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NYC Sues Delivery App Over Lost Pay in Mamdani Crackdown · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: or watch us live on YouTube.
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  Speaker 2: Of course, it is now only fifteen days into the
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  Speaker 2: New York City Mayor Zoramum Donnie's tenure, and he is.
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  Speaker 3: Making moves already. Alex, do you live in the city.
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  Speaker 4: I do.
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  Speaker 5: I'm a lifelong New Yorker.
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  Speaker 2: You're a lifelong New Yorker, so you feel it more
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  Speaker 2: than I do. I live in the suburbs along with
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  Speaker 2: John Tuckers.
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  Speaker 3: So did you get your free bus service?
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  Speaker 5: Yeah? Not yet, still waiting for.
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  Speaker 3: You, Still waiting a free child here take the bus.
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  Speaker 5: That often usually the train, so I don't think it'll
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  Speaker 5: direct they impact me.
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  Speaker 3: Okay, but still waiting, still waiting. Let's check in with
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  Speaker 3: Miles Miller.
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  Speaker 2: He is our senior reporter covering security the National Desk,
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  Speaker 2: law enforcement, governments and cities. And it's here where we
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  Speaker 2: want to talk to him, because Miles is joining us
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  Speaker 2: from downtown Manhattan. And Miles talk to us a little
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  Speaker 2: bit about what the new mayor, Zoramumdani is doing when
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  Speaker 2: it comes to work. He is cracking down on some
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  Speaker 2: companies and how they're treating workers.
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  Speaker 6: Yeah, you know, he's enlisted Lena Kahn as an advisor
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  Speaker 6: unpaid advisor to him, of course, known to the Bloomberg
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  Speaker 6: audience as the former FTC chair. In addition to that,
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  Speaker 6: Julie Sue who joined us on our fabulous Labor Fridays
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  Speaker 6: right the fridays where we get the jobs report. And
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  Speaker 6: then in addition to that Sam Levine, who was at
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  Speaker 6: the FTC running enforcement. That's his dream team. And what
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  Speaker 6: they're doing is going after companies that are involved in delivery,
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  Speaker 6: that are involved in the gig economy to make sure
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  Speaker 6: that workers are protected. The story across the Bloomberg terminal
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  Speaker 6: just about twenty minutes ago is one that really they're
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  Speaker 6: suing food delivery providers for what they say is withholding
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  Speaker 6: pay from workers. And it really gets to the heart
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  Speaker 6: of what the Mammdani administration is going to be about,
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  Speaker 6: using little known laws to go after big companies to
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  Speaker 6: fight for who they say is the little guy. The
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  Speaker 6: company that is being sued today is Motoclick, and the
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  Speaker 6: allegations are pretty simple that they violated delivery worker laws
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  Speaker 6: by failing to pay the required minimum rate and deducting
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  Speaker 6: canceled and refunded orders directly from their paychecks. And these
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  Speaker 6: are folks who most times are only making you know,
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  Speaker 6: money off of the tips that they're getting from these
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  Speaker 6: people who are ordering food.
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  Speaker 2: What you mentioned, the company that is in question here
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  Speaker 2: is Motoclick. This is not a company that I think
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  Speaker 2: a lot of people are necessarily familiar with. We don't
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  Speaker 2: if you order from DoorDash or a grubhub, you don't
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  Speaker 2: necessarily have a direct interaction with motoclick, do you.
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  Speaker 4: Right?
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  Speaker 6: You know, this is what of those companies that says
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  Speaker 6: it works with platforms like Uber Eats, door Dash and
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  Speaker 6: grub hub. You know, you may value order through these companies,
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  Speaker 6: and then you don't know that the folks who are
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  Speaker 6: coming to deliver it are actually working with this. You know,
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  Speaker 6: in some cases last mile company, they are basically integrated
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  Speaker 6: into the point of sale systems at some of these restaurants.
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  Speaker 6: And so yeah, you may order from Uber lyft, but
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  Speaker 6: you don't know that I was sorry, Uber or doordasher, grubhub,
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  Speaker 6: But you don't understand, you know, in that last mile
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  Speaker 6: where it's coming from. Well, the city is putting them
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  Speaker 6: unnotice that, you know that they're going to be sued
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  Speaker 6: for this. And then in addition to that, the city
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  Speaker 6: pass laws in the last year or so that protects
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  Speaker 6: these workers. In addition to this lawsuit, they're also putting
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  Speaker 6: the delivery companies on notice that there are specific laws
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  Speaker 6: that protect workers as it relates to deliveries, making sure
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  Speaker 6: that they get proper wages, minimum wage and all of that.
