Latest / Bloomberg Law / Weekend Law: Meta, Blue State Bias & Privacy Risks
Transcript
- 0:02Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
- 0:08Speaker 2: We're going to work with President Trump to push back
- 0:11Speaker 2: on governments around the world. They're going after American companies
- 0:14Speaker 2: and pushing to censor more.
- 0:17Speaker 1: Meta CEO Mark Zuckerberg has been courting President Donald Trump
- 0:21Speaker 1: since his election, scrapping content moderation policies criticized by conservatives,
- 0:27Speaker 1: donating a million dollars to Trump's inauguration, promoting Republicans to
- 0:32Speaker 1: top roles in Meta, and visiting the White House several times.
- 0:37Speaker 1: Despite all that lobbying, the historic antitrust case against Meta
- 0:42Speaker 1: that was started in the first Trump administration went to
- 0:45Speaker 1: trial this week in DC. The Federal Trade Commission is
- 0:49Speaker 1: trying to force METTA to divest Instagram and WhatsApp, calling
- 0:53Speaker 1: Zuckerberg as its first witness. Joining me is anti trust
- 0:57Speaker 1: expert Harry First, a professor at NYU Law School. Harry,
- 1:01Speaker 1: what's the main issue the FGC has to prove? Here?
- 1:05Speaker 2: There are a few main issues. The first issue is
- 1:07Speaker 2: the definition of the market. So the question is who
- 1:11Speaker 2: are Facebook's competitors? That sort of in some ways a
- 1:14Speaker 2: simple question. Who will consumers turn to? What sellers? If
- 1:18Speaker 2: the sellers they're looking at offers a bad deal. Usually
- 1:22Speaker 2: it's raises price, they switch to something else. We do
- 1:25Speaker 2: this all the time. So the question is who are
- 1:27Speaker 2: the rivals of Facebook and who do consumers switch to
- 1:32Speaker 2: if they wanted to switch. Market definition always critical issue
- 1:36Speaker 2: in any trust cases, and the first issue to resolve.
- 1:40Speaker 2: The second issue is are they a monopolists in this market?
- 1:43Speaker 2: You know, do they have a large enough share of
- 1:46Speaker 2: the market. Is it hard to enter the market so
- 1:48Speaker 2: they can sort of have power to do what they want?
- 1:51Speaker 2: Do we see them doing the bad things that monopolists do,
- 1:55Speaker 2: which often means, you know, selling something at a high price.
- 1:58Speaker 2: Of course, Facebook says, hey, we give our thing away
- 2:01Speaker 2: for free. So what's their problem? And then the third
- 2:05Speaker 2: thing is, okay, if they are monopoly with monopoly power,
- 2:09Speaker 2: have they engaged in anti competitive conduct that excludes competitors
- 2:14Speaker 2: unreasonably from the market. And so that's the third thing,
- 2:17Speaker 2: and that's where the acquisitions of Instagram and WhatsApp come in.
- 2:22Speaker 1: Let's start with the market definition, which was one of
- 2:25Speaker 1: the key points Zuckerberg was questioned about. So tell us
- 2:29Speaker 1: how the FTC and Meta are viewing the market.
- 2:34Speaker 2: Facebook contends that the market, you know, whatever it was
- 2:39Speaker 2: maybe in twenty eleven. Now there are lots of competitors
- 2:43Speaker 2: and Facebook is doing things similar to particularly TikTok. So
- 2:48Speaker 2: the Pedroal Trade Commission has called the market we always
- 2:52Speaker 2: love these names and anti trust, the Personal Social Networking
- 2:56Speaker 2: Services market, and then they use an acronym, so you
- 2:59Speaker 2: think it's something special, the PSN market, And basically that's
- 3:03Speaker 2: friends and family. You know where Facebook started out putting
- 3:07Speaker 2: people together and creating the social network, as the name
- 3:11Speaker 2: of that movie was way back at the start. So
- 3:15Speaker 2: the Federal Trade Commission says, that's really the core of
- 3:18Speaker 2: their services, and it's not something that actually other platforms
- 3:21Speaker 2: except for Instagram offer, They don't really offer that sort
- 3:26Speaker 2: of friends and family network. You know, TikTok and follow people,
- 3:29Speaker 2: but you know, not for keeping up on what your
- 3:31Speaker 2: high school buddies are doing. So the first question is
- 3:34Speaker 2: how broad is that market? So Facebook says, hey, you know,
- 3:39Speaker 2: lots of choices for consumers. They don't want to watch
- 3:41Speaker 2: reels on Facebook, they go to TikTok and vice versa,
- 3:45Speaker 2: so we have to include them in the market, says Meta,
- 3:49Speaker 2: And you know that's what a lot of the argument's
- 3:52Speaker 2: going to be with data and consumer surveys and so forth.
- 3:55Speaker 2: And the analogy that the Commission has used and I
- 3:59Speaker 2: think we'll continue to use, is supermarkets. So there was
- 4:03Speaker 2: a famous case involving Whole Foods and an acquisition that
- 4:07Speaker 2: Whole Foods did, and the Federal Trade Commission called the
- 4:12Speaker 2: markets the PNOS market got it premium natural organic supermarkets.
- 4:18Speaker 2: And when Whole Foods made this acquisition of another market
- 4:23Speaker 2: like that, they said, ah, that's the market. Other supermarkets
- 4:26Speaker 2: are not in this market, you know, like stopping shopper
- 4:29Speaker 2: and so forth. And the court in which this case
- 4:33Speaker 2: is being tried, the PC Circuit, accepted that definition. And
- 4:36Speaker 2: the point is sort of a simple one. Yeah, they've
- 4:38Speaker 2: got lots of things in the supermarket, but you go
- 4:41Speaker 2: to certain supermarkets sort of a core of users for
- 4:44Speaker 2: a core of things. So you go to Whole Foods
- 4:47Speaker 2: because you like to pay high prices. Oh wait a minute,
- 4:49Speaker 2: that's wrong. You go to Whole Foods because you want
- 4:52Speaker 2: the organic, natural, premium stuff that they specialize in. And
- 4:56Speaker 2: then you buy milk, so you know, you go to
- 4:59Speaker 2: Facebook do you want to communicate with your friends and family?
