September 19, 2025 • 47 mins
In this week’s Votes and Verdicts podcast, Bloomberg Intelligence’s litigation and policy team looks at a number of key catalysts. Elliott Stein discusses Federal Reserve Governor Lisa Cook’s lawsuit challenging her termination. Nathan Dean discusses the ramifications of moving to semiannual earnings reports, and offers his views on the likelihood of a government shutdown this month. Matt Schettenhelm discusses the suspension of the Jimmy Kimmel Show and what it means for Disney, Nexstar and Sinclair. He also gives an outlook on President Donald Trump’s defamation suit against the New York Times and on a potential TikTok deal. Jen Rie explains the FTC’s lawsuit against LiveNation, and analyzes the latest in Epic Games v. Google. Justin Teresi previews the remedies phase of DOJ’s antitrust case against Google’s ad-tech stack.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Hello, and welcome to the Votes and Verdict podcast, hosted
by the litigation and policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg Terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we've outlooks
(00:38):
on more than ninety industries and one hundred market indices,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's our weekly look at
the litigation and policy catalysts that we're currently watching and
that we think will impact companies across a number of
different sectors. My name's Elliott Stein. I'm an analyst with
(01:00):
Bloomberg Intelligence covering litigation in the financial sector, and I'm
delighted today as always to be joined by a handful
of my Bloomberg Intelligence colleagues. As always, you can find
all of our research on the Bloomberg terminal at big
and you can find all of our litigation and policy
research on our DASHBOARDI laws go just to time stamp
(01:23):
this because things are moving particularly quickly, it seems. Today
today is September eighteenth, twenty twenty five. It's about three
eleven pm New York time, and there really is a
lot going on in terms of litigation and policy developments,
particularly coming out of Washington DC. Just today, I'll kick
(01:43):
things off. President Trump asked the Supreme Court to remove
Federal Reserve Governor Lisa Cook while her lawsuit challenging her
termination plays out. Cook of course won preliminary rulings in
the lower courts, and the Supreme Court, of course, has
been largely receptive to President Trump's arguments for an expansive
(02:04):
executive branch authority. But despite that, we think Cook has
a decent shot at winning in the High Court, particularly
because at least a majority of the justices in May
signaled that they view the Federal Reserve a little differently.
They view it as a quasi private entity, which is
different from other executive branch agencies where President Trump has
(02:27):
more power to remove the top officials of those agencies.
In doing that, we think the High Court was trying
to give effect to the Federal Reserve Acts for cause
removal restriction, and if the Supreme Court winds up adopting
President Trump's argument that his decision to fire Cook is
unreviewable that effectively would render the four cause restriction meaningless
(02:51):
in terms of timing. This will go to Chief Justice
Roberts in the first instance, and he can decide whether
or not to grant an administrative stay. I tend to
think that he won't do that, but if he does,
if he surprises me, which sometimes happens, that could happen
within a matter of days. I think it's more likely
that he refers the matter to all of the justices
(03:12):
on the High Court, and then the parties submit written
arguments over the next several days or a couple of weeks,
and then the justices will issue a RULIN on what's
known as the shadow docket, which means we won't get
oral arguments, and then we'll just get a ruin from
them on whether Lisa Cook can continue to serve on
(03:32):
the Federal Reserve Board while her litigation plays out. So
stay tuned for more on that. I'm writing about that
case on the Bloomberg Terminal almost daily because things are
happening almost daily. But there's a lot of other things
to talk about today. Today, the FTC sued Live Nation,
which we're going to talk about with my colleague Jenrie.
(03:54):
Earlier this week, President Trump sued The New York Times
for defamation. Last night, ABC pulled the Jimmy Kill Show
off the air. In definitely, we'll talk to my colleague
Matt Schuttenhelm about those cases.
Speaker 2 (04:04):
On Monday.
Speaker 1 (04:05):
Coming up, the remedies phase begins in the Justice Department's
antitrust case against Google's ad tech Stack. We'll talk to
my colleague Justin Taresi about that. But first, let's bring
in Nathan Dean, our chief policy analyst in Washington, DC,
because there's a lot happening in his world too. For one,
(04:26):
President Trump earlier this week said the SEC should allow
companies to report earnings on a semi annual basis instead
of a quarterly basis. And we're also coming up on
the deadline for funding the government, which of course means
we could be getting closer to a government shutdown dot
dot All right, Nathan, let's bring you in. Let's start
(04:51):
with semi annual reporting. In this proposal for recommendation or
suggestion floated by President Trump, it seems like most companies
would prefer to move to a semi annual report. In cadence.
Seems like most investors would probably want to keep the
quarterly cadence so they continue to get more information. I mean,
(05:12):
any idea what triggered President Trump to raise this issue?
Now I know he raised it previously, but like why now?
Speaker 3 (05:19):
Yeah, so you know, he mentioned this obviously, like you met,
like you said, this came from twenty eighteen, and in fact,
the SEC at the time had a request for comment,
and in that request for comment, as you noted, most
of the byside community and certainly the funds, they certainly
want to stick to quarterly reporting. They want the transparency.
And Blackrock even submitted a letter and I'm paraphrasing here
(05:39):
that said that, you know, the transparency, the benefits of
transparency outweighs the short term ism that comes with the
corporate side. But NASDAK at the time also released a
study about one hundred and thirty eight companies and seventy
five percent of those companies surveyed said they'd rather go
to biannual or semi annual reporting.
Speaker 2 (05:59):
Now stirred this.
Speaker 3 (06:00):
I'm trying to figure that out because President Trump went
to the Yankees game on September eleventh, and was I
think in Bedminster last weekend, so I have to imagine
somebody mentioned.
Speaker 2 (06:13):
It to him.
Speaker 3 (06:14):
But again, like you know, I don't know specifically what
caused this, because we had heard that this issue was
brewing around town. I mean, and I'm sort of giving
away a little bit of the secret sauce here, but
like you know, we often hear that these issues are
floating around town, and in this case, you know, the
Long Term Stock Exchange had a white paper that was
going around amongst the folks in DC. I was kind
(06:37):
of shocked that it came out on Monday morning though
that President Trump said that he wanted to do this.
So what happens now, Well, the SEC Chairman Paul Atkins
has already said that he is reviewing recommendations from staff
and thed heally is a waiting a proposal.
Speaker 2 (06:51):
Now.
Speaker 3 (06:52):
I think that's going to be an advanced notice of
proposed rulemaking, which is the first step. They essentially just
ask a lot of questions because Chairman Act has a
problem here, and the problem is the Byside community wants
to remain with quarterly reporting and the corporates most likely
want to go to a semi semi annual and this
is kind of hard for share Ekins because he has
(07:12):
good relationships with both. So you got to pick which
one do you like more here? And so if I'm
the SEC, I'm going to take a little bit more
slower and deliberate process to this because I do think
a solution that ultimately benefits both sides can be found.
And I think that solution is going to look like
something like this, where under the Securities Exchange Act in
(07:35):
nineteen thirty four, quarterly reporting remains and only Congress can
amend that. But using an extreme example here, there's nothing
that doesn't say to the SEC they can't go forth
and say, you know what, on quarters one and quarter three,
all you have to do is sign a piece of
paper saying you're good, submit it. You know. Quarters two
and quarters four that's where you do the ten Q
and the end of annual report. So I think the
(07:57):
SEC what they do is they ultimately embark on rulemaking
here where they de emphasize what is in quarter one
and quarter three you have to still submit something, but
you de emphasize it, and then in quarter two and
quarter four that's when you do the full fledged reports. Now,
the other thing we've heard, though, is that larger companies
may stick and continue as is, because if you look
(08:19):
at Europe, Europe already has this model. And for example,
I cover the equity side of Experience, which is based
out of London, and they have two earnings calls, and
then on quarters one and quarters three they have sales
and revenue releases. So I still get a little bit
of a sense of what Experience is going on, not
to the same flavor as a full earnings call, but
(08:40):
it's still something so that investors don't get caught with
this volatility or this idea of speculation, and management does
a lot more investor days as a response of as
a result of that. So I think you're gonna get
this medium where if you're a smaller company, you probably
don't have to do much for that first or third quarter,
but if you're a larger company, you may not have
to do a full fledged ten Q, but maybe you
(09:02):
still have to release something. So I think that proposal
comes out early next year. Finalization is most likely end
of twenty twenty six twenty twenty seven, and we'll have
to see how the market reacts in response to the
details of that proposal.
Speaker 1 (09:16):
How far did the SEC get with this in twenty eighteen,
when when they proposed this idea previously.
Speaker 3 (09:21):
So they released the rease for comment in December twenty eighteen.
The responses came back ninety days later, and then they
promptly didn't act on it again. So this wasn't a
high priority for former SEC chairman Jay Clayton, because you
have the byside community saying, look, I want these quarterly reports,
this is what I need, and then you have the
(09:42):
corporate saying I don't like this short termism, and so
forth and back in twenty eighteen. It's important to note
that there were a lot of companies, including folks like Berkshire,
Hathaway and General Motors and Verizon. They signed this open
letter at the time saying we don't want to do
away with quarterly earnings. We want to do away with
quarterly guidance. Now, the SEC doesn't manage guidance. That's not
(10:03):
a mandate of the SEC. It's just if one company
does it, then everybody's got to do it. And so
they were trying to get rid of quarterly guidance and
they just never could figure out what was going on,
like they could never come to a consensus. But the
reason why it's different today is because back in twenty eighteen,
the Trump white House did not have such a heavy
(10:23):
hand about what's going on in the regulators as they
do today. Is we remember, every proposal has to go
to the Office of Management and Budget before it's released
for the White House to review on it. And the
SEC is not in the business of telling the White
House no.
Speaker 1 (10:36):
So in twenty eighteen they didn't even get to a
draft proposal at all. Right, so they can't recycle what
they did before to that extent. Yeah, all right, So
let's talk shutdown. Today's September eighteenth. The deadline to I
guess come to an agreement for funding the government is
twelve days away. I know for a while you've been
(10:57):
at forty odds of a shutdown. You lowered that just
thirty percent earlier this week. Is that you tell us
you're thinking about that and if that's where you still are.
Speaker 3 (11:08):
Yeah, So you know the reason why I lowered it
to thirty percent is because the Republicans offered a clean
cr Now it's technically clean ish because there's some additional
funding which maintains everybody at fiscal year twenty twenty five funding.
And look there are a lot of folks that don't
like that on the Republican side, military hawks, for example.
