Specialist
Senior executive at Bloom Strategic Counsel
Agenda
- Overview of US federal and state antitrust matters involving primarily Alphabet/Google (NASDAQ: GOOGL) and Facebook (NASDAQ: FB)
- Latest related legal and regulatory developments
- What’s next, and how and when will these situations be resolved?
- Potential associated executive, legislative and regulatory actions
Questions
1.
Could you start by briefly describing the three cases filed against Google by the DoJ [Department of Justice] and various states? What is consistent across these cases, and how do they differ?
2.
How has Google responded to the DoJ, Colorado and Texas cases? What do you expect to happen next?
3.
Do you think Google will ultimately be successful in moving the Texas case to California? A convenient offshoot of this request is that, as you pointed out, it would take more time to move through the courts.
4.
What do you think will be the outcome of the DoJ and Colorado cases, which you noted have been consolidated for pre-trial discovery? Why do you think it is unlikely that Google will settle?
5.
To confirm, as we frame the potential remedies, fines would not be a possibility in the DoJ case?
6.
What do you think are the most likely remedies in a scenario where the DoJ and the states prevail against Google? You referenced the possibility of divestitures and existing contractual agreements being cancelled.
7.
How do you expect the cases to impact Google’s behaviour? We’re at the end of March 2021, and this may not be resolved until September 2023. Do you think Google will be less active or less aggressive as a result?
8.
Could you break down the two cases that the FTC [Federal Trade Commission] and various states have filed against Facebook? There are some similarities to other cases we’ve referenced, but it also seems like the stances or the remedies being pursued for this set of matters are perhaps more aggressive.
9.
How has Facebook responded to the cases thus far? It filed motions to dismiss these cases in early March. How did you assess that decision, and when will the courts make related decisions?
10.
Would you expect Facebook to consider settling, if we assume the motions to dismiss are not granted? If it doesn’t settle, when would you expect the trial to start?
11.
You alluded to Facebook’s prior issues in these contexts, which have resulted in fines or equivalent measures. These newer cases seem far more tailored towards structural rather than behavioural remedies. Do you think there is any possibility of a settlement in which Facebook agrees to behavioural remedies?
12.
You referenced President Biden nominating Lina Khan to become commissioner at the FTC. She’s widely perceived as someone who would pursue a case such as this fairly aggressively. Given this case is already fairly aggressive, is it fair to say that her announced appointment makes settlement even less likely?
13.
How do you think the Facebook cases will ultimately be resolved? Your assessment thus far seems to be that the motions to dismiss will likely not be granted. It seems a settlement is unlikely, but perhaps more feasible than in the Google case. You also indicated Facebook has a better case than Google, and so it would seem you think that Facebook will largely prevail. Is that a fair summary of your expectations?
14.
Let’s assume the various cases come to trial two-and-a-half years from now and that Google and Facebook both initially lose. They have the ability to appeal, not just to an appeals court, but ultimately to the Supreme Court. What are the implications of this process taking the better part of five years to play out, factoring in the potential addition of two further years?
15.
Let’s assume the various cases come to trial two-and-a-half years from now and that Google and Facebook both initially lose. They have the ability to appeal, not just to an appeals court, but ultimately to the Supreme Court. What are the implications of this process taking the better part of five years to play out, factoring in the potential addition of two further years?
16.
How should we consider any potential legislative actions that could impact similar cases in future? Presumably, it’s not possible to pass laws that can retroactively influence these cases, but what prospective legislative shifts could influence the behaviour of these companies or others?
17.
Is there a high probability of these cases catalysing the most significant reforms to antitrust laws in a long time? When people think of significant antitrust laws, they consider precedents such as the Sherman Act in 1890, or the Clayton Act in 1914. How radical would you expect any new reforms to be?
18.
Reforms to antitrust law will not retroactively impact Google and Facebook. Could we therefore suggest that the companies may benefit from these cases being brought, essentially, over the last handful of months?
19.
How would you characterise the relative vulnerability of any individual big tech companies against the backdrop of multiple lawsuits and the reforms being discussed?
20.
What are your expectations for these specific antitrust cases or other related government actions over the next couple of years? Which key developments should investors be tracking particularly closely?