- 5:03Speaker 2: And then you know, maybe you'll look at some reels
- 5:05Speaker 2: or maybe do some other things or what whatever other
- 5:07Speaker 2: fees they've got. But the core is still the friends
- 5:10Speaker 2: and family. So that's going to be the legal and
- 5:13Speaker 2: sort of factual contention that the parties are going to
- 5:16Speaker 2: litigate over during the course of this trial, and to.
- 5:20Speaker 1: The point of bad conduct or anti competitive conduct. The
- 5:25Speaker 1: FTC showed Zuckerberg some smoking gun emails, including one from
- 5:30Speaker 1: twenty twelve where he described the Instagram deal as a
- 5:33Speaker 1: way to neutralize a competitor.
- 5:35Speaker 2: Yeah, that's a good one. Yeah. I could see the
- 5:38Speaker 2: lawyers looking at that going, oh my god, did you
- 5:41Speaker 2: write that. There's a good reason why that would be
- 5:44Speaker 2: called a smoking gun. You know, not every acquisition that
- 5:47Speaker 2: a major platform or a monopoly, let's say, makes is illegal.
- 5:51Speaker 2: It's not illegal for that reason. Firms make acquisitions all
- 5:55Speaker 2: the time. The ones that are illegal in this context
- 5:58Speaker 2: are those that are done to u out a threat
- 6:01Speaker 2: to the monopolists. As they said, a buyer bury strategy.
- 6:05Speaker 2: They would just buy up the competitions they were worried about.
- 6:08Speaker 2: So on its face it could be neutral. Well, they
- 6:11Speaker 2: made an acquisition, what the heck? And maybe they have
- 6:14Speaker 2: some alleged good reasons, but then you read the email
- 6:17Speaker 2: in Zuckerberg says, hey, we're worried about this company, we
- 6:19Speaker 2: better buy it. And their effort at incorporating photographs into
- 6:25Speaker 2: Facebook and making it the kind of thing that Instagram
- 6:28Speaker 2: was doing was not going well. So they were really
- 6:31Speaker 2: being challenged by Instagram, and you know, they responded to
- 6:34Speaker 2: that challenge not by making a better product, but by
- 6:38Speaker 2: buying their competitor. Classic move, but not a competitive move.
- 6:43Speaker 2: It's an anti competitive move, so the government says, and
- 6:47Speaker 2: so Mark Zuckerberg apparently said.
- 6:50Speaker 1: At one point, Zuckerberg said that Facebook's feed has turned
- 6:54Speaker 1: away from family and friends and toward quote more of
- 6:57Speaker 1: a broad discovery entertainment space.
- 7:01Speaker 2: Right, Yeah, sure, we compete with television, Yeah, and tennis
- 7:05Speaker 2: and the national football. They're not going to go that far,
- 7:08Speaker 2: but you know the game if you want to call
- 7:11Speaker 2: it that. But the idea is you broaden that consumers
- 7:14Speaker 2: do have lots of choices, do do different things. You know,
- 7:17Speaker 2: they don't only look at Facebook, and Facebook over time
- 7:22Speaker 2: has tried to bring more things within his ecosystem, within
- 7:26Speaker 2: the platform. So they're gone into virtual reality. That's why
- 7:31Speaker 2: Zuckerberg renamed the company meta because he wants the metaverse.
- 7:36Speaker 2: So true that, but that doesn't take away from the
- 7:39Speaker 2: fact that they still sell groceries. You know, they may
- 7:41Speaker 2: want to have espressos, you know, in the grocery store,
- 7:44Speaker 2: but they're not an espresso store. So you know, they
- 7:47Speaker 2: still sell their core function and that's why people put
- 7:51Speaker 2: up with all the junk pardon my French that they
- 7:54Speaker 2: see with these ads constantly.
- 7:57Speaker 1: Can we read anything into the fact that Judge Bosberg
- 8:01Speaker 1: has sounded skeptical about the FTC's case. He dismissed the
- 8:06Speaker 1: initial case in twenty twenty one, and in November he
- 8:09Speaker 1: said the agency faces hard questions about whether it's claims
- 8:14Speaker 1: can hold up in the crucible of trial.
- 8:17Speaker 2: Right, well, he's running the crucible like an Arthur Miller play.
- 8:21Speaker 2: So Judge Bosburg, just from reading his opinions, is sharp,
- 8:28Speaker 2: he's critical. He is not a pushover for the government,
- 8:31Speaker 2: but he's not a pushover for the defendants either. So
- 8:36Speaker 2: you know, I read this as saying he'll come out
- 8:39Speaker 2: with an opinion that will prove challenging for the losing
- 8:43Speaker 2: party on appeal, wherever that is. And I don't predict
- 8:47Speaker 2: that he's necessarily going to come out in favor of Facebook, frankly,
- 8:52Speaker 2: because he's been willing to accept, at least as a
- 8:54Speaker 2: legal matter, important arguments from the government and dismissed some
- 8:58Speaker 2: of Facebook's defenses. And you're not going to fool a.
- 9:03Speaker 1: Judge if the judge does find against Meta. How likely
- 9:07Speaker 1: is in order to divest Instagram and WhatsApp, I mean,
- 9:11Speaker 1: a breakup of that size hasn't happened since AT and
- 9:14Speaker 1: T forty years ago.
- 9:16Speaker 2: Well, we haven't taken on companies of this size. We
- 9:19Speaker 2: did take on Microsoft, I didn't order structural relief. The
- 9:23Speaker 2: AT and T breakup was by agreement, so it's not
- 9:27Speaker 2: a decree entered by a court after losing a case.
- 9:32Speaker 2: So we don't do divestitures that often, you know, not never,
- 9:38Speaker 2: it does get done, but this is certainly of an
- 9:40Speaker 2: important magnitude, and you know, puts the court in a
- 9:44Speaker 2: difficult role of trying to separate companies that Facebook frankly
- 9:49Speaker 2: has done its best to smush together, to use the
- 9:53Speaker 2: technical term. So that's sort of an obvious remedy but
- 9:58Speaker 2: not necessarily going to be the one the court will accept.
