Matt is joined by antitrust and competition policy expert Charlotte Slaiman to discuss the ongoing antitrust cases against Google and Facebook, the basics of antitrust litigation, and their outlook for the future of regulatory efforts to rein in the power of Big Tech through pro-competition policy.
"Only Regulation Can Jumpstart Competition in Big Tech" by Gene Kimmelman and Charlotte Slaiman, Fortune (July 16, 2019)
"FTC Sues Facebook for Illegal Monopolization" (December 9, 2020)
"Colorado Attorney General leads multistate lawsuit seeking to end Google's illegal monopoly in search market" (December 17, 2020)
Charlotte Slaiman (@CharlottesWWWeb), Competition Policy Director, Public Knowledge
Matt Yglesias (@mattyglesias), Slowboring.com
Erikk Geannikis, Editor and Producer.
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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hello. Welcome to another episode of the weed on the box media podcast network, I'm Matthew, Glacius. We are continuing and in fact ending our next four years series here with a return guest, Charlotte Layman from public knowledge, but she has been promoted since last time is now director of competition policy there, which is excellent, and we were going to talk about competition policy and specifically
but this is very. The weeds politics seems more insane than ever, and you know binding is trying to get his agenda going, but
super literal sense like he is just going to be in paraday, some ongoing anti trust litigation that I think
It's important for people to understand. This is one of these things that is far from the zoo of politics, but actually quite important, so we're going to talk first about this is a case against
Google that was initiated by. I guess the Justice Department and some states what what's the deal, that's right, so there is actually three different antitrust cases against go
from various enforcers. One is from the Department of Justice and then there's one from a group of states, that's led by Colorado in New York and then there's another case from a group of states led by Texas awhile
yeah, that's right also is it is it like? Is that, like the democratic
attorney general or doing one case of the Republicans, are doing the other. Is that so
states led by Colorado in New York is by partisan. There are Democrats and Republicans, but I do think the Texas cases only republican state attorney general. Well, ok, so that is those companies
an air all about separate issues, tide of
The Colorado and New York case is similar to the Doj case, but a little different, whereas the Texas case is very different. It's it's about a whole different market.
Do doing. I can guess I mean Google is like it's a thing like you, you can google it, but this is also a big sprawling conglomerate.
Yeah. So I can imagine, there's a lot you might or might not want to sue Google them exactly. There is a lot
so the dear J case actually does focus on Google search that sort of most obvious Google product and their concern
is that the way that Google became so powerful was in part not just because it was a great product, but really because they had a series of exclusive default contracts and that they used their powerful position in other industries to make Google search the default across many different products, and that that's a big part of
They were able to get this huge ARCA possession they have today. Please you're, gonna tied together, read because, if you like, if you use Google, like you, really is a great product but part of how it works right, it's not it's. Only somebody like makes a chair in a factory. The data from Google's users is an input.
To the product, exactly acquiring customers helps them refine the product which helps them retain customers. So exactly how that loop works is very important. To understanding
like a rival is like you could be a really smart computer programmer or whatever, but you can't compete with that volume of input. Yes, I mean part of it is that they have really smart
computer programmers likes to some extent it's like making a really good chair, but yes than that
is hugely important and there is value to Google in having so much more data from having so many more users, there's also value to Google in preventing competitors or a potential competitor from getting that data, so that competitors can't make a product
there's really effective enough to compete and show and was a what can it deals? Are we talking about? This is like if I fire up my phone. If I, if I put something in like that, that's a Google search, yes,
so Google did have an agreement with Apple out to be the default search provider on iphones that was incredibly expensive agreement. Apparently they ve been paying eight to twelve billion dollars a year. For that you know, prime
on the Iphone the lawsuit doesn't tell us exactly. I think the detailed information is redacted, but they said it's in that public reporting indicates it's in that range.
And it's not just that right, the crow.
