SBF, Trump Immunity, Google Loss & Clean Beauty

This is Bloomberg Law with June Brusso from Bloomberg Radio.

I've been gathering the greatest hunters across all realities, and I started with the best cost a lot of credits to convince Mando.

But this is the way.

The plan, pure chaos and no one will sew it better than them.

Fortnite is an online video game where players collaborate to survive in an open world environment, and the winner is really Epic Games, which makes billions of dollars every year from it. And this week Epic won its years long real world battle with Google over its app store, where it charges companies' fees when users make purchases.

For games like Fortnite.

In a major blow to the tech giant, a San Francisco jury found that Google's app store constitutes an illegal monopoly in violation of the anti trust laws. Google is vowing to appeal. Joining me is anti trust expert Harry First, a professor at NYU Law School.

What did the jury decide exactly?

Here?

So, the jury decided basically that in a number of different ways, Google abused its power to keep its monopoly in the Google app stores or the distribution of Google apps and that they did a number of different ways, Agreements with the handset makers, agreements with developers, you know, making sure that Google Play appears on every Android phone, keeping developers from going off and developing their own app stores, and basically requiring everyone to sort of go through this funnel.

You know.

It's sort of like the old hourglasses. You know, it goes down into the middle and everything goes through. Google will play if you want to reach someone with an Android phone in their hands. So those little grains of sand, thirty percent of them go into Google's pocket.

Yes, those are the commissions as high as thirty percent that Google takes from software developers. The jury deliberated for a little over three hours after a month long trial, and came back with the unanimous verdict.

Was the evidence against Google. That's strong.

Jurors take these cases very seriously. Jurors pay attention. They sit there and they listen hard. This is new to them in a sense. I mean maybe some of them have played video games on their phone, but they listen hard. And I took a look at the sheep with their findings, and it said, you're supposed to define what the market is, and instead of the sheet having a list of things with a checkbox. You know what it might be. It just had a box and you had to write it in.

And Google's it Epic, which seems to be on a mission, lost a similar challenge to Apple's Appstor two years ago, and both companies have asked the Supreme Court to review that. Does the judges verdict there contradict the jury's verdict here, or are the cases and the facts different.

Yes, maybe or maybe yes. It depends, So you're doing.

It again, Harry, you got me in one of those.

I mean, this.

Certainly is going to be one of Google's arguments when Google appeals this case to the Court of Appeals in the Ninth Circuit, saying, you know, you just affirmed this decision finding a very different statement of what the product market is, finding that Apple and Google compete in the distribution of gaming apps, and you were right in the

The case isn't over because the judge has to decide what the remedy will be. Yet Epic didn't seek monetary damages from Google, only a change in app store policies. I mean, what's the range that the judge can order here?

Well, you're being more specific about what Epic seeking than Epic was in its complaint. The remedy was stated very generally about adjunctive relief. So it's not one hundred percent clear what Epic wants, except to say that apparently whatever match was offered Match dot Com was offered and agreed to in its settlement. Presumably Google would have been glad for Epic to take the same settlement it didn't, so

Analysts have been saying that the business model in apps that generates for Google and Apple close to two hundred billion dollars a year is in jeopardy. Jim Sweeney, the chief executive officer of Epic, said, the dominoes are going to start falling here. The end of thirty percent is in sight.

Do you think it's as big as all that?

Well? Maybe, I mean it's certainly Epic wants to argue that your business is about to end. You know, this may just be a dance towards the settlement. Hard to say, but you know, whatever it is. Apple and Google have already moderated some of their pricing for smaller developers, but the big money appears to be particularly with the games, which offers subscriptions and things that can be bought within the app itself, and there's a lot of money in that.

Google is defending two other anti trust cases by the Justice Department, one in DC over its search engine and another in Virginia over its ad tech business, and the Justice Department has been investigating Apple's app store practices since around twenty nineteen. So is it like an antitrust revolution against big tech? Looking at it from the viewpoint of a professor of antitrust.

Well, from professor of antitrust, I think, gee, what took everyone so long catched up?

You know?

If you think about using anti trust against major economic powerhouses, and particularly in the tech space, it took two decades between Microsoft and filing cases against the major tech platforms. So in that sense, it's a revolution not taking place in the streets, it's taking place in courtrooms. So it's pretty amazing in that sense. And the ad tech case against Google that will also be tried before a jury because the Justice Department is asking for money damages because

About that sort of a test of whether a jury makes a difference rather than a judge. Thanks so much, Harry. That's Professor Harry First of NYU Law School. This is Bloomberg.