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  Speaker 6: And if that's not followed, that they could meet the
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  Speaker 6: same fate that's being met by motorclick right now miles.
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  Speaker 5: This of course follows the allegations that DoorDash and Uber
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  Speaker 5: deprived New York City delivery workers of more than five
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  Speaker 5: hundred and fifty million dollars in tips. That is a
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  Speaker 5: lot of money. Is there a sense if this lawsuit
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  Speaker 5: is successful that they might see those wages come back.
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  Speaker 7: Yeah.
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  Speaker 6: I think what the city wants to do, and specifically
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  Speaker 6: the the Department of Consumer and Worker Protection wants to do,
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  Speaker 6: is in filing any of these lawsuits or in making
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  Speaker 6: these claims public, is to put pressure on these companies
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  Speaker 6: to do the right thing before they get to the
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  Speaker 6: enforcement level. We've seen a lot of these companies that
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  Speaker 6: have been sued in the past, whether into the Blasio administration,
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  Speaker 6: whether being sued by the Controller's office, come to an
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  Speaker 6: agreement on a settlement, and that money does trickle down
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  Speaker 6: back to workers. But it doesn't stop with just the
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  Speaker 6: city Hall and doesn't stop with the Comptroller's office. You know,
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  Speaker 6: just today the Manhattan DA also you know, trying to
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  Speaker 6: make it clear that he wants protections for these workers
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  Speaker 6: because these are you know, these wage cases continue to
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  Speaker 6: pop up. It was just about a year and a
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  Speaker 6: half ago, two years ago that Grimaldi's Pizza was being
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  Speaker 6: accused of of wage theft and holding back pay pay
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  Speaker 6: for these low paid workers. And that's going to be
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  Speaker 6: a major focus of this administration.
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  Speaker 2: So can you reconcile this this first action, it's kind
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  Speaker 2: of like a shot across about by the mum donnie
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  Speaker 2: administration with the promises it had made to its supporters,
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  Speaker 2: to voters, to folks in the city, like alex Hemanova,
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  Speaker 2: who's a lifelong New Yorker, is this is this kind
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  Speaker 2: of the what they promised to prioritize.
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  Speaker 6: Yeah, I mean, you know, they have changed the role
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  Speaker 6: that Julie Sue is in. It used to be the
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  Speaker 6: mayor for a deputy mayor for economic development. But it's
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  Speaker 6: not just economic development, it's it's really with a focus
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  Speaker 6: on worker protection. It's really on a focus on equality
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  Speaker 6: and rights for people. And you know, this is a
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  Speaker 6: person who has spent a good amount of time in Washington,
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  Speaker 6: had spent time in California, who is going to be
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  Speaker 6: leading this effort. You know, when you look at Lena
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  Speaker 6: Khan being involved in decision making here at city Hall
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  Speaker 6: and going and doing what she knows best right and
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  Speaker 6: going through you know, very complex parts of the city
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  Speaker 6: Charter to find where you can really stick it to
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  Speaker 6: companies or where they could stick it to companies, you know,
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  Speaker 6: it really shows that this is a top priority for him.
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  Speaker 6: You know, and in addition to that, this role, the
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  Speaker 6: role in consumer protection was one of the first roles
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  Speaker 6: he filled after being being elected and right before take
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  Speaker 6: it or right after he took office, because he knew
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  Speaker 6: it was going to be something that people really relate to.
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  Speaker 5: Miles, when was the last time that we saw a
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  Speaker 5: New York City mayor go after big companies like this?
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  Speaker 5: Is this unusual.
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  Speaker 6: No, I mean in the Basio administration, we saw companies targeted,
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  Speaker 6: certainly UH. And then you know, in the Atoms administration,
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  Speaker 6: it was certainly a very pro business administration trying to
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  Speaker 6: work with business, but also sort of the bonus on
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  Speaker 6: businesses to.
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  Speaker 4: UH.
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  Speaker 6: And so it's it's a this is obviously a different tactic,
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  Speaker 6: and I think for the first time you're seeing UH
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  Speaker 6: an administration where they're not taking people really from big
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  Speaker 6: business and saying, Okay, here's how you can work on
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  Speaker 6: economic development. In the Vasio administration, Lesha Glenn was the
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  Speaker 6: Deputy Mayor for economic Development and had come from the
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  Speaker 6: business community. No, these are people who've worked in government
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  Speaker 6: for some time and are trying to figure out a
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  Speaker 6: way to make government work for people who you know,
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  Speaker 6: don't have much money, or to hit at the affordability crisis.