Browser is owned by Google and the Android operating system is owned by Google, so you're thinking about mobile, which has become more and more of the market. Overtime. More and more searches are happening on mobile, as opposed to on your desktop
Brian, your laptop all the mobile phones are either Iphones or Android advance. The only operating system that is available to smartphone manufacturer is Android or they can make their own and its incredibly difficult to make your own smartphone operating system. So that's all
realistic option and by locking down the Iphone and all of the Android phones to have Google be the default search engine, that's very powerful right, and so it gives them this kind of dominant position. But I mean what's the sort of
legal case there right because I'm companies pay at. I don't usually Nova, knows this, but like companies pay for favourable placement on the shelves in in retail stores, all the time, if you go
mean at like big chain: bookstores aren't so much of the thing any more but it, but it used to be that it was like like what table you're on.
All arranged between the publishers and and the retailers are, you know, because defaults are a valuable and so people pay, but is that is that illegal? So I think what is important is the distinction of market power, so one book at a bookstore having
the agreement. You know there used to be competition and bookstores, I'm interested now and whether that's true, but these are not competitive markets and so that the choices that one company makes there isn't a competitive valve to to do something else. If you don't like the way that they're doing at your really stuck because of the market power, I guess what's a remedy,
swayed right because you, you, sell Google you're you're not allowed to pay all ten billion dollars a year to try to get this kind of placement.
I almost feel like Google might say what I'm gas, because, if you're out
This point of view Renzo inside right now, but the default position is valuable, so they extract this ten billion dollars or whatever it is from Google. But if nobody was allowed to pay apple for the default, like aren't, they still just gonna default to Google right, so I think you're you're, right that the remedy is really hard and simply undoing the contracts is not gonna, be sufficient. What was
important about this conduct is largely what happened in the past its how Google was able to prevent being from becoming a successful competitor, prevent other companies from becoming successful competitors, and so just getting rid of the contracts now does not actually remedy the situation. They do talk a little bit in the d o J complaint about
Oh, the payment to Apple is in some ways sharing of monopoly rents. It's it's not just that they're paying for value, and so it may be that if apple wasn't getting paid to support this, but not believe that they might, you know, be more interested to invest in competitor or invest in their own competitor. But yes,
think we're going to need to do a lot more than just undo the the contracts. It's like a weird situation where, in the in the
alas, market apple and Google, are the only to the gate they compete and that the only to competitors, but then apple, doesn't have a search offering at all. So one way to think of it is like. Ok, Google wants apple to collude in the smartphone market
but there's no real upside to apple for doing that. So they give the haven money right. Maybe so they'll come
and New York case gets into a little bit more of the sort of forward thinking how? How could this look different? One theory
as apple has SIRI and voice assistance could be next layer up from search engines, so they could be sourcing from multiple search engines, and we don't really see that happening, but maybe, if apple had a greater incentive to make their voice assistant, more independent thou, be an opportunity for other search engines to come
man and help serve the types of searches that Google isn't great. Ass, wait any joke, as we have in the in the kind of voice assisted market where we have three big players. Basically, I am an like series, no good. I have some Alexa stuff in my house, and I have my phone. Unlike the election, clearly works better, but also like using the thing that's under
is sometimes convenient right. I remember. I was more of a business reporter back in the heyday of of being was failing.
And I remember thinking it was a very convenient for the world that Microsoft is pouring all this money into the thing that didn't seem to have great prospects, but I feel it that's. That's just feels to me like, like the problem, he write that it's like, if you could order apple to say. Well, you need to build your own surgeons.
Like you got to go. Take on Google. That would be great. Can we make anybody want to go out in this market? No
We want to set up the competitive situation where it will make business sense for our companies to compete.
And any one thing that search has
for it as a place that ought to be competitive, is its incredibly lucrative. There is a huge and Senate as if there was a realistic path to you now, building a thriving business. You could make a lot of money, so I think if we could create a real competitive environment, there would be an incentive for companies to come and incomplete and saw this. He other question you know I mean always. I think it only in an age of
cases I'd like who is suffering from a lack of competition? Like I don't hear from people like big complaints about the quality of their mobile web search
because I think it is true that, like you, can switch that he thought of you. If you want to know what does because, like Google works, fine and its freely, so I've been listening,
for complaints, and I agree with you- there are not a lot of them, but every once in a while, you do see complaints about the quality of Google search and it's like certain types of searching
So when I saw the ghost Sergey on Twitter, maybe like a year ago, I pickles
central to this stuff and she was like I'm looking for. You know vague in recipes on Google, and so many of them are awful and I think Google may not be a good set up for recipe search because the website, the rises to the top on Google is the one that has the most collects the most things linking to it and people. You know, don't immediately click away from the website once they go through to it that's out, but tells you whether a recipe is good right. There could be an opportunity for recipes
search engine that actually has some indicators of quality, and that would be really useful for people looking for recipes online. Sometimes it gets more serious, like health information, so you don't. I heard a story from someone who said my mom got sick and I was trying to research so that I could have an informed conversation with her daughter.
