly, many an executive is trying to lean into what 0:08:33.800 --> 0:08:36.839 investors and analysts such as yourself like, and look we 0:08:37.000 --> 0:08:39.520 had and flipski on earlier in the week just talking 0:08:39.559 --> 0:08:43.120 about how generative AI is becoming such a focus for AWS. 0:08:43.200 --> 0:08:44.680 On the flip side of all of this is the 0:08:44.720 --> 0:08:47.760 regulatory environment and look Amazon Meta all of them being 0:08:47.880 --> 0:08:51.000 eyed from regulators in particularly the FTC. 0:08:51.160 --> 0:08:51.840 We just heard. 0:08:51.760 --> 0:08:54.760 Yesterday of course Amazon under fire there. What are you 0:08:54.840 --> 0:08:57.840 making of this landscape? How do you expect the FTC 0:08:58.040 --> 0:09:00.280 some of these legal wranglings to unfold for is In, 0:09:00.320 --> 0:09:01.400 for example, brand. 0:09:03.760 --> 0:09:06.360 The government has been trying to tackle big tech for 0:09:06.400 --> 0:09:10.040 a long time, and we've said this that the government, 0:09:10.400 --> 0:09:13.160 the government or oversight is the right thing to help 0:09:13.200 --> 0:09:16.400 protect all of us as consumers. But the big tech 0:09:17.120 --> 0:09:20.760 is being big is not bad, right, Being bad is bad. 0:09:21.080 --> 0:09:23.439 So as long as they find the middle ground. We've 0:09:23.440 --> 0:09:26.720 said this repeatedly, investors, anytime a regulatory scare comes in, 0:09:26.880 --> 0:09:27.720 you buy these stocks. 0:09:28.040 --> 0:09:29.040 Just look at the charts of. 0:09:29.000 --> 0:09:32.360 Meta, Google, Amazon or over the course of the last 0:09:32.400 --> 0:09:35.920 five years, any any regulatory scare, these need these names 0:09:36.040 --> 0:09:36.760 need to be bought. 0:09:37.360 --> 0:09:37.800 Clearly. 0:09:38.200 --> 0:09:41.080 Uh, there's been multiple attempts for the government to take 0:09:41.120 --> 0:09:41.600 down tech. 0:09:41.679 --> 0:09:42.600 It hasn't happened. 0:09:42.920 --> 0:09:46.480 They find a way out, stocks recover, Investors make money. 0:09:46.559 --> 0:09:49.960 So I'm all for regulation and doing the right thing 0:09:50.000 --> 0:09:52.600 to protect all of us. But I think what's happened 0:09:52.679 --> 0:09:55.920 is they've overstepped their boundaries and they've gone after things 0:09:55.960 --> 0:09:58.839 that they don't necessarily have good footing or educate it 0:09:58.920 --> 0:10:01.040 on and then that's caused the proms. 0:10:01.800 --> 0:10:04.880 So I think ultimately these are comedies that have. 0:10:07.400 --> 0:10:10.240 Both one and then end goal, and I think they 0:10:10.280 --> 0:10:12.520 can meet in the middle. And we've said this repeatedly, 0:10:12.880 --> 0:10:16.480 like any regulatory scaring, Internet has not really done anything 0:10:16.520 --> 0:10:18.400 that he stocks. Just pull up the chart at Google 0:10:18.640 --> 0:10:20.800 for the last five years and you can just see 0:10:20.800 --> 0:10:23.120 it's an amazing up into the right chart. 0:10:23.559 --> 0:10:26.959 So respected believe in it. 0:10:27.600 --> 0:10:29.840 Don't believe they're going to have a mass of consequence 0:10:30.320 --> 0:10:31.080 or businesses. 0:10:31.760 --> 0:10:32.040 Brent. 