I mean, you don't like there's Some of the conservative
(11:28):
talking points is you're just essentially continuing Biden era spending levels,
and this week keep the government open through November twentieth,
with the idea that as we approach the Thanksgiving holiday,
certain parties could jam up other parties and nobody would
risk having a shutdown over Thanksgiving. Now I lowered it
to thirty percent because it was extremely difficult in my
(11:49):
view for the Democrats to say no to a clean
CR because the party that offers the clean CR is
usually the party that has the moral high ground here,
and because people hate eight shuts down shutdowns, I thought
the Democrats would be forced to take that deal. Now
I still don't think there's gonna be a shutdown, but
there is one caveat that I'm gonna be looking at
(12:10):
over the weekend, and that is the impact of the
Jimmy Kimmel situation. Because the Jimmy Kimmel situation is a
little bit different because it offers Democrats the narrative to
get in front of the news cycle, and this is
something Democrats have been struggling because they've been trying to
tie it to ACA subsidies that need to be dealt with,
and they weren't able to get it to the top
of the news cycle. For example, David Axelrod tweeted just
(12:31):
this week that this is something that they should be pushing,
and another Democratic operative came back and said, we are
pushing this, but if you don't think we are, then
we've got a messaging problem here.
Speaker 1 (12:42):
I saw that too. I don't think it was a
Democratic operative. I think it was Dave Leigel, who's a reporter,
and he said this, Democrats have been bounding the table
on this, and if it's not resonating with you, David Axelrod,
I don't know who's here in it. So I think
that's what.
Speaker 2 (12:54):
I think. That's what.
Speaker 3 (12:55):
Yeah, I know that's the one that I was referring to.
And so you know, I just go back to the
idea that the Jimmy Kiff Kimmel offers them a point
to get to the front of the news cycle and
the way I would see it playing out and the
reason why. So if you were to say why do
you think a shutdown would occur? I would say, look,
if I was on the Democratic side, you know, shutting
(13:15):
the government down in September versus shutting it down in
November or in twenty twenty six is a better time
to shut it down. You're showing the Democrats that you're fighting,
so you're keeping the people in your party happy, and
your approval reigning is already not good. And if it
goes from not good to just a little bit more
not good, then it really isn't all that big of
(13:36):
a deal. And so you know, former House for former
House Financial Services Committee Chairman Patrick McHenry think of him
as you know, member him was Speaker pro tempt during
the you know, when they couldn't figure out that speaker
with the boat tie and so forth.
Speaker 1 (13:53):
And Bloomberg Television contributor exactly.
Speaker 3 (13:55):
And when he was on Bloomberg Television contributing to Balance
of Power, they asked him, are you do you think
a shutdowns happened? He said absolutely, now really wow yeah,
and so like now, but it's one of those things
where I still think there's plenty of time to come
up with a deal here. So I because I don't
think either party really wants a shutdown, you know, because
from the Democratic side. You know, you don't want the
(14:18):
Office of Management, budget RUSS vote really dictating what's going
to happen here. But the challenging is that Congress is
out for a decent chunk next week because of Russhashana,
and so there are only just a handful of days
to actually negotiate before September thirtieth. So I wouldn't be
surprised that the House passes their CR this week or
(14:38):
maybe a little bit into the weekend, and then they
send it to the Senate and the Senate gets jammed
and or they come up with their own solution or
something like that. But stay tuned. Next week is going
to be really really interesting, as every week is.
Speaker 1 (14:51):
I think, Thanks Nathan, I think that's a good segue
to bring in Matt Suttenham to talk some more about
this Jimmy Kimmel situation. Seem to be dominating the headlines
today on a day when there's just so many other
things going on as well. So for that to dominate
tells you something, Matt. You put out a headline this
(15:14):
morning saying kim Ol knockout keeps Next Star and Sinclair
FCC priorities on track. You know, we hear at BI
we're not interested so much in the cultural issues of
the day, but we're interested in the business impact. So
talk to us, you know, I mean, obviously give us
the context of sort of what's going on here, but
(15:35):
why is this an important issue for next Star and
Sinclair and tell us what those companies do for those
who aren't familiar.
Speaker 2 (15:41):
Yeah, thanks Elliott.
Speaker 4 (15:42):
Yeah, we've talked on this call before about the importance
for TV broadcast station owners to get deregulation at the
FCC and the real solid chance that that's going to
happen at the end of the year into next year,
and Next Star and Sinclair are are a handful of
(16:06):
are two of the biggest owners of those TV stations.
The FCC has started and is significantly through a rule
making to ease how many stations those companies can own
across the United States. They're also easing how many the
limits on how many stations you can own in any
one local market, and that creates all sorts of opportunities
(16:28):
for these companies. And so that really played a role
in this Jimmy Kimmel's story. I think that that emerged
yesterday because, uh, not to get too into the details
of it, because I think it's it's pretty well out there,
but effectively, Kimmel made comments that were about Charlie Kirk's
(16:53):
death and about about the alleged shooter that we were
upsetting to too many in car. The FCC chair went
on a podcast and suggested that by broadcasting Jimmy Kimmel's comments,
ABC and Disney and local station owners that that broadcast
(17:16):
it may be brought maybe violating the FCC's news distortion rule,
and basically, you know, in not so many words, threatened
to take action on that. He said, we can do
this the easy way or the hard way. He suggested
Jimmy Kimmel could be suspended, uh he and he also
(17:37):
directly to those station owners like Nextstar in Sinclair, said,
by the way, you have the power to preempt Disney programming,
ABC programming, and to knock it out. And within hours
of Brendan Carr saying that Next Star and Sinclair had
put out press releases saying they were preempting Jimmy kill
(18:01):
on their networks going forward. After that happened, Disney responded
and said, you know, we're we're going to suspend Jimmy
Kimmel going forward. So you can draw a pretty direct
line between Next Star and Sinclair and those companies needing
to keep the FCC on their side and and and
their response to Brendan Carr's call for them to take
(18:23):
immediate action on this issue.
Speaker 1 (18:25):
And it's also an M and A approval that is
the next Next Star Nerds.
Speaker 4 (18:30):
Right exactly, and and and so that that's related to
the easing of these rules. They need the FCC to
ease those rules because Nextstar has the six billion dollar
deal to acquire another large TV station owner, Tegna, and
and and to consolidate those operations that can't happen if
the FCC doesn't advance these deregulatory initiatives and and then
(18:54):
approve the deal along with the Department of Justice review
that that Jenri has covered for us.
Speaker 2 (19:00):
Right.
Speaker 1 (19:01):
So the so the so Kimmel's suspension is indefinite. We
don't know how long it's going to last. You have
any thoughts on how this is going to play out?
Speaker 4 (19:11):
No, I mean, I think from Next Star in Sinclair's perspective, look,
this is this they they got thank you notes from
Brendan Carr after after they took this action.
Speaker 1 (19:22):
You're talking metaphoric or not not literally.
Speaker 4 (19:24):
They literally got tweets from him, I guess, you know,
like like you know, he sent out messages on on
on X saying thank you for doing this.
Speaker 1 (19:33):
I hadn't seen it.
Speaker 4 (19:35):
Yeah, So so in that sense, it's a it's a
positive for them. I don't I don't have any intel
and how long this suspension will will play out on
the Disney side, or or or how ABC will handle it.
Speaker 1 (19:49):
Right but presumably right next Star in Sinclair obviously satisfied
car to some extent, So we'll see how much more
if a I think they actually have to do in
terms of getting what they want.
Speaker 4 (20:04):
The October meeting from the FCC, I think is the
one I'm watching now as potential action on on that
that key national ownership cap.
Speaker 1 (20:12):
So we'll be watching for that's interesting. Okay, all right,
let's talk about another case that's been heavy in the
news this week for you. That's Trump's President Trump's case
in his individual capacity against the New York Times. It's
a defamation suit. I guess he's complaining about New York
(20:35):
Times reporting over how he achieved his wealth and fame.
What are your I know you published on this as well.
But what are your initial thoughts on the strengths or
weaknesses of the case.
Speaker 4 (20:50):
Yeah, so it's difficult to win a defamation case, for
for for any public figure to win a defamation case
because of Supreme Court precedent. That that makes it very hard.
They the design of the First Amendment law here is
to create breathing room for reporters to be able to
(21:11):
report on public figures without the risk of facing litigation
on defamation issues.
Speaker 2 (21:19):
And and and and.
Speaker 4 (21:20):
The one of the biggest turtles is, I think one
that that President Trump might run into and in this
case is what's known as the actual malice standard. That
it's not enough for the reporters to have written statements
that that are are false, but the reporters have to
(21:42):
do that with actual malice, meaning they have to do
it knowing that the statement was false, or at least
being reckless about whether it could be false. And so
that puts a burden on the plaintiff as he pleads
his case to plausibly show that you've met that high bar.
(22:05):
And it's not enough to just say, well, he knew,
he knew. And that's sort of what you feel like
as you read this complaint. I think President Trump probably
plead some claims that are statements of facts that he
could prove are false. But the question at the motion
to dismiss stage, which is going to be the first
big fight in this case, is going to be, not
(22:28):
only are these things facts versus opinion? They have to
be facts, but it did President Trump do enough to
plead that these reporters knew they were false or at
least were reckless in publishing them. And that's where many
many defamation cases against public figures run into trouble. I think,
(22:49):
you know, there's a good chance that New York Times
can escape this case in round one on that basis.
The judge could could come back and say, look, you
need to do more or to show actual malice, to
show the reporters knew that these are falsehoods they're publishing,
or at least were reckless.
Speaker 1 (23:08):
And if I recall correctly that Ashwell Mallie standard comes
from another New York Times case, right, is that the
Sullivan for New York Times.
Speaker 4 (23:14):
That's Sullivan versus New York Times. I want to say
nineteen sixty four, but don't quote me on that.
Speaker 1 (23:20):
It sounds right, but one thing. I mean, it's interesting
that you say it has to be facts and not opinions,
because I didn't read the complaint, I read news articles
about it. I read your note, but it sounds like
a lot of the statements he's complaining about that Trump
is complaining about sort of are more fall more along
the opinion line of the axis than the fact line.
Speaker 4 (23:41):
I think some of the some of the claims probably
will be knocked out on that basis. His complaint lists
about thirty to forty different statements in these three New
York Times reports and the book that the reporters put together,
but some of them I do think will be knocked
out is sort of characterization of facts. And I think,
(24:03):
for example, he makes a big deal about his when
he when he went on the television show the reality
TV show The Apprentice, and and and Mark Burnett, the
producer of that show. The report says that that Mark
Burnett discovered President Trump too, you know, to be a
star on that show. And Trump goes on pretty extensively
(24:25):
about how that's a defamatory statement that that Burnett discovered him.
