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All right,

0:38

welcome to Deconstructed. I'm Ryan

0:40

Grim. Earlier this week, the FTC,

0:43

joined by 17 state attorneys

0:45

general, launched a landmark suit against

0:48

Amazon. Meanwhile, the Department of Justice is

0:50

in its third, heading into its fourth week in a

0:52

trial against Google.

0:54

Might be the biggest moment for antitrust in

0:57

decades. Today, I'm joined by Matt Stoller,

0:59

Director of Research at the American Economic

1:01

Liberties Project, and also Amanda

1:03

Lewis, who's a partner at the law firm of Cuneo,

1:06

Gilbert, and Laduca. She's also co-founder

1:09

of what's called the Responsible Online Commerce

1:11

Coalition, which represents third-party

1:13

sellers and others operating on

1:15

Amazon. Amanda and Matt, thank

1:18

you so much for joining me. Thanks

1:19

for having me. Thank you. Great to be here.

1:22

Amanda, let me start with you. Can you talk a little bit

1:24

about what is in this

1:26

Amazon lawsuit? And were

1:29

there elements of it that pleasantly surprised

1:31

you or that you were disappointed in? What is

1:34

the FTC taking on when they're taking

1:36

on Amazon this time?

1:37

Right. So I was

1:40

really, really pleased with the complaint.

1:43

This is something

1:45

that the situation with Amazon

1:48

and the anti-competitive conduct that

1:51

the company has been engaged in, and in particular,

1:53

with respect to third-party sellers

1:56

and companies that rely

1:58

on the platform.

1:59

for their entire economic livelihood is something

2:02

that the company will absolutely need it to be held accountable

2:05

for. The other really important

2:07

thing here that is very center

2:10

in the component is the

2:12

effect of the anti-competitive pandas,

2:14

not just on these other businesses, which

2:17

is critical and is important, but

2:19

also the effect on consumers. And

2:22

so while it seems like

2:25

Amazon is offering the lowest

2:27

prices to consumers, in a

2:30

sense, you have basically the invisible

2:33

hand of Amazon that is setting

2:35

prices at an

2:37

artificially high level because

2:40

they don't allow sellers to

2:42

offer their products on any computing

2:45

per sense for a

2:47

lower price.

2:48

And if they do so, they

2:51

get punished. I saw something in the complaint

2:53

about the buy button and the kind of exploitation

2:55

of that. So what does it look like? How

2:58

does Amazon kind of discipline third

3:00

party sellers? So

3:01

this used to be in black and white

3:04

in the context. You need to agree

3:07

that if you wanted to sell on Amazon,

3:09

you had to agree not to offer a lower price

3:12

elsewhere. The way that Amazon

3:14

enforces its pricing

3:16

power, if they know, is

3:19

if you're an Amazon seller

3:21

and they find

3:23

Amazon trash, sell the prices on

3:26

other retailers and other channels,

3:29

if they find that your

3:31

product is available for a lower price,

3:34

somewhere else, they do with

3:36

called Gailbox Suppression.

3:39

And that's what you're talking about with the baby's kitten.

3:42

And so then every day when maybe

3:45

not every day, but for people who shop

3:47

on Amazon regularly, when

3:50

you search for a product, there will come up

3:52

a featured offer. And

3:55

if you are not that featured offer or

3:57

showing up high on the list.

3:59

of searching those, you

4:02

basically don't exist. And

4:05

so the connection here is that if

4:07

Amazon signs that you have

4:09

offered your product or your product is available

4:11

for a lower post elsewhere,

4:14

you cannot get the buy

4:16

box.

4:17

And it's almost like you don't exist. And

4:21

so you're punished for offering a lower

4:23

price to consumers.

4:24

I wanna come back in a second to how this also hurts consumers.

4:27

But Matt, can you talk a little bit about how

4:29

the Google trial has been unfolding and how the

4:33

fight against Google fits into this

4:36

overall framework?

4:37

Yeah, so we're in a really interesting

4:39

moment. There's a basic view, I think,

4:42

since the financial crisis of 2008 that

4:45

we have too big to fail

4:47

institutions that exist sort of across the economy.

4:49

And these are not just in the banking system, but they're

4:52

in everything from seeds and chemicals to

4:54

airlines to search engines to online shopping.

4:57

The terms and conditions by which we buy and sell

4:59

things are set by a small number of

5:01

people in corporate headquarters. And

5:04

there are multiple important antitrust

5:06

suits that are happening as a result of that.

5:08

One of them is just filed the suite, the Amazon suit, which

5:10

is largely about how Amazon surreptitiously

5:12

inflates prices in ways that consumers don't necessarily

5:15

see but are very real nonetheless.

5:18

But there are also a number of

5:20

cases against Google which

5:22

is the gateway to the internet and how Google manipulates

5:25

and controls our access to

5:28

the web to serve itself. So

5:31

that case was not filed this week.