0:10:32.080 --> 0:10:34.120 When you outlined that ten minutes with an ar v 0:10:34.240 --> 0:10:36.440 I headset playing with your kids at the weekend wouldn't 0:10:36.480 --> 0:10:38.880 change your life, there were parents in the San Francisco 0:10:39.000 --> 0:10:42.120 studio team here that tickled them a lot. I think 0:10:42.120 --> 0:10:44.880 they probably share that view of you. Jeffrey, Senior Internet Analysts, 0:10:45.120 --> 0:10:49.360 Brent Hill, thank you very much. Sticking with devices, Amazon 0:10:49.400 --> 0:10:53.040 has lured away longtime Microsoft executive Panos Pana to head 0:10:53.080 --> 0:10:56.760 the company's devices and services business after device's chief Dave 0:10:56.840 --> 0:11:00.200 limp announced his plans to retire. He most recently was 0:11:00.240 --> 0:11:03.840 Microsoft's chief product officer, overseeing Windows as well as the 0:11:03.840 --> 0:11:07.079 company's hardware teams, and of course Dave Limpoff to head 0:11:07.160 --> 0:11:09.559 up Blue Origin carr Lots. 0:11:09.280 --> 0:11:17.000 Of Revolving Doors. 0:11:19.480 --> 0:11:22.480 FTC chair Lena Kahan is seeking to end what she 0:11:22.600 --> 0:11:26.080 calls Amazon's illegal conduct, but didn't go as far as 0:11:26.120 --> 0:11:28.360 to call for a breakup of Amazon. We sat down 0:11:28.360 --> 0:11:31.040 with her at our Bloomberg office in Washington, DC. 0:11:31.559 --> 0:11:32.920 This is the conversation. Have listen. 0:11:33.880 --> 0:11:34.480 This is a. 0:11:34.400 --> 0:11:38.080 Case about a set of unlawful tactics that Amazon has 0:11:38.200 --> 0:11:42.520 used to maintain its monopolies. We note in the complaint 0:11:42.679 --> 0:11:46.480 both a set of anti discounting tactics that Amazon uses 0:11:46.520 --> 0:11:50.679 to punish any seller or retailer that dares to discount, 0:11:51.040 --> 0:11:55.920 and ultimately these sets of tactics deter sellers and retailers 0:11:55.920 --> 0:11:59.400 from lowering prices and closes off an entire dimension of 0:11:59.440 --> 0:12:00.280 price competition. 0:12:00.800 --> 0:12:02.400 The other set of tactics. 0:12:02.000 --> 0:12:05.200 We note, is a coercive scheme that Amazon uses to 0:12:05.280 --> 0:12:10.480 effectively require sellers use its fulfillment service, and this in 0:12:10.520 --> 0:12:14.359 turn ends up stunting the development of independent fulfillment providers 0:12:14.600 --> 0:12:18.440 and ultimately also deprives actual and potential rivals of scale. 0:12:18.640 --> 0:12:20.400 And that's really the core theme here. 0:12:20.840 --> 0:12:23.720 These are a set of tactics, but ultimately Amazon has 0:12:23.760 --> 0:12:28.600 pursued them to deprive actual and potential competitors of the 0:12:28.640 --> 0:12:32.400 ability to gain the scale and momentum needed to effectively 0:12:32.480 --> 0:12:36.959 compete online. And having achieved and protected its monopoly power, 0:12:37.000 --> 0:12:40.800 our complaint details how Amazon is now exploiting that monopoly 0:12:40.920 --> 0:12:45.040 power in ways that harm customers, both the sellers, the 0:12:45.120 --> 0:12:48.280 tens of millions of American families that use Amazon to 0:12:48.320 --> 0:12:50.560 do their shopping, but also the. 0:12:51.440 --> 0:12:53.480 Sorry, both the shoppers, but also the sellers. 0:12:53.520 --> 0:12:56.640 The hundreds of thousands and tens of thousands of sellers 0:12:57.040 --> 0:13:00.959 use Amazon to access those shoppers, and it's done that 0:13:01.000 --> 0:13:04.920 through actively raising prices. Amazon takes close to one out 0:13:04.920 --> 0:13:08.240 of every two dollars from sellers that they use its platform. 0:13:08.920 --> 0:13:11.120 It's also degraded its. 0:13:10.920 --> 0:13:13.480 Service by adding a whole set of pay to play 0:13:13.520 --> 0:13:16.760 ads that make it more difficult for consumers to find 0:13:16.760 --> 0:13:20.000 what they're looking for and steers them to higher price products. 