Speaker 2 (24:32):
For this show.
Speaker 4 (24:34):
I'm not sure the judge is going to think that's
a definitive statement that can be proven false or not.
You can you could get into an argument about what
does discovered mean in that in that setting?
Speaker 2 (24:46):
I think and and I'm not.
Speaker 4 (24:47):
Sure that it's the sort of you know, concrete fact
that really makes a successful defamation case, right.
Speaker 1 (24:55):
And I wonder, I mean, is is Trump's plan here
to try to get the Sullivan Versus New York Times
standard overruled? Because there have been a couple of justices
right who seem receptive to that.
Speaker 2 (25:10):
It's a possibility.
Speaker 4 (25:13):
My sense though, is most likely his his goal is,
you know, it would be great for.
Speaker 2 (25:20):
Him to to to.
Speaker 4 (25:22):
To earn a settlement here, to force the New York
Times to settle the way other media companies have settled.
And and just from a PR perspective, you know, these
were some some you know, critical reports of President Trump.
Speaker 2 (25:37):
If any time anyone.
Speaker 4 (25:38):
Raises the issues in these reports, he can come back
and say, yeah, what did New York Times do when
when I confronted them over it?
Speaker 2 (25:45):
They they had to get out of that case. They
they they resolved it.
Speaker 4 (25:49):
I think I think it's I think that might be
his ultimate goal here, is to force a settlement as
as he's he's he's.
Speaker 2 (25:56):
Done with other media companies.
Speaker 4 (25:58):
They you know, similar suits have settled with with ABC
with paramount in the you know, for the mid teen
millions of dollar range. And you know, it will be
tempting for New York Times to avoid you know what
could be very costly litigation that costs more much more
than that, by doing a settlement that you know, around
(26:22):
that range. And President Trump might view that as as
a win as much as anything to to to force
a settlement with with his critic.
Speaker 1 (26:31):
That makes sense, all right, Just one one last issue
for you to talk about, the TikTok deal that seems
to be in the works. It's kind of crazy that
this is sort of like the third most important story
for you to talk about in this episode, because usually
that's like at the top. But it sounds like there's
some sort of TikTok to you in the works. What
do you what do you know?
Speaker 4 (26:51):
And can you say maybe we're finally getting some progress here.
You know, the law took effect in January. It was
supposed to ban take talk then, but President Trump basically
said don't worry about it. With with three and now
four extensions of that law, he just a couple of
days ago, extended it into December again, but there are
(27:13):
reports that a deal is coming together. We'll we'll see, mate,
we'll see tomorrow if if this is a concrete deal
that's actually going to move things forward. Big question for
me is will it comply with the law. And and
and you know.
Speaker 1 (27:28):
Always worried about the law, Maggie, such a stil for the.
Speaker 2 (27:32):
Law, old fashioned like that.
Speaker 1 (27:33):
But if you talk about that, the why is tomorrow important?
Speaker 4 (27:37):
There are reports that that Trump is is meeting with
President she tomorrow and and and that and and that
you know, I hope that that details from the deal
come out then. But you know, on the law, my
big question is, you know, the con when Congress passed
this it it it had some thoughts about what's what
(27:58):
a deal would look like, the for byte Dance to
divest TikTok, and specifically it said that byte Dance could
no longer control any new entity, which which basically the
law says no more than twenty percent ownership for sure,
So I expect they'll do that. That's easy to do,
(28:18):
But maybe the harder part is that the law also
said that there could be no operational relationship between the
new company and byte Dance and no cooperation between Byteedance
and that new company with respect to operation of the algorithm.
And that's going to be the key thing here, because
(28:40):
the algorithm is really what makes TikTok what it is,
and it's going to be really interesting to see if
this arrangement that they come up with honors those terms.
Maybe there's some sort of licensing of the algorithm, and
maybe if you just license it, that's not an operation
(29:00):
relationship with with respect to how the algorithm operates on
a day to day basis, maybe that's sufficient.
Speaker 2 (29:08):
But that remains to be seen.
Speaker 4 (29:09):
So that's the detail I'm going to dive in right away.
Speaker 1 (29:13):
Do you I mean, you've talked about this issue on
you know, many times on this on this podcast many
times before, and you're always a little surprised that no
one has sued to challenge the lack of enforcement.
Speaker 2 (29:26):
Of the law.
Speaker 1 (29:27):
If the deal goes through and there's questions about, you know,
what operational relationship means, do you think we might do
lawsuits at that point over over that term.
Speaker 4 (29:39):
It's possible the law has an express cause of action
that says any action under the law can be challenged
in the DC circuits and and potentially if they take
an action that doesn't follow the terms of what is
required for a divestiture, you could envision a lawsuit coming there,
(30:02):
you know, from someone that that is harmed by the
not following the law. But that that's a potential problem.
Anyone needs legal standing, constitutional standing to show that they're
injured in fact in order to sue, and I think
that probably has been the hang up on, you know,
litigation generally on this issue.
Speaker 2 (30:22):
Yep.
Speaker 1 (30:23):
All right, Matt, good stuff. A lot of really a
lot of interesting issues. All right, Jenry, let's bring you in.
When the red headlines came across the terminal saying that
the FTC was suing Ticketmaster and Live Nation, I was like, Oh,
it's it's the anti trust case that we've been waiting for.
And then you very politely reminded me that the Justice
(30:44):
Department already sued these companies last year over anti trust
and that this FTC case is not anti trust, but
it's sort of adjacent. Why don't you tell us what
it actually is?
Speaker 5 (30:55):
Yeah, you know, Elliot, when I saw the headlines, I
was a little thrown myself because I saw these headlines
saying conspiracy. You know, the FDC accuses Live Nation of
conspiring with ticket brokers. I thought, well, hold on, ad minute,
I've been a nanny stresslawyer for a long time. FDC
is not allowed to bring conspiracy cases. That's the DOJ.
But then I look closer and I realized, okay, this
is enforcement of a statute called the Better Online Ticket
(31:17):
Sales Act of twenty sixteen, also called the BOTS Act.
Then I thought to myself, I'm an FTC follower. How
come I don't know about FTC's enforcement of this act.
But then I learned it's because it hasn't enforced it ever.
Well once, and that's it. In twenty twenty one, that
is it. There was one very quiet little case that
came and went quickly in which the FDC accused three
(31:39):
small ticket brokers of violating the act. They settled the
same day for three point seven million.
Speaker 2 (31:44):
It went away.
Speaker 5 (31:45):
You know, those were all private companies, probably didn't even
make headlines here at Bloomberg. And that is it until
this year. So this is something kind of new, but
follows an executive order by President Trump not that long ago,
where he basically said we need to do better at
enforcing this Act FTC, and so I think this is
in response.
Speaker 1 (32:04):
To that, As they always say, President Trump is a
long time fan of the Bots Act right.
Speaker 5 (32:09):
A long time right. So what this is about is
what the access There are two things that are illegal
under the Act, and one is for ticket brokers to
circumvent access controls or security measures that are used by
ticket sellers such as ticketmasters to buy in bulk. So
if the limits eight tickets and they're buying one hundred,
(32:31):
you know, and they're doing something illegal to go around
whatever the security measures are, then they're violating the Act.
But the second piece is, and this is where Live
Nation's lawsuit comes in, is that if you are a
reseller of those tickets knowing that they're purchase violated the Act,
then you're violating the Act as well. And that's where
this conspiracy comes in. What the FDC is alleging is
(32:51):
that Live Nation knew and knew that ticket brokers were
buying thousands and thousands of tickets and violating their rules,
but just allowed that to happen because they have their
own resale market, right they resell the tickets, so now
they've doubled it. They've made money twice. They sold the ticket.
The first time to the broker, they made money, and
(33:11):
now it's on their resale platform being sold by the
broker and they're making money there too, So it actually
benefits them financially to do this. And the FTC has
quite a few documents. It looks like a pretty strong
case honestly, that suggests that Live Nation really just turned
a blind eye to this activity. And what they're looking
for here just finds what the act says is that
(33:33):
it's subject defines it up to fifty three thousand, eighty
eight dollars per violation. Now we're talking about probably thousands
and thousands of millions of violations, so that could add
up to a lot of money. And normally when the
FDC has these statutes with you know, per violation top
end find they never find anywhere near it. It could
be one percent or two percent, but we don't have
(33:55):
a history here to see what the average is in
this case. That small suit to tenty twenty one I
was talking about, the fine was thirty one million, but
the three brokers were able to settle for three point
seven because they're small companies. Because of inability to pay,
they all they couldn't have paid it, then all would
have gone out of business, So the FTC dropped it down.
So you know, we don't know what a settlement might
(34:18):
look like. Here, I tend to feel already, even though
we've got to get into the meat of the suit,
this is just a complaint that it's something that's probably
going to have to settle down the road, because at
least from the evidence I saw in the complaint, it
doesn't look very good for LB Nation.
Speaker 1 (34:31):
Right, and the potential of dramatically high damages is pretty
risky for them. Well, can you just remind us sort
of what the status is of the Justice Department's case?
Speaker 5 (34:42):
So I see that case as riskier, at least I
did until recently, far riskier because it's a big monopolization suit.
It's not about fines. The Department of Justice is trying
to force get an order that forces Live Nation to
sell ticketmasters. So it's a breakup of the company and
it is going to trial in March before a jury,
which is if we all know Live Nation, we've all
(35:02):
bought tickets. That's bad news for Live Nation because it's
going to be hard to find a jury that doesn't
dislike the company.
Speaker 1 (35:09):
I would say, you even get how do you find
one zuror who doesn't have feelings one way.
Speaker 5 (35:14):
Or the other exactly, I'm not sure. So it doesn't
look good now. And the reason why divestiture is risky
here because you've probably seen for years I've been writing
about Google and Meta and all these other cases where
the DOJ wanted divestiture and I said, it's never going
to happen. The judge isn't going to do it. In fact,
the judge didn't do it in the Google search remedies
that just occurred.
Speaker 2 (35:36):
Here.
Speaker 5 (35:36):
It's a little bit different because Live Nation bought ticket Master.
