US Sues Google & Taylor Swift Ticket Fiasco

out competitors. Google has engaged an exclusionary conductor, severely weakened, if not destroy competition in the ad tech industry. It's a high stakes attempt to break up Google's ad tech business, one of the few times the government has called for the breakup of a major company. In response, Google said the lawsuit attempts to pick winners and losers in the highly competitive advertising technology sector. Joining me is Bloomberg Intelligence.

Senior litigation analyst Jennifer ree Gent tell us a little about the government's case against Google. So, the government's case is actually very much like an ongoing case that's already been in litigation for a couple of years now, that was brought by a group of states led by Texas, and both of these losses cover what they call the ad text stack, and the ad tex stack is a series of products that are used basically by advertisers and

by publishers for placing advertisements online. When somebody opens up a website, you know, we don't know what. We opened a website and we see all these advertisements, but there's this complex series of transactions that happen to place that ad there and to figure out what add to place

depending on who the user is. And there are tools on the publishers side and their tools on the advertiser side that they use, and then there's an exchange where they kind of come together to auction on the space and the ads that are available. And so the allegation here is that Google has slowly bought in to each of these tools all the way across that chain and at this point have dominance, you know, all the way

across from publisher to advertiser. And they did it by buying products and then also by engaging an anti competitive conduct that kind of blocked out the rivals that were out there that we're able to compete, and they now have dominance across this whole chain of products the complaints says, and this was from the words of one of Google's own advertising executives. The analogy would be of Goldman or

City Bank owned the New York stock ege change. Right exactly, it looks like a very big conflict of interest on its face. You know, they have both ends. They can control everything that occurs, and they have dominance in each piece of it. Right, so they can affect where these ads go. They can preference in themselves because they themselves have ad space and our advertisers, and then they can also extract a lot of money out of advertisers and

publishers because they don't really have of competition. And if these publishers and advertisers want to meet up and place these ads in the best places, and the publishers want to sell their space, they have to use these Google tools.

Have no choice but to pay these high fees. Essentially, so Google has argued different times that its ad business is not a monopoly because it has to compete with Meta, Amazon, Comcast and others, and its share of the digital ad revenue market has dropped from thirty six point seven percent in sixteen to eight point eight percent last year, according to Insider intelligence. So does that show that there is

some competition? Well, that is Google sort of characterizing things differently than the Department of Justices and the States are. You know, they're looking generally and broadly at advertising on the Internet, but what the Department of Justice is looking at is something that's much more narrow you know, they're looking specifically at each tool that's you by advertisers and publishers to place advertisements on space on websites. And so you have to take out, let's say, a Facebook, because

Facebook operates its own wall system. So in other words, if there's an ad exchange tool that auctions on ads that Facebook is not involved in, that Facebook isn't a competitor there. Facebook is negotiating itself with advertisers for placement on its own website, et cetera. So it's not in there. It may be a place where an advertiser can go right online to advertise and it has space for those advertisements, but it's not competing with the Google products that are

at issue in the complaints. So, you know, while Google may not be wrong about those assertions, they're just looking at the market differently than the Department of Justices. This was mentioned that the press conference, the a G was asked, why are you duplicating this lawsuit by the Texas a Journey General and other states? So why are they duplicating that happens a lot, doesn't it. It does, yeah, And I would say there are a couple of different reasons

for it. I mean, the first reason is that they are an anti trust enforcer, and it doesn't mean they're going to sit back and rely on some other plaintiff to bring their case when they think that there's been anti competitive conduct. They're going to bring their own case. They have their own evidence, they've done a long investigation, and they want to pursue that enforcement and not rely on somebody else. But I actually think there also might

be another reason. The states, unlike the Department of Justice, are subject to consolidation of lawsuits where there are other similar lawsuits. And in the case of the the suit that was brought by Texas, they were consolidated with other lawsuits over the exact same thing that are broad as consumer class actions, one by advertisers and one by publishers, and they got consolidated and moved to a New York court, and by virtue of that, they were slowed down immensely.