0:13:20.000 --> 0:13:23.760 So really encourage everybody to read the complaint. It details 0:13:23.800 --> 0:13:26.800 all of this conduct in great detail, and we're really 0:13:26.800 --> 0:13:28.280 looking forward to moving forward with it. 0:13:28.840 --> 0:13:31.320 So one of the things in the complaint is. 0:13:31.280 --> 0:13:36.120 This phrase structural relief that you're seeking structural relief in 0:13:36.160 --> 0:13:38.760 this case, which implies a breakup. 0:13:39.040 --> 0:13:40.160 What would that look like. 0:13:41.240 --> 0:13:43.520 So at this stage the complaint is really focused on 0:13:43.559 --> 0:13:47.000 the issue of liability. We lay out a scheme that 0:13:47.040 --> 0:13:49.720 we believe violates the US antitrust laws. 0:13:50.280 --> 0:13:51.400 What we note in. 0:13:51.280 --> 0:13:56.240 The complaint is that these different aspects of Amazon's scheme have. 0:13:56.320 --> 0:13:57.600 An aggregated effect. 0:13:57.920 --> 0:14:01.960 So the harm is accumulating their feedback loops between the harms, 0:14:02.240 --> 0:14:05.599 and so the net exclusionary effect of Amazon's conduct is 0:14:05.679 --> 0:14:09.640 quite significant. Ultimately, we'll want to make sure that any 0:14:09.679 --> 0:14:13.920 remedy is halting the illegal conduct, preventing a recurrence, and 0:14:14.040 --> 0:14:17.040 ensuring that Amazon is not able to profit and benefit 0:14:17.080 --> 0:14:20.320 from its illegal behavior. So right now we're squarely focused 0:14:20.320 --> 0:14:23.640 on the question of liability, But when we get to 0:14:23.680 --> 0:14:25.320 the issue of remedy, those are going to be the 0:14:25.320 --> 0:14:26.560 principles we'll be focused on. 0:14:27.680 --> 0:14:31.320 FTC Chair Lena Calm there and look, Amazon has responded 0:14:31.320 --> 0:14:34.120 to this lawsuit, with the company's Global Council writing that 0:14:34.400 --> 0:14:36.920 if the FTC were to be successful, the result would 0:14:36.960 --> 0:14:40.760 be actually anti competitive, anti consumer. Let's stick in to 0:14:40.840 --> 0:14:43.760 all of this with Charlotte's lame and competition Policy Director 0:14:43.800 --> 0:14:44.760 of Policy. 0:14:44.480 --> 0:14:45.600 At public Knowledge. 0:14:45.640 --> 0:14:48.520 And also you previously worked in the Anti competitive Practices 0:14:48.600 --> 0:14:52.640 division of the FTZ investigating, litigating, and Charlotte, if you 0:14:52.680 --> 0:14:55.760 were there now, how much confidence would you have that 0:14:55.840 --> 0:14:57.720 this would be a winnable action. 0:14:59.320 --> 0:15:02.120 I think there's a reason that the antitrust attorneys at 0:15:02.120 --> 0:15:05.480 the FTC tried not to answer those kinds of questions. 0:15:05.080 --> 0:15:08.880 It's really hard to say at this early stage, but 0:15:09.000 --> 0:15:12.280 I think they feel confident, right. I watched that interview 0:15:12.320 --> 0:15:16.720 with Lena Khan yesterday, and it's so important to highlight 0:15:16.840 --> 0:15:20.600 this problem for people. It seems clear, even though Amazon 0:15:20.640 --> 0:15:24.280 has built their reputation on having the best prices, that 0:15:24.280 --> 0:15:29.120 that didn't come from being a really efficient competitor. It 0:15:29.160 --> 0:15:32.560 came from pushing those third party sellers to raise prices 0:15:32.600 --> 0:15:35.880 everywhere else. That's not fair competition and if that's what's 0:15:35.920 --> 0:15:38.320 going on, it needs to step Charlotte. 