Specialist
Executive at Bloom Strategic Counsel PLLC
Agenda
- Update on US federal and state antitrust matters involving Alphabet/Google (NASDAQ: GOOGL) and Facebook (NASDAQ: FB)
- Latest associated legal and regulatory developments and Europe vs US dynamics
- Related executive and legislative branch actions
- Possibility of new actions against Microsoft (NASDAQ: MSFT), in light of international complaints and pending purchase of Activision Blizzard (NASDAQ: ATVI)
- Implications for other companies and 1-3-year outlook
Questions
1.
Where do the cases that have been filed against Alphabet/Google stand? I think there are multiple matters in process currently.
2.
How do you see the four cases against Google playing out, in terms of the near-to-mid-term and their possible conclusions? Companies get sued all the time.
3.
Why wouldn’t Google go to the table and try to negotiate some agreement in the DoJ [Department of Justice] case, especially since it’s such a strong case? The DoJ seems steadfast to take this to trial and put up a win, but there obviously is a cost and risk to trying to do that. Do you think there’s any chance of a settlement, and what could something like that look like? You seemed to suggest that settlement will be harder to achieve in contexts where multiple states’ attorneys general are involved.
4.
Do you think Google could or should take other pre-emptive actions to address some of the allegations or concerns that are embodied across the four cases? What are some examples of this?
5.
It would seem to be a pretty extreme move for Google to proactively decide to divest any of its acquired adtech businesses – or for any type of victory to warrant that – but I think many people are focused on the possibility of divestitures, predominantly if they would be forced upon Alphabet/Google. Do you have any updated view as to whether that is a possible or even likely outcome?
6.
The alleged agreement between Google and Facebook, codenamed Jedi Blue – which is an agreement related to online advertising – is also important. More has come out about this over the past few months. Authorities in Europe have been scrutinising this potential agreement and the details. Might that change things at all, for Google in particular, as it pertains to the US?
7.
Based upon what you know regarding the Jedi Blue agreement, do you think it’s contrary to antitrust law, or does more need to be understood about the nature of that agreement?
8.
Could you outline the cases currently pending regarding Meta Platforms/Facebook/Instagram? I think there are fewer, but still multiple, cases and some complicated aspects.
9.
I think many people were surprised that the lawsuits against Meta were initially dismissed and that, at least in one of the cases, the FTC [Federal Trade Commission] was allowed to amend the complaint and suddenly, now, it’s allowed to go forward. The states’ case was dismissed and they are appealing that dismissal, as you indicated. Does that say anything about the strength of the case or cases here, depending on how you want to define them?
10.
You seem to think that Alphabet/Google having to divest DoubleClick One is potentially likelier than Meta/Facebook divesting Instagram. Is that correct?
11.
Do you have any sense of the timetable of the two cases you’ve mentioned, in terms of when we should start seeing more specifics? I suppose it’s probably appropriate to focus on the FTC case because that’s further along and has at least withstood current challenges, whereas no one knows whether the state case will proceed.
12.
Microsoft, interestingly – and perhaps based on the history that you highlighted – hasn’t been targeted, particularly by US government authorities, amid all these big tech actions and lawsuits. Do you think there’s a risk of the company suddenly being brought into this fray? How could you see that playing out?
13.
You mentioned Microsoft’s proposed purchase of Activision Blizzard is having some challenges. What do you think some of those challenges are? On one hand, there’s been a lot of consolidation in the video games area and there are several very large competitors outside the US. I think one of the company’s big points about why this deal should go through is it strengthens the US competitors against very strong competition, particularly in Asia, where you have Tencent, Nintendo and Sony. How do you see that playing out? What can it do to get this deal through?
14.
It’s been reported that European regulators have started to look into Microsoft’s cloud businesses and Azure. I think a lot of people wonder about the differences in how Europe vs the US are approaching big tech and antitrust. It seems like the US has been trying to catch up. What are your observations there?
15.
On more government actions involving big tech and antitrust and some companies we’ve discussed, you highlighted Jonathan Kanter – who heads the DoJ’s Antitrust Division – and Lina Khan – who is the FTC Chair and who now has a Democratic majority as of this week, I believe. What do you expect from those people and their organisations?
16.
What are some of the practical implications of what we’ve discussed? People might think that more enforcement actions, merger blocking or a rulemaking seem like very theoretical concepts.
17.
You mentioned Elon Musk’s proposed acquisition of Twitter and that he indicated he’d be taking a step back and evaluating the fake account situation and such, but he said he’s still committed to the acquisition. Notwithstanding that, I think many people wonder how far this goes for the DoJ and FTC, in terms of what they’re willing to do. It’s one thing if you say a company with very large market share is looking to make substantial acquisitions – as with Microsoft-Activision Blizzard. It is another if a private individual is looking to buy Twitter or if PE firms are looking to buy something. Do you think it will stop at strategic-type transactions or might they also include financial transactions?
18.
You touched upon legislative actions and I think over the last year or two, people have talked about and actually proposed several pieces of legislation. It seems like there’s a significant piece left that people think has a chance of passing, which I think is HR3816 – the American Choice and Innovation Online Act. What are your thoughts on that?
19.
Regarding the two pieces of legislation that I think people are probably most focused on, you talked about the American Choice and Innovation Online Act having around a 40% chance of passing. What’s significant about that proposed legislation that we should know?
20.
You referenced the app store bill and it sounded like you’re a lot more optimistic about that one. Is that fair?
21.
Are there any smaller companies – particularly those that may have been involved in some of the suits or discovery involving some of the larger firms – that you think could benefit from the new wave of oversight? We’ve talked about specific companies such as Alphabet, Meta and Microsoft.
22.
Regarding the midterm elections and the implications, obviously we’re at a very close balance and people are talking about Republicans possibly retaking seats or majorities. How does that affect the way that some of the things we’ve discussed could play out?
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