I mean even for litigation June. That litigation is going at a glacial pace. It's complex, there are lot of issues there, the judges taking it in tranches and in stages, and you're looking at a matter that probably I doubt would get to trial any time before two thousand twenty five. On the other hand, the Department of Justice doesn't have to consolidate. It can stay where it brought it suit in Virginia, and I suspect could probably get to trial

on this before that other case gets to trial. This is one of the few times that the Justice Department has called for the breakup of a major company since it dismantled Bell in the nine eighties. Why do you think they're doing that here? Well, I think if they view anti competitive conduct to start at anti competitive purchases.

In other words, Google tried to compete and couldn't and instead went out and started buying up competitors and sort of hoovering up all of the different products that were in the space in order to dominate it. That that in itself, that the acquisition activity in and of its health is part of the anti competitive conduct here. And if that is the case, then the remedy to seek is to sell off some of these illegally acquired technologies.

You know, it would be different if if a company was bought for pro competitive reasons, let's say, but once it was bought, the company developed into a monopoly which wouldn't be illegal, but then behave badly and engaged in an exclusionary tactics with that monopoly to then keep out rivals. I think that's a little bit different. But here they say just buying Double Click, let's say, and add mobs and some of the other pieces of this puzzle that

they bought. Those in itself were anti competitive, maybe should have been stopped by the agency at the time of the acquisition, but wererant, and now we need to seek to have them sold off. It's it's very much like the FTC's lawsuit against Facebook right now, where it's seeking

the divestiture of either WhatsApp or Instagram or both. This represents the Biden administration's first major case challenging one of the largest tech companies, and Attorney General Garland said, no matter the industry, no matter the company, the Justice Department will vigorously enforce our antitrust laws. How important is this lawsuit to the Justice Department. I think it's quite important.

I would say also that it's existing lawsuit against Alphabet related to Google Search, which it brought a few years ago and will go to trial in September of this year, at least it's set to at this moment. It's also very important. I mean, they very much mirror the really huge sort of seminal antitrust monopolization antitrust case against Microsoft,

which was generally successful. And I think they're very important cases because since Microsoft, there has been very few big monopolization suits brought either by the SEC or the Department of Justice. I think critics would say that they pretty

much just dropped that kind of enforcement. And we have a problem now because for the last ten years, the FTC and d OJ have sat around and allowed these big tech platforms just to buy up the industries that they're in, just buy up small competitors right and left, to rise to a position of dominance and now need to do something about it. And I think that's what they're trying to do here now with this Google case and also the one that they're pursuing over Google Search,

and I think they're very important cases for them. Yeah, I think they really tried to pump up this case at the press conference called it a landmark case, and also Vanita Gupta, the Associated Tourney General, went through a list of the different accomplishments in antitrust that the Justice Department has their you know, the Biden administrations, So right right, yeah, And I think that's somewhat in response to a July I guess it was now in two thousand twenty one

executive order by President Biden that basically encouraged all of the agencies in the federal government to sort of ramp up to try to in prease competition in the marketplace. And so they're basically saying, look, that's what we've done. We're responding to your executive order. We're working really hard. We've accomplished a lot to try to you know, follow our mission and ramp up competition in the marketplace, and

this is a big piece of it. And I think this is an important case too, because it will be incredibly difficult for them to actually win and achieve a breakup order here. You know, they came close to it with Microsoft, but that was overturned on appeal, and the

Department of Justice ultimately settled. Pieces of the liability portion were overturned on appeal, and then the appellate court urged them to rethink what the remedy was because the disrecord did say the breakup was the appropriate remedy, and then the Department of Justice ended up settling with Microsoft. But many think that the settlement was actually quite useful and did increase competition in the marketplace, and so this is a big risk. They are taking a stab, they're trying again.

I think their goal will be to try to force Google to type into some of these products. Do you think that this will actually go to trial or there'll be a settlement? You know, it's so early to predict something like that because oftentimes settlements come about because of the direction that the litigation is going in, you know, reading the chord, reading some of the conferences, And we haven't gotten anywhere near there yet with just a complaint.