5:34

That case was filed in 2020, actually under the

5:36

Trump administration. The investigation

5:38

started in 2019 and

5:40

it is now actually in trial. So I think we're

5:43

in the third week or fourth week of trial where

5:45

the government is trying to prove that Google

5:48

is a monopoly, that it has 90, 95% of the search

5:50

markets, search

5:53

ads market, and that it is illegally maintaining

5:55

that monopoly by thwarting rivals that

5:57

wanna come into the market and offer...

5:59

a different search engine

6:02

or arrival service. And

6:05

the case, I mean, interest

6:08

cases are weird because you have a judge and the judge

6:10

is the, they make all the procedural determinations,

6:13

but they also decide usually their

6:15

bench trials, which means that you don't have a jury. Not

6:17

always the case, but usually it's the case.

6:19

And so you're just guessing how this random

6:21

person is thinking about it. But

6:24

in terms of the actual evidence that the government

6:26

has put forward, it seems like

6:29

it's going pretty well. So the basic

6:31

claim from the government is that Google

6:34

has 90% of the search market, not

6:36

because they are the best product, but

6:39

because anywhere where you might access

6:41

a rival search engine, when you, most

6:44

people start to use a search engine

6:46

when they buy their phone or they buy a computer

6:48

and they launch their browser and they just search

6:50

for something. And then a search engine just pops

6:53

up that they start using and they don't think

6:55

about it. And that is what's called a default and

6:58

Google pays the

7:00

most important partner is Apple, but it

7:02

pays Samsung, Verizon, Mozilla,

7:05

like it owns Android, which is a lot of, a

7:07

lot of cell phones use the Android operating system.

7:09

It pays billions and billions of dollars to make sure

7:11

that it is the default search engine

7:14

at all of those places. And the goal

7:16

that Google has in doing that is to make

7:19

sure that rivals can't get

7:22

access to customers and can't

7:24

get access to the data that customers generate.

7:27

And that data is very important because you

7:30

know, that's what makes a search

7:32

engine better. And so there's all this evidence

7:34

coming out showing that Microsoft was

7:36

willing to pay a lot of money to get Bing

7:38

to be the default and Apple wouldn't

7:40

consider it. Or Apple was considering starting

7:43

its own search engine, but it was just making so

7:45

much money from Google that it decided that

7:47

Apple decided not to, or there are, there are startups.

7:50

There's a startup called branch, which made

7:52

a kind of a search, a search

7:54

product, but let you search your phone and all

7:56

your apps for stuff. And Samsung

7:58

wanted to embed branch. in its own phones

8:01

because they thought, oh, this is a neat product. And

8:04

it's not a direct rival of general

8:06

search, but it could kind of

8:08

get there. And Google

8:10

said to Samsung, you cannot embed

8:13

branch in your phone because

8:15

it's a violation of our contract, which says that

8:18

essentially Google is the exclusive provider

8:20

of search services. So this was called monopoly

8:23

maintenance, and it's illegal. And

8:25

then if the judge accepts

8:28

that Google is, you know, that this behavior

8:30

is intended to thwart competition. So

8:33

this is the biggest is very similar to what Microsoft

8:35

was doing in the 1990s. Microsoft was,

8:38

was, you know, that they were trying to destroy

8:40

a rival browser producer Netscape. They

8:42

were also trying to avoid and send

8:44

microsystems from putting middleware

8:47

tools into, into the market.

8:49

And the idea there was that Microsoft

8:51

knew that if you could, if you, if

8:54

the Netscape could put a browser on top

8:56

of an operating system, and ultimately, if

8:58

they were able to do that, they could displace Microsoft

9:01

windows and Microsoft didn't want to do what didn't

9:03

want that to happen. It was a monopoly maintenance case. And

9:05

Microsoft lost, lost

9:08

that case. But because what the judge

9:10

determined, and what an appeals court

9:12

upheld is that they were thwarting competition,

9:14

and that this was, this was unlawful.

9:17

And that's, that's basically the same thing that Google is doing here.

9:20

From a consumer perspective, it does just

9:22

kind of feel that Google

9:24

has gotten worse, just from search perspective,

9:27

like in the last couple of years. And

9:29

I don't have anything to back that up. Just my own

9:31

like, it just doesn't seem like it's getting

9:34

better. You know, we did, we actually did some polling

9:36

that is, that is like about 40% of the public does

9:38

think they've noticed there are more ads, it's gotten

9:40

worse. Like, most people, you

9:43

know, 50% of the public is like, no, you know,

9:45

we, Google's really good. But 40% is a substantial

9:47

number, right? Like there's a lot of people, a lot of people, you

9:49

know, it's higher than I would have thought. But

9:52

like, clearly, there's a market for a different search engine.