You're and Google was not very useful for that. You know it's not surfacing the most reliable medical information. I think they ve done some work to try to improve that since then, because of how serious that is, but there are all types of searches
Were you really might benefit from an alternative? I want to say as it as a content person. So then what happens is that people don't always know when something is Google's fought. So, like a lot of people, I have not heard a lot of complaints.
The quality of Google's recipe searching. I have heard a lot of complaints about the fact that recipe websites breakfast
everything a little anecdote. Yes, and I dont think people understand that that's a search engine optimization taken
The Google will know. What is you if you just post a bare ingredient list and instruction said I did not
that so we see this there. What? What? What are you work at a bar? There were certain kinds of content formats that we discovered. We couldn't do that if you just post a bullet lest like a warm perform in search, you happen, but several hundred words of of copy on top of it, and so that's why all recipe websites have that.
By structural feature, but because its own- and also nobody, tells you right, because I part of running a website, is you have to stand by your product
It's so nobody has ever gonna say in their little.
The intro yeah like this- I don't know- I guess you're right. It's always you. I mean it becomes doubly confusing because first
They sort, of course, the websites into adopting a particular content format.
And then the websites dont want to admit to the readers that that's what's going on and they want to say like a. We think these anecdotes are amazing, so people don't know right anyway, so the Google has
reasons for having search work. This way, as you are saying, right
specialized recipes search has different considerations: sweet both as using in terms of like wasn't quality but like people looking for articles to read, I think,
do you want them to have were hits, and that's why Google does it that way to turn my window out scams that people looking for recipes dont want work say that they want the recipe yeah and I think it can
will be much bigger than this right. I mean these are small examples that we can think of, but I really liked in the Colorado New York case. They they call this sort of sector of the market information discovery and I think because we only have had Google really and and products that are pretty similar to Google
in that space. We ve sort of lost our imagination and about what information discovery on the internet could look like, and if all of these smart engineers were not working for a company that really benefits from the status quo, but instead working for companies that we're trying to disrupt Google's monopoly. We might have really cool and interesting information. Discover
tools, and we don't have that because Google may have been violating the law, but so soldiers just so so I can understand, and everybody can understand,
It's a the part of images that I most familiar with is is like merger review, yeah
so, let's simpler issue. In that case, it's like a company wants to buy
the company and the government says no. You can't do that and then they dont do it yet like how would this war
read like if ever judges like you're right Colorado
or the binding ministration continues with this lawsuit, and they win like liquid is at me and practical sense.
Yeah. So the court has an opportunity to oppose remedies and the remedies ought to actually remedy the harm right. So the result of the court case should not just be ok. You can't do that bad behaviour anymore. It should not just be a fine there really supposed to try to figure out a way
to fix the harm that happened, and it can be really hard. It's really hard in situations like this, where this conduct has been going on for a long time. It's a complicated industry.
There are network effects and other things that
I hesitate to say this because I am I dont want people to take this too far, but like there are some benefits to having it be somewhat consolidated. I hope will get to talk more about the limits of that, but it just really difficult for a court to figure out how to remedy something like this and and they're gonna try hard, but it's it's gonna be complicated. So you probably shouldn't think of this, as as, like a win, lose binary
I'll come yeah, that's a good way to think of it. You know the win lose binary outcome would be, they win the case and they get a ruling that would googled. It was illegal, but we, as consumers might not win if they dont do a good job of revenue
the harm. Semi Lucas has been a lot of litigation in Europe about I mean about a lot of different stuff related to Google,
but their remedies have not been very effective right. It's a d, she'll quantity of litigant.
Save is a sign that it's not not actually working right. They like
every year or so is like some new fine. I wouldn't say that the quantity of litigation indicates that it's not working, because there is a time of different conduct like they are addressed.