You know. My guess is that the Department of Justice is very interested in trying this case, and I think at least for now, unless they see they get a very hostile judge. For now, it would be hard to see how they'd reach a settlement because I'm not sure that DJ would want any kind of a settlement that's short of some divestment, and I really doubt Google would agree to that. Jen. Let's turn now to another antitrust issue that online ticket buyers shouldn't be able to relate to.

That's such a fast Taylor Swift fans known as Swifties rallied outside the US capital on Tuesday as the Senate Judiciary Committee held a hearing about what went wrong during the pre sale for Swift tickets late less year. Millions of fans were left in virtual queues or denied tickets altogether, and Ticketmaster had to shut down the pre sale. There were complaints that the murder of Live Nation and events company with Ticketmaster means that it controls event production as

well as ticket sales. Here's Jack Rotzinger, the CEO of seat geek Arrival ticket platform. It is no mystery why no other company has significantly penetrated the primary ticketing market. Major venues in the US know that if they move their primary ticketing business from Ticketmaster, they risk losing revenue they earned from Live Nation concerts. But the president and CFO of Live Nation, Joe Burke, told blamed bots who buy up tickets in large quantities for the pre sale fiasco.

We knew bots would attack that on sale and planned accordingly. We were then hit with three times the amount of bot traffic that we'd ever experienced, and for the first time in four hundred verified fan on sales, they came after our verified fan pass password servers as wealth Jen give us the background here. You know, there have been complaints about Live Nation for years, I mean essentially ever since Live Nation acquired Ticketmaster, which vertically integrated the company.

It was a promoter and now was also a ticket seller and across the board, there have been complaints about abuse of that position. And at the time that Live Nation acquire Ticketmaster, it did enter into a consent order basically promising to behave barely and not to discriminate against other ticket sellers that are selling tickets for concerts and

events that it's promoting. Well, the Department of Justice loan Behold found a bit it wasn't abiding by those terms, and when after Live Nation just a couple of years ago, again saying hey, you violated these terms, and what they did is they extended a consent order and they kind of beefed up some of the terms, and now people are saying, hey, they're still not abiding by these terms.

And the problem at the core of it was you the determat of Justice allowed Live Nation to buy Ticketmaster, and that's just a big conflict of interest and it's really harms and forecloses other bival ticket sellers, and that's a problem. And there was this big snap who was selling Taylor Swift tickets for her upcoming tour, and a lot of people say, hey, that's because there's no competition

and the systems aren't good enough. Because Live Nation they have no incentive to innovate, they have no incentive to try to keep thoughts out, they have no incentive to have the best quality technology here, so this process can go smoothly. So this is just an example of why their dominance is a bad thing. Is the Justice Department doing anything about this? Now? We do understand from news that the d o J has still another investigation at this point of Live Nation ongoing, and that that had

started before the whole Taylor Swift fiasco. But you know, Congress is upset about this too. So the Senate Judiciary Committee at hearing and brought in quite a few people to testify one from Live Nation, as the rest were all various people involved in the industry, promoters, actually somebody from a band was there speaking about the troubles the they have in the small piece of the ticket price that they actually get, because I think they want to

draw attention to this. What can Congress do besides the whole hearings? I mean, Congress can't really do very much, but at least what these hearings do is bring out information that's useful for the Department of Justice and then also um validates what the Department of Justice is doing if they continue to pursue the investigation and then ultimately decided to bring a lawsuit because June, I think at this point they have already failed to abide by the

consent order one. If it's found that they failed to abide by those terms a second time, I don't think there's going to be a third chance. The third chance will be a lawsuit, and that lawsuit, given this Department of Justice, could be yet another one where they seek the breakup of a company. They could seek to force them to sell ticket Master. I think anyone who's tried to buy tickets online and get stuck in one of those cues can relate to this absolutely. Thanks so much, Jen.

That's Bloomberg Intelligence seen you litigate Ation analyst Jennifer Ree coming up next on the Bloomberg Law Show. The Supreme Court's first decision of the term is a blow to veterans. I'm June Grosso and you're listening to Bloomberg. Texas is leading another lawsuit against the Biden administration over immigration policy.