This is Bloomberg Law with June Brusso from Bloomberg Radio.

Look, I screwed up, like I would CEO. I had a responsibility here. I had a responsibility to be on top of what was going on on the exchange. I wish I had done much better at that.

Sam Bankman Freed accepted responsibility for ftx's collapse in his so called apology tour after its bankruptcy in November of twenty twenty two. But fast forward to a year later when he took the stand at his front trial, and it was a completely different story. Bankman Freed danced around the questions and appeared vague and evasive in a painstaking cross examination, so much so that his own lawyer says

David Mills is a Stamford law professor, a longtime White Cole lawyer who is also best friends with Sam Bateman, Fred's parents, Barbara and Joe. They're also Stanford Lall professors, and he came into SBF case to be the legal strategist, though he was sort of directing the approach that trial attorney should take, suggesting different strategies in terms of dealing with the chargers, the defense, the kind of case that they would make at the trial.

Law isn't his only career. He has quite an expansive resume.

The's riot.

He's a very interesting guy. On top of being an attorney, he's also a managing director at Fortress. He's also a general counsel at a quite reputable Silicon Valley design firm run by the very well known former chief designer Apple, Johnny Ives. He's also been advisor to the VC firm Benchmark, when it was trying to out the Uber CEO Travis Kalenick a few years ago. So he has his things in a lot of different pies, but he is relatively unknown.

And he's done very well, although he won't talk about just how well. He donated at least ten million dollars to stand for law school, millions more to the NAACP Legal Defense Fund, and when SBF was jailed in the Bahamas, he flew there on his own private jet.

But he's also been involved in a lot of pro.

Bono efforts for criminal defendants, and when you interviewed him, he had a cap on with the number three, four, one nine representing the number of people he's helped to get out of prison.

This is something he's probably most proud of. Was a major financial backer and driver of the effort to overturn California's three strikes law. That was a law that put people in prison for life on their third conviction, no matter how big or small that third conviction was. So he worked with students at Stanford Law in twenty twelve to change that law, which ended up getting thousands of people released from prison.

He told you that he realized right away that it would be an uphill battle defending bankman freed because lawyers turned him down.

He'd had a bit of an idea about FTX from Joe's and Beamon Fred's barber. They had informal conversations about how the crypto exchange was going. Joe thinking about going over and working for FDx full time, but when there was a run of a bank at FTX in November twenty twenty two, so called David essentially for advice. David's response was, Sam needs a lawyer right away. So David started calling around on different firms looking for someone to try and represent Sam Bankman Freeze, but he said a

He doesn't believe the trial was fair. Tell us why.

He said he believed that Sam is innocent because he didn't form the intent to do anything wrong, which is obviously a key element of proving fraud. He said that the pre trial motions, though the orders that the judge handed down before the trial even got started, really put the defense at had disadvantaged. They weren't allowed to haul a number of expert witnesses, so they couldn't really rely on the defense that Sam was acting on the advice of lawyers and doing a lot of the things that

And you and I have discussed Sam bekman Fried's decision to take the witness down. He said that after the prosecution's case, SBF really had no choice but to testify.

He said, after those profile motions and hearing the damning testimony from some of Sam mcman fried's former friends and fellow executives that Sam really had no other choice but to testify himself. Mill said it was his idea and his strategy for Sam to get up there and say, yes, I did everything that you said I did, and I made all of these statements that yes, they were conflicting after FTX Pubs bankruptcy last year, but I was doing my best to look after customers and I was trying

Cross I assume they prepped him, but did he talk about how they prepped him at all?

I asked that question. I said, well, isn't it your job to Sam ahead of his trial for this very situation. He said that while there was a lot of preparation done for his direct examination, it was really difficult to prepare him adequately because he was in prison. His battle

Essentially, he told you that SBF went off script when he took the stand.

What did he mean by that?

Mills said that it was his strategy and he wanted Sam to get up there and admit to everything that the prosecution and the witnesses said that he did. They wanted him to just admit to all of the public statements for the tweets and the media interviews and all of those different things that were on the public record in the context of yes, I said these things, but I was trying the best in really difficult circumstances to

But Mills thinks that even if bankman Freed had performed better on the stand, the jury still would have found him guilty.

