Will Music Streaming be the Next Anti-Trust Battle

and on Bloomberg dot com slash podcast. Anti trust law seems to be all the rage lately, from Senator Elizabeth Warren suggesting a breakup of the tech giants to the aggressive move by the European Union's anti competition Authority, and we'll muse e streaming be the next high profile anti trust battle. Here to tell us all, and I'm going to call this an antitrust roundup. Is Bloomberg Intelligence Senior

litigation analyst Jennifer ree So Jen. This week, EU Competition Commissioner margrethe f Sayer played down reports that they're poised to open a formal investigation into Apple. Tell us about what's happening. Well, you know, I think before they make an official announcement, she has to do that right because what they're doing, in what they plan on doing, is confidential. But if they do open a formal investigation, she will say something or the commission will say something. Spotify has

complained to them. They did this in March. And what they really object to is that they call Apple a player and a referee, and they say it's not fair. They have market power, they claim, in the app Store, and they participate in the App Store and in particular competing with Spotify with streaming music. Right, you can have a subscription to Spotify to stream music. You can have

a subscription to Apple Music to stream music. And what Spotify says is since they started that business, they have been taking measures to disadvantage Spotify and discriminate against Spotify to their own benefit. And that's what they object to. And does it seem as if the EU is going to look into it? I would suspect they will. And I say, you know, this is very much like the Amazon shopping case. They find Amazon a few years I'm sorry Google, What am I saying? Amazon's next? That's coming

the Google? When they find Google because they were moving their own shopping comparison services up in a in a search above their competitors, and Google that in trouble for that they find them a few years ago. This is very similar, right, where a company is providing the platform and then also participating in that platform against its rivals and disadvantaging its rivals. So I think they will have a lot of interest in looking into this and a very serious in the EU, and she is very serious,

she is. So Now, from music to pharmacy is not a great segue, but the Justice Department had agreed to approve the merger of CVS, one of the nation's largest pharmacy service providers, and health insurance giant Etna, and the deal closed in November. It was approved by Justice. That's right. So what's happening now? You know, this in the antitrust world has so much buzz because what is happening is

so odd and unprecedented. When the Department of Justice settles a merger investigation like they did with CVS Etna, which was requiring the companies to divest a Medicare part D business of Etna because they had an overlap of horizontal overlap there, they sign what's called the consent order, and that consent order, by law, needs to be signed off on by a judge. It's called a Tunny Act procedure. And in the past this has really been kind of

proform of the judge takes it. They may ask some questions about the settlement, about whether the remedy will fix the harm that the DJ is alleged could have occurred, and then they sign off will Lo and beholder before Judge Leon, the same judge that oversaw the A. T and T Time Warner merger trial, and he said, well, hold on a minute, now, I'm not just signing this. I'm not just signing on the dotted line. My job is to look at this and make sure that this

is appropriate. Now that's where the disagreement lies. The d o J would say, yes, you're just meant to look at it and ask whether our settlement fixes the harm we allege and our complaint. And he's kind of second second guessing the whole entire thing, whether the determination of harm was the proper determination to begin with, and whether or not they ignored other harms that might occur from

this deal. So it's unusual. And the d o J also says that having this kind of testimony from different people before the judge could hurt its ability to settle future cases, because who is going to believe, oh, this is done. No, maybe a judge might intervene in this. Well, that's exactly right. He's going to have hearing and