Texas and twenty other Republican led states are suing over change in immigration policy that would turn away more migrants but still allow three hundred sixty thousand people to legally enter each year from Cuba, Haiti, Nicaragua, and Venezuela. The lawsuit accuses the Biden administration of arbitrarily creating recent changes and overstepping its authority. Joining me is immigration law expert

Leon Fresco, a partner at Holland and Knight. Leon, We've talked about this parole program before, but why don't you give us a little recap of what it is. So the Biden administration decided recently that because the border has become very very difficult command in that they would employ

a new carrots and take approach to the border. The sixth part being that if you try to enter illegally in between the ports of entry, meaning you try to cross the border illegally, what would happen to that person is they would immediately be subject to Title forty two

expulsion from the United States. But because that approach was being draconian by a lot of the folks on the Democratic side of the aisle, the idea is it would be combined with carrots, which is this parole program, which was to say, look, we're going to allow about three thousand people per years, thirty thousand people per months to come in legally from the basic four countries where we're getting a lot of the traffic right now, Cuba, Nicaragua,

Venezuela and eighty and that way. It's times that we're rejecting everybody, but we're asking them to come through this legal manner that lessons the burden on our courts of entry. So now the State of Texas and others are suing over this program, and they say it's you know, the administration has created a kind of visa program without approval from Congress, without legislation. Tell us more about the suit. So the lawsuit is basically saying that the way the

parole authority works. And what parole is is it some authority that Congress has conferred upon the President of the United States, whoever president at that time, to admit any foreign naginal if there is what's either called a compelling humanitarian interest or a significant public benefit for letting that person in. So in the history of the United States, this program had been used many times for programmatic purposes with Cubans, with Vietnam, Cambodia, during the Vietnam War. It

has been used many many times. But in the nighties, that program got substituted with what we now know as the refuge keep program. So the refugee program is the program that Congress intends the president's use on an annual plan basis to say, we're gonna take this many refugees from this place, as many from this place, etcetera. And what parole is is this a program that was changed

so it would be just for one person at a time. So, for instance, somebody is having cancer treatment and the the their mother has been denied visas for you know, because they think the mother is gonna immigrate to the United States, so they can't get a visitor visa. But now they say, look, I need my mother in because I'm dying, and police letter of visiting while hunting cancer treatment or something, and you would parole the mother into the United States in

that situation. Things like that. And so the point that the States are making is you have to keep that on a one on one basis that you can't create a memo that basically creates a criteria where people who meet that criteria would be able to apply for a parole program. They think that exceeds the bounds of what Congress created in this new parole framework in the center. Does it sound like they're right, because it sounds like something that Congress should be involved in. I think the

issue is going to be twofold. So number one, I think ordinarily you would have a very close on this because the argument that the Biden administration is going to make is, well, this is a significant public benefit to do a program like this, because we have two million people crossing our border and if we can end that by creating a legal flows to site and this off, that's gonna be a massive victory brawl of us. So

they're gonna try to make that argument. The question is going to be how differential the court will be, and the court have not been very differential in the last few years to the president. So that's gonna be one problem. But the second problem is this new and I'm sure you keep talking about it on your show, People keep

talking about it. That made your questions doctrine that came out recently in the Supreme Court from the climate change cases, which is basically saying, look, whatever there's any major change that don't be an administrative action. Then the question is that Congress explicitly allow you to do that, And so that's going to be sort of another issue that may come up here that may make it harder for the

administration to win long serve. I do think it will be enjoined very quickly at the district court level, because you know, they filed it in a location that tends to lead towards that, and I do think the Fifth Circuit will probably keep the programming joined. And then the question is will the Supreme Court allow this program to actually get implemented. All indications are when it was used with the Ukrainians is that the program does help at

the border. So is Texas suing you think just to sue or I mean, this is sort of the sixty four thousand dollar question, which is looks there are certainly some arguments that can be made on the inflammatory side about well, why did you sue when we did this for Ukrainians? Are you suggesting something about that you were okay with it with one psycho population and you're not

okay with it with another type of population. There's certainly arguments that people will raise at regard and there's other arguments about, hey, look, why are the States suing? Are they cutting up their nose despite their face, Because since we know these programs of a track record of success of channeling people toward legal immigration and getting them off the border, why would they sue? Those are fair questions