A lot of different issues, but I do agree that the remedies are not working right:
you you would. I guess in some sense like to say: ok, we now
have like a competitive market in search our information discovery which everyone gas and then we can have actually less scrutiny and what you do yes now. That would be the dream
because it's hard for regulators and and antitrust enforcers to know what the white, what the best certain
not to be right, you and I dont know the answer me
that's the that's the! I guess the competition policy dream is
Instead of having the regulators constantly over your shoulder, you have competition, and then you say people can do what they want to try. Let's take a break and then I want to ask about Texas Great:
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So you're, so you, as you mentioned right. We have three different cases with with Google tool
similar ones, bipartisan attorney general case a case brought by the Trump administration handing over to the Bush administration. But then a third wine that was brought by the state of Texas,
mostly republican, a cheese, and what are they? But today on about here? Yes,
this is about a different part of the alphabet company. It's about Google's advertising technology tools so
Google has powerful position in multiple pieces of that advertising technology stack. I guess it's it incredibly com.
Get it by trying to simplify it. Basically, they,
our representing advertisers and there representing publishers, which is like the websites that we go to
and they also only exchange where the advertisers and the publishers come together to do their auctions and figure out, which adds gonna. Be shown on which website and by having those three important competitive positions, they have a lot of opportunities to benefit them
else, and it sounds like they're doing that in a variety of ways of services,
I mean, I guessed it to contain choices that little bit for people read in old fashioned jobs. You know print advertising, it's like you would call up a magazines, sales department and say you know, I'm gonna, wanna put a page in your June issue and and there's some price said, and you can do it in the primitive days of the web. There was an effort to sell digital ads.
The same basis and to an extent that happens, I mean publishers, do sob premium side, specific, rising but
A ton of the ad inventory is what they call programmatic and so, as a publisher, you just kind of have these slots on your website that are filled with ads and you have an ad exchange that you work with that determines what goes there, but then, from the ad buyers point of view.
You. Instead of targeting specific publications, they are essentially trying to target certain kinds of red, so its wings
and being like my inference. Is that a lot of men in the Philadelphia area, a reading the sport section of the Enquirer you can like go after people who you believed to be
then, who live in the Philadelphia area and, of course, its much more detailed than that right. You have an age range and income range, their real
interests, it's really
and ended. It is as well. I think we ve all noticed right. It's like if you go search if you'd like searching for tables to buy, you will be stopped around the internet by adds value balls is, I think you have this
wrong intent to purchase, and so Google is you're saying owns like many different pieces of this, and I mean I guess that's good for them. It sink. It's also incredibly lucrative assets
really good. For them. I mean these people in the media. You know, particularly like people who write on the internet, because it is really bad for us
because essentially it use
To be super duper valuable till I have an audience of. There was big or bridge short whatever. What is right in our eyes, with purchasing power of you had a lot of value as a journal.
An institution, and now, thanks to this kind of digital disintermediation, it is really not that valuable. The value has migrated to the ownership of this. This add technology, so it's worth going into that a little bit more so
you know, if you were the Seattle Times right, like that's a way to reach the Seattle, geography and thus sports page is certain people and the news pages, certain other people, and so that sort of control over the audience was difficult to achieve in other ways. I do think it's important that there are a lot of other factors that have been making things really hard for the news lately. So this is definitely a part of it, but I think just sort of migrating to the internet as a medium term, regardless of targeted advertising was a tricky thing
for many newspapers, I think there's an issue Wes Private equity and and the ownership of many news organisations trying tat sort of make them run super efficiently doing the airports so there's of ready problem. But yes, this is one of them, but here too the like what is the what's the the meat of the the complaint here but like who? Who would win from you know like a more competitive,
more fair digital, add swapping Gaston, so that people who are being harmed, and so thus that the people that we're trying to remedy those harms is advertisers, publishers, witches websites and news organisations, and also users, of course, regular people in the world who are paying more for products that advertise on Google, because those advertisers are paying more and who are receiving lower quality content on the publishers, because those publishers are receiving less money from Google? And how did this come to me? Like a republican attorney general thing, that's a great question and of course
the internal processes of the state attorney General Arsh heard not public, so I dont know the answer. I think there is so much to do in the Google antitrust space that there was sort of a need to like parcel off different chunks to different groups of people, and so it's it's not crazy that there would be multiple state cases, Addio J case, that it just would take a few cases to fully cover this, so they could just be like a division of labour thing. I could be what I think about it. So what do you mean? You knew you. You do big big, compters ethic
What do you think about this litigation like? Is it like this? Like super promising- and you know, everybody should be really excited, or is it because I mean I was I was watching his is my uncle, but he's a veteran in future.