- 10:02Speaker 2: But there are lots of steps before we would see
- 10:07Speaker 2: an order to separate those companies.
- 10:09Speaker 1: Mark Zuckerberg has been closing up to Trump for a
- 10:12Speaker 1: while now. Could Trump bail Meta out if it does
- 10:16Speaker 1: lose the case.
- 10:17Speaker 2: I guess the answer is sure. At least at this point,
- 10:20Speaker 2: he has pretty much seized control. I don't know what
- 10:23Speaker 2: you want to call it. A hostile takeover of the
- 10:25Speaker 2: Federal Trade Commission. He fired the two Democratic members of
- 10:29Speaker 2: the commission, supposed to be balanced bipartisan commission. He's fired
- 10:34Speaker 2: the two for no reason other than the Democrats. The
- 10:38Speaker 2: chair is slavish in his praise of the President. I
- 10:42Speaker 2: think that's a fair work. So yes, I think Trump
- 10:45Speaker 2: could very well order whatever he wanted to order, and
- 10:48Speaker 2: if the chairman or the other commissioners didn't want to
- 10:51Speaker 2: go along, you can just fire them. At least that's
- 10:53Speaker 2: how he sees the law. It may turn out that
- 10:56Speaker 2: that's not going to be the law. Maybe the Supreme
- 10:58Speaker 2: Court is going to not take that final step in
- 11:01Speaker 2: terms of ending the independence of regulatory agencies, but we'll
- 11:06Speaker 2: have to see. That's in litigation. But if he has control,
- 11:09Speaker 2: then he can do that. Even before he did try
- 11:12Speaker 2: to pressure in his first administration, pressure the chair of
- 11:16Speaker 2: the Federal Trade Commission who resisted things. But now the
- 11:19Speaker 2: ability and willingness of the chairman who resists whatever the
- 11:23Speaker 2: president wants is zero. That's said, I'm not quite sure
- 11:26Speaker 2: I know or understand, and maybe the President doesn't either
- 11:30Speaker 2: what he might want and what he would pressure the
- 11:33Speaker 2: Federal Trade Commission to do. Obviously he's not pulled the
- 11:36Speaker 2: plug on this litigation, which he could have, so we'll
- 11:39Speaker 2: just have to see how it goes.
- 11:41Speaker 1: Always a pleasure, Harry, Thank you. That's Professor Harry First
- 11:45Speaker 1: of NYU Law School. Coming up next. How the Blue
- 11:49Speaker 1: states could fight back when they're targeted. I'm June Grosso.
- 11:52Speaker 1: When you're listening to Bloomberg. In the past, President Trump
- 11:57Speaker 1: has even blamed the criminal case against him on blue
- 12:01Speaker 1: states being out to get him.
- 12:03Speaker 3: Can we fly over a Democrat state?
- 12:06Speaker 4: I get it, grand jury subpoena?
- 12:10Speaker 3: So what happened?
- 12:11Speaker 2: What do you do?
- 12:11Speaker 4: Sir?
- 12:12Speaker 1: They're investigated you.
- 12:13Speaker 3: You flew over the state.
- 12:14Speaker 1: They think something's up. So now is he targeting those
- 12:18Speaker 1: states for retribution? On April first, the Trump administration announced
- 12:22Speaker 1: the closing of five of ten regional offices of the
- 12:25Speaker 1: Department of Health and Human Services, all in blue states.
- 12:29Speaker 1: On April eighth, an executive order was aimed at the
- 12:32Speaker 1: blue states of New York, Vermont, in California for state
- 12:36Speaker 1: overreach with respect to climate change policies. And six of
- 12:41Speaker 1: the seven universities that have lost funding on the grounds
- 12:44Speaker 1: that they didn't adequately address anti semitism on campus are
- 12:48Speaker 1: in blue states. The seventh is in a purple state.
- 12:52Speaker 1: But even if Trump is in fact targeting Blue states,
- 12:55Speaker 1: what can they do about it? Joining me is retired
- 12:58Speaker 1: federal judge Nancy Goer, a senior lecturer at Harvard Law School.
- 13:03Speaker 1: She's the co author of an article on Bloomberg Law
- 13:06Speaker 1: entitled Trump's Blue state bias could rip the US apart.
- 13:11Speaker 1: Judge tell us how President Trump has been discriminating against
- 13:15Speaker 1: the Blue states.
- 13:16Speaker 3: Well, the most recent one was when he closed five
- 13:20Speaker 3: of the ten AHHS offices, and significantly the five were
- 13:27Speaker 3: all in blue states. In addition, he has suspended the
- 13:31Speaker 3: funding for various kinds of programs to hospitals. But really
- 13:37Speaker 3: he's listening, we believe, only to the red states that
- 13:41Speaker 3: are begging for these two return. So you know, Katie
- 13:45Speaker 3: Britt from Alabama calls him to rein state and we
- 13:48Speaker 3: believe that he will do that. So he's basically doling
- 13:51Speaker 3: out federal funds who had vanished the red states over
- 13:55Speaker 3: the blue. And we think that that's going to be
- 13:57Speaker 3: a pattern going forward. You know, the pattern has not
- 13:59Speaker 3: been completed. We haven't seen all aspects of it, but
- 14:03Speaker 3: clearly this is what we have seen so far, particularly
- 14:06Speaker 3: the thing that happens with respect to AHHS. I mean,
- 14:08Speaker 3: why do you shut down the regional offices that do
- 14:12Speaker 3: the most business, the most business, namely you know, New York, Boston, Chicago,
- 14:19Speaker 3: San Francisco, Seattle. It's really pretty transparent what's going on.
- 14:23Speaker 1: And has the Supreme Court been clear that the Constitution
- 14:27Speaker 1: requires the federal government to treat all states the same.