9:54

And actually, 60% of people said

9:56

in that poll, that if Apple

9:58

came out with a search engine, they would

9:59

try it, right? So there is demand

10:02

for something different. So Amanda,

10:05

what are the consumer implications that

10:07

you were talking about for Amazon's

10:10

behavior? Because a lot of people think, well, too

10:13

bad that they are destroying

10:15

all of these third-party sellers, but as long as prices

10:18

stay low and things are okay

10:20

for me, I'm not so concerned. But what

10:22

are you seeing on the consumer side?

10:25

Right. So first,

10:27

it's really important to

10:29

think about the fact that third-party sellers

10:33

are people. So I think of

10:35

the third-party sellers as somewhat

10:37

of

10:38

like a digital main street.

10:40

So these people are like

10:42

your neighborhood,

10:43

neighborhood stationery store,

10:45

or various businesses,

10:48

your neighbors, your families. So

10:50

just because it's a link that shows up

10:52

on the page, on

10:54

Amazon, when you go to buy something,

10:56

doesn't mean that these aren't real people with

10:59

real

10:59

businesses and real employees that depend

11:01

on

11:01

them. Yeah.

11:04

And in 2016 or 2017, a friend of mine and

11:06

I launched a little tiny publishing house that we called

11:09

Strongarm Press to try to kind of fill a

11:11

void that we thought there was a room

11:13

for kind of progressive books that were kind

11:15

of short and punchy. And we were

11:20

doing biographies of Trump cabinet officials

11:22

and things like that. And we launched

11:25

a couple of best sellers. It was metrically

11:28

a success, but Amazon basically

11:30

walked away with all of the revenue

11:33

and the publishing house sort

11:35

of still exists, but not really because it's

11:38

just a volunteer effort at

11:40

this point because they

11:43

owned everything. They owned the kind of the

11:45

publishing entities, the tools, the

11:47

selling, the printing, the distribution,

11:50

and they just decided what they would take and they decided they

11:52

were going to take everything. So yes,

11:57

as a third party seller, I'll just

11:59

put my bias out.

11:59

out there that, yeah, I witnessed it firsthand.

12:02

But sorry, go ahead, Amanda. Yeah.

12:04

So, so 100% on that. And

12:06

that's another part of the case that we could talk about in

12:08

a little bit, which are the fees, the

12:10

increasing fees and extraction,

12:13

squeezing

12:13

of sellers

12:15

that's an anabonded.

12:16

But for consumers, let

12:18

me just give you an example. There

12:21

are a few examples that I've heard about firsthand

12:23

from third party sellers.

12:26

And so, in one example,

12:29

someone has a product,

12:32

they're selling it on Amazon. They're

12:35

also selling it at a major online

12:38

paint retailer. The pet

12:40

retailer

12:41

just has to be able

12:44

to see relationships with the business retailer.

12:47

We have been to Amazon since the

12:50

third party for lower cost

12:52

to purchase the baby. And

12:54

now start losing souls.

12:56

Well, thousands of dollars of souls,

12:59

right, every day. So what do

13:01

they say? They go back to the

13:03

pet retailer, the online store,

13:05

and they say, please, please,

13:07

this is my date. You have

13:10

to keep, basically, then you have to keep the

13:12

price of my product, hey, or

13:14

I can't hold all of them.

13:18

And so then, well,

13:21

so repeatedly these two decisions can go

13:23

in. But the online

13:25

pet store says,

13:27

well, not my bad one. And

13:30

the ultimate result is then

13:33

usually, or sometimes at least, the third party

13:35

seller has to actually

13:36

pull their product from

13:38

anywhere outside of Amazon

13:41

because they can't control the pricing

13:43

in these other replays. Because

13:46

of the fear that that product is going

13:48

to be offered for a lower price elsewhere and

13:50

then they're going to get punished by Amazon,

13:54

then it all becomes self-reinforcing.

13:56

And you see a

13:57

trend here that then you can only get

13:59

that product on Amazon. And that's,

14:02

that's under NSSR, the

14:06

ultimate price increase is,

14:09

is where you can't ask that

14:11

thing,

14:12

where a store shuts down or

14:14

a product is not available somewhere.

14:17

So that's

14:19

how, like, strained the situation is.

14:21

And so Matt, back in 2017,

14:23

I think it was Lena Kahn, who's now FTC

14:26

chair, published this kind of landmark

14:28

or published a law

14:31

review article about Amazon that became

14:33

something of a phenom. Now, just six

14:35

years later, here she is in

14:37

court against Amazon. What

14:39

is the relationship between the arguments that she

14:41

made there and in this case?