Economists. I remembered this from our last conversation simply been. She was saying like, like these cases are really hard to win, but monopolization cases, and it didn't seem that promises to well that that you were gonna, put a ton of work into it. It was gonna take years and it was gonna end up with a kind of unsatisfactory settlement that probably leaves us more or less, where we, where we stood verses like is gonna, really make everybody feel happy about the industry yeah it's somewhere in between right. It's true that monopolization.
Cases in general are hard to win, but that's like a huge problem. We really need to work on that because monopolization is happening all over the economy and we need to figure out ways to bring monopolization cases and with them. We cannot just give up on monopolization. It's a huge
important priority for antitrust. So there are some efforts in Congress to make bringing monopolization cases easier. Senator culture is working specifically on south preference, seeing as you know, she had this great hearing about the issue of self preferences. That's one of the types of monopolization that we see a lot in big tech. So I think this is like a recognised problem. A lot of people talked about it when the FCC had these. You know anti trust for the twenty first century hearings, when a german Simons first came in, I got something that we need to work on. One of the ways that we can work
it is bringing cases and I'm trying to improve the law that way. But it's a super, that's a super slow method to. Actually I should probably get you to explain my boy like what it. What is a monopolization case? Yes, that's a good place to start yet so we talked about how a lot of antitrust his murder enforcement. This is a completely different part of antitrust enforcement. Of these types of cases that I worked.
The activity conduct. There are a variety of types of anti competitive conduct that the Anti trust laws are concerned about something that we hear a lot from folks who are new to antitrust is this company? Is a monopolies or the government needs to,
to stop them. The law does not allow that right. You have to have a monopoly plus some illegal conduct and the conduct has to be of a certain category that is considered anti competitive. So it can't just be. You know. Facebook share my data with Cambridge Analytica, that's an antitrust violation, you have
to explain how it's connected to competition. That's the thing. People need the need to take us away. Why don't you just be like? Ah, I think this company, as like a monopoly or even worse, like a small and of companies, has like market power and, like that's true, yeah and antitrust. I've doesn't care until they are acting on fairly well, that's the difficulty where we say that the cases are hard to win. It is not that, like robust tool kit to actually come
and and and sanction companies compared to what I think psych takes that you read some seem to indicate that I give
just went in and we're like. Hey
I do in that that the companies would have to stop yeah those are it there's always a risk that you would lose the case and even if you were, in the cases, take a long time and even active waited that long time. In one case, the remedy is hard.
Right right and the remedy part is. We were talking about this at the top, but, like obviously that's very important.
Because, unless your remedies are good you're, not you haven't achieved that the mission of safeguarding the public there
you know. That's what's he break here, because I also want to ask where Facebook great, if the last year's harvest anything it's that we don't know what will happen next, but there's one thing we can all be sure of the only future is one we can all share and leading the charge in building that future.
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calm, slash, weeds and join the over one million people who have taken charge of their mental health with the help of an experienced better help professional some separate from these. These Google cases there said case is empty see case. Yes, Israel brought against Facebook,
and and what's up with that yeah, so I'm the activity allegation is that Facebook had a. I think they call it by
or bury strategy that whenever there was a competitor of potential competitors that looked like it might pose a competitive threat to Facebook that they would either try to buy that come.
Me or use their very considerable power to make it really difficult for that company to compete fairly.