- 14:31Speaker 3: Well, in a decision that I mostly disagreed with, which
- 14:34Speaker 3: is the Shelby County decision, that was dealing with preclearance
- 14:37Speaker 3: requirement of the Voting Rights Act. Preclearance was a requirement
- 14:41Speaker 3: that really reflected the discrimination against black people that had
- 14:45Speaker 3: occurred in certain states in the South, that was documented,
- 14:49Speaker 3: that was well known. The Supreme Court eliminated preclearance, which
- 14:52Speaker 3: basically was a situation in which the government would review
- 14:56Speaker 3: any changes in voting rights procedures in those states to
- 15:00Speaker 3: make certain that it didn't continue to disadvantage black people
- 15:03Speaker 3: or didn't re disadvantage black people. And what happened was
- 15:07Speaker 3: the court eliminated that preclearance on the theory that there
- 15:10Speaker 3: was a requirement of equal treatment of all states. And
- 15:14Speaker 3: so if that is a principle reaffirms now only a
- 15:17Speaker 3: few years ago, then Trump simply does not have the
- 15:21Speaker 3: right to discriminate against blue states in favor of red.
- 15:25Speaker 3: He can't use the federal spending power to disadvantage blue
- 15:29Speaker 3: states at the expense of red.
- 15:31Speaker 1: In the article, you talk about tax dollars, and a
- 15:34Speaker 1: recent report from the Rockefeller Institute of Government shows that
- 15:38Speaker 1: only thirteen states send more money to the federal government
- 15:42Speaker 1: than they receive, and ten of those are Blue states.
- 15:46Speaker 3: Every state is an employer and is oftentimes the major
- 15:50Speaker 3: employer in any given state, and as with any employer,
- 15:53Speaker 3: the state has to withhold money for federal taxes. And
- 15:57Speaker 3: in the case of the blue states that we mention,
- 16:00Speaker 3: it is a substantial amount of money. In fact, as
- 16:03Speaker 3: we note in the article, the blue states are net donors.
- 16:07Speaker 3: In other words, they give more money to the federal
- 16:09Speaker 3: government and they get in the form of services. Now,
- 16:12Speaker 3: it would be illegal, and I have to say that
- 16:15Speaker 3: quite candidly, for the Blue states to withhold federal dollars.
- 16:20Speaker 3: In other words, the withholding that you do on your taxes,
- 16:24Speaker 3: you withhold for the purpose of turning it over to
- 16:27Speaker 3: the federal government at the appropriate time. This would be
- 16:30Speaker 3: illegal to withhold it, frankly, until the government makes the
- 16:34Speaker 3: allocations among the states equal. It would certainly be illegal.
- 16:37Speaker 3: But it is leverage, what we say, and the piece
- 16:40Speaker 3: is that the government, if they continue to favor Red
- 16:43Speaker 3: states over blue, will be acting illegally and unconstitutionally. And
- 16:48Speaker 3: so we speculate that this is something the Blue states
- 16:51Speaker 3: could do, although it is illegal.
- 16:54Speaker 1: And California has a ballot issue where voters are already
- 16:57Speaker 1: considering this.
- 16:59Speaker 3: So California Balid initiative goes even further. The Baalid initiative
- 17:03Speaker 3: is to secede from the Union, which is extraordinary. It's
- 17:07Speaker 3: asking the voters to endorse the idea of secession. It's
- 17:11Speaker 3: not clear what legal authority that would have, but that's
- 17:15Speaker 3: certainly what California voters are indulging in. Again, you know,
- 17:18Speaker 3: both withholding federal tax dollars and obviously, seceding from the
- 17:21Speaker 3: Union are patently illegal. But the notion here is the
- 17:26Speaker 3: government is behaving illegally. Were they to punish Massachusetts and California,
- 17:31Speaker 3: for example, in favor of the Red States. The government
- 17:34Speaker 3: is behaving blatantly illegally. There's no question. When the government
- 17:38Speaker 3: behaves illegally, citizens have to decide what to do. Citizens
- 17:42Speaker 3: have to decide what the appropriate response is. And make
- 17:45Speaker 3: no mistake, this government is behaving illegally on numbers of fronts,
- 17:50Speaker 3: as numbers of federal courts have found.
- 17:52Speaker 1: Have we reached a constitutional crisis yet?
- 17:55Speaker 3: I don't think there's any doubt that we are in
- 17:57Speaker 3: a constitutional crisis, whatever the name you put on it,
- 18:00Speaker 3: I don't think that there's any doubt. So far. There
- 18:02Speaker 3: isn't a situation, you know, with a Southern politician now
- 18:05Speaker 3: barring federal truths from coming into Mississippi or Georgia or
- 18:09Speaker 3: Alabama or anything like that. That's not what we have
- 18:12Speaker 3: seen yet. What we have seen, as with for example,
- 18:15Speaker 3: the most recent case of mister Abrago Garcia, this is
- 18:19Speaker 3: an individual who is wrongly deported to El Salvador. What
- 18:23Speaker 3: we have seen is the government effectively ignoring a Supreme
- 18:27Speaker 3: Court decision. We've seen the government effectively ignoring decisions of
- 18:33Speaker 3: the lower courts. We've seen sophistry men outright lying. The
- 18:37Speaker 3: sophistry is describing the Supreme Court's decision in a way
- 18:40Speaker 3: which is patently false, patently false. You know, they saying
- 18:43Speaker 3: things like the Supreme Court in dealing with the Abrago
- 18:47Speaker 3: Garcia case didn't really demand that the government do anything,
- 18:51Speaker 3: but only they can passively make certain that if El
- 18:55Speaker 3: Salvador releases a man he could come into the countries.
- 18:58Speaker 3: I mean, that's absolutely not the Supreme Court said. It's
- 19:01Speaker 3: not at all what the Supreme Court said. So that's
- 19:03Speaker 3: sort of really sophistry in dealing with Supreme Court decisions.
- 19:07Speaker 3: And then there's been outright ignoring and disobedience of them.
- 19:11Speaker 3: You know, in the cases involving the funding freezes on
- 19:15Speaker 3: government funds across the country, a court will require that
- 19:19Speaker 3: the funding be restored, and the government is just ignoring it,
- 19:23Speaker 3: just ignoring it, requiring you know, courts to essentially get
- 19:27Speaker 3: to the point to the moment of contempt. So I
- 19:30Speaker 3: don't think there's any question we're in a constitutional crisis
- 19:33Speaker 3: when the government can lie as they did in the
- 19:37Speaker 3: Oval office, in the meeting with El Salvador's who Cale
- 19:41Speaker 3: about again, this gentleman Albrego Garcia, when the government can
- 19:44Speaker 3: lie flat out that he had been found to be
- 19:47Speaker 3: an MS thirteen member, not true anywhere that the government
- 19:53Speaker 3: can lie about its arrangements with with Cale. I don't
- 19:57Speaker 3: think there's any doubt that we're in a constitutional crisis.