14:45

So that paper, she wrote, that paper was about

14:47

how Amazon acquired its market power. And

14:49

it did it through something called predatory pricing,

14:51

which is to say charged

14:53

below cost to drive its rivals out of

14:55

the market. That was used

14:57

to be illegal. What the

15:00

paper, Kahn's paper said is no

15:02

longer illegal. Therefore you have companies like

15:05

Amazon. Well, why would you charge lower

15:07

than like, why would you intentionally lose money to acquire

15:09

the market to, you know, obviously, because

15:11

later on in different ways, you're

15:13

going to raise prices

15:16

to

15:17

make the money back. Right. And

15:20

predatory pricing was made almost

15:22

unenforceable. And it's

15:25

still the Supreme Court made it almost unenforceable.

15:28

This case is six years later and

15:31

Amazon is now a monopoly and

15:34

they are raising prices. And so

15:36

this case is not about how Amazon

15:39

acquired its monopoly. This case is about how

15:41

Amazon is maintaining and

15:43

then exploiting its monopoly. So

15:47

one way to understand it is Amazon Prime is

15:49

essentially a scam. Right.

15:51

That's, you know, you don't see that. But

15:54

what is going on here is that like most

15:57

of the 60 percent of the products sold on Amazon,

15:59

when you click on the. Amazon, you want to buy something sold

16:01

by, you know, a third party, right? And

16:03

then Amazon charges those third parties that

16:05

about 50% of their revenue to list

16:08

on Amazon for their logistics and everything

16:10

like that to sell on Amazon, you have to pay one out of every $2.

16:12

And then, and

16:16

then Amazon takes that money and

16:18

pays for quote, unquote, free shipping. They

16:20

also pay for Amazon, you know, the

16:23

Amazon Prime, like video services, Twitch,

16:25

audio, like, oh, that's about 130, $140 billion that they're charging to. And

16:30

then Amazon, like, you know, they're like, okay, well,

16:32

if you have to charge, you know, 10 bucks on Amazon, but you know,

16:34

you could charge six bucks elsewhere. Why isn't the

16:36

web full of ads being like, buy cheaper on, you

16:39

know, Walmart or buy cheaper direct or

16:41

for this widget you want? Well,

16:56

the reason is because Amazon, as Amanda was saying,

16:58

has these anti discounting measures and it says if you

17:01

can sell on Amazon for our high price,

17:04

which includes quote unquote, free shipping, although nothing

17:06

really is free, there's no such things as free lunch, or

17:10

you can sell off of

17:12

Amazon. And if you sell off of Amazon,

17:14

that's 60, 70, 80% of the customers are never gonna, they're not

17:16

gonna see you. Because most people shop on Amazon, they're not

17:18

gonna see you. Because

17:21

most people shop on Amazon. So that's,

17:24

that's essentially the argument of this case.

17:26

The paper from from Khan

17:29

said it was about predatory pricing,

17:31

predatory pricing is not an element here. However,

17:34

the paper also talked about this

17:36

thing called vertical integration, which is basically a company,

17:39

owning a bunch of different lines of business, and then

17:41

integrating them in a way that disadvantages

17:44

rivals. And it is something that is going on here. Because

17:46

the way that Amazon raises its prices is

17:49

by doing things like saying, all right,

17:51

if you want to get access to Amazon

17:54

customers, you have to use our logistics

17:56

service fulfillment by Amazon and that costs

17:58

a bunch of money. Oh, and by the way, You

18:00

also have to advertise on Amazon and they

18:02

get about 30 billion dollars through advertising

18:05

And so what the net effect is as

18:07

a consumer, you know You you put batteries

18:09

into Amazon and most of the links that you see

18:12

are sponsored links Although you can't really

18:14

tell because sponsored is written in really or

18:16

really small font and those are often more expensive

18:18

or worse quality But from the

18:21

from the the perspective of the seller, you know as

18:23

you put it all the revenue or all

18:26

the margin is being taken by Amazon and That

18:28

is a function of vertical integration. So so

18:31

it is in part drawn from

18:34

Khan's paper It's mostly

18:36

the kind of new things that Amazon

18:38

has been doing to exploit the

18:40

monopoly that that that Khan Described

18:43

how they acquired so I don't know if that

18:45

makes sense But it's you know But I

18:47

think there's also there's also one other

18:50

element here when you're talking about like that paper

18:52

and the relationship to the case You

18:55

know Lena Khan is very important person, right?

18:57

She's the chair of the felt trade Commission but

19:00

the Federal Trade Commission and 17 states

19:02

brought this case This is not

19:04

like Lena Khan wrote a complaint and

19:06

brought the case. This is it. This is three commissioners

19:09

Alvaro badoya Becca Kelly slaughter

19:12

and Lena Khan voted out this complaint which was

19:14

written by probably Dozens

19:16

of people who were involved in the investigation And

19:19

then there were 17 state attorneys general and

19:22

all their staff and they all had to agree

19:24

on a case to bring And so that's what

19:26

this is. This is not about one person.