Yes, Mills said that he thought a guilty verdict was inevitable, but the trial wasn't there. This circles back to Mills referring to the pretrial motions that essentially whittled down the defense case to a case that was very thin. He also thought that the testimony from Sam Batemanfried's former friends Gary Wong, Caroline Ellison, and the Shad Seeing were pretty powerful and it was difficult to go up against those.

This really struck me, he said, I'm not going to get myself emotionally involved on a very deep personal level in a case like this again, And he's rethinking taking criminal law.

Cases exactly He seems like someone who just throws absolutely everything into a case once he signs onto it.

You know.

He told us he often talks to his wife to almost get her permission and her support to take on a client because he just gives his entire life to it. So that's what he did in this case. And I think it had the added complexity of a friendship there. And he found the whole experience very demanding, very exhausting, and he just doesn't want to do another criminal law case like it again.

So he's not going to be involved in the appeal.

Then, that's what he said. He doesn't want to be involved in the appeal. He feels like he's done his bit and he's ready to just take it down a few notches and spend a bit more time with his family.

Did the trial cause a breach in his friendship with Sam bankman Fried's parents.

Yes.

Mill thinks that this case and the verdict against Sam bankman Fred has certainly had an impact on his friendship with Barbara and Joe. Neil said that he took on this case out of the favor to Sam bankman Free's parents, as well as an interest in being involved in a really novel and high profile case. Mills said that he was concerned that parents who think that their child hasn't done anything wrong will look for someone to blame, and that he was in their line of sight. He also

For There are often fallouts from trials that the public doesn't see. Fascinating interview. Thank you so much, Ava. That's Bloomberg Legal reporter Ava, Benny Morrison. I'm June Grosso. When you're listening to Bloomberg.

This is Bloomberg Law with June Grusso from Bloomberg Radio.

Adherence to the rule of law is a bedrock principle of the Department of Justice, and our nation's commitment to the rule of law sets an example for the world. We have one set of laws in this country and they apply to everyone.

In announcing one of the two federal criminal cases against Donald Trump, special counsel Jack Smith said that no one is above the law. It applies equally to everyone. However, the former president is claiming the law doesn't apply to him. Trump says he's entitled to absolute presidential immunity against criminal charges over his efforts to overturn earn the twenty twenty

Think about, you know, immunity from your actions as president. That is, you are engaged in your official capacity, you are engaged in executive functions, and the notion that you can be criminally prosecuted for that behavior, for the things that you're doing while you're conducting your job, and should be exempt from criminal prosecution as a result, and get a lot of turns on at what point does your behavior sort of flip from official executive behavior too unofficial behavior,

The Special Council is asking the Supreme Court to step in using Scherai before judgment, which is essentially skipping the appellate court. It's unusual, But how unusual is it for the court to grant that kind of review?

Pretty unusual, I mean, so I think you can think about it this as some layers. If you're asking the Supreme Court to have a petition for corcerari before judgment, you know, sometimes that might arise if there's just a sort of preliminary injunction or preliminary posture of the case where maybe you want the court to step in, and so that happens. It's not common, but it's not uncommon.

Now.

On the one hand, you could say, well, I think this is a matter of presidential executive power. What has happened in some of the cases involving Richard Nixon. If we're dealing with executive power and criminal investigations and so on, and these are major issues that we expect the Supreme Court is going to have to weigh in on some point. So there's this notion up front that they'll weigh in, and so maybe we should just skip that stepping at

Trial judge has paused the case pending this appeal, although she said she wasn't throwing out all the dates.

I did want to ask.

You about the political overtones in the Special Council's request to the Supreme Court, because trials are delayed all the time, but if it's delayed in this case and he wins the presidency, then it'll never happen.

I think the concern is if we have to go through a level of briefing in oral argument and waiting for an opinion at the DC Circuit, and then wait for another round of appeals to the United States Supreme Court, and do the same thing all over again, which we feel like is inevitable, that can really start to press upon that March fourth date. And so there is this

You mentioned US v. Nixon in nineteen seventy four. In that case, I believe it was sixty one days from start to finish.