- 20:00Speaker 1: And not only did the Attorney General misinterpret the Supreme
- 20:03Speaker 1: Court's decision, but Trump advisor Stephen Miller actually said that
- 20:07Speaker 1: the Supreme Court had ruled unanimously for the Trump administration.
- 20:12Speaker 4: Right.
- 20:13Speaker 3: Again, this is not even close to truth. When the
- 20:15Speaker 3: Supreme Court says the government has to facilitate its return,
- 20:19Speaker 3: and clearly in the context of a decision that is
- 20:22Speaker 3: about how there was no right to deport him. When
- 20:25Speaker 3: they say it has to facilitate his return, that doesn't
- 20:29Speaker 3: mean well, El Salvador, if you wish to send him,
- 20:33Speaker 3: we will allow him in. It's clear that it meant
- 20:36Speaker 3: more than that. It meant affirmative steps to right or wrong.
- 20:40Speaker 3: The government was responsible for a wrong and they had
- 20:44Speaker 3: to take affirmative steps to write it. I mean also
- 20:46Speaker 3: the notion that this is a foreign policy issue is
- 20:49Speaker 3: pure poppycock. This is a commercial issue. This is not
- 20:54Speaker 3: like returning Brittany Griner from Russia, which was a matter
- 20:58Speaker 3: of delicate diplomatic negation. This is about a commercial contract
- 21:02Speaker 3: between a two big dictator and the United States dealing
- 21:06Speaker 3: with a contract for six million dollars to receive deportees
- 21:11Speaker 3: from the United States. And clearly the United States has
- 21:14Speaker 3: rights under the contract and the United States has power.
- 21:18Speaker 3: If in the meeting, before the public meeting, Trump had
- 21:21Speaker 3: said to Bouquele, return this guy, it would have been over.
- 21:25Speaker 3: It would have been over. And the fact that they
- 21:28Speaker 3: don't even think that this is a wrong that needs
- 21:31Speaker 3: to be righted is stunning.
- 21:34Speaker 1: The Fourth Circuit agrees with you. It denied an emergency
- 21:38Speaker 1: motion by the Trump administration to halt a federal judge's
- 21:42Speaker 1: effort to facilitate Garcia's return, saying the Justice Department's conduct
- 21:47Speaker 1: were shocking to American sense of liberty. Is this the
- 21:51Speaker 1: most serious constitutional crisis we've faced since the Civil War?
- 21:56Speaker 3: I think that that's true. It's one thing to have,
- 21:59Speaker 3: you know, the pictures of the Southern States defying a
- 22:03Speaker 3: constitutional directive to desegregate, requiring troops to be sent to
- 22:09Speaker 3: southern states to enforce the prohibition against segregation. That was
- 22:14Speaker 3: a confrontation as between a unified federal government and particular states.
- 22:19Speaker 3: This is a confrontation between the federal government as a
- 22:23Speaker 3: whole individuals, and a confrontation between the federal government as
- 22:28Speaker 3: a whole and the states. It's about to involve almost
- 22:31Speaker 3: every aspect of our lives. The federal government is asserting
- 22:35Speaker 3: control over universities. The federal government is seeking to control
- 22:39Speaker 3: who is in the country and who is not, seeking
- 22:42Speaker 3: to control who is a citizen, and flouting the Constitution
- 22:45Speaker 3: in numbers of ways. So in both the scope of
- 22:49Speaker 3: the disobedience the scope of the violations by the federal
- 22:52Speaker 3: government on every front. So yes, I would call it
- 22:56Speaker 3: the most serious constitutional crisis in the Civil War.
- 22:59Speaker 1: And capitulation by some of the country's largest law firms.
- 23:04Speaker 3: Well, I think we're beginning to see something different. And
- 23:06Speaker 3: let me make a more general points. So, the strength
- 23:09Speaker 3: of the United States is not just in representative government,
- 23:12Speaker 3: not just having Congress and the president elected by the people,
- 23:18Speaker 3: not just having local governments. The strength of the United
- 23:21Speaker 3: States is also having civil society, namely organizations like universities,
- 23:26Speaker 3: and law firms that are independent of the government. They
- 23:30Speaker 3: stand for principles that the government can't control. So what
- 23:34Speaker 3: Trump has done is he's taken over the government we
- 23:37Speaker 3: elected him. That was the product of the voters, namely
- 23:40Speaker 3: that he has a House of Representatives, the Senate, and
- 23:42Speaker 3: the Lighthouse. But the judges are supposed to be independent,
- 23:45Speaker 3: and the judges have been holding the judges have reflected
- 23:48Speaker 3: that independence. What he is doing is trying to dismantle
- 23:52Speaker 3: civil society. And the way you dismantle civil society is
- 23:55Speaker 3: you dismantle the universities, and you'd sort of tried to
- 23:58Speaker 3: co opt the law firms. I think we're seeing a
- 24:01Speaker 3: change now. I think there was a certain kind of
- 24:03Speaker 3: shock at the beginning of this administration. People didn't quite
- 24:07Speaker 3: understand how far he was prepared to go. I think
- 24:09Speaker 3: that the firms that have sued the government for its
- 24:12Speaker 3: illegal actions, I think are going to be the wave
- 24:15Speaker 3: of the future. And Harvard's standing up to Trump, I
- 24:19Speaker 3: think will forecast other universities doing exactly the same. I
- 24:23Speaker 3: think there was a certain amount of shock. Surely he
- 24:25Speaker 3: didn't mean to go as far as he went, was
- 24:29Speaker 3: the sense, And the answer is yes, he has an
- 24:32Speaker 3: indeed further.
- 24:33Speaker 1: Thanks for joining me. That's retired federal judge Nancy Gertner
- 24:37Speaker 1: coming up. Can you keep your data private? I'm June
- 24:40Speaker 1: Grosso and you're listening to Bloomberg Holden.