19:28

This is about an argument

19:32

How we run our society and should

19:34

it be run should pricing in terms and

19:36

and worker salaries and all the rest of it be set

19:39

By a small group of people in Seattle

19:42

over the whole online retail sector and then

19:44

you know Google for search and

19:46

Walmart and airlines and ticket master

19:48

and so on and so forth or should it be

19:50

done through a competitive open market

19:53

and Public rules and that's so

19:55

that that's the relationship the paper and then

19:57

kind of behind that the ideological debate over

19:59

that paper is the case.

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21:10

Amanda,

21:12

this isn't the first pressure that's been applied to

21:15

Amazon. How have they

21:18

adapted to the kind

21:21

of political efforts to investigate

21:23

them and rein them

21:24

in before?

21:26

Right. You're absolutely correct.

21:29

While I was at the Federal Trade Commission as

21:31

a self-attorney, I was on detail to

21:33

Congress, to the House Judiciary Committee.

21:36

I was a counsel due to me when

21:38

Lena Kahn was our counsel

21:41

on the subcommittee. And we worked with

21:44

Dave Bond,

21:44

who was the chief counsel, and several

21:47

other people on the committee to

21:49

conduct a digital market

21:52

investigation. And that was

21:54

focused on Amazon, Google,

21:57

Facebook,

21:57

and Apple.

21:59

So, so Amazon has

22:03

a focus of that investigation

22:05

and I have

22:07

to say they stood out as one of the

22:11

least cooperative companies of all four.

22:14

So they don't respond well to scrutiny.

22:16

They're not really cooperative. This

22:18

was alluded to in

22:21

the complaints as well that

22:23

it seems like the company

22:26

is very comfortable.

22:29

In the case of this is a committee investigation,

22:32

there was actually a perjury referral for

22:35

one of Amazon's executives that testified

22:38

before Congress

22:39

and misled Congress. What

22:42

was the upshot of that?

22:43

Is that still alive? So

22:46

once a perjury

22:48

referral does to the

22:51

Department of Justice and

22:53

it was also a bipartisan referral, then

22:56

it's up to the Department of Justice whether they want

22:58

to pursue it.

23:00

There is a fairly high standard

23:03

for proving perjury and

23:07

I don't have any insight into what happened after

23:10

we sent that over, but I

23:12

imagine. DOJ sucks.

23:15

Let's be honest, like DOJ skiddies. I

23:18

mean, no, I mean like it's

23:20

true. Like the government is not functional except for

23:22

the antitrust agencies. Like it's

23:24

embarrassing and why is there all this

23:26

fraud? Why is there all this corporate

23:29

crime? Like it's because I

23:31

love the antitrust, what the interest and forces are doing,

23:34

but like the rest of the government is not

23:36

functional. One of the things in this complaint is

23:38

they were lying to the FTC. They were lying to the FTC

23:40

a few years ago in a case

23:43

that FTC brought on Amazon Prime

23:45

and deceptive advertising. We

23:48

have a lawlessness problem in this country with regards

23:51

to large corporations and like we need

23:53

somebody to put some damn handcuffs on someone and

23:55

like the FTC can't do it. They have, they

23:58

don't

23:58

have criminal authority and they don't.