and criticism. You know, I'm not here to launch them or not launched them, just to introduce them to your viewers and let them make their decisions. And so it's unclear policy wise why this would be object stitutins they

would relieve pressure on the Texas border. But nevertheless they're just trying to say perhaps that even if this is relieving pressure, they just object to three hundred and sixty thou people being allowed legally into the United States that wouldn't have been allowed legally, you know a few months ago. Let me ask you about one allegation. They say it

unlawfully creates a de facto pathway to citizenship. Doesn't do that. Well, what happens is it could in sort of a rude gold bird imagination for a few of the people in the program. And you might say, well, what do I mean by this? Well, what happens is there's a lot of people who if they don't have an entry way into the United States, then they can't get a green card.

So if you cross the border illegally, you can't get a green card, even if you marry a U S c isen or you have some other citizen relative like a sibling or a parent that could petition for you.

But if there are people who need these circumstances, that they have a relative that is able to petition for them under a normal green card system, and the only barrier to entry so far has been that they can't get parolled into the United States, then this parole in that small subset of cases could lead to a past to citizenship. But it's not going to be all the three hundred and sixty thousand people, but there will be

some number. I don't know what the percentage will be that would become Green card holders and eventually US citizens because of this program that wouldn't have otherwise had that. So is that number gonna be one? I think it'll be more than one. Will it be all three hundred thousand? I think it'll be much less than that, but it will be some number in between. And the question is, you know, and people are going to talk about public benefits and other things like that to try to get

standing in the court. Then the question is is that all too speculative for the courts to take into a count or can the court take into account this kind of thing where there's a probability you can easily make the causal link, but you have no way to predict how many people will be in this group. I want to turn to another immigration issue, and that's there are these mass tech layoffs and it's leaving hundreds of workers or maybe more that are living in the US on

the H one B visas scrambling for jobs. Explain the H one B visa. The H one B visa is the primary visa mechanism for skilled workers to enter the United States to work if they copped visa. So there's only sixty five thousand per year, plus additional twenty thousand for people with master's degree. And so there's always a lottery there, you hear, because there's about five hundred thousand people who want the visas and only about eighty five thousand,

as I said, get them in total. And so what happens is that you win the off me and you get sezzas. You have to work in a skilled occupation for an employer who is giving you this kind of skilled work. And they are visas that last or two terms of three years. So the most you can be on H one B status is six years total and then you either have to go home or an employer as the petition for you for a Green card, which then extend your say until that green card adjudication continue

or is decided. And so now one of the problems is that people are on the visas to work at these tech companies, and even worse, if you're from India, the problem is you could be in a backlog waiting for a green card for up to thirty forty years. Because the way our green card system works is that we don't have a first come, first served green card system. We divide it up for country, and so we say, of all the green card plots, people from one country

can only get seven person and of the plot. And so India, which has one point four billion people, is limited to the same fourteen thousand green cards employment plots that Monaco is limited too. And so from that same point, the Indians have long, long line. And so if they get laid off anywhere in this forty year line, suddenly they lose their sadus, their spouse loses their sabbus, their kids, blues their status and it becomes this humanitarian nightmare. So

they have only sixty days to find another job. Is that a firm? Sixty days? So here's what happens. When you are an eight one B visa and you lose your job, another employer can position for you if you meet the criteria to also have h one sabbus as bad employer. Now it has to get approved at the end of the day. In order for you to say so, they'll have to show that this is a legitimate employer giving you legitimate skills, work at or on. And so

if it gets approved, then you're fine. Then your problem has been solved. If it does not get approved, then the question is, well, what is the administration gonna do. Is it going to just allow people to remain here illegally?