- 24:46Speaker 4: Almost missed it.
- 24:48Speaker 1: That's for your wife. Yeah, I thought your wife liked roses.
- 24:56Speaker 4: Excuse me?
- 24:58Speaker 3: Do I know you?
- 24:59Speaker 1: No?
- 25:00Speaker 3: But I know you Bill little relationship advice.
- 25:04Speaker 1: If you're going to step out on your wife, you
- 25:06Speaker 1: need to think it through. Do work here, because if
- 25:10Speaker 1: you do, you're fired.
- 25:12Speaker 3: I'm more like an independent contract.
- 25:14Speaker 1: In the TV series Person of Interest, a computer program
- 25:18Speaker 1: known as the Machine monitors all electronic communications and surveillance
- 25:23Speaker 1: video feeds in order to find people planning to commit crimes.
- 25:28Speaker 1: The Machine knows all about you. The series is science fiction,
- 25:32Speaker 1: but is it that far from reality? Our online activities
- 25:36Speaker 1: and data are increasingly being tracked, collected, and analyzed, so
- 25:41Speaker 1: our digital data, including photos, documents, emails, finances, and even
- 25:47Speaker 1: health information, isn't really private anymore. For example, according to
- 25:52Speaker 1: a class action lawsuit, weight Watchers websites allegedly shared users'
- 25:57Speaker 1: personal information, including health related data, with third party tracking
- 26:02Speaker 1: services like Google, Facebook, and Amplitude. Joining me is an
- 26:07Speaker 1: expert in cybersecurity and data privacy. Colin Walkee a partner
- 26:12Speaker 1: at holestal So Colin what kind of information did WeightWatchers
- 26:16Speaker 1: allegedly give out and how.
- 26:18Speaker 4: So WeightWatchers was able to give out this information utilizing
- 26:22Speaker 4: pixels that were on their website from companies like Facebook, Splash, Meta,
- 26:27Speaker 4: Google for analytics purposes. And their allegations are that essentially
- 26:33Speaker 4: every question that you answered on their website up to
- 26:37Speaker 4: and including you know, are you living with Type two diatabetes?
- 26:40Speaker 4: Have you used any weight loss medication? You know, do
- 26:44Speaker 4: you have a history of cancer? Blood pressure? All of
- 26:47Speaker 4: these sorts of sensitive information, low testosterone, All of these
- 26:51Speaker 4: were questions that you were supposed to answer when you
- 26:53Speaker 4: went to the website that had these pixels on them
- 26:56Speaker 4: and share that information then with third parties.
- 26:58Speaker 1: The sharing with third party was deliberate or was it
- 27:02Speaker 1: a mistake?
- 27:03Speaker 4: Well, it appears that it was deliberate. I mean, according
- 27:05Speaker 4: to the allegation, certainly WeightWatchers knew about utilizing pixels in
- 27:11Speaker 4: relation to healthcare information because the Federal Trade Commission has
- 27:14Speaker 4: issued warnings to that, and in fact, Weight Watchers was
- 27:17Speaker 4: sued once before regarding these types of issues, and so
- 27:21Speaker 4: weight watchers knew that pixels were being utilized and continue
- 27:25Speaker 4: to do so in spite of warnings from the Federal
- 27:27Speaker 4: Trade Commission. So, for example, like fitbit, it collects healthcare information,
- 27:31Speaker 4: but it's not a hipoprotected entity, and so they can
- 27:34Speaker 4: do whatever they want with that information. So consequently, the
- 27:37Speaker 4: FDC came out and said, no, you need to start
- 27:39Speaker 4: treating healthcare information wildly different than any other type of
- 27:43Speaker 4: information and protect it better, ie, don't use pixels on website.
- 27:47Speaker 1: They had a privacy policy, right, and they pledged that
- 27:50Speaker 1: they wouldn't share the information without written consent.
- 27:53Speaker 4: That's correct, but you have to read between the lines
- 27:56Speaker 4: on their privacy policy because they do know that they
- 28:00Speaker 4: share this information with third parties. And that's part of
- 28:02Speaker 4: the problem with privacy policies. One, if you actually took
- 28:05Speaker 4: the time to read all of them, you know, you
- 28:06Speaker 4: would never actually utilize a website. You'd just be reading
- 28:09Speaker 4: all of these vague details. And then two, because there
- 28:12Speaker 4: aren't requirements on what privacy policies have to contain with
- 28:16Speaker 4: certain nominal exceptions, they can get away with making broad
- 28:20Speaker 4: statements like we don't sell or share your data to
- 28:22Speaker 4: third parties, and at the same time, they can still
- 28:25Speaker 4: do it because they'll share that information for marketing purposes
- 28:28Speaker 4: or other sorts of quote unquote internal business purposes. And
- 28:32Speaker 4: so if you're utilizing the information for internal business purposes
- 28:35Speaker 4: i e. Analytics, then you can get away with sharing
- 28:38Speaker 4: this type of information with third parties. So it's really
- 28:40Speaker 4: all about wordsmithing.
- 28:42Speaker 1: Weight Watchers is reportedly facing bankruptcy. If it does go
- 28:46Speaker 1: into bankruptcy, what happens with the data?
- 28:48Speaker 4: So that's all part of the questions, right. So first
- 28:50Speaker 4: and foremost, this class action law to filed against weight
- 28:53Speaker 4: Watchers was filed on April nine, so they're still at
- 28:56Speaker 4: the beginning stages. And in fact, I do not believe
- 28:58Speaker 4: that weight Watchers has answered yet. If it the case
- 29:00Speaker 4: that WeightWatchers isn't fact going to file for bankruptcy, the
- 29:04Speaker 4: question becomes is it going to be like a twenty
- 29:06Speaker 4: three and me situation in which they're looking for buyers,
- 29:09Speaker 4: ie a Chapter seven or something along those lines, or
- 29:12Speaker 4: is it going to be something more like a Chapter
- 29:15Speaker 4: eleven where it's a true restructuring, in which case WeightWatchers
- 29:18Speaker 4: wouldn't necessarily sell or give away this information to any
- 29:21Speaker 4: third parties, but we retain it for their future use,
- 29:24Speaker 4: you know, after they've addressed all of their debt issues.