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  Speaker 6: It's a it's really a first of its kind approach
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  Speaker 6: to doing this kind of work.
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  Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
• 8:05
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am. He's done on Apple, Cocklay and
• 8:12
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• 8:14
  Speaker 3: Listen on demand.
• 8:15
  Speaker 1: Wherever you get your podcasts or watch us live on YouTube.
• 8:20
  Speaker 2: Let's move over to the tech sector because there's some
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  Speaker 2: big news for the AI sector given that Taiwan Semiconductor
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  Speaker 2: Manufacturing and partner of Nvidia and other chip makers, came
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  Speaker 2: out with a monster forecast. Man Deep saying is our
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  Speaker 2: global tech research had apt Bloomberg Intelligence and he joins
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  Speaker 2: US now and TSMC is a bellweather for the AI story,
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  Speaker 2: and the revenue forecast it has given is growth of
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  Speaker 2: almost thirty percent, handily beating analystsessimates.
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  Speaker 4: Well, I mean, right now, we are in an environment
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  Speaker 4: where the supply constraints are at the component level, at
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  Speaker 4: the fab level, I mean TSMC doubt how advanced nodes
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  Speaker 4: are almost seventy seven percent of their revenue. So that
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  Speaker 4: just goes to show that if they have more wayfor
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  Speaker 4: capacity at the advanced node level, they'll probably be you know,
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  Speaker 4: growing even faster. And that's why they raise their own capex.
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  Speaker 4: So think of the trickle down effect. Hyperscalers are raising
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  Speaker 4: their capex. TSMC, being the fab layer, is raising their capex.
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  Speaker 4: And this is the entire supply chain that everyone realizes
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  Speaker 4: they need more data center capacity when it comes to
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  Speaker 4: running AI and all the way through the supply chain.
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  Speaker 4: Right now, it's trickling down now. The question is obviously
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  Speaker 4: of overbuild and if and when, you know, we'll hit
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  Speaker 4: an equilibrium. And from what we have seen in terms
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  Speaker 4: of partnerships and deal making like open Ai Cerebris, I
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  Speaker 4: mean right now, they're trying to procure as much chip
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  Speaker 4: capacity as they can because I mean Opening has said
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  Speaker 4: their revenue growth is a function of the power and
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  Speaker 4: chip available computer availability they have, so right last year
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  Speaker 4: they grew their power and computer availability three x, their
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  Speaker 4: revenue grew three x. So that's the kind of part
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  Speaker 4: of the cycle we are in. And the question is
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  Speaker 4: you know how long it's going to sustain and so
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  Speaker 4: so far as signs are, this is going to carry
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  Speaker 4: through at least through twenty twenty six.
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  Speaker 5: Mandy, what does the strong outlook from TSMC mean for
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  Speaker 5: Intel and its foundry business. Intel is up some thirty
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  Speaker 5: percent this year. Is it a positive sign for them
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  Speaker 5: that demand is there or signed that TSMC is a
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  Speaker 5: dominant name here.
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  Speaker 4: Actually, there was some demand spill over to an Intel
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  Speaker 4: and Samsung, especially on the non data center side. So
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  Speaker 4: I mentioned TSMC is heavily skewed towards advanced notes and
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  Speaker 4: more towards data centers. Well, there is demand for you know,
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  Speaker 4: chip capacity on the PC side, smartphone side, and that's
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  Speaker 4: where there is some spillover that's carrying over to an
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  Speaker 4: Intel on the PC side, to Samsung as well. And
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  Speaker 4: so right now, everyone seems to be benefiting from overall
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  Speaker 4: chip demand across the board.
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  Speaker 2: Right and something else that's in demand is memory. And
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  Speaker 2: we've seen Micron, we've seen sand Disk, we've seen Western
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  Speaker 2: Digital really benefit from that demand for memory chips. But
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  Speaker 2: it also there's a downside to that because you have
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  Speaker 2: hardware companies as a result under pressure because they need
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  Speaker 2: to pay for that memory and they need to go
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  Speaker 2: out and source it and it's not always available unless you.
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  Speaker 4: Are Jensen and Nvidia, who has really managed the supply chain. Well,
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  Speaker 4: I mean, I was amazed how Nvidia mentioned that they
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  Speaker 4: still feel comfortable holding on to that mid seventy percent
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  Speaker 4: ross margins. They're one of the biggest users of HBM memory.
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  Speaker 4: That is a supply constrained right now, and the prices
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  Speaker 4: are going through the roof, but they have logged in
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  Speaker 4: those multi year agreements where these suppliers can really raise prices,
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  Speaker 4: and so from that perspective, the bigger you are, if
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  Speaker 4: you're an Apple, I'm sure they can source their memory.