Is it gonna get people some other status, like the third action for them to remain here, and then perhaps if they can find an eighth one B job later retroactively approve it's called nuke pro tunk approval, so that the approval goes back to where if it had been approved prior to that, they could have kept their status. They have that discretion to do that, and so all of those decisions are being debated in the administration. But

that's the issue. And then you know, people may decide, because this is a totally different group than the group that comes without status, that they don't want to live in the United States without status. But that's too scary, too uncertain. They don't want to drive it out a driver's license, because that's not what the folk for doing, you folk for making hundreds of thousands of dollars. They had drivers licenses, they had you know, bank accounts and

houses and things like this. And that group may not want to live even one day undocumented in the United States. And so what happened there is you could see a lot of people selling their house or moving to Canada, or you know, doing something like that in that situation. And so if this problem becomes a protracted problem where people really can't change employers, you might start seeing some of that behavior. Just to take the personal element out

of it for a moment. The reason for these visas are that it's supposed to be a program that fills an area where there's a shortage of Americans to work science technology. But now that there have been all these layoffs and a lot of Americans are laid off, should this program be an effect at the numbers that it is. Well, so, this is a very interesting point about which VISA does want. So the ployment based green card has a test where you have to show an American worker is not available

in order to get that green card. The H one dvs are actually doesn't have that test. The employer is not required to prove that American worker couldn't be found before they hire a foreign worker. They just have to prove that the foreign worker is getting all of the same weight as a benefit that an American would be paid for that job. The other interesting point is that even though these layoffs are occurring, they're occurring within a

backdrop of relatively low unemployment for skill docupations. And so at the end of the day, right now, at least anecdotally from my world of clients, but also for the people I talkt to a a lot of the layoffs that are occurring are this first much more toward the group that's not really the eighth one beholding group. There are some people being laid off, but not in large number.

But even to the those folks are being laid off at the moment, there are other places for them to go because of the low unemployment rate in the skilled workforce. If this problem were to start to pick up where if actually we're seeing an inversion from what we have now. Right now we have more job openings and unemployed people

in these skill in sectors. But if it inverts where you start having more unemployment and less job opening and the skills suctors, then the kinds of concerns you're talking about certainly can be raised. And look, that's why during the Trump administration, he actually during the COVID period said this and put a travel ban on H one B holders and said no more h want to be visa to be issued there in COVID because we ate COVID, but be we're worried about the economic loss of jobs

that now set the signs to let people in. Would god Biden administration ever do this? Probably not, but it's certainly a tool that now President Trump has used. It has raised the possibility that any president could use it in a situation like this. And employers who want to hire an H one B VISA holder it costs more than hiring a US citizen for the job. Well, so here's the question. There's a lot of criticism on that end. Well, maybe employers are only hiring for IT workers to save wages,

but forgetting about what it costs right now. But right now it costs in fees. It costs about five thousand dollars just in government to filing fees who hire an H one B worker. And that's not even paying a lawyer yet, So you know, it could be between sixteen and twenty thousand dollars right now. U s c i s is basically doubling that amount upcoming with their new fee rules. So if they end up big thirty thousand dollars to bring in an h one B worker into

the United States. When this is all said and done, you know, when this new fee schedule gets put in very so and so the idea that you'd hire an ant to be to undercut an American starts to become

much more unsubstantiated at that kind of feed level. And what you really see happening is employers basically doing what the National Basketball Association or the National Hockey League is doing, which is what they're just saying is, look, we don't view this marketplace as America or global or anything else. Just we want the best people. And if we've determined that X person is the best person, but they don't happen to be a US citizen, we just want to

bring them in, period. And it's not really viewed by the way didsue. It's more viewed by them just deciding that they want to bring in X or Y person because that's the person they want on their feet. And some of these workers are making a hundred thousand, two hundred thousand dollars. There are some people making six hundred thousand dollars on h mbps. It just depends what type of work they're doing and then what type of companies, and there's a lot of folks that were making even

that kind of money. That's not the average, but but I certainly know of some clients making that amount of money. And what it just comes down to is the marketplace and employers in a lot of these markets, they've become very talent sensitive, just like affortunately give. So you want that top level of talent because it could actually makes the difference between a product being more successful and less successful.

Thanks so much for being on the show. Leon. That's immigration law expert Leon Fresco, a partner at Hollanden Knight. And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news, honor Bloomberg Law Podcast. 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

week night at ten BM Wall Street Time. I'm June Grosso and you're listening to Bloomberg One