0:15:38.320 --> 0:15:41.760 What's interesting is sort of investor an analyst reaction to 0:15:41.840 --> 0:15:45.240 all of this, and one particular analyst saying that this 0:15:45.320 --> 0:15:47.920 is a benign scenario for Amazon over at BED, and 0:15:47.960 --> 0:15:51.320 in fact they said that they were surprised the narrowness 0:15:51.640 --> 0:15:54.200 of the overall case, saying that there isn't sort of 0:15:54.200 --> 0:15:57.800 a reference to disallowing vertical integration. Do you think the 0:15:57.840 --> 0:16:01.560 outcome should be some sort of breakup or has it 0:16:01.720 --> 0:16:02.880 got to be something else? 0:16:04.880 --> 0:16:07.880 So certainly I think stopping the conduct is not going 0:16:07.920 --> 0:16:08.760 to be sufficient. 0:16:09.280 --> 0:16:09.960 This has been. 0:16:09.800 --> 0:16:12.920 Going on for a long time and replacing the competition 0:16:13.000 --> 0:16:16.920 that has been lost is really difficult. So step one 0:16:17.080 --> 0:16:18.920 is going to be to stop the conduct, but more 0:16:19.000 --> 0:16:22.960 will be needed. And I heard Chair con yesterday sort 0:16:23.000 --> 0:16:25.600 of demurring that this is going to be a decision 0:16:25.600 --> 0:16:28.040 that happens far in the future, and that's absolutely right. 0:16:28.480 --> 0:16:32.560 The remedy stage of litigation is later and separate. But 0:16:32.640 --> 0:16:35.720 it may be that, you know, separating off the fulfilled 0:16:35.760 --> 0:16:39.320 by Amazon part of the business is the only way 0:16:39.360 --> 0:16:43.000 to address that lost competition, in which case the court 0:16:43.000 --> 0:16:46.720 would have to take that seriously, Charlotte. 0:16:46.800 --> 0:16:50.000 Some news in the last hour. The FTC has issued 0:16:50.000 --> 0:16:53.240 an order saying that it will continue its internal case 0:16:53.840 --> 0:16:58.760 against Activision and Microsoft steal that when that deal closes, 0:16:58.800 --> 0:17:01.560 they could then after the fact, try to unwind it. 0:17:01.880 --> 0:17:06.280 This is what Activision had to say in response via 0:17:06.400 --> 0:17:09.879 a spokesperson. We're focused on working with Microsoft toward closing 0:17:10.440 --> 0:17:13.840 how the FTC uses limited taxpayer dollars. 0:17:14.280 --> 0:17:16.320 Is its decision. 0:17:16.240 --> 0:17:19.760 Given your CV that Caroline outline, What is your response 0:17:19.800 --> 0:17:20.679 to this situation. 0:17:23.080 --> 0:17:25.080 Well, they're drying on an important point, which is that 0:17:25.119 --> 0:17:28.879 the FTC has limited resources and there are so many 0:17:28.960 --> 0:17:31.480 important cases that we want them to bring with those 0:17:31.520 --> 0:17:35.639 limited resources. But this case against Microsoft and Activision is 0:17:35.640 --> 0:17:38.720 a really important case. So if they think that that 0:17:39.240 --> 0:17:42.119 has the opportunity to help so many consumers, as I 0:17:42.160 --> 0:17:45.280 believe it would, that might be an important priority to 0:17:45.720 --> 0:17:48.840 spend those limited resources. But they're absolutely right. We do 0:17:48.920 --> 0:17:51.880 need to increase funding for these agencies so that they 0:17:51.880 --> 0:17:54.200 can take on all of these important cases. 0:17:55.160 --> 0:17:58.680 Charlotte quickly, it is Lena Khan picking too many fights. 