- 29:27Speaker 4: But all of that said, it goes right back to
- 29:29Speaker 4: what we saw with twenty three and meters filing bankruptcy,
- 29:31Speaker 4: which is, if it's the case that they go ahead
- 29:33Speaker 4: and liquidates company, these are assets, which is part of
- 29:36Speaker 4: the reason why the PLANEFF sued for unjust En Richmond.
- 29:39Speaker 4: And this is the private type of information that's going
- 29:41Speaker 4: to be sold in a bankruptcy proceeding.
- 29:43Speaker 1: So you can go on these sites and they give
- 29:45Speaker 1: you options about whether you want to share your information
- 29:48Speaker 1: or not. Does any of that matter in reality?
- 29:52Speaker 4: Well, so you've got to remember there's a slight difference
- 29:55Speaker 4: between for example, accepting cookies, right or rejecting cookies, which
- 30:00Speaker 4: is one way that they can obtain your information.
- 30:03Speaker 2: But anytime you.
- 30:04Speaker 4: Fill out a form, the form and that information is
- 30:07Speaker 4: going to be stored with that company. So even if
- 30:10Speaker 4: you opt out of all cookies, you might still be
- 30:13Speaker 4: consenting to them utilizing this information. Because remember all state
- 30:16Speaker 4: laws at this stage are opt out. What's the exception
- 30:19Speaker 4: of Colorado, which is a minor exception for sensitive information,
- 30:23Speaker 4: But otherwise, these are all opt out statuses. And what
- 30:25Speaker 4: that means is is while you may decline cookies, once
- 30:28Speaker 4: you've submitted your information to that company, they can basically
- 30:31Speaker 4: do anything that they want with that information, up to
- 30:34Speaker 4: and including selling it to third party.
- 30:36Speaker 1: So then as you respond to the questions or fill
- 30:39Speaker 1: out forms, you should just consider that information is gone,
- 30:43Speaker 1: whatever information I'm giving them.
- 30:45Speaker 4: I don't think that most consumers realize how unprotected their
- 30:49Speaker 4: data is. Once you go on the Internet and you
- 30:51Speaker 4: interact with the third party for all intents and purposes,
- 30:54Speaker 4: that information is then going to be retained by them
- 30:57Speaker 4: and they can pretty much do whatever they want with it.
- 31:00Speaker 4: And so the concept of privacy no longer exists because
- 31:05Speaker 4: we have divided human beings from their data. What the
- 31:09Speaker 4: reality is is human beings are data. What we do
- 31:13Speaker 4: on a daily basis is being collected, and so consequently
- 31:16Speaker 4: we need to make sure or we need to try
- 31:18Speaker 4: and obtain right to our data, not just privacy laws
- 31:23Speaker 4: and those sorts of things, but actual rights, because then if,
- 31:26Speaker 4: for example, weightwatcher says we don't sell your information or
- 31:29Speaker 4: give it away to third parties, and meta gets hacked
- 31:33Speaker 4: and all of a sudden you find out that they've
- 31:34Speaker 4: got WeightWatchers information in their website. You now have a claim,
- 31:39Speaker 4: plain and simple because they stole your property and used
- 31:42Speaker 4: it without your consent. But right now, there are no
- 31:45Speaker 4: laws on the books they even except for a few
- 31:47Speaker 4: minor exceptions, that say your data is yours. Otherwise your
- 31:51Speaker 4: data is whoever you.
- 31:52Speaker 1: Give it to, So then it would take a law
- 31:55Speaker 1: to change this.
- 31:57Speaker 4: That's correct. So for example, in Oklahoma, and this is
- 31:59Speaker 4: the only law that I'm aware of on the books,
- 32:01Speaker 4: but I would love to see it in other states.
- 32:03Speaker 4: In Oklahoma, there's a law that says if you upload
- 32:06Speaker 4: health care information to Oklahoma's Health Information Exchange, which is
- 32:10Speaker 4: a database that most states have where if you get
- 32:13Speaker 4: injured in one part of the state, a doctor in
- 32:15Speaker 4: another part of the state can look up that information
- 32:17Speaker 4: and the Health Information Exchange. And the law says that
- 32:20Speaker 4: all of the information and data that you upload to
- 32:23Speaker 4: the Health Information Exchange, you quote retain a property right
- 32:28Speaker 4: in that healthcare data, but then give them a license
- 32:31Speaker 4: to use it. So there is a statutory instantiation of
- 32:36Speaker 4: your property rights in your healthcare data. Now how far
- 32:39Speaker 4: does that extend, Probably not much further. Than your healthcare data.
- 32:42Speaker 4: But you can see how we would be able to
- 32:44Speaker 4: pass the law that would cover any type of data
- 32:45Speaker 4: that you'd give over to third parties.
- 32:47Speaker 1: So a few months ago I got to notice that
- 32:50Speaker 1: a company had been hacked, and it was a company
- 32:53Speaker 1: that was somehow involved in processing claims for one of
- 32:56Speaker 1: my doctors. So you're giving information to your doctor and
- 33:00Speaker 1: somehow that information is getting hacked.
- 33:03Speaker 4: So that's another great example. So within HIPPA, there are
- 33:06Speaker 4: rules that permit third parties to utilize this data on
- 33:09Speaker 4: behalf of the covertant. So for example, your doctor, he
- 33:13Speaker 4: gives this over to a third party so that they
- 33:15Speaker 4: can essentially manage it, but not utilize it without his permission.
- 33:18Speaker 4: Here's the problem is that I would be shocked in
- 33:21Speaker 4: astounded whether many, if any health care entities actually then
- 33:26Speaker 4: go to their business associates and bet their cybersecurity protocol instead.
- 33:31Speaker 4: The business associated agreements typically say that you know you're
- 33:34Speaker 4: going to comply with HIPPA, and you're going to comply
- 33:37Speaker 4: with my instructions, but there's no verification, there's no auditing
- 33:40Speaker 4: that in fact, that's what they're doing with that data.