Yeah, So I mean, we can move things quickly, and it's no question that we can move things quickly in these processes for the United States Supreme Court. I think about bushfee Gore where they granted certain on December ninth, or argument December eleventh, decision December twelfth. I mean that's record pace to move it in three days, right at.

The Special Council's request. If the DC Appellate Court has agreed to expedite its consideration of Trump's appeal, setting deadlines for briefs to be filed between December twenty third and January second, how does that play in here?

But even then you then have to schedule oral argument, And while you have that as a firm date, you don't know how long it will take after oral argument to issue a decision. You can say that you'd like it as quickly as possible, and the DC Circuit can try, but you know it might take a couple of weeks, even working under the fastest of circumstances. So just looking at the calendar, it might not be teed up for

Normally, our responding gets a month to file a brief opposing an appeal, but on Monday, the Supreme Court agreed to speed up the part of the process where it decides whether to take the case. It's only giving Trump until December twentieth to respond to the Special Council's request. Does that indicate that the Justices are aware of the seriousness of the case, or that they're inclined to grant the Special Counsel's request?

I mean, does it indicate anything at all?

So I don't know if they're inclined to grant, but I think it certainly means they are not disinclined. I mean, this is a small but important victory for Smith's team here, because if the Court just says, no, we're just going to give you a month to respond, well, that pretty much settles it, right, It pretty much makes the decision for you. But by allowing expedited response to the petition

The Supreme Court, of course, has a six to three conservative majority, but it has not been especially receptive to the cases that Trump has brought since he left the presidency. I mean, does a conservative majority lean toward no presidents above the law or does it lean in another direction.

Whenever you're justice in the court, you realize that you are setting major precedents for presidential power executive authority immunities, not just for Donald Trump, but also for Joe Biden, whoever the next president is. Right, So there is I think this institutional concern from the Court, and that's a major question.

Right.

Once we've established that precedent about when former presidents can be prosecuted, it's going to have a lot of sway in the future. So I think the court's view, regardless of whether you're a conservative or more liberal, justice is going to be thinking about these issues from other kinds of hallmarks of executive power and what kinds of behavior conduct in office immunize you from future prosecutions. Where that immunity attaches and arises and where it doesn't.

It would be a landmark decision. Thanks so much, Derek. That's Professor Derek Muller of Notre Dame Law School. I'm June Grosso and this is Bloomberg.

This is Bloomberg Law with June Grosso from Bloomberg Radio.

Hey everyone, it's Helen and I'm here with my beautiful model Lucy, and today we're creating an everyday makeup look using all.

Clean its for our products.

I'm Ayisha and I'm Melinda, and today we're going to be talking about five clean beauty brands you need to know.

Hi. I'm Danil and today I'm going to share with you some of my top picks from my lipstick wardrobe and they're all clean. Sephora is just one of the companies promoting clean beauty products. How much does that matter to consumers like climate conscious gen zers and millennials well, the clean beauty market has grown from its roots in luxury and independent brands to take over shelves at mass market retailers like Target, and it's forecast to expand to

No, there are, And that's probably the most first strading part about it. And this is not abnormal. I mean, the FTC and the regulatory bodies are always five to ten years behind where the marketplace is. But you know that is everybody's great frustration is that there is no legal definition for beauty. And so the FTC releases what they call guidelines, so you'll see if you google it FTC guidance on what it means to have a clean

There are now consumer led class action lawsuits.

Tell us a little bit about the lawsuit.

Against the form the reality of lossuit against the Four, and the reason why you're seeing so many plaintiffs attorneys go after them is it's like anything in life, tall trees attract the most wins. The four is one of the most recognized beauty and skincare companies in the world. You know, you walk into any mall and even online they have huge e commerce present and so Planet's attorneys are coming after them and saying, you know, this is what the FTC guidance says, and you didn't do that,

So what do you tell your clients about promoting clean beauty products?

I tell my clients, if you're advertising here in California and you're going to use that word clean or all natural, and you know that there might be an ingredient or more that could potentially not be classified as clean or all natural by the California Attorney General, you need to do to one or two things you have. They need a hedge with your language. Meaning most people like say

Well, as these cases proceed, we'll find out more about what courts consider to be clean beauty. Thanks so much, Sean. That's Sean Collins, a shareholder at Straddling And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law podcasts. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com, slash podcast slash Law, and remember to tune into The Bloomberg Law Show every