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  Speaker 4: They may have to pay higher prices and it will
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  Speaker 4: impact their gross margins, but not to the same extent
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  Speaker 4: it's going to hit a smaller hardware vender. And that's
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  Speaker 4: what I think we'll find out this earning season.
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  Speaker 5: Man Deep also looking at the story today about Oracle
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  Speaker 5: struggling to hire workout workers for the buildout of its
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  Speaker 5: headquarters in Nashville. What has this AI build out meant
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  Speaker 5: for hiring the talent war? Is there anyone who's winning it?
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  Speaker 4: Yeah, I mean we read the story on the terminal
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  Speaker 4: about electricians, you know, having almost a doubling off their pay,
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  Speaker 4: and so anyone who is linked to that data center
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  Speaker 4: construction right now is in high demand. And so it
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  Speaker 4: doesn't surprise me that you are sort of in this
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  Speaker 4: environment where laborers in short supply, you know, components are
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  Speaker 4: in short supply, and putting all these things together is
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  Speaker 4: taking longer time because everyone wants them to be ready overnight. Well,
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  Speaker 4: that's where you're running into these bottom lines.
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  Speaker 2: Well too, Alex's point, Oracle is trying to attract workers
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  Speaker 2: in Nashville where it's developing this riverfront headquarters. Is that
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  Speaker 2: a place where the tech talent will flock to.
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  Speaker 4: I mean, we've seen what has happened in Texas right
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  Speaker 4: in terms of companies going to Texas just because it's
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  Speaker 4: easier to set up data centers over there.
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  Speaker 3: So oh and no income tax.
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  Speaker 4: No income tax, that's right. So all these pockets I
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  Speaker 4: think are having their moment in terms of one attracting
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  Speaker 4: these big companies. And if you have power, and I
• 13:43
  Speaker 4: haven't studied Nashville in that detail, but if you have power,
• 13:47
  Speaker 4: then it suddenly becomes a very attractive destination.
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  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
• 13:58
  Speaker 1: You're listening to the Bloomberg and Helogen's podcast. Catch us
• 14:01
  Speaker 1: Live weekdays at ten am. He's done on Apple, Cocklay
• 14:04
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• 14:07
  Speaker 1: demand wherever you get your podcasts, or watch us live
• 14:11
  Speaker 1: on YouTube.
• 14:12
  Speaker 2: One of the tailwinds for the market heading into this
• 14:15
  Speaker 2: year was the expectation of a spate of deal making,
• 14:18
  Speaker 2: and to that point, we did learn today that Boston
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  Speaker 2: Scientific is looking to buy p Number for about fourteen
• 14:25
  Speaker 2: and a half billion dollars. Obviously, with the big banks
• 14:28
  Speaker 2: reporting earnings, bank executives are also making comments. David Solomon,
• 14:32
  Speaker 2: the CEO of Goldman Sachs, says that we are not
• 14:34
  Speaker 2: yet in the middle of a full on M and
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  Speaker 2: A cycle, and he sees a very very good year
• 14:39
  Speaker 2: for M and A overall. Let's bring in Jennifer Ree,
• 14:41
  Speaker 2: she is our senior litigation analyst for Bloomberg Intelligence, to
• 14:44
  Speaker 2: talk to us about the antitrust landscape. Is there an
• 14:47
  Speaker 2: active antitrust monitoring happening right now because this administration has
• 14:52
  Speaker 2: signaled that it wants to see deals being made.
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  Speaker 4: Yeah.
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  Speaker 7: Absolutely, and it certainly is a big change from the
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  Speaker 7: Biden administration, where we kind of had the opposite sentiment.
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  Speaker 7: I mean, we are really seeing very little activity from
• 15:04
  Speaker 7: the Department of Justice, a little bit more from the
• 15:06
  Speaker 7: Federal Trade Commission, but even in their case, it's been
• 15:08
  Speaker 7: pretty restrained. And it seems that both authorities are really
• 15:12
  Speaker 7: willing to work with the companies if they think that
• 15:15
  Speaker 7: there's a problem with the deal, to work out some
• 15:17
  Speaker 7: kind of settlement. And that's what didn't exist during the
• 15:19
  Speaker 7: Biden administration and why deal making was so stymied At
• 15:22
  Speaker 7: that time, and I think most companies see if we
• 15:25
  Speaker 7: can come up if we have a problem, A lot
• 15:27
  Speaker 7: of deals don't. But if we do and we can
• 15:29
  Speaker 7: come up with a solution, we can probably get it cleared.