23:59

perjury complaints and the anti-trust division doesn't

24:02

handle criminal complaints on they

24:04

handle criminal interest complaints but not things like

24:06

perjury like we have a real problem with the rule of

24:08

law and I mean like I'm gonna I'm gonna you

24:10

know I'm the biggest cheerleader of like anti-trust

24:12

cases but we have a problem with other

24:14

areas of the department of justice in other parts of the

24:17

government I don't know if the judges would accept

24:19

a perjury claim like this I don't know if congress

24:21

would but but

24:24

but like

24:24

certainly Amazon executives would notice

24:27

if they actually got some damn handcuffs so

24:30

that I mean I don't mean I want to go on a rant

24:32

because like I'm really mad about this

24:34

but like we have a problem with the rule of law and like

24:36

it can't we have to we have to do more than

24:38

just what the FTC and DOJ are doing

24:41

the anti-trust division are doing well even even

24:43

in the case of Google that's

24:46

in trial right now you've

24:48

had this

24:49

remarkable kind

24:52

of bizarrely unfolding situation

24:54

where you do finally have the DOJ

24:56

taking on right major company at the same

24:58

time there's a there's a strange

25:01

amount of respect on display that that a typical

25:04

defendant would not get from a typical prosecutor

25:07

uh Google has been able to

25:09

muzzle most of this trial can you talk Mac

25:11

you talk a little bit about why we haven't heard a

25:13

lot about it yeah I mean Google has been saying

25:15

I mean you saw this you know Amanda can probably

25:17

talk about the redactions in the Amazon complaint but in Google

25:20

in the Google trial

25:21

you know there's a judge named Amit Mehta

25:23

right who is that's the judge who's over

25:26

over seeing it and he said

25:28

very explicitly like I'm just a judge

25:30

I'm not a business person and I'm going to defer to you guys

25:33

on talking to Google on what

25:35

kind of information is competitively sensitive and

25:38

make sure that I don't want to hurt your business which

25:40

is you know might sound reasonable if

25:43

you're just like a guy but if you're a judge that's

25:45

crazy like that's a real problem because these trials

25:47

are supposed to be a

25:49

public right Google gets

25:51

better privacy you know they get to

25:54

they they get more protection

25:57

from a judge over their just

26:00

normal business behavior

26:02

than like a sexual assault

26:05

victim would get in a court, right? Like

26:07

it's totally insane. They get to hide,

26:09

like everyone knows Apple

26:11

pays Google huge amounts of money

26:13

for the default search engine placement,

26:16

right? Whether it's 12 billion or 8 billion or 20 billion,

26:18

we don't know the exact number, but we know

26:20

there's a number. And like it's always

26:22

redacted. And that's totally insane. Like

26:24

that's crazy. We, why is that?

26:27

Why are these numbers just redacted? And so

26:29

the judge is deferential, but so

26:31

is the DOJ. The DOJ trial team

26:33

is like, well, you know, we don't

26:35

want to, like, they're not like

26:37

pushing particularly hard for public access to

26:40

these numbers. And this is something that has to change.

26:42

Fortunately, like a number of newspapers

26:44

have done stories we've been pushing for it. And

26:47

the judge is now actually, it's funny, the DOJ

26:49

and the judge are kind of blaming each other for like things

26:52

that are in closed session or hiding things. And

26:54

so they've actually started to hear the criticism and

26:57

the judge was like, look, the CEO

26:59

of Microsoft is testifying on Monday. I

27:01

want as much of it to be in public as possible. So

27:03

it's like, I don't want to allege

27:05

bad faith here. I think the judge and the DOJ

27:07

didn't know that people were actually really interested in

27:10

this, but we do have this problem with like this

27:12

excessive deference to corporate

27:14

secrecy was very different than it was 25 years

27:17

ago with Microsoft. When it was front page news every

27:19

day, the judge unsealed that just the

27:21

trial, but over 100 depositions,

27:24

which are like the extra interviews you do with industry

27:26

participants outside of a trial, you

27:28

know, there were 20 hours of videotaped

27:32

deposition of Bill Gates that were what

27:35

you can watch on YouTube, because the judge unsealed

27:37

it like these, the public record is super

27:39

important here. And we're not getting enough

27:41

of a public record in the Google trial. But

27:44

hopefully, well, because we haven't done a monopolization

27:46

case, a big monopolization case 25 years, but

27:48

hopefully, like, the exposure of

27:51

the fact that it is super secretive,

27:53

and like, that's crazy, because it is, you know, apparently,

27:56

Google does care about its own privacy. But

27:59

like, it's crazy. And I

28:01

think people in the judiciary are actually hearing

28:03

that, and they may be

28:06

open to making things more public going

28:08

forward.

28:09

Amanda, how's the Amazon case look on that

28:11

front? Yeah. So

28:13

if we looked at the complaint, there are unfortunately

28:16

a significant number of redactions. My

28:20

understanding is that the ECC is within

28:22

a complete organization

28:24

to at least some

28:26

of the

28:32

redactions within, so I think it's

28:34

a little bit of a stay tuned on

28:36

that. And then we'll also have

28:39

to see the goods, as

28:42

in if we go with it. And

28:44

going back to what Matt said about how it's

28:46

a little bit crazy that you do have this one

28:49

individual with so much power deciding

28:53

who can see what the members,

28:56

what's the public and the media has

28:58

access to in the

29:01

historic and

29:04

really

29:05

important trials.

29:08

But it is a little

29:10

bit concerning that these decisions

29:13

are left to the whim of a single

29:17

person, a judge in

29:19

this case. One thing

29:21

that I wanted to point out is something

29:23

that's interesting and maybe not to pay

29:26

them with these things, it'll be fascinating

29:28

that with Amazon, is

29:30

they are very protective of their

29:32

own confidential

29:33

information. While

29:36

it comes to

29:37

third parties, maybe smaller

29:39

businesses

29:41

who

29:42

are having no choice but to participate

29:44

in these cases because

29:46

they've been subpoenaed,

29:48

when it comes to those people,

29:51

Amazon wants

29:53

the names of those people and the details

29:55

of their business to be public. And so

29:57

isn't that double standard interesting?

29:59

Sorry, I just want to say there's a sort of a funny story

30:02

when it went about like funny.