So this one is is near and dear to my heart, because I
remember years ago, when Facebook bought Instagram
was considered by a lot of people to be outlandish, that you would spend a billion dollars on buying a photo sharing up that had no revenue and not their many users and didn't even exist on Android
I'd like that during its late at the time. So I know I was in the minority because my job was to come up with, like trolley takes,
so I said you know. I bet the way Facebook is looking at this is that they ve got a really strong business and the biggest risk to them. Isn't that what people will start using facebook, but is at some other new thing will come
long and take people's attention, and you know, instruments actually pretty promising in that regard, even if their revenue and all that other staff isn't that clear. A lot of people like to use it so paying a billion dollars to protect the long term viability of Facebook against competition. You don't really makes a lot of sense, yeah size, correct
I am in kind of that's just a moment should have read my takes you. I mean it's definitely possible that part of the reason that Facebook paid so much for Instagram is not because they actually that that Instagram as a company had that evaluation, but rather because it was particularly important to Facebook. It's like if you have boardwalk, it's like worth a lot more to you to buy park, place
That kind of thing, which is definitely something that antitrust enforcers, are interested, makes it sound like you're trying to get a monopoly. The other thing that's important in the complaint is they have a lot of internal facebook, conversations by email that they're looking at behind. It does seem like they were,
concerned about the transition to mobile. So just as you were saying, it's not
my style Instagram was maybe I direct competitor to Facebook at the time, but the Facebook saw that the next big place that there are going to need to compete with mobile and that they were not succeeding but Instagram with great at mobile. So sometimes we hear in anti trust these arguments that like, why are you wearing a vow antitrust enforcement? The next big thing is coming, and you now just like Facebook took over from my space, like someone's gonna, take over from Facebook, but it seems like that big inflection point might have ban when Mobile was overtaking desktops. That was the opportunity when Instagram would have overtaken Facebook
and Facebook saw that and prevented it with potentially illegal merger which, in the end, the concern is that that the companies have read the same business books as the people offering that take
because I can a traditional merger review, you'd say like why some
profound you sell microphones if we combine
biggest share of the microphone market. A second be right, yeah, but then, if you have, what were counting on intact is that their strong network of facts? There won't be a lot of players in any given market, but the risk is disruption right as like.
Mobile rises, things like that, so companies can buy, buying relatively small companies, be safeguarding themselves from future competition exactly in antitrust. We call this competition for monopoly, as opposed to dynamic competition, where you have six microphone manufacturers competing with each other. All at once, the competitive threat to companies like Facebook, dominant digital platforms, but also other,
types of industries that have similar characteristics. The competitive threat is these small guys who have a chance of really disrupting the monopoly and and becoming the new and and so so so important for antitrust enforcers to
Take those small competitor seriously, because that is the major source of competitive threat and it doesn't look like captain
threat in other industries. So I think that's part of the reason that they probably missed that the first time around
where so you want. I one thing you could do here.
Is to say, okay in the future, we are going to be just incredibly skeptical about acquisitions by big digital companies,
in industries was allotted network of facts right that they should do that? I
This is the thing where the remedies are easy ride, like my mother.
Review of the grid, we know how to do it. The government usually winds those cases when they bring them yeah. But yes, yes, they do, but I think
using wind rates as a metric is tricky because the government is careful about what cases they bring further if they like to say we have these great when rates and a lot of time.
I use those when rates as a criticism, because it's like, why aren't you bringing harder cases
if you're winning eighty five percent of your cases like you're, not having the correct priorities. Right re read
means you're, not you're, not taking on the public spending
Well, I guess even so red you
need to convince the Supreme Court or some appellate courts. Ok, now like they're right, we need to be super skeptical of these mergers, but if you want to actually remedy like past facebook, mergers like what would you do
I mean I'm not a big facebook person, but they are clearly clearly now succeeding with it. They they at the the right so like. How could you fix yeah? So the after you see calls for two potential remedies here. One is to untie vast instagram and what's up, which means outbreak them off and the other one
is inter operability requirements. I'm sorry, I want to explain what that means. So one of the concerns that we have in network effect industries, so network effects are, you know you think about a social network. You wanna be on a social network with a lot of people, maybe with business.