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  Speaker 5: Jen you mentioned muted activity from the regulators, but are
• 15:36
  Speaker 5: there any industries that they're targeting right now more than others.
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  Speaker 3: Well, it looks like it.
• 15:40
  Speaker 7: It's interesting that we see Boston Scientific has a deal
• 15:43
  Speaker 7: because of the few challenges that have been brought to
• 15:46
  Speaker 7: deals by the FTC, they've been in the healthcare space,
• 15:49
  Speaker 7: one in the housing area construction adhesives, which is a
• 15:52
  Speaker 7: recent case they filed, but two in the healthcare space.
• 15:56
  Speaker 7: And it doesn't surprise me really because these are very
• 15:59
  Speaker 7: sensitive sector's, consumer facing sectors, and that does align with
• 16:03
  Speaker 7: essentially a populist agenda, which they talked about in the
• 16:06
  Speaker 7: beginning when they took on their positions, and so I
• 16:09
  Speaker 7: think we'll probably see if we see continued activity in
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  Speaker 7: those areas or other very sensitive consumer areas.
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  Speaker 2: The other thing that we need to keep in mind
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  Speaker 2: is most of these companies that we're talking about are
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  Speaker 2: big multinationals. They operate all around the world, so you
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  Speaker 2: have US regulators and they may be stepping back and
• 16:25
  Speaker 2: letting things happen, but regulators in Europe may not be.
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  Speaker 2: And I bring this up because we heard reports yesterday
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  Speaker 2: that Paramount and Netflix have been meeting with European Commission
• 16:36
  Speaker 2: officials as part of their bid for Warner Brothers. What
• 16:41
  Speaker 2: can pare contrast, for instance, the European Commission regulators with
• 16:44
  Speaker 2: those in the US.
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  Speaker 7: You know, there's been a little bit of a pullback.
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  Speaker 7: I think when I think of really big regulators in antitrust,
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  Speaker 7: I think of US, China, UK and Europe. These are
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  Speaker 7: the jurisdictions which would be willing to actually block.
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  Speaker 3: A global deal.
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  Speaker 7: And we've seen a little bit of pullback across the board,
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  Speaker 7: and not so much with China. It's really just a
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  Speaker 7: black box there. I can't speak to what they're doing.
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  Speaker 7: But in the UK and in Europe there has also
• 17:09
  Speaker 7: been a bit of a pullback, especially in the UK
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  Speaker 7: after they kind of got really chided from Microsoft Activision
• 17:15
  Speaker 7: and trying to step in there. The thing is, for
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  Speaker 7: companies doing a deal that might have scrutiny in Europe,
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  Speaker 7: it's a bit scarier than in the US because they
• 17:23
  Speaker 7: have the ability under their law to actually block a deal,
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  Speaker 7: whereas the US regulators don't. They have to go to
• 17:29
  Speaker 7: court and they have to win in court in order
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  Speaker 7: to actually block a deal. It is far more difficult
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  Speaker 7: for them. It is easier in the EU. And Netflix,
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  Speaker 7: by the way, is gigantic. I didn't know this until
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  Speaker 7: I started looking at the deal, but it's really really.
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  Speaker 3: Big outside the US.
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  Speaker 7: An HBO is getting bigger in many of the countries
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  Speaker 7: in Europe. It's recently expanded in Italy, in a seven
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  Speaker 7: or eight other countries.
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  Speaker 3: So they will that deal. I think no matter which.
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  Speaker 7: Company ends up buying, Warner Brothers is going to get
• 17:56
  Speaker 7: a lot of scrutiny, and certainly scrutiny in EU, and
• 17:59
  Speaker 7: that is going to be one area where they're going
• 18:01
  Speaker 7: to have to work, I think, to get clearance.
• 18:03
  Speaker 5: Jen The past couple of years saw a lot of
• 18:05
  Speaker 5: high profile antitrust cases, specifically within big tech. We had
• 18:09
  Speaker 5: rulings against Google and Meta. What kind of precedent have
• 18:12
  Speaker 5: they set for big tech regulation in twenty twenty six.
• 18:16
  Speaker 7: Well, what they're showing is that it's going to be very,
• 18:18
  Speaker 7: very difficult for US and anti trust agencies to actually
• 18:21
  Speaker 7: tame what they view as monopolistic conduct. I mean, they
• 18:25
  Speaker 7: did win technically against Google with respect to monopolizing search,
• 18:29
  Speaker 7: but the remedy was fairly weak. They didn't get what
• 18:33
  Speaker 7: they were looking for. Look at what Google's doing now
• 18:35
  Speaker 7: with AI with Apple, which is exactly what the plaintiffs
• 18:40
  Speaker 7: were trying to avoid, you know, dominance in AI after
• 18:43
  Speaker 7: dominance in search.
