Facebook Prepared to Battle Antitrust Concerns

for antitrust action against Facebook. That was echoed in questions from Republican Senator Lindsey Graham about whether Facebook was a monopoly. The average American uses eight different apps, okay, communicate with their friends and stay in touch with people, ranging from texting apps, email service. You provide well, we provide a number of differences Twitter the same as what you do. It overlap the portion. Don't think you have a monopoly.

It's certainly doesn't feel like that to me. Zuckerberg's answer may have gotten a laugh, but it's no laughing matter. Joining me is Gary Reback of counsel a car and Ferrell. Gary. I'm going to begin by asking what Lindsay Graham was basically asking Zuckerberg and never got a straight answer. Is Facebook a monopoly? Well, it hasn't been judged a monopoly in any case yet the way Google has. But I think all the year marks and all the hallmarks are there,

of course, explain that a little more. Well, the easiest way to define a monopoly is the way the Europeans do, which is that you can set all your terms of sale and your terms of engagement with consumers without even considering what competitors might do. And I think that clearly describes Facebook, as Senator Graham indicated, Uh, the closest competitors to Facebook are now owned by Facebook. That's What's App and Instagram. So there's nothing really on the horizon that

challenges Facebook's hed gemony in social networking. And the notion that email as a competitor for a social network platform really is risible. I think Zuckerberg was prepared to cite competition with China and the overall ad market if asked whether Facebook should be broken up. According to a photograph that was published by a p of a binder of internal notes he took to the hearing, Are those good responses? Uh?

I think the China part is almost a joke that has been raised initially by Google in response to antitrust scrutiny. I mean, first Google would say, you don't have to worry about us. We have competition from Apple, and then they would say we have competition for Facebook from Facebook. And now they say we have competition from China. And I think sort of all these big tech companies have gotten together and decided that in students, instead of shooting

at each other, they'll just shoot at China. But the real issue from an anti trust for perspective, is not China. It's having a healthy US economy and a robust competitive market and social networking. And I don't think the Chinese playing that in any respect. Graham also asked Zuckerberg about regulation in Europe, where a new General Data Protection regulation or GDP or law is about to kick in. Tell us about that. Yeah, Now, of course that's not that's

a privacy issue and not really an antitrust issue. But generally speaking, the Europeans are way ahead of the United States on concerns about privacy. They've been investigating breaches by Google and by Facebook for quite some time, and there's a new law that's coming into effect that essentially requires affirmative consent by users before any use of their data might be made. And even more than that June, it

prevents companies from saying take it or leave it. In other words, you can't just say, hey, you want on my side, you agree to my terms. The point is, uh, you want to use user data, You've got to get affirmative, knowledgeable consent. There's also another law on the works in Europe behind that that would go even further. And the big tech companies i am told are law being hard

against that. The antitrust division of the Justice Department under Trump has seemed to be more expansive in attacking mergers. We see the trial over the A T and T Time Warner merger. Might it look at Facebook? Uh? First of all, I think you're quite right that part of the unpredictability of the Trump administration is they do seem to be enforcing the n trust laws more than the Obama administration did. Um. But is Facebook and the crosshres.

Most of the focus on Facebook. The scrutiny of Facebook heretofore has been about privacy, and conversely, most of the antitrust scrutiny and high tech has been about Google, and so there are Google cases has very far ahead, both in the United States and in Europe in terms of investigation than anything and I trust wise involving Facebook, I mean, I think the first order of business for the new Federal Trade Commission when they're confirmed, just what they're going

to do about the alleged violation of the consent decree they had with Facebook. But you know, they would have to start a Facebook investigation from scratch. Might they do that? Of course they might, is something that's going to happen very soon. I doubt it. So the Senators and we're talking a lot about regulating Facebook, and you know, it looks like regulation is upon us, etcetera. They made all these big statements, but what kind of regulation would it take.

And I'm talking about the monopoly aspect of Facebook as well here, what kind of regulation would it take? What would it look like if Congress actually did want to pass something. Well, I uh, if we're talking about and I trust in force spentthon, Congress doesn't really need to pass anything. I mean, Congress needs to enforce what's there. And as we've discussed in this interview, The way Facebook got its dominant market position was that the anti trust

officials allowed Facebook to buy its too closest competitors. So if you were looking at this anti trust wise and you wanted to bring a case against Facebook, you'd have to point out some anti competitive behavior that that really hasn't been focused on yet. But then you would focus on what kind of remedy you could get under the anti trust laws, which would logically involve spinning off those

two companies, and it would focus on data. I think the Europeans have said that data is a barrier to entry. Small companies can't get the necessary data to compete with a big company like Facebook, and so if you're going to spin off any companies from Facebook, you would spend them off with the same database that Facebook currently has, making them robust competitors from day one. We have about a minute and a half here, Gary. If you look in the future, do you see any kind of regulation

of Facebook in the US on the horizon? In reality, when you look at it, you know, I'm having done this for many years now, I'm kind of cynical about what Congress can do. The the likelihood is that not a lot is going to happen. I think I have to admit that, um, if something happens, it will be the result of an administration of an initiative through the Antitrust Division of the Department of Justice or through the Federal Trade Commission, not I think through anything that Congress