As an institution that you want to connect with, everybody wants to be where the people are
so social network that is big and has a lot of people has a huge competitive advantage over a small start. Up that doesn't have a lot of people are a lot of content, but network effects can be too one company or they can be too and industry, so they ve made it really easy freed across post from Facebook to Instagram and from Instagram to Facebook, and they ve been talking about improving the chat functionality between them, so they they are recognising the benefits of interoperable Eddie. What we need is for Facebook to offer that same inter operability to competitors that they don't know. What is it really unique to Facebook? Or do we see a lot of companies pursuing this sort of kind of of strategy, at least potentially
anti competitive acquisition, said and kind of thing. That's a good question. I think it's probably common, but companies are often better about hiding it. The documents
That's up to you see sites their facebook, internal conversations you know, Mark Zuckerberg, says like Instagram was a competitive threat
so I decided to buy them. It's a single line, unreal levels of admission,
You know it's not a criminal conspiracy, a little bit yeah, I'm sure that they have great lawyers who who would tell them not to write those types of documents and other companies are getting that legal advice as well. So usually, when you're trying to convince the government to let you marriage, he'll, say things like we want to merge because it's going to be so efficient and great for consumers, and no, this company is not account.
The threat at all? They they do something different. That would be valuable to our business at way like you're supposed to say like yours as other company. They do something totally different exactly that by combining our office capita functions like we're gonna make both things much more. Also, an
here. We go right. Yeah, like you, gotta make sure that's what all your documents say yet and that's what they usually do. Yes,
oh yeah, so phase would maybe maybe maybe messed up there in Sweden in political terms right we, you know, we ve seen a change of administrations here. Do we anticipate any kind of
change of direction in these cases, because that sometimes happen right. You know where I think that, with the Microsoft case, twenty
ago now, with the Bush administration came in and they were sort of less enthusiastic about
prosecuting at an eight and it led to maybe different settlement. The new then you might have otherwise scene
Obviously we will now who is gonna, be a pc director or or anything like that. But I do know Europe. Your well informed person, so I'm sending you can look at is the fact that the two democratic commissioners at the empty see supported this case against Facebook. So
even if we don't see one of them as the new chairman and the by the administration. I think the new chairman will certainly be I'm taking advice from that. I think that's a really good indication that the vital administration will want to continue the case against Facebook, and I think that by the administration will
so want to continue the case against Google Addio J as well the one potential change in direction that we could see.
An expansion of that case. There are real concerns in the ad tech market as well. We talked a little bit about the Texas case that focuses on the ad tech market. You know Doj could expand their case to include
you'd those types of concerns if they also thought that that was a good case shows. Oh, you dig if there was a change it would probably be and in the direction of a more gas exactly
you're going ahead about this. It's a kilo of Ivory watching Congress and politicians, Sir yelling about tack and competition
I feel it is actually mostly not yelling about this stuff that we have just been talking about.
People seem very worried about like whose posts get censored or not, rather than
like add tat girl who has a default on an apple smartphone? Is that over these, like two hermetically sealed world,
of complaint, or is there some inter mixture there? So I'm here is how I think about that. The antitrust cases are focused on particular anti competitive conduct that Google and Facebook have engaged in, and if they are successful, they will endeavour to remedy that particular conduct. I think there are broader competition problems in this
industry that will not be addressed by antitrust cases and that's what Congress should be focused on and some in Congress are focused on that, so that house, antitrust, subcommittee, german Sicily had out excellent, really detailed investigation of not just Google and Facebook, but also Amazon and Apple, dominant digital platforms and all of the many competitive concerns that we see there and they had a section of that report about remedies where they talk about. Some of these options, inter operability, like I disguised non discrimination, is another,
That's really important to me, and so I think there is like hope. People are working on this and and talking about it, but you're right that a lot of the conversation in Congress right now is about content. Moderation concerns the posts that are left out, the posts that are taken down
the efforts to label or change the algorithm and all of that, but I actually think that these broader competition concerns can help address some of those problems. I don't think that the antitrust cases are going to have a huge impact on that, but if we have pro competition regulations targeted at big tech, I think we can have some impact on on the content. Moderation. Discussion,
but it needs a bit, but that is like two leaps, I'm Hopscotch board from from the litigation that we're talking about. Yes, exactly, I just like just for fun for people's understanding of that's right, because I get
I have noticed you know, there's a tendency. People will start like yelling about one day and then junior you enter. That conversation
a black eye, Anti Trust straight. He asked his overlaid read like the conduct of Facebook and the government's regulation of their conduct do relate to one another, but not in this case the color moderation conversation and the existing litigation are pretty far a part a minute. It sounds like particularly in that in the Google case right because we are really talking about having some kind of like whole alternative to web search, as we understand it rather than like another search engine. So I I want to give people the benefit of the doubt like this,
is a pretty detailed distinction between antitrust and competition policy and I think sometimes when people say antitrust what they really mean is competition policy, and so they might not in a way
you're in these conversations on twitter, someone might say: look at antitrust match and- and they do you know- are making a mistake. You know the Anti trust laws are not gonna, probably solve that, but maybe it's just a pedantic difference in terminology, because pro competition policies,
They really can do something, that's a good one. I like it. So how would you explain that distinction? Yeah, so I mean to get her trust. Laws are fishermen in the Clayton ACT. They address particular violations across the economy, but in many important industries we have other competition laws that our sector specific and focused on that industry and trying to actually promote
competition there. The antitrust laws are really just about maintaining competition and I think big tack in particular.