- 33:43Speaker 4: And in healthcare space, it is all over the place
- 33:46Speaker 4: because you're sharing information with testing facilities, with third parties,
- 33:51Speaker 4: billing companies, so your data gets spread all over the
- 33:54Speaker 4: place and you're hoping and praying that somebody's actually can
- 33:56Speaker 4: imply with that business associate agreement.
- 33:58Speaker 1: And their solution is usually to give you something like
- 34:01Speaker 1: a year of free credit monitoring. But what can you do?
- 34:04Speaker 1: You really don't have a choice but giving information in
- 34:07Speaker 1: some of these situations.
- 34:09Speaker 4: That's a very good point. And not only that, but
- 34:10Speaker 4: what are you going to do about the data breaches themselves?
- 34:12Speaker 4: I mean, in HIPPA, if somebody has breached in less
- 34:16Speaker 4: than five hundred healthcare records or access, the reporting entity
- 34:20Speaker 4: does not have to report that hack until February one
- 34:23Speaker 4: of the following year. So you, as a consumer, how
- 34:26Speaker 4: are you going to protect yourself when you find out
- 34:28Speaker 4: about this hack a year later? You're not. And in fact,
- 34:31Speaker 4: I've been an advocate that we need to rethink our
- 34:34Speaker 4: breach notification laws altogether, because just like you said, what
- 34:38Speaker 4: do you do when you get that piece of paper?
- 34:39Speaker 4: You throw it away or you call a credit agency
- 34:42Speaker 4: to monitor your credit. That's about all that you can
- 34:44Speaker 4: do at the moment. There needs to be more meat
- 34:46Speaker 4: on the bones when it comes to data breach notification requirements.
- 34:50Speaker 1: And what about all the information that the government has
- 34:53Speaker 1: about us?
- 34:54Speaker 4: And it's not just information that you've supplied through for example,
- 34:58Speaker 4: social security information in those works, but it's all that
- 35:01Speaker 4: information plus whatever else that the government can aggregate from
- 35:04Speaker 4: data brokers, which they have full rain and free access to,
- 35:08Speaker 4: just by asking the data brokers to give them copies
- 35:10Speaker 4: of that information. And just think about it this way.
- 35:12Speaker 4: Every time that you go to the airport, you have
- 35:14Speaker 4: that bioinformation screenpace check when you go to check in.
- 35:17Speaker 4: That information is then stored and utilized so that, for example,
- 35:21Speaker 4: if you're in New York City and there's a street
- 35:23Speaker 4: camera that can pick you up, they can then reidentify
- 35:25Speaker 4: you fairly quickly. And not just that, but your gate.
- 35:28Speaker 4: All sorts of unique aspects about you are stored not
- 35:31Speaker 4: just by third parties but by the government as well.
- 35:34Speaker 4: The thing is is that I do not think that
- 35:36Speaker 4: people appreciate the surveillance state that we live in at
- 35:39Speaker 4: the particular moment. If we want to identify any particular
- 35:42Speaker 4: person in the United States right now, at this moment
- 35:44Speaker 4: where they're at, if they have a cell phone. We
- 35:47Speaker 4: can do that fairly.
- 35:48Speaker 1: So it's like the TV shows where they can track
- 35:50Speaker 1: people no matter where they are.
- 35:52Speaker 4: It is, it is Unfortunately, it's a very scary situation
- 35:56Speaker 4: in which we're living in. So I mean, for example,
- 35:58Speaker 4: you know, one of the questions on wait Watchers was
- 36:01Speaker 4: have you made yourself vomit within the past week? What
- 36:03Speaker 4: you could imagine then that information being sold to some
- 36:06Speaker 4: diet pill company who then sends a targeted ad towards you,
- 36:10Speaker 4: And now you're getting, you know, fluff medication from some
- 36:13Speaker 4: third party that probably doesn't work as opposed to from
- 36:16Speaker 4: your actual healthcare provider. And so it's really concerning how
- 36:20Speaker 4: we're giving away this information, how can be utilized.
- 36:23Speaker 1: So what do you do when a website ask for
- 36:24Speaker 1: your information?
- 36:26Speaker 4: So again it's all about risk and so certain websites
- 36:29Speaker 4: I have to use, But I will tell you I
- 36:30Speaker 4: don't use apps on my phone at all. I have
- 36:32Speaker 4: like five apps that didn't come pre stored, and it's
- 36:35Speaker 4: because I'm more concerned about them tracking me on my
- 36:38Speaker 4: phone and where I'm at, more so than necessarily what
- 36:41Speaker 4: I'm uploading the website. Because the reality is is we
- 36:43Speaker 4: live in the world in which we have to upload
- 36:45Speaker 4: information to websites every day, so it's a matter of
- 36:47Speaker 4: managing your risk.
- 36:49Speaker 1: So then when you check, don't follow me. Uh huh,
- 36:52Speaker 1: that doesn't work.
- 36:53Speaker 4: Well, it can, I mean it can to some degree,
- 36:57Speaker 4: but you just never know. I mean there's a lot
- 36:59Speaker 4: of backdoor and so I just prefer not to even
- 37:01Speaker 4: risk it.
- 37:02Speaker 1: So I guess the only solution is to go back
- 37:04Speaker 1: to an analog world.
- 37:06Speaker 4: I think that's the way people are going to realize
- 37:08Speaker 4: they need to be safe.
- 37:09Speaker 1: Yes, whenever I talk to you, Colin, I resolve to
- 37:12Speaker 1: be more careful about my personal information. Thanks for the warnings.
- 37:17Speaker 1: That's Colin Walkee of hall Estell and that's it for
- 37:20Speaker 1: this edition of The Bloomberg Law Show. Remember you can
- 37:23Speaker 1: always get the latest legal news on our Bloomberg Law Podcast.
- 37:26Speaker 1: You can find them on Apple Podcasts, Spotify, and at
- 37:30Speaker 1: www dot Bloomberg dot com, slash podcast Slash Law, and
- 37:35Speaker 1: remember to tune into The Bloomberg Law Show every weeknight
- 37:38Speaker 1: at ten pm Wall Street Time. I'm June Grosso, and
- 37:41Speaker 1: you're listening to Bloomberg