I think it was back in two I don't even
remember the year. Maybe it was eight twenty twelve. But anyway,
when they bought Ticketmaster, they only did it by signing
a consent order. The government made them agree that they
would behave in a certain way with respect to how
they handled their ticket sales. You know that they can't
(35:57):
force venues that don't use Live Nations promotion or artists
or venue management to use Ticketmaster as the seller. They
can't enter these long term exclusive agreements. Well, they have
done all that. They have violated this order. Trump one
point zero. The first Trump administration DOJ found that they
violated the order, they extended the order and they clarified
(36:19):
the order. Well, now the DOJ is saying, you're still
paying no attention to this government order, Live Nation. What
can the DOJ do here other than seek a divestiture
and it sort of lays it out, gives a judge
a much easier case to order something like that than
some of these other cases and the other little issues
(36:40):
that Ticketmaster is handled as a subsidiary, easier to cleave
off the parent. It's not as integrated if it wasn't
operated as a subsidiary. And some of the precedent says
that's the better time for a structural remedy when the
company is operated independently and was once independent of the
parent anyway. So this sort of seems right for something
like that now. I said recently, the risk went down
(37:01):
in my mind, and that is because reported it's been reported.
I don't have any firsthand knowledge of this. That Live
Nations working very very very hard at this point to
ingratiate itself with the Trump administration. They hired Trump allied lobbyists.
They put Richard Grennell, who is a Trump, aali as
the chairman of the board of the Kennedy Center. Apparently
(37:22):
they've offered a lot of money. Again, this is reported rumored.
I can't say that any of this is actually true
other than Richard Grennell, and I do think sometimes in
this administration, those tactics work to reach a settlement. So,
but March is coming up fast.
Speaker 1 (37:37):
Yeah, it's sure, is all right? You mentioned Google and
that discussion given its antitrust cases, So why don't we
talk about epic games versus Google. You told me that
Google lost the last ditch effort to stay in order
relating to its play store in that Games versus Google case.
(38:01):
Why don't you tell us a little bit more about that?
Speaker 5 (38:03):
You know, Elliott, I wanted to talk about this today
because I think it's been completely and totally overshadowed by
the fact that the Girl Search case, the Google ad
take case. Nobody's thinking about this, But honestly, the impact
of it is going to be a pretty drastic change
to Android mobile devices because all Google has left is
Supreme Court review, and we know that that's probably unlikely.
(38:24):
They have lost an attempt to get a rehearing in
the Appellate Court they have lost an attempt to get
a stay of the injunction, which now has to go
some of it go into effect in thirty days and
some of it has to go into effect in ten months.
Of course, they can ask the Supreme Court for another stay.
I don't think they're going to win it. And the
big part of that injunction that's to me pretty significant
for the company is that Google has to permit on
(38:46):
Android devices any number of third party app stores that
are deemed safe and want to be on the Android device.
So when you buy an Android device and you want
to download an app, you would no longer have to
go to the play Store.
Speaker 2 (39:01):
You would no longer have.
Speaker 5 (39:02):
To pay Google in the Playstore if you bought an
app that required a payment or made an in app purchase.
And what makes this even more sting Google even more
is that it's also required to distribute these stores through
its own Playstore, So I could download a whole other
app store through the Playstore, and it's required to provide
its entire catalog of apps to these third parties to
(39:24):
get them going unless a developer opt out aside, right,
And that's pretty big deal. It means you could immediately
have some other app store on an Android device that
has that's exactly like that mirrors the Playstore and you
can buy all your apps there. And Google charges fifteen
percent and thirty percent fees for app and in app purchases.
This could They don't break it out in revenue, but
(39:45):
we're thinking it can be. It can be ten billion
a year and they could lose out on a lot
of that revenue. And they may have to do that
in ten months.
Speaker 1 (39:53):
So when did they lose this latest bid?
Speaker 5 (39:57):
Oh September twelfth? Oh my baky oh that's it was
your birthday?
Speaker 6 (40:02):
Yes?
Speaker 1 (40:03):
Okay, wow, yeah, No, I mean you're right that has
been lost in all the news shuffle because I didn't
see any headlines about that. Okay, So I guess we'll
stay tuned to see what happens there too. All right,
but all right, thanks Jen. Let's bringing justin because we
have another Google anti trust case to talk about. This
(40:26):
is the Justice Department's case against Google over its ad
tech stack. Google lost on liability. Boy, I've lost track
of timing. Was it earlier this year?
Speaker 2 (40:37):
April?
Speaker 3 (40:37):
April?
Speaker 2 (40:38):
April?
Speaker 1 (40:38):
Okay, it seems like a lifetime ago. And the remedies
phase begins on Monday, and so justin you're headed down
to court on Monday to watch that, Why don't you
give us an overview of the case beyond what I
just described.
Speaker 6 (40:52):
Yeah, definitely really excited to go back to the Eastern
District of Virginia. Yeah, who would it be? That's right,
that's right. But just uicking up a bit here on
what the actual issues in the case are. So this
relates to Google's open Web display advertising ad tech stack,
and there's a lot of hyphens there, so I apologize.
But basically how this works is every time you go
(41:13):
to a website, there's a really quick auction that happens
and less than a second that gets the right ads
on that website to the right user at the right time,
and most importantly for this case, it does it at
the right price. The problem here, though, is that Google
has an immense market share and was found to be
monopolist with the cell side involved in that ad tech stack. Right,
(41:34):
so the website's looking to sell that ad space. Google's
market share by some counts is above ninety percent. That's
reliability was found in terms of an illegal monopolization on
that side. It was also found that they illegally monopolized
that advertising exchange, that ad exchange in the middle that
actually conducts that auction. Right, Google's Adects is the primary
or premiere advertising exchange in the middle. There there were
(41:55):
claims about domination on the cell side of the stack
or advertise for the people actually looking to buy ad space,
but the judge said, no, I think that's a very
competitive marketplace. I don't find my ability there. But I
think most importantly heading into this remedies phase here, it's
the tie between those two things, the tie between the
cell side platform and the tie between between that and
(42:17):
the advertising exchange that seems to be the court's problem
because time and time again at the trial, publishers were saying,
you know, they were asked, why do you feel like
you have to use Google's publisher side publisher side server,
and time and time again they said, it's because we
want that real time ad demand that comes through Google's
ad exchange, and we can only get that if we
(42:40):
use Google's cell side platform.
Speaker 2 (42:42):
So there you go.
Speaker 6 (42:43):
That's the tie access to that real time ad demand
in the middle. And quite frankly, I know I'm a
little bit out of consensus on this at least at
the moment. I think at the moment anyway, that's something
that can be fixed by a behavioral remedy, not necessarily
a divestiture.
Speaker 2 (42:58):
But I think that's.
Speaker 6 (42:58):
Really going to depend on the evidence that comes out
here at the remedies hearing and later on and closing.
Speaker 1 (43:02):
Arguments, and in terms of the evidence and in terms
of closing arguments, what stands out to you as especially
compelling arguments for each side.
Speaker 6 (43:12):
Yeah, So, you know, I think both sides here really
have some cards in their back pocket to play, and
I think that whether or not there's going to be
a divestiture is a much closer question, I think than
a lot of folks are saying right now. So in
favor of the DOJ, they're really pointing to all these
trust issues that the court has with Google. Right there
are claims of evidence destruction that occurred in the past.
(43:33):
There are claims of overuse of attornity client privilege that
really resonated with the judge. I think the judge has
a lot of problems with whether or not Google could
be trusted if there's not a divestiture, Right, So that
is something that plays, you know, toward the DOJ's side. There,
there's also questions of how feasible a divestiture would be, right,
and we know from the past that Google offered to
sell either addicts or parts of it as potential settlement
(43:56):
of this case and a similar case in the EU,
So that being the case too, it seems to be
that perhaps there is some feasibility here between behind Google
actually making that sale if they're ordered to write. So
those are things that the DOJ has its back pocket,
But in terms of Google, you can't ever count them out.
You certainly can't count their trial team out either. And
(44:17):
here they're really pointing to the fact that the DOJ
chose to frame this case around desktop for desktop advertising, right,
so on your computer going to a desktop, clicking through
on a traditional browser to get these ads. It did
not include mobile ads in the space. It did not
include connected TV ads in the space, all of these
things right where you know Google's argument will be the
(44:40):
market is changing here, and it's changing quickly. So we're
talking about domination of a marketplace that's really growing further
and further out of favor, and all of these tools
that the government would like a divestiture of, they transact
in all of these things beyond just desktop ads. So
therefore Google's going to argue divestiture really isn't warrant in
this case.
Speaker 1 (45:00):
Feel like we sort of got similar arguments in the
search case that Jen covered, right, So.
Speaker 6 (45:06):
Changing the guest star is going to be AI here too,
I think, yeah, yeah, I know, I know, and the
winner is AI.
Speaker 1 (45:15):
So just quickly, in terms of timing, where do we
go from here? Yeah, so you know, we're looking at
a closing arguments hearing. I think it'll be in November
again this year. That's kind of the same timeframe we
were looking at last year with the liability trial, And
you know, last year everybody was scratching their heads for
months and months and months because the judge said there
would be a liability for it rendered by the end
(45:36):
of twenty twenty four.
Speaker 6 (45:37):
Didn't come until April twenty five. So I think realistically,
giving the gravitmen of the issues involved here, we're probably
not going to see something until the first half of
twenty six.
Speaker 2 (45:45):
I think that's.
Speaker 6 (45:46):
Realistically where we are. But appeals probably for years down
the road here, no matter who wins. And we also
have a case by the State of Texas that is
going to be proceeding after this. I think, you know,
really looking for civil penalties there, but I think that
will be guided by the out come up the DOJ case.
And we're also seeing a ton of private litigation, whether
there be class actions that have been pending for years
(46:06):
now up in New York or follow on suits by
competitive competing publisher ad servers and ad exchanges who are
really looking to apply the findings of the liability ruling
to their own private litigation and get damages you know,
stemming from that.
Speaker 2 (46:19):
So that's all at play too.
Speaker 6 (46:21):
I think we're looking at years to come of fun
ad tech litigation.
Speaker 1 (46:26):
Well, a lot of moving parts. I mean this really,
I think this episode, of all the ones we've done,
really just had the most going on. There's just so
much going on right now in terms of litigation and
policy in Washington and elsewhere, including the Eastern District of Virginia.
But I think with that we will wrap up this
(46:48):
episode of Votes and Verdicts. As always, thank you for listening.
If you have any questions about any of the matters
that we talked about on today's episode, don't hesitate to
reach out to us at you're convenience with questions. As
a reminder, you can find all of our research on
the Bloomberg terminal at BIG or on our litigation and
policy dashboard, which is available at bi laws go. We
(47:12):
also want to thank our producer at DJ Somani, without
whom this podcast would never publish on time. Thank you
for listening and have a great day.