30:04

Ha ha, but more like funny with

30:07

WTF. Apple, which is essentially in

30:09

collusion with Google over over controlling the search

30:11

market. They actually pre briefed

30:14

reporters on what their executive

30:16

was going to say. And there's a bunch of stories,

30:18

you know, in one in the last couple of years, and while Strena wanted Bloomberg

30:21

wanted like, you know, here's what the Apple executive

30:23

is going to testify to. And then they demanded

30:25

that the testimony be sealed. Right

30:28

in close. So it was like it was like there were these articles about

30:30

what he was gonna say and then it was all closed session. I

30:33

mean, I may or may not have said that even. Yeah, I mean, it's

30:35

like, it's like, what like

30:37

this is clown show. And I think, I

30:39

think like what, what is exciting

30:42

about this moment is that,

30:44

you know, I talked to,

30:45

I talked to a bunch of judges now, and,

30:48

and they're new to this,

30:49

right? They're new to antitrust. They're

30:51

new to public interest in some

30:54

of these kind of corporate litigation, like I've been to

30:56

some antitrust trials. And, you

30:59

know, I've been to some that are like well attended and others that

31:01

aren't. And they're there, those judges

31:03

are surprised that there's public interest in

31:05

these, in these trials, and they they act

31:08

differently when they realize, oh, the

31:10

public is interested in this stuff. So they're

31:13

like, oh, this is something I should learn about, I shouldn't just

31:15

be like dismiss it because, you

31:17

know, I learned these stupid theories in the 80s,

31:19

and I'm going to dismiss these things now. So there's

31:22

it's, it's it's kind of like a cool moment to see, like this wave of populist

31:24

anger turned into legal arguments, you know, the, the people,

31:26

the, the people of truth. And,

31:28

and, you know, the, the,

31:31

the, the, the work that Amanda enslaved

31:34

did investigating in Congress.

31:37

You know, that's turned into these legal arguments, which

31:39

are now hitting the courts and the judges are

31:41

being kind of bad, but like, they

31:44

don't know any better. And now they're kind of like learning.

31:46

And so this is like, it

31:48

looks kind of annoying and conspiratorial,

31:52

but it's actually like, I think it's actually like a there's

31:54

a lot of positive movement in the,

31:56

in the, in the courts.

31:59

To finish, I'm curious

32:01

for both of your takes on this, and

32:03

maybe Matt, you could go first. If

32:06

you're the judge here and

32:08

you can issue a ruling, like what does ... We

32:10

could do both Google

32:12

and Amazon. What

32:14

should happen to these companies? What would be

32:16

proper antitrust policy? Well,

32:18

first of all, if I were the judge in the Google case, I

32:21

would sanction Google and sanction

32:23

their lawyers really hard for destroying

32:25

documents who said they could do ... Talk

32:27

about antitrust with the chat,

32:30

the auto delete on. That's the CEO

32:32

of Google said that. I would really

32:35

go hard and say, this is unlawful

32:38

behavior. When

32:42

there is a litigation hold, you cannot

32:45

shred documents. You just can't do it.

32:47

Whether you're shredding documents digitally or not,

32:49

no, not okay.

32:54

That's very important to do that.

32:57

Procedurally, that's what I would do. I would also try

32:59

to make things as public as possible. I would say,

33:01

unless there's a good reason, the data, everything

33:04

is public. If you cannot

33:06

show me direct harm that unveiling

33:10

this will cause, it's public, including

33:12

depositions. Maybe

33:15

not for smaller companies who could fear retaliation

33:18

from dominant firms, but there's

33:22

really no reason that Google and Apple have

33:25

to claim trade secrets on anything but

33:27

very, very, very specific stuff that

33:29

might be trade secrets. That's just the

33:31

way that things work. Your

33:34

dirty laundry, just because it's embarrassing,

33:36

doesn't stay private. If

33:40

you don't want to be exposed in a trial,

33:43

don't violate the antitrust laws. That's

33:45

pretty ... That seems like ...

33:47

Or don't come close to it. That's

33:50

what I ... In terms of the ruling, I think you

33:52

could imagine, I think the evidence from

33:57

the government has been fairly persuasive.

34:00

but you also have to think not just the

34:02

evidence from the government that they've presented, but you

34:04

have to really weigh the evidence that's been deleted,

34:07

right? And so you have to like assume

34:10

that there's a lot more there that you would never

34:12

get to hear because it was destroyed. So the

34:15

actual destruction of the evidence should

34:17

be a strong factor in not

34:19

only

34:20

like assuming bad

34:23

faith from the company and assuming

34:25

law breaking. Like it's a little

34:28

bit like the income tax violation for

34:32

Al Capone, right? Like

34:35

when you delete the evidence, that's pretty compelling

34:37

evidence that you were doing something wrong. So I would take

34:39

that strongly into account. And then the remedy,

34:43

then you have to have a separate trial for the remedy, but

34:46

the same problems are gonna emerge with that trial, which

34:48

is the evidence has been deleted. And the

34:51

thing is is there is another trial in Virginia

34:54

against Google where Google has been

34:57

screwing around the same way they have in DC, but

35:00

the judge in Virginia is

35:02

not having it. She's just like, oh, you made a

35:04

discovery error. Fuck you,

35:06

fix it. And so Google literally had to hire

35:09

a thousand contract attorneys, which

35:11

was pretty really expensive to go through

35:13

millions of documents because they

35:16

screwed up in discovery. And the judge is

35:18

not like trying to split the baby. She's just like, you

35:20

screwed up, you fix it. And that's

35:22

the way that you actually have to deal with these big corporations.