has done. Thanks so much, Gary, it's it's been fascinating and we will pick up with this, I'm sure again in the future. That's Gary reback of car and Beryl. President Trump discussed firing Deputy Attorney General Rod Rosenstein with White House Aids yesterday. According to a person familiar with the matter, Rosenstein is overseeing the Mall investigation, and Trump appears to be ratcheting up his personal attacks on Mueller this week as well, after an FBI raid on the

home and office of Trump's personal attorney. William Banks is our guest. He's a professor at Syracuse University Law School. Bill. We have discussed Trump's threats to fire Mueller in the similarity Richard Nixon's Saturday night massacre. Would firing Rosenstein have the same basic consequences, Well, it could, June Rosen. He

could order Rosenstein to to dismiss Mueller. Rosenstein would likely decline to do that, because, as we've discussed before, there's a Justice Department regulation that says that the Independent Council Special Prosecutor can only be dismissed for cause for misseeasons in an office, and certainly Mueller can't be reasonably accused of that. So but fire Rosenstein? Could he fire Rosenstein? Yes, he could do that and then try to replace him with someone more inclined to rein in what he views

as as an investigation that's run off the rails. So that would not be as precipitous an action as firing Mueller or telling fire Muller. That's right, because after all, these are executive branch officials. The President appoints uh these officials with the advising consented Senate, so he generally has the legal authority to remove them, and to remove them for any reason at all, so long as the reason

isn't an unlawful reason. And here, because Jeff Sessions is recused from the from the question surrounding this investigation, then it's up to the deputy Attorney general. President doesn't like the way the deputy Attorney general, he could do his job. He could dismiss him. I think that would be a politically very damaging thing for the president to do. But of course he uh, you know, he hasn't let that stop him in the past and probably won't let that

stop up him in the future. So Noah Feldman, a professor at Harvard Law School and a Bloomberg View Columns, has a new column entitled what if Trump fires Muller and Mueller says no? And it talks about what might happen if Trump tries to fire Muller without rescinding those special counsel regulations you just spoke about. Muller is a stickler for the letter of the law. Do you agree

that he would be within his rights and refusing to leave. Well, if if Trump attempted to dismiss Muller without following the remove, you know, without at first removing Rosenstein and then asking Rosenstein's replacement to remove Muller, then I believe yes, it's possible that if Trump tried to remove Muller directly, with Rosenstein still in place and in violation of the regulations that are still the law and the Justice Department, Muller might well choose to hold ground and say I'm still

lawfully in my job and I'm going to continue to do my job. And I've seen in Feltman's column in that case, you could precipitate a crisis, a very serious crisis like the one that was nearly upon us in the Nixon administration after the Saturday Night massacre. We there are some set to. Senators Lindsey Graham and Tom Tillis have put together legislation to protect Mueller's job, but as people have pointed out, they would need sixty seven Senators and two thirds of the House to override a likely

veto from President Trump. So what might it be is that why the Republicans are sort of hanging back on that legislation because it would really put the spotlight on on them. Well, they have been hanging back, as you say, but certainly the mood has changed in Congress with these recent rumblings from the from the White House. I think this legislation should have been considered seriously several months ago

and was left to languish and commits. He if it does smoke through committee now in the next week or two, as it may, well they'll have a chance to pass it. Certainly, even if if it's not capable of surviving a presidential veto legislation would send a very strong signal to the White House that, you know, disobeying the will of Congress here, the majority of Congress, would put Trump in a very bad light politically and set up likely grounds for impeachment

down the road. Bill. You know, we've talked so many times about about the possibility that the President might fire Muller and the different things he might do. He hasn't done any of that yet. But does it seem to you that this ratcheting up of his you know, of his tweets against Mueller, direct personal attacks, now that it

might lead to something, might lead to something. I think the other road that that the President might choose to take care as the pressure increases now with Michael Cohen under investigation, is to begin issuing pardons and to try to clear the the way for himself by pardon he knows who would otherwise be inclined to provide evidence that could be used against him, if not in a court

of law eventually in an impeachment inquiry. Would those pardons be looked at It's obviously he has the power to pardon, but would those pardons be looked at as an obstruction another obstruction of justice. They could they could down the road. He as you say, clearly has a constitutional power to pardon. But but if information comes out, uh, either before the issuance of those pardons or after them in some other way, then that information would be available to Congress to use

for its own purposes, as a political purposes. The impeachment, of course, is a lawful process, but it's primarily driven politically, so that could happen. And it's also you know, we should remember in the case of Colin as well as others who can under investigation, there's a possibility, even after a pardon, that state governments, through their attorneys general, could

pursue charges against those who've been under investigation. The pardon wouldn't affect the possible availability of state criminal prosecution, so the information could come out that way. And we know that Mueller is has already been working in concert with the New York AG, so that seems likely. Thanks so much, Bill, that's William Banks, the professor at Syracuse University Law School.

Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg Dot com Slash Podcast. I'm June Brosso. This is Bloomberg