Hello, and welcome to the Votes and Verdict podcast, hosted
by the litigation and policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg Terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we've outlooks
(00:38):
on more than ninety industries and one hundred market indices,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's our weekly look at
the litigation and policy catalysts that we're currently watching and
that we think will impact companies across a number of
different sectors. My name's Elliott Stein. I'm an analyst with
(01:00):
Bloomberg Intelligence covering litigation in the financial sector, and I'm
delighted today as always to be joined by a handful
of my Bloomberg Intelligence colleagues. As always, you can find
all of our research on the Bloomberg terminal at big
and you can find all of our litigation and policy
research on our DASHBOARDI laws go just to time stamp
(01:23):
this because things are moving particularly quickly, it seems. Today
today is September eighteenth, twenty twenty five. It's about three
eleven pm New York time, and there really is a
lot going on in terms of litigation and policy developments,
particularly coming out of Washington DC. Just today, I'll kick
(01:43):
things off. President Trump asked the Supreme Court to remove
Federal Reserve Governor Lisa Cook while her lawsuit challenging her
termination plays out. Cook of course won preliminary rulings in
the lower courts, and the Supreme Court, of course, has
been largely receptive to President Trump's arguments for an expansive
(02:04):
executive branch authority. But despite that, we think Cook has
a decent shot at winning in the High Court, particularly
because at least a majority of the justices in May
signaled that they view the Federal Reserve a little differently.
They view it as a quasi private entity, which is
different from other executive branch agencies where President Trump has
(02:27):
more power to remove the top officials of those agencies.
In doing that, we think the High Court was trying
to give effect to the Federal Reserve Acts for cause
removal restriction, and if the Supreme Court winds up adopting
President Trump's argument that his decision to fire Cook is
unreviewable that effectively would render the four cause restriction meaningless
(02:51):
in terms of timing. This will go to Chief Justice
Roberts in the first instance, and he can decide whether
or not to grant an administrative stay. I tend to
think that he won't do that, but if he does,
if he surprises me, which sometimes happens, that could happen
within a matter of days. I think it's more likely
that he refers the matter to all of the justices
(03:12):
on the High Court, and then the parties submit written
arguments over the next several days or a couple of weeks,
and then the justices will issue a RULIN on what's
known as the shadow docket, which means we won't get
oral arguments, and then we'll just get a ruin from
them on whether Lisa Cook can continue to serve on
(03:32):
the Federal Reserve Board while her litigation plays out. So
stay tuned for more on that. I'm writing about that
case on the Bloomberg Terminal almost daily because things are
happening almost daily. But there's a lot of other things
to talk about today. Today, the FTC sued Live Nation,
which we're going to talk about with my colleague Jenrie.
(03:54):
Earlier this week, President Trump sued The New York Times
for defamation. Last night, ABC pulled the Jimmy Kill Show
off the air. In definitely, we'll talk to my colleague
Matt Schuttenhelm about those cases.
Speaker 2 (04:04):
On Monday.
Speaker 1 (04:05):
Coming up, the remedies phase begins in the Justice Department's
antitrust case against Google's ad tech Stack. We'll talk to
my colleague Justin Taresi about that. But first, let's bring
in Nathan Dean, our chief policy analyst in Washington, DC,
because there's a lot happening in his world too. For one,
(04:26):
President Trump earlier this week said the SEC should allow
companies to report earnings on a semi annual basis instead
of a quarterly basis. And we're also coming up on
the deadline for funding the government, which of course means
we could be getting closer to a government shutdown dot
dot All right, Nathan, let's bring you in. Let's start
(04:51):
with semi annual reporting. In this proposal for recommendation or
suggestion floated by President Trump, it seems like most companies
would prefer to move to a semi annual report. In cadence.
Seems like most investors would probably want to keep the
quarterly cadence so they continue to get more information. I mean,
(05:12):
any idea what triggered President Trump to raise this issue?
Now I know he raised it previously, but like why now?
Speaker 3 (05:19):
Yeah, so you know, he mentioned this obviously, like you met,
like you said, this came from twenty eighteen, and in fact,
the SEC at the time had a request for comment,
and in that request for comment, as you noted, most
of the byside community and certainly the funds, they certainly
want to stick to quarterly reporting. They want the transparency.
And Blackrock even submitted a letter and I'm paraphrasing here
(05:39):
that said that, you know, the transparency, the benefits of
transparency outweighs the short term ism that comes with the
corporate side. But NASDAK at the time also released a
study about one hundred and thirty eight companies and seventy
five percent of those companies surveyed said they'd rather go
to biannual or semi annual reporting.
Speaker 2 (05:59):
Now stirred this.
Speaker 3 (06:00):
I'm trying to figure that out because President Trump went
to the Yankees game on September eleventh, and was I
think in Bedminster last weekend, so I have to imagine
somebody mentioned.
Speaker 2 (06:13):
It to him.
Speaker 3 (06:14):
But again, like you know, I don't know specifically what
caused this, because we had heard that this issue was
brewing around town. I mean, and I'm sort of giving
away a little bit of the secret sauce here, but
like you know, we often hear that these issues are
floating around town, and in this case, you know, the
Long Term Stock Exchange had a white paper that was
going around amongst the folks in DC. I was kind
(06:37):
of shocked that it came out on Monday morning though
that President Trump said that he wanted to do this.
So what happens now, Well, the SEC Chairman Paul Atkins
has already said that he is reviewing recommendations from staff
and thed heally is a waiting a proposal.
Speaker 2 (06:51):
Now.
Speaker 3 (06:52):
I think that's going to be an advanced notice of
proposed rulemaking, which is the first step. They essentially just
ask a lot of questions because Chairman Act has a
problem here, and the problem is the Byside community wants
to remain with quarterly reporting and the corporates most likely
want to go to a semi semi annual and this
is kind of hard for share Ekins because he has
(07:12):
good relationships with both. So you got to pick which
one do you like more here? And so if I'm
the SEC, I'm going to take a little bit more
slower and deliberate process to this because I do think
a solution that ultimately benefits both sides can be found.
And I think that solution is going to look like
something like this, where under the Securities Exchange Act in
(07:35):
nineteen thirty four, quarterly reporting remains and only Congress can
amend that. But using an extreme example here, there's nothing
that doesn't say to the SEC they can't go forth
and say, you know what, on quarters one and quarter three,
all you have to do is sign a piece of
paper saying you're good, submit it. You know. Quarters two
and quarters four that's where you do the ten Q
and the end of annual report. So I think the
(07:57):
SEC what they do is they ultimately embark on rulemaking
here where they de emphasize what is in quarter one
and quarter three you have to still submit something, but
you de emphasize it, and then in quarter two and
quarter four that's when you do the full fledged reports. Now,
the other thing we've heard, though, is that larger companies
may stick and continue as is, because if you look
(08:19):
at Europe, Europe already has this model. And for example,
I cover the equity side of Experience, which is based
out of London, and they have two earnings calls, and
then on quarters one and quarters three they have sales
and revenue releases. So I still get a little bit
of a sense of what Experience is going on, not
to the same flavor as a full earnings call, but
(08:40):
it's still something so that investors don't get caught with
this volatility or this idea of speculation, and management does
a lot more investor days as a response of as
a result of that. So I think you're gonna get
this medium where if you're a smaller company, you probably
don't have to do much for that first or third quarter,
but if you're a larger company, you may not have
to do a full fledged ten Q, but maybe you
(09:02):
still have to release something. So I think that proposal
comes out early next year. Finalization is most likely end
of twenty twenty six twenty twenty seven, and we'll have
to see how the market reacts in response to the
details of that proposal.
Speaker 1 (09:16):
How far did the SEC get with this in twenty eighteen,
when when they proposed this idea previously.
Speaker 3 (09:21):
So they released the rease for comment in December twenty eighteen.
The responses came back ninety days later, and then they
promptly didn't act on it again. So this wasn't a
high priority for former SEC chairman Jay Clayton, because you
have the byside community saying, look, I want these quarterly reports,
this is what I need, and then you have the
(09:42):
corporate saying I don't like this short termism, and so
forth and back in twenty eighteen. It's important to note
that there were a lot of companies, including folks like Berkshire,
Hathaway and General Motors and Verizon. They signed this open
letter at the time saying we don't want to do
away with quarterly earnings. We want to do away with
quarterly guidance. Now, the SEC doesn't manage guidance. That's not
(10:03):
a mandate of the SEC. It's just if one company
does it, then everybody's got to do it. And so
they were trying to get rid of quarterly guidance and
they just never could figure out what was going on,
like they could never come to a consensus. But the
reason why it's different today is because back in twenty eighteen,
the Trump white House did not have such a heavy
(10:23):
hand about what's going on in the regulators as they
do today. Is we remember, every proposal has to go
to the Office of Management and Budget before it's released
for the White House to review on it. And the
SEC is not in the business of telling the White
House no.
Speaker 1 (10:36):
So in twenty eighteen they didn't even get to a
draft proposal at all. Right, so they can't recycle what
they did before to that extent. Yeah, all right, So
let's talk shutdown. Today's September eighteenth. The deadline to I
guess come to an agreement for funding the government is
twelve days away. I know for a while you've been
(10:57):
at forty odds of a shutdown. You lowered that just
thirty percent earlier this week. Is that you tell us
you're thinking about that and if that's where you still are.
Speaker 3 (11:08):
Yeah, So you know the reason why I lowered it
to thirty percent is because the Republicans offered a clean
cr Now it's technically clean ish because there's some additional
funding which maintains everybody at fiscal year twenty twenty five funding.
And look there are a lot of folks that don't
like that on the Republican side, military hawks, for example.
I mean, you don't like there's Some of the conservative
(11:28):
talking points is you're just essentially continuing Biden era spending levels,
and this week keep the government open through November twentieth,
with the idea that as we approach the Thanksgiving holiday,
certain parties could jam up other parties and nobody would
risk having a shutdown over Thanksgiving. Now I lowered it
to thirty percent because it was extremely difficult in my
(11:49):
view for the Democrats to say no to a clean
CR because the party that offers the clean CR is
usually the party that has the moral high ground here,
and because people hate eight shuts down shutdowns, I thought
the Democrats would be forced to take that deal. Now
I still don't think there's gonna be a shutdown, but
there is one caveat that I'm gonna be looking at
(12:10):
over the weekend, and that is the impact of the
Jimmy Kimmel situation. Because the Jimmy Kimmel situation is a
little bit different because it offers Democrats the narrative to
get in front of the news cycle, and this is
something Democrats have been struggling because they've been trying to
tie it to ACA subsidies that need to be dealt with,
and they weren't able to get it to the top
of the news cycle. For example, David Axelrod tweeted just
(12:31):
this week that this is something that they should be pushing,
and another Democratic operative came back and said, we are
pushing this, but if you don't think we are, then
we've got a messaging problem here.