An area where there is
necessarily going to be so much more of a problem then just went antitrust can address because of the network effects that we talked about because of the power of data and the sort of economies of scope and scale that the importance of data provides to these industries. So we really need to change the structure of the market, not just remedy particular antitrust violations, but create broad inter operability requirements on not just for
Spock bite on whoever comes next and on other companies in the space, especially powerful, dominant platforms. Joint so should I have to say, like we have decided
lot of laws on the books other than the Sherman and Clayton acts?
Let them addressed competition issues, yeah specific industries
Finally, I don't have a lot like that for technology, exactly and so old timidly. If you like, interested in the question of competition in this sector, you may need to think the way I'm broadcast television affiliates of this incredibly detailed regulatory framework
particularly in its heyday, was like incredibly relevant to how american society operated, and it was not just like Generic Sherman at competition law. Writing was like
no, but it's how many affiliates. Can you oh and rail,
Can you also under newspaper and just like all kinds of stuff
because when you zero in on a particular industry, we now
oh so much more about how competition functions there. So we can get a lot more specific than the antitrust laws which are pretty vague so that they can apply across the
higher economy. One also weakens your win, unlike what is it actually were worried about? Yes, like a big concerned like the
traditional concern with the tv affiliates in the newspapers and all that wasn't really that like
the tv would be too expensive or the advice.
Here's what yeah, but that's not, I think, that's a little bit of a caricature of antitrust, right, antitrust, isn't just about prices
I ve made its true, but I mean there was a young. You don't get. People just like have a core concern about like the functioning of the information ecosystem right, it's different from like the market for spoons vis, a different set of things. We worry about. Yes, yes and you need it at some point, like you, gotta like zero in and try to decide like what you
do there. Yes, I'm and another thing that I think it is important here is that there is a wide variety of types of regulation. You can do so Matt. I read yourself
pouring piece about utility style regulation and pro competition regulation is pretty different from utility style regulation and I think a lot of times when we say we need regulation in the tax base. People assume its utility Sal regulation, but what I think we really need.
Is pro competition regulation right, because these are like almost the opposite. Well
Real opposite is no regulation at all, which is now better I'd be everyday utility. So regulation, though, is kind of like you ve given up, I asked it
write your language skills,
you think about. Writing me with like a core utility like. Are you going to have eleven different companies all owning parallel? Electrical grids like that would be dumb
right. So you have a regulatory framework, that's to say
If you live in DC, you can be getting your power from TAT girl realistically, so we
neither a market it and your saying like don't like don't give up, we can't do it. I gotta get that's good, no to add on, but you know both of our. I let you go, I should ask em: is there anything we missed on on these Google cases? There is a time more. You talk about, I'm sure we can talk about it for another hour, but hopefully this is enough to get people interested yet, but I do think that final point is important. It it seems, really intimidating and we think about the difficulty of remedying these violations and in its it can't seem to many like there's nothing we can do here, but I really think there's a lot of momentum to address these problems. I think this is really a moment when we can try to rein in the power of big tack and
people showed champion and get involved. The wheels are in fact already spinning. Yes, there is more to be done if you want a sort of engage with this. I'm so thank you so much showed Simon and thanks as always to our sponsors, our producer
Jamaica's and will be back onto
Transcript generated on 2021-05-13.