0:18:01.240 --> 0:18:04.560 No, we need to pick these fights. And she spoke 0:18:04.680 --> 0:18:09.720 yesterday about the deterrence strategy which can make this more 0:18:09.760 --> 0:18:14.520 efficient use of resources. Right, if businesses out there can 0:18:14.600 --> 0:18:17.399 see this is not going to be an opportunity for 0:18:17.480 --> 0:18:22.480 you to try something risky because there is a really 0:18:22.880 --> 0:18:26.439 fierce enforcer here that can actually be a way of 0:18:26.480 --> 0:18:29.480 saving resources. So I think that's part of the strategy 0:18:29.560 --> 0:18:30.880 and that can work over time. 0:18:31.960 --> 0:18:35.280 Charlott's Lane and competition policy director at public knowledge. Thank 0:18:35.320 --> 0:19:05.080 you so much for your time. This is Bloomberg Technology. 0:18:53.000 --> 0:18:55.119 Time now for work shifting when we look at the 0:18:55.200 --> 0:18:58.240 changing landscape of the labor market amid advances in technology. 0:18:58.600 --> 0:19:00.720 Big breakthrough for Hollywood. 0:19:00.760 --> 0:19:03.399 The Writers Guild of America approved a new contract with 0:19:03.480 --> 0:19:07.160 the studios, ending it strike after months of intense negotiations. 0:19:07.240 --> 0:19:09.400 Now one of the biggest wins in the deal is. 0:19:09.320 --> 0:19:12.639 Some assurance that artificial intelligence well won't replace their jobs. 0:19:12.840 --> 0:19:15.720 Glomberg's Felix Jillet is here with us with more details 0:19:15.720 --> 0:19:18.919 and before we move to what's next to occur in 0:19:18.960 --> 0:19:22.120 all of this, Yeah, AI, how have they won any 0:19:22.119 --> 0:19:23.160 sort of protection here? 0:19:23.680 --> 0:19:26.080 Well, they got what they wanted basically, which is that 0:19:26.119 --> 0:19:29.520 the Hollywood studios agreed that they're not going to you know, 0:19:29.600 --> 0:19:33.760 feed a bunch of scripts into the AI machine and 0:19:33.800 --> 0:19:36.679 come back and credit a movie to an AI that 0:19:36.840 --> 0:19:38.679 you know, the humans are still going to get the credit, 0:19:39.520 --> 0:19:42.359 and that was what was really important. Now, the studios 0:19:42.359 --> 0:19:46.800 did retain the right to experiment a little bit with AI, 0:19:47.160 --> 0:19:49.000 so you know, it remains to be seen a little 0:19:49.000 --> 0:19:50.399 bit how this is going to play out, But for 0:19:50.440 --> 0:19:53.080 the time being, the writers are declaring victory. 0:19:53.000 --> 0:19:56.040 And read across therefore to actors because they too, particularly 0:19:56.080 --> 0:19:59.320 perhaps you know, the extras that are used, worried about 0:19:59.520 --> 0:20:01.280 AI replacing them in some way. 0:20:01.359 --> 0:20:02.040 Is this an issue? 0:20:02.119 --> 0:20:05.120 Yeah, I think they had similar concerns. And now there's 0:20:05.160 --> 0:20:08.919 a template for these protections. So I think, you know, 0:20:09.160 --> 0:20:13.320 there's optimism to believe that the writers, having made this pack, 0:20:13.400 --> 0:20:16.199 well now the actors will make some real progress quickly. 0:20:17.119 --> 0:20:19.320 Some of the numbers bind this felix are incredible, the 0:20:19.400 --> 0:20:21.960 loss of the economy based on the strike. But the 0:20:22.000 --> 0:20:24.600 whole point here is that the cost of contents getting higher. 0:20:25.720 --> 0:20:28.000 Did the studios feel good about this outcome? 0:20:28.840 --> 0:20:32.800 Their reaction has been notably more muted than the writers. 0:20:32.840 --> 0:20:35.480 I mean, the writers have been very exuberant, very you know, 0:20:35.560 --> 0:20:36.600 declaring victory. 0:20:37.200 --> 0:20:38.440 The studios gave up a lot. 0:20:38.480 --> 0:20:40.199 I think they gave up more than they thought they 0:20:40.240 --> 0:20:44.200