• 18:46
  Speaker 3: So the difficulty they have is even.
• 18:48
  Speaker 7: Where they win on liability, they have a really tough
• 18:50
  Speaker 7: time with remedies. Most US federal judges are going to
• 18:53
  Speaker 7: be very cautious when it comes to meddling in business
• 18:56
  Speaker 7: and the way a sector may develop, especially in technology,
• 18:59
  Speaker 7: because it's so changing and nobody knows where it's going.
• 19:02
  Speaker 7: So when you have these cautious judges, you're just not
• 19:05
  Speaker 7: going to get the drastic remedies that are probably the
• 19:08
  Speaker 7: remedies that are needed to really do something about the
• 19:11
  Speaker 7: market positions of some of these companies. So we're seeing
• 19:14
  Speaker 7: that it's going to be difficult, but we haven't seen
• 19:16
  Speaker 7: as much of a let up on the cases that
• 19:19
  Speaker 7: were inherited from the Biden administration. This DOJ and FTC
• 19:23
  Speaker 7: are continuing to go after these cases in court. They're
• 19:25
  Speaker 7: continuing to pursue what you might think of as a
• 19:28
  Speaker 7: drastic remedy a structural remedy. The next test will be
• 19:31
  Speaker 7: Live Nation, which is going to trial March second against
• 19:34
  Speaker 7: the DOJ and some states.
• 19:36
  Speaker 2: Okay, so we'll watch for them. Then it's a bit
• 19:38
  Speaker 2: of leftover from the previous administration. We talk about regulators,
• 19:43
  Speaker 2: and that's usually how the antitrust enforcement shows up, or
• 19:46
  Speaker 2: any kind of pushback from government authorities.
• 19:49
  Speaker 3: But there's also the role of President.
• 19:50
  Speaker 2: Trump as well, and he's made clear that because he
• 19:54
  Speaker 2: has some firm opinions about certain companies and certain sectors,
• 19:57
  Speaker 2: that he's going to be what he says personally in
• 20:00
  Speaker 2: some of them.
• 20:00
  Speaker 3: That's right.
• 20:01
  Speaker 2: Is there a playbook for this? I mean, how do
• 20:03
  Speaker 2: regulators work in concert with a mercurial president?
• 20:07
  Speaker 3: You know, there really.
• 20:08
  Speaker 7: Isn't a playbook. This is somewhat unprecedented. Now there are
• 20:11
  Speaker 7: many that would argue that this kind of started during
• 20:13
  Speaker 7: the Biden administration, but we have authorities at the Federal
• 20:18
  Speaker 7: Trade Commission and Department of Justice that are very much
• 20:20
  Speaker 7: trying to align what they're doing in the anti trust
• 20:22
  Speaker 7: space with the policy priorities of this administration, I think
• 20:25
  Speaker 7: much more so than in the past. And they just
• 20:28
  Speaker 7: don't look like they'd be willing to buck the White
• 20:31
  Speaker 7: House if the White House has some feel or some something,
• 20:36
  Speaker 7: you know, an issue with the deal. Right, So we're
• 20:39
  Speaker 7: seeing a lot of alignment, and we're also seeing a
• 20:42
  Speaker 7: lot of reemptive alignment. It's preemptive alignment. And we're seeing
• 20:45
  Speaker 7: a lot of lobbying which we hadn't seen before too
• 20:48
  Speaker 7: in the overruling of the Anti Trust Division by senior
• 20:51
  Speaker 7: officials who are talking to lobbyists. And so there is
• 20:55
  Speaker 7: a lot of concern right now in the anti trust
• 20:57
  Speaker 7: community about the rule of lobbying really prevailing over the
• 21:01
  Speaker 7: rule of law when it comes to merger enforcement.
• 21:04
  Speaker 2: And this is stuff that we see after the fact,
• 21:06
  Speaker 2: after an announcement has made, as opposed to during it.
• 21:09
  Speaker 4: That's right.
• 21:09
  Speaker 7: We see reports and of course I'm not privy to
• 21:11
  Speaker 7: what's going on behind closed doors, but there has been
• 21:14
  Speaker 7: a lot of news reporting and a former senior FTC
• 21:17
  Speaker 7: official who recently left, who has spoken out about some
• 21:20
  Speaker 7: of the activities related to the.