Speaker 1 (12:42):
I saw that too. I don't think it was a
Democratic operative. I think it was Dave Leigel, who's a reporter,
and he said this, Democrats have been bounding the table
on this, and if it's not resonating with you, David Axelrod,
I don't know who's here in it. So I think
that's what.
Speaker 2 (12:54):
I think. That's what.
Speaker 3 (12:55):
Yeah, I know that's the one that I was referring to.
And so you know, I just go back to the
idea that the Jimmy Kiff Kimmel offers them a point
to get to the front of the news cycle and
the way I would see it playing out and the
reason why. So if you were to say why do
you think a shutdown would occur? I would say, look,
if I was on the Democratic side, you know, shutting
(13:15):
the government down in September versus shutting it down in
November or in twenty twenty six is a better time
to shut it down. You're showing the Democrats that you're fighting,
so you're keeping the people in your party happy, and
your approval reigning is already not good. And if it
goes from not good to just a little bit more
not good, then it really isn't all that big of
(13:36):
a deal. And so you know, former House for former
House Financial Services Committee Chairman Patrick McHenry think of him
as you know, member him was Speaker pro tempt during
the you know, when they couldn't figure out that speaker
with the boat tie and so forth.
Speaker 1 (13:53):
And Bloomberg Television contributor exactly.
Speaker 3 (13:55):
And when he was on Bloomberg Television contributing to Balance
of Power, they asked him, are you do you think
a shutdowns happened? He said absolutely, now really wow yeah,
and so like now, but it's one of those things
where I still think there's plenty of time to come
up with a deal here. So I because I don't
think either party really wants a shutdown, you know, because
from the Democratic side. You know, you don't want the
(14:18):
Office of Management, budget RUSS vote really dictating what's going
to happen here. But the challenging is that Congress is
out for a decent chunk next week because of Russhashana,
and so there are only just a handful of days
to actually negotiate before September thirtieth. So I wouldn't be
surprised that the House passes their CR this week or
(14:38):
maybe a little bit into the weekend, and then they
send it to the Senate and the Senate gets jammed
and or they come up with their own solution or
something like that. But stay tuned. Next week is going
to be really really interesting, as every week is.
Speaker 1 (14:51):
I think, Thanks Nathan, I think that's a good segue
to bring in Matt Suttenham to talk some more about
this Jimmy Kimmel situation. Seem to be dominating the headlines
today on a day when there's just so many other
things going on as well. So for that to dominate
tells you something, Matt. You put out a headline this
(15:14):
morning saying kim Ol knockout keeps Next Star and Sinclair
FCC priorities on track. You know, we hear at BI
we're not interested so much in the cultural issues of
the day, but we're interested in the business impact. So
talk to us, you know, I mean, obviously give us
the context of sort of what's going on here, but
(15:35):
why is this an important issue for next Star and
Sinclair and tell us what those companies do for those
who aren't familiar.
Speaker 2 (15:41):
Yeah, thanks Elliott.
Speaker 4 (15:42):
Yeah, we've talked on this call before about the importance
for TV broadcast station owners to get deregulation at the
FCC and the real solid chance that that's going to
happen at the end of the year into next year,
and Next Star and Sinclair are are a handful of
(16:06):
are two of the biggest owners of those TV stations.
The FCC has started and is significantly through a rule
making to ease how many stations those companies can own
across the United States. They're also easing how many the
limits on how many stations you can own in any
one local market, and that creates all sorts of opportunities
(16:28):
for these companies. And so that really played a role
in this Jimmy Kimmel's story. I think that that emerged
yesterday because, uh, not to get too into the details
of it, because I think it's it's pretty well out there,
but effectively, Kimmel made comments that were about Charlie Kirk's
(16:53):
death and about about the alleged shooter that we were
upsetting to too many in car. The FCC chair went
on a podcast and suggested that by broadcasting Jimmy Kimmel's comments,
ABC and Disney and local station owners that that broadcast
(17:16):
it may be brought maybe violating the FCC's news distortion rule,
and basically, you know, in not so many words, threatened
to take action on that. He said, we can do
this the easy way or the hard way. He suggested
Jimmy Kimmel could be suspended, uh he and he also
(17:37):
directly to those station owners like Nextstar in Sinclair, said,
by the way, you have the power to preempt Disney programming,
ABC programming, and to knock it out. And within hours
of Brendan Carr saying that Next Star and Sinclair had
put out press releases saying they were preempting Jimmy kill
(18:01):
on their networks going forward. After that happened, Disney responded
and said, you know, we're we're going to suspend Jimmy
Kimmel going forward. So you can draw a pretty direct
line between Next Star and Sinclair and those companies needing
to keep the FCC on their side and and and
their response to Brendan Carr's call for them to take
(18:23):
immediate action on this issue.
Speaker 1 (18:25):
And it's also an M and A approval that is
the next Next Star Nerds.
Speaker 4 (18:30):
Right exactly, and and and so that that's related to
the easing of these rules. They need the FCC to
ease those rules because Nextstar has the six billion dollar
deal to acquire another large TV station owner, Tegna, and
and and to consolidate those operations that can't happen if
the FCC doesn't advance these deregulatory initiatives and and then
(18:54):
approve the deal along with the Department of Justice review
that that Jenri has covered for us.
Speaker 2 (19:00):
Right.
Speaker 1 (19:01):
So the so the so Kimmel's suspension is indefinite. We
don't know how long it's going to last. You have
any thoughts on how this is going to play out?
Speaker 4 (19:11):
No, I mean, I think from Next Star in Sinclair's perspective, look,
this is this they they got thank you notes from
Brendan Carr after after they took this action.
Speaker 1 (19:22):
You're talking metaphoric or not not literally.
Speaker 4 (19:24):
They literally got tweets from him, I guess, you know,
like like you know, he sent out messages on on
on X saying thank you for doing this.
Speaker 1 (19:33):
I hadn't seen it.
Speaker 4 (19:35):
Yeah, So so in that sense, it's a it's a
positive for them. I don't I don't have any intel
and how long this suspension will will play out on
the Disney side, or or or how ABC will handle it.
Speaker 1 (19:49):
Right but presumably right next Star in Sinclair obviously satisfied
car to some extent, So we'll see how much more
if a I think they actually have to do in
terms of getting what they want.
Speaker 4 (20:04):
The October meeting from the FCC, I think is the
one I'm watching now as potential action on on that
that key national ownership cap.
Speaker 1 (20:12):
So we'll be watching for that's interesting. Okay, all right,
let's talk about another case that's been heavy in the
news this week for you. That's Trump's President Trump's case
in his individual capacity against the New York Times. It's
a defamation suit. I guess he's complaining about New York
(20:35):
Times reporting over how he achieved his wealth and fame.
What are your I know you published on this as well.
But what are your initial thoughts on the strengths or
weaknesses of the case.
Speaker 4 (20:50):
Yeah, so it's difficult to win a defamation case, for
for for any public figure to win a defamation case
because of Supreme Court precedent. That that makes it very hard.
They the design of the First Amendment law here is
to create breathing room for reporters to be able to
(21:11):
report on public figures without the risk of facing litigation
on defamation issues.
Speaker 2 (21:19):
And and and and.
Speaker 4 (21:20):
The one of the biggest turtles is, I think one
that that President Trump might run into and in this
case is what's known as the actual malice standard. That
it's not enough for the reporters to have written statements
that that are are false, but the reporters have to
(21:42):
do that with actual malice, meaning they have to do
it knowing that the statement was false, or at least
being reckless about whether it could be false. And so
that puts a burden on the plaintiff as he pleads
his case to plausibly show that you've met that high bar.
(22:05):
And it's not enough to just say, well, he knew,
he knew. And that's sort of what you feel like
as you read this complaint. I think President Trump probably
plead some claims that are statements of facts that he
could prove are false. But the question at the motion
to dismiss stage, which is going to be the first
big fight in this case, is going to be, not
(22:28):
only are these things facts versus opinion? They have to
be facts, but it did President Trump do enough to
plead that these reporters knew they were false or at
least were reckless in publishing them. And that's where many
many defamation cases against public figures run into trouble. I think,
(22:49):
you know, there's a good chance that New York Times
can escape this case in round one on that basis.
The judge could could come back and say, look, you
need to do more or to show actual malice, to
show the reporters knew that these are falsehoods they're publishing,
or at least were reckless.
Speaker 1 (23:08):
And if I recall correctly that Ashwell Mallie standard comes
from another New York Times case, right, is that the
Sullivan for New York Times.
Speaker 4 (23:14):
That's Sullivan versus New York Times. I want to say
nineteen sixty four, but don't quote me on that.
Speaker 1 (23:20):
It sounds right, but one thing. I mean, it's interesting
that you say it has to be facts and not opinions,
because I didn't read the complaint, I read news articles
about it. I read your note, but it sounds like
a lot of the statements he's complaining about that Trump
is complaining about sort of are more fall more along
the opinion line of the axis than the fact line.
Speaker 4 (23:41):
I think some of the some of the claims probably
will be knocked out on that basis. His complaint lists
about thirty to forty different statements in these three New
York Times reports and the book that the reporters put together,
but some of them I do think will be knocked
out is sort of characterization of facts. And I think,
(24:03):
for example, he makes a big deal about his when
he when he went on the television show the reality
TV show The Apprentice, and and and Mark Burnett, the
producer of that show. The report says that that Mark
Burnett discovered President Trump too, you know, to be a
star on that show. And Trump goes on pretty extensively
(24:25):
about how that's a defamatory statement that that Burnett discovered him.
Speaker 2 (24:32):
For this show.
Speaker 4 (24:34):
I'm not sure the judge is going to think that's
a definitive statement that can be proven false or not.
You can you could get into an argument about what
does discovered mean in that in that setting?
Speaker 2 (24:46):
I think and and I'm not.
Speaker 4 (24:47):
Sure that it's the sort of you know, concrete fact
that really makes a successful defamation case, right.
Speaker 1 (24:55):
And I wonder, I mean, is is Trump's plan here
to try to get the Sullivan Versus New York Times
standard overruled? Because there have been a couple of justices
right who seem receptive to that.
Speaker 2 (25:10):
It's a possibility.
Speaker 4 (25:13):
My sense though, is most likely his his goal is,
you know, it would be great for.