35:25

Otherwise, they

35:27

have more information than everybody and they'll

35:29

just run circles around you. And Amanda,

35:32

when it comes to Amazon, if let's say Amazon does

35:34

get found guilty of this, what

35:36

should be the remedy?

35:38

That's a really good question and an important

35:40

one.

35:42

So if Amazon is, if the

35:44

conduct is found to violate antitrust

35:46

law,

35:47

you can either have a behavioral

35:50

remedy,

35:51

which basically says, Amazon,

35:55

you cannot have these person policies.

35:57

You cannot have these anti-discount. that

36:00

is, that's the very

36:02

minimum of what could be done.

36:09

In the other pain,

36:11

you can go further, the court does have the power to go much

36:13

further and actually

36:15

require like a best-deter. And so

36:18

there is actually just an inherent conflict

36:20

here as Annavon is going to run the first thing.

36:24

The town

36:24

also can see a lot

36:28

and false defense and

36:31

engaging in a way to ensure

36:33

a misconduct in a legal

36:36

context is

36:39

a system

36:40

of something. The

36:42

court is really likely to

36:44

get up to

36:47

order a break-up or a divestiture. But

36:50

I have to say, what's difficult is you

36:53

always end up with a prohibition on

36:55

the conduct.

36:57

If Annavon had a history of sort of safe

37:00

system, their anti-competitive

37:02

policy,

37:03

you also can think of it sort

37:05

of like a balloon. Like if Annavon has this

37:08

monopoly power and you sort of push

37:10

it and run for it, it's

37:13

going to just move somewhere else. They're

37:15

just going to find somewhere

37:16

else to

37:19

extract these monopoly rents and

37:21

to exercise this monopoly power that they have

37:24

in a way that's going to be harmful to

37:27

third-party sellers and consumers. So

37:29

I am someone

37:30

who probably not surprisingly

37:35

also thinks that we need compensation. So

37:39

regardless of what happens here, by the time

37:42

the remedy gets put into place, it's very important

37:43

that the case is brought, but

37:46

it will likely be ten years before

37:49

appeals are exhausted and there's actually

37:51

a remedy put into place. And so

37:53

I think we also need to really continue to post on

37:56

a legislative form.

37:57

Not that time, but that's particularly

37:59

important.

37:59

I think it's really

38:03

important to have a

38:05

dual track and be

38:08

pushing as hard as we can

38:10

on both sides to reduce these

38:12

critical problems with more

38:15

of this Amazon, Google,

38:17

Facebook, and Apple. We're

38:21

in a situation that we are

38:23

not seeing an anniversary,

38:25

or the first thing, and then we're in a situation where we're

38:27

not seeing a new opportunity to do this. So

38:30

for everyone who said, oh, we can't

38:33

change our laws and

38:35

we can't change our policies because

38:37

everything is working so great and we have the

38:40

best tech companies and the whole world and

38:42

we're the only ones who innovate. Well, look

38:44

around. That's

38:45

not true. That's not

38:47

the pieces.

38:50

We're trying to get our bodies coming

38:52

out of the way

38:55

to continue to build the most and

38:58

maintain our, maintain

39:00

any sense, so I'm going to wait there. Well, Amanda, thank

39:02

you. Matt, you've often got a last word.

39:05

Do you have any last words

39:07

you want to sum up on or you wrapped up? Yeah,

39:10

I mean, I think that, to

39:12

Amanda's point, I think we need, this has

39:15

been the most extraordinary month of antitrust

39:17

action in 50 years, right? The

39:20

DOJ has this Google trial. The

39:22

FTC brought a case

39:24

against Amazon. They

39:27

also brought a case against a

39:30

private equity healthcare roll-up in anesthesiologists

39:33

in Texas, which is upsetting everyone in private equity

39:35

and healthcare. They did something

39:37

important on pharmaceutical patents.

39:40

It's called the Orange Book, which is technocratic

39:42

but important. The DOJ brought

39:45

a huge case

39:47

on price fixing in the meat industry, right,

39:49

against poultry, pork,

39:52

and chicken. It's just the

39:54

amount of,

39:55

like,

39:56

the number of cases, the amount of activity

39:59

is just, I think,

41:59

Legal Review by David Brelo. Leonardo

42:02

Fireman transcribed this episode. Our

42:04

theme music was composed by Bart Warshaw. Roger

42:06

Hodge is the Intercept's editor-in-chief. And

42:09

I'm Ryan Grimm, DC Bureau Chief of the Intercept.

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Thanks so much. And I'll see you

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