• 21:22
  Speaker 3: Hewlett Packard Juniper deal.
• 21:23
  Speaker 7: Now, most recently, we have a deal between two huge
• 21:26
  Speaker 7: real estate brokerages, Compass and Anywhere, that was cleared very
• 21:29
  Speaker 7: quickly without even a deep investigation by the Federal Trade
• 21:32
  Speaker 7: Commission upside the Department of Justice. That surprised a lot
• 21:35
  Speaker 7: of people. I think it even surprised the companies that
• 21:37
  Speaker 7: have projected to close much later this year. And apparently
• 21:41
  Speaker 7: that was also because lobbyist had stepped in.
• 21:44
  Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
• 21:51
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 21:54
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• 21:58
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• 22:01
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• 22:05
  Speaker 2: We need to talk about AI, not so far, not
• 22:07
  Speaker 2: so much so far as to how it's impacting the
• 22:10
  Speaker 2: stock market, because we've seen that and we see that today,
• 22:13
  Speaker 2: but how companies are actually integrating it and how consumers
• 22:16
  Speaker 2: are experiencing it. Lindsay Dutch is our Bloomberg Intelligence Consumer
• 22:20
  Speaker 2: Hardlines senior analysts, and she's been researching this idea of
• 22:24
  Speaker 2: retailers embracing AI. But I guess there's a recognition, Lindsay
• 22:29
  Speaker 2: that for impulse purchases, which are so critical for the industry,
• 22:34
  Speaker 2: you still need a human touch, so it can't be
• 22:36
  Speaker 2: done remotely. It can't be done virtually. It's usually done
• 22:39
  Speaker 2: in person, and it's kind of unpredictable.
• 22:44
  Speaker 8: Yes, Hi Scarlett, thanks so much for having me. I
• 22:47
  Speaker 8: just returned from the NRF conference, forty thousand people. There
• 22:50
  Speaker 8: lots of retailer leaders there. You know, AI was all
• 22:53
  Speaker 8: the buzz. It was pretty much the topic of every session.
• 22:58
  Speaker 8: And as I think about it, there's a lot of
• 23:00
  Speaker 8: really cool technology going into this, and retailers are mostly
• 23:04
  Speaker 8: using AI to improve employee productivity, move employees up the
• 23:08
  Speaker 8: value chain, improve afflirational efficiency. And on the customer side,
• 23:14
  Speaker 8: we're mostly seeing it in terms of like a customer
• 23:16
  Speaker 8: service chatbot, maybe some personalization when you look at your
• 23:20
  Speaker 8: email ads. But there's you know, new levels that are
• 23:24
  Speaker 8: coming that will really you know, amp up. You know,
• 23:26
  Speaker 8: AI's place in that retail shopping journey. But as you mentioned,
• 23:31
  Speaker 8: I think, you know that spur of the moment, that's spontaneity,
• 23:34
  Speaker 8: when you find something that you love and you have
• 23:35
  Speaker 8: to buy it.
• 23:36
  Speaker 3: You know, that's a big.
• 23:37
  Speaker 8: Piece of the shopping and retail world, and that really
• 23:41
  Speaker 8: still you need some human element in that process.
• 23:45
  Speaker 5: Lindsay, we talk often about the death of brick and
• 23:48
  Speaker 5: mortar stores. People aren't going into physical stores as much
• 23:51
  Speaker 5: as they are shopping online. Do you think that AI
• 23:54
  Speaker 5: can reignite the excitement for going into a store and
• 23:57
  Speaker 5: experiencing the technology.
• 24:00
  Speaker 8: So I actually think we're already seeing a return to
• 24:03
  Speaker 8: brick and mortar, you know, coming out of the pandemic.
• 24:06
  Speaker 8: You know, people realize how important it is to have
• 24:08
  Speaker 8: an in person experience. More recently, you know, I've heard comments,
• 24:13
  Speaker 8: you know, I follow best Buy. You know they have
• 24:15
  Speaker 8: talked about that gen Z and younger shoppers are showing
• 24:19
  Speaker 8: a much stronger preference to shop in the store, to
• 24:22
  Speaker 8: talk to their geek squad, you know, you know, to
• 24:25
  Speaker 8: get advice, to browse things in person. We also see
• 24:28
  Speaker 8: that from an alta beauty as well. So I do
• 24:31
  Speaker 8: think e commerce penetation will continue to rise.
• 24:33
  Speaker 3: As a whole.