Speaker 2 (25:20):
Him to to to.
Speaker 4 (25:22):
To earn a settlement here, to force the New York
Times to settle the way other media companies have settled.
And and just from a PR perspective, you know, these
were some some you know, critical reports of President Trump.
Speaker 2 (25:37):
If any time anyone.
Speaker 4 (25:38):
Raises the issues in these reports, he can come back
and say, yeah, what did New York Times do when
when I confronted them over it?
Speaker 2 (25:45):
They they had to get out of that case. They
they they resolved it.
Speaker 4 (25:49):
I think I think it's I think that might be
his ultimate goal here, is to force a settlement as
as he's he's he's.
Speaker 2 (25:56):
Done with other media companies.
Speaker 4 (25:58):
They you know, similar suits have settled with with ABC
with paramount in the you know, for the mid teen
millions of dollar range. And you know, it will be
tempting for New York Times to avoid you know what
could be very costly litigation that costs more much more
than that, by doing a settlement that you know, around
(26:22):
that range. And President Trump might view that as as
a win as much as anything to to to force
a settlement with with his critic.
Speaker 1 (26:31):
That makes sense, all right, Just one one last issue
for you to talk about, the TikTok deal that seems
to be in the works. It's kind of crazy that
this is sort of like the third most important story
for you to talk about in this episode, because usually
that's like at the top. But it sounds like there's
some sort of TikTok to you in the works. What
do you what do you know?
Speaker 4 (26:51):
And can you say maybe we're finally getting some progress here.
You know, the law took effect in January. It was
supposed to ban take talk then, but President Trump basically
said don't worry about it. With with three and now
four extensions of that law, he just a couple of
days ago, extended it into December again, but there are
(27:13):
reports that a deal is coming together. We'll we'll see, mate,
we'll see tomorrow if if this is a concrete deal
that's actually going to move things forward. Big question for
me is will it comply with the law. And and
and you know.
Speaker 1 (27:28):
Always worried about the law, Maggie, such a stil for the.
Speaker 2 (27:32):
Law, old fashioned like that.
Speaker 1 (27:33):
But if you talk about that, the why is tomorrow important?
Speaker 4 (27:37):
There are reports that that Trump is is meeting with
President she tomorrow and and and that and and that
you know, I hope that that details from the deal
come out then. But you know, on the law, my
big question is, you know, the con when Congress passed
this it it it had some thoughts about what's what
(27:58):
a deal would look like, the for byte Dance to
divest TikTok, and specifically it said that byte Dance could
no longer control any new entity, which which basically the
law says no more than twenty percent ownership for sure,
So I expect they'll do that. That's easy to do,
(28:18):
But maybe the harder part is that the law also
said that there could be no operational relationship between the
new company and byte Dance and no cooperation between Byteedance
and that new company with respect to operation of the algorithm.
And that's going to be the key thing here, because
(28:40):
the algorithm is really what makes TikTok what it is,
and it's going to be really interesting to see if
this arrangement that they come up with honors those terms.
Maybe there's some sort of licensing of the algorithm, and
maybe if you just license it, that's not an operation
(29:00):
relationship with with respect to how the algorithm operates on
a day to day basis, maybe that's sufficient.
Speaker 2 (29:08):
But that remains to be seen.
Speaker 4 (29:09):
So that's the detail I'm going to dive in right away.
Speaker 1 (29:13):
Do you I mean, you've talked about this issue on
you know, many times on this on this podcast many
times before, and you're always a little surprised that no
one has sued to challenge the lack of enforcement.
Speaker 2 (29:26):
Of the law.
Speaker 1 (29:27):
If the deal goes through and there's questions about, you know,
what operational relationship means, do you think we might do
lawsuits at that point over over that term.
Speaker 4 (29:39):
It's possible the law has an express cause of action
that says any action under the law can be challenged
in the DC circuits and and potentially if they take
an action that doesn't follow the terms of what is
required for a divestiture, you could envision a lawsuit coming there,
(30:02):
you know, from someone that that is harmed by the
not following the law. But that that's a potential problem.
Anyone needs legal standing, constitutional standing to show that they're
injured in fact in order to sue, and I think
that probably has been the hang up on, you know,
litigation generally on this issue.
Speaker 2 (30:22):
Yep.
Speaker 1 (30:23):
All right, Matt, good stuff. A lot of really a
lot of interesting issues. All right, Jenry, let's bring you in.
When the red headlines came across the terminal saying that
the FTC was suing Ticketmaster and Live Nation, I was like, Oh,
it's it's the anti trust case that we've been waiting for.
And then you very politely reminded me that the Justice
(30:44):
Department already sued these companies last year over anti trust
and that this FTC case is not anti trust, but
it's sort of adjacent. Why don't you tell us what
it actually is?
Speaker 5 (30:55):
Yeah, you know, Elliot, when I saw the headlines, I
was a little thrown myself because I saw these headlines
saying conspiracy. You know, the FDC accuses Live Nation of
conspiring with ticket brokers. I thought, well, hold on, ad minute,
I've been a nanny stresslawyer for a long time. FDC
is not allowed to bring conspiracy cases. That's the DOJ.
But then I look closer and I realized, okay, this
is enforcement of a statute called the Better Online Ticket
(31:17):
Sales Act of twenty sixteen, also called the BOTS Act.
Then I thought to myself, I'm an FTC follower. How
come I don't know about FTC's enforcement of this act.
But then I learned it's because it hasn't enforced it ever.
Well once, and that's it. In twenty twenty one, that
is it. There was one very quiet little case that
came and went quickly in which the FDC accused three
(31:39):
small ticket brokers of violating the act. They settled the
same day for three point seven million.
Speaker 2 (31:44):
It went away.
Speaker 5 (31:45):
You know, those were all private companies, probably didn't even
make headlines here at Bloomberg. And that is it until
this year. So this is something kind of new, but
follows an executive order by President Trump not that long ago,
where he basically said we need to do better at
enforcing this Act FTC, and so I think this is
in response.
Speaker 1 (32:04):
To that, As they always say, President Trump is a
long time fan of the Bots Act right.
Speaker 5 (32:09):
A long time right. So what this is about is
what the access There are two things that are illegal
under the Act, and one is for ticket brokers to
circumvent access controls or security measures that are used by
ticket sellers such as ticketmasters to buy in bulk. So
if the limits eight tickets and they're buying one hundred,
(32:31):
you know, and they're doing something illegal to go around
whatever the security measures are, then they're violating the Act.
But the second piece is, and this is where Live
Nation's lawsuit comes in, is that if you are a
reseller of those tickets knowing that they're purchase violated the Act,
then you're violating the Act as well. And that's where
this conspiracy comes in. What the FDC is alleging is
(32:51):
that Live Nation knew and knew that ticket brokers were
buying thousands and thousands of tickets and violating their rules,
but just allowed that to happen because they have their
own resale market, right they resell the tickets, so now
they've doubled it. They've made money twice. They sold the ticket.
The first time to the broker, they made money, and
(33:11):
now it's on their resale platform being sold by the
broker and they're making money there too, So it actually
benefits them financially to do this. And the FTC has
quite a few documents. It looks like a pretty strong
case honestly, that suggests that Live Nation really just turned
a blind eye to this activity. And what they're looking
for here just finds what the act says is that
(33:33):
it's subject defines it up to fifty three thousand, eighty
eight dollars per violation. Now we're talking about probably thousands
and thousands of millions of violations, so that could add
up to a lot of money. And normally when the
FDC has these statutes with you know, per violation top
end find they never find anywhere near it. It could
be one percent or two percent, but we don't have
(33:55):
a history here to see what the average is in
this case. That small suit to tenty twenty one I
was talking about, the fine was thirty one million, but
the three brokers were able to settle for three point
seven because they're small companies. Because of inability to pay,
they all they couldn't have paid it, then all would
have gone out of business, So the FTC dropped it down.
So you know, we don't know what a settlement might
(34:18):
look like. Here, I tend to feel already, even though
we've got to get into the meat of the suit,
this is just a complaint that it's something that's probably
going to have to settle down the road, because at
least from the evidence I saw in the complaint, it
doesn't look very good for LB Nation.
Speaker 1 (34:31):
Right, and the potential of dramatically high damages is pretty
risky for them. Well, can you just remind us sort
of what the status is of the Justice Department's case?
Speaker 5 (34:42):
So I see that case as riskier, at least I
did until recently, far riskier because it's a big monopolization suit.
It's not about fines. The Department of Justice is trying
to force get an order that forces Live Nation to
sell ticketmasters. So it's a breakup of the company and
it is going to trial in March before a jury,
which is if we all know Live Nation, we've all
(35:02):
bought tickets. That's bad news for Live Nation because it's
going to be hard to find a jury that doesn't
dislike the company.
Speaker 1 (35:09):
I would say, you even get how do you find
one zuror who doesn't have feelings one way.
Speaker 5 (35:14):
Or the other exactly, I'm not sure. So it doesn't
look good now. And the reason why divestiture is risky
here because you've probably seen for years I've been writing
about Google and Meta and all these other cases where
the DOJ wanted divestiture and I said, it's never going
to happen. The judge isn't going to do it. In fact,
the judge didn't do it in the Google search remedies
that just occurred.
Speaker 2 (35:36):
Here.
Speaker 5 (35:36):
It's a little bit different because Live Nation bought ticket Master.
I think it was back in two I don't even
remember the year. Maybe it was eight twenty twelve. But anyway,
when they bought Ticketmaster, they only did it by signing
a consent order. The government made them agree that they
would behave in a certain way with respect to how
they handled their ticket sales. You know that they can't
(35:57):
force venues that don't use Live Nations promotion or artists
or venue management to use Ticketmaster as the seller. They
can't enter these long term exclusive agreements. Well, they have
done all that. They have violated this order. Trump one
point zero. The first Trump administration DOJ found that they
violated the order, they extended the order and they clarified
(36:19):
the order. Well, now the DOJ is saying, you're still
paying no attention to this government order, Live Nation. What
can the DOJ do here other than seek a divestiture
and it sort of lays it out, gives a judge
a much easier case to order something like that than
some of these other cases and the other little issues
(36:40):
that Ticketmaster is handled as a subsidiary, easier to cleave
off the parent. It's not as integrated if it wasn't
operated as a subsidiary. And some of the precedent says
that's the better time for a structural remedy when the
company is operated independently and was once independent of the
parent anyway. So this sort of seems right for something
like that now. I said recently, the risk went down
(37:01):
in my mind, and that is because reported it's been reported.