• 24:34
  Speaker 8: I think these new technologies will continue to support more
• 24:37
  Speaker 8: shopping online, but I do think there is a personal
• 24:41
  Speaker 8: element that will remain. And you know, we see strong
• 24:46
  Speaker 8: brick and mortar demand on the retail real estate side,
• 24:49
  Speaker 8: and that is expected to continue for some time.
• 24:52
  Speaker 2: Having said all that, how does AI enhance the ability
• 24:56
  Speaker 2: for stores to be able to reach out to consumers
• 25:00
  Speaker 2: so that they're there and have the right recommendations when
• 25:05
  Speaker 2: consumers are in the mood to make impulse purchases.
• 25:09
  Speaker 8: Yeah, so right now, I think the best consumer facing
• 25:14
  Speaker 8: use of AI is really increasing discovery exactly what you're saying,
• 25:18
  Speaker 8: So being able to serve up product online when a
• 25:22
  Speaker 8: customer is looking for it. And you know, this new
• 25:24
  Speaker 8: tool that Google co developed with Walmart and others, Universal
• 25:29
  Speaker 8: Commerce Protocol, is going to do just that. So you
• 25:32
  Speaker 8: can pop into this tool which is powered by Gemini,
• 25:37
  Speaker 8: and you can say I'm looking for a navy boot
• 25:39
  Speaker 8: blazer that I don't want to have dry cleaned, and
• 25:42
  Speaker 8: it will serve up you know, the product from the brand.
• 25:47
  Speaker 8: You can transact right there, so it's all seamless. Something
• 25:51
  Speaker 8: like that, you know, is a great tool to bring
• 25:55
  Speaker 8: product directly to the person and close the gap between
• 25:58
  Speaker 8: looking for something that you want, finding it, and transacting it.
• 26:02
  Speaker 8: And we see a lot of technology, you know, coming
• 26:04
  Speaker 8: to the fore that that's going to allow that to happen.
• 26:08
  Speaker 5: Lindsay, AI and new technology can be really complicated for
• 26:12
  Speaker 5: consumers to navigate. What are companies doing to help guide
• 26:15
  Speaker 5: shoppers through maximizing the experience they get with AI.
• 26:21
  Speaker 3: Yeah, that's a tough one.
• 26:22
  Speaker 8: I mean I think that you know, people in generally
• 26:25
  Speaker 8: are using more tools like Gemini, you know, for all
• 26:28
  Speaker 8: sorts of things chat, GPT that will you increase that
• 26:32
  Speaker 8: comfort level. And we have seen over time, you know,
• 26:35
  Speaker 8: I also cover home furnishings. You know, in the beginning,
• 26:39
  Speaker 8: when people were starting to transact online, like no one
• 26:41
  Speaker 8: wanted to buy a couch or a big product like
• 26:44
  Speaker 8: that that that you would typically want to sit on
• 26:45
  Speaker 8: and feel.
• 26:47
  Speaker 3: And you know that over time, you.
• 26:49
  Speaker 8: Know, retailers have figured out how to showcase their product
• 26:53
  Speaker 8: in a digital way that makes comfortable customers more comfortable
• 26:57
  Speaker 8: transacting on a big ticket item like that that you
• 27:01
  Speaker 8: would normally really want to see in person. And I
• 27:04
  Speaker 8: think the same thing would be true for these other
• 27:06
  Speaker 8: new technologies. It will take time, you know, adoption will rise,
• 27:10
  Speaker 8: it will rise slowly, and that's why I think it's
• 27:14
  Speaker 8: a real balance. You have to be, you know, in
• 27:16
  Speaker 8: that tech world, but you also have to be in person.
• 27:18
  Speaker 2: Well said what surprised you the most, lindsay, very quickly
• 27:22
  Speaker 2: at NRF twenty twenty six when you went there.
• 27:24
  Speaker 3: What kind of blew you away?
• 27:27
  Speaker 8: You know, I think the retail environment right now has
• 27:32
  Speaker 8: in twenty twenty five, is an extremely challenging environment, you know,
• 27:35
  Speaker 8: And I think what's most impressive is, you know, the
• 27:38
  Speaker 8: people in the industry are just so excited to take
• 27:41
  Speaker 8: on new challenges in twenty twenty six, you know, even
• 27:45
  Speaker 8: though we're still battling costs from tariffs, trying to implement
• 27:48
  Speaker 8: all this technology, a difficult consumer backdrop. So there's just
• 27:52
  Speaker 8: a lot of excitement in the industry and everyone is
• 27:55
  Speaker 8: just so excited to rise to that next new challenge.
• 27:58
  Speaker 8: And I love that energy.
• 28:00
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