I don't have any firsthand knowledge of this. That Live
Nations working very very very hard at this point to
ingratiate itself with the Trump administration. They hired Trump allied lobbyists.
They put Richard Grennell, who is a Trump, aali as
the chairman of the board of the Kennedy Center. Apparently
(37:22):
they've offered a lot of money. Again, this is reported rumored.
I can't say that any of this is actually true
other than Richard Grennell, and I do think sometimes in
this administration, those tactics work to reach a settlement. So,
but March is coming up fast.
Speaker 1 (37:37):
Yeah, it's sure, is all right? You mentioned Google and
that discussion given its antitrust cases, So why don't we
talk about epic games versus Google. You told me that
Google lost the last ditch effort to stay in order
relating to its play store in that Games versus Google case.
(38:01):
Why don't you tell us a little bit more about that?
Speaker 5 (38:03):
You know, Elliott, I wanted to talk about this today
because I think it's been completely and totally overshadowed by
the fact that the Girl Search case, the Google ad
take case. Nobody's thinking about this, But honestly, the impact
of it is going to be a pretty drastic change
to Android mobile devices because all Google has left is
Supreme Court review, and we know that that's probably unlikely.
(38:24):
They have lost an attempt to get a rehearing in
the Appellate Court they have lost an attempt to get
a stay of the injunction, which now has to go
some of it go into effect in thirty days and
some of it has to go into effect in ten months.
Of course, they can ask the Supreme Court for another stay.
I don't think they're going to win it. And the
big part of that injunction that's to me pretty significant
for the company is that Google has to permit on
(38:46):
Android devices any number of third party app stores that
are deemed safe and want to be on the Android device.
So when you buy an Android device and you want
to download an app, you would no longer have to
go to the play Store.
Speaker 2 (39:01):
You would no longer have.
Speaker 5 (39:02):
To pay Google in the Playstore if you bought an
app that required a payment or made an in app purchase.
And what makes this even more sting Google even more
is that it's also required to distribute these stores through
its own Playstore, So I could download a whole other
app store through the Playstore, and it's required to provide
its entire catalog of apps to these third parties to
(39:24):
get them going unless a developer opt out aside, right,
And that's pretty big deal. It means you could immediately
have some other app store on an Android device that
has that's exactly like that mirrors the Playstore and you
can buy all your apps there. And Google charges fifteen
percent and thirty percent fees for app and in app purchases.
This could They don't break it out in revenue, but
(39:45):
we're thinking it can be. It can be ten billion
a year and they could lose out on a lot
of that revenue. And they may have to do that
in ten months.
Speaker 1 (39:53):
So when did they lose this latest bid?
Speaker 5 (39:57):
Oh September twelfth? Oh my baky oh that's it was
your birthday?
Speaker 6 (40:02):
Yes?
Speaker 1 (40:03):
Okay, wow, yeah, No, I mean you're right that has
been lost in all the news shuffle because I didn't
see any headlines about that. Okay, So I guess we'll
stay tuned to see what happens there too. All right,
but all right, thanks Jen. Let's bringing justin because we
have another Google anti trust case to talk about. This
(40:26):
is the Justice Department's case against Google over its ad
tech stack. Google lost on liability. Boy, I've lost track
of timing. Was it earlier this year?
Speaker 2 (40:37):
April?
Speaker 3 (40:37):
April?
Speaker 2 (40:38):
April?
Speaker 1 (40:38):
Okay, it seems like a lifetime ago. And the remedies
phase begins on Monday, and so justin you're headed down
to court on Monday to watch that, Why don't you
give us an overview of the case beyond what I
just described.
Speaker 6 (40:52):
Yeah, definitely really excited to go back to the Eastern
District of Virginia. Yeah, who would it be? That's right,
that's right. But just uicking up a bit here on
what the actual issues in the case are. So this
relates to Google's open Web display advertising ad tech stack,
and there's a lot of hyphens there, so I apologize.
But basically how this works is every time you go
(41:13):
to a website, there's a really quick auction that happens
and less than a second that gets the right ads
on that website to the right user at the right time,
and most importantly for this case, it does it at
the right price. The problem here, though, is that Google
has an immense market share and was found to be
monopolist with the cell side involved in that ad tech stack. Right,
(41:34):
so the website's looking to sell that ad space. Google's
market share by some counts is above ninety percent. That's
reliability was found in terms of an illegal monopolization on
that side. It was also found that they illegally monopolized
that advertising exchange, that ad exchange in the middle that
actually conducts that auction. Right, Google's Adects is the primary
or premiere advertising exchange in the middle. There there were
(41:55):
claims about domination on the cell side of the stack
or advertise for the people actually looking to buy ad space,
but the judge said, no, I think that's a very
competitive marketplace. I don't find my ability there. But I
think most importantly heading into this remedies phase here, it's
the tie between those two things, the tie between the
cell side platform and the tie between between that and
(42:17):
the advertising exchange that seems to be the court's problem
because time and time again at the trial, publishers were saying,
you know, they were asked, why do you feel like
you have to use Google's publisher side publisher side server,
and time and time again they said, it's because we
want that real time ad demand that comes through Google's
ad exchange, and we can only get that if we
(42:40):
use Google's cell side platform.
Speaker 2 (42:42):
So there you go.
Speaker 6 (42:43):
That's the tie access to that real time ad demand
in the middle. And quite frankly, I know I'm a
little bit out of consensus on this at least at
the moment. I think at the moment anyway, that's something
that can be fixed by a behavioral remedy, not necessarily
a divestiture.
Speaker 2 (42:58):
But I think that's.
Speaker 6 (42:58):
Really going to depend on the evidence that comes out
here at the remedies hearing and later on and closing.
Speaker 1 (43:02):
Arguments, and in terms of the evidence and in terms
of closing arguments, what stands out to you as especially
compelling arguments for each side.
Speaker 6 (43:12):
Yeah, So, you know, I think both sides here really
have some cards in their back pocket to play, and
I think that whether or not there's going to be
a divestiture is a much closer question, I think than
a lot of folks are saying right now. So in
favor of the DOJ, they're really pointing to all these
trust issues that the court has with Google. Right there
are claims of evidence destruction that occurred in the past.
(43:33):
There are claims of overuse of attornity client privilege that
really resonated with the judge. I think the judge has
a lot of problems with whether or not Google could
be trusted if there's not a divestiture, Right, So that
is something that plays, you know, toward the DOJ's side. There,
there's also questions of how feasible a divestiture would be, right,
and we know from the past that Google offered to
sell either addicts or parts of it as potential settlement
(43:56):
of this case and a similar case in the EU,
So that being the case too, it seems to be
that perhaps there is some feasibility here between behind Google
actually making that sale if they're ordered to write. So
those are things that the DOJ has its back pocket,
But in terms of Google, you can't ever count them out.
You certainly can't count their trial team out either. And
(44:17):
here they're really pointing to the fact that the DOJ
chose to frame this case around desktop for desktop advertising, right,
so on your computer going to a desktop, clicking through
on a traditional browser to get these ads. It did
not include mobile ads in the space. It did not
include connected TV ads in the space, all of these
things right where you know Google's argument will be the
(44:40):
market is changing here, and it's changing quickly. So we're
talking about domination of a marketplace that's really growing further
and further out of favor, and all of these tools
that the government would like a divestiture of, they transact
in all of these things beyond just desktop ads. So
therefore Google's going to argue divestiture really isn't warrant in
this case.
Speaker 1 (45:00):
Feel like we sort of got similar arguments in the
search case that Jen covered, right, So.
Speaker 6 (45:06):
Changing the guest star is going to be AI here too,
I think, yeah, yeah, I know, I know, and the
winner is AI.
Speaker 1 (45:15):
So just quickly, in terms of timing, where do we
go from here? Yeah, so you know, we're looking at
a closing arguments hearing. I think it'll be in November
again this year. That's kind of the same timeframe we
were looking at last year with the liability trial, And
you know, last year everybody was scratching their heads for
months and months and months because the judge said there
would be a liability for it rendered by the end
(45:36):
of twenty twenty four.
Speaker 6 (45:37):
Didn't come until April twenty five. So I think realistically,
giving the gravitmen of the issues involved here, we're probably
not going to see something until the first half of
twenty six.
Speaker 2 (45:45):
I think that's.
Speaker 6 (45:46):
Realistically where we are. But appeals probably for years down
the road here, no matter who wins. And we also
have a case by the State of Texas that is
going to be proceeding after this. I think, you know,
really looking for civil penalties there, but I think that
will be guided by the out come up the DOJ case.
And we're also seeing a ton of private litigation, whether
there be class actions that have been pending for years
(46:06):
now up in New York or follow on suits by
competitive competing publisher ad servers and ad exchanges who are
really looking to apply the findings of the liability ruling
to their own private litigation and get damages you know,
stemming from that.
Speaker 2 (46:19):
So that's all at play too.
Speaker 6 (46:21):
I think we're looking at years to come of fun
ad tech litigation.
Speaker 1 (46:26):
Well, a lot of moving parts. I mean this really,
I think this episode, of all the ones we've done,
really just had the most going on. There's just so
much going on right now in terms of litigation and
policy in Washington and elsewhere, including the Eastern District of Virginia.
But I think with that we will wrap up this
(46:48):
episode of Votes and Verdicts. As always, thank you for listening.
If you have any questions about any of the matters
that we talked about on today's episode, don't hesitate to
reach out to us at you're convenience with questions. As
a reminder, you can find all of our research on
the Bloomberg terminal at BIG or on our litigation and
policy dashboard, which is available at bi laws go. We
(47:12):
also want to thank our producer at DJ Somani, without
whom this podcast would never publish on time. Thank you
for listening and have a great day.
Host
Elliott Stein
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Cardiac Cowboys
The heart was always off-limits to surgeons. Cutting into it spelled instant death for the patient. That is, until a ragtag group of doctors scattered across the Midwest and Texas decided to throw out the rule book. Working in makeshift laboratories and home garages, using medical devices made from scavenged machine parts and beer tubes, these men and women invented the field of open heart surgery. Odds are, someone you know is alive because of them. So why has history left them behind? Presented by Chris Pine, CARDIAC COWBOYS tells the gripping true story behind the birth of heart surgery, and the young, Greatest Generation doctors who made it happen. For years, they competed and feuded, racing to be the first, the best, and the most prolific. Some appeared on the cover of Time Magazine, operated on kings and advised presidents. Others ended up disgraced, penniless, and convicted of felonies. Together, they ignited a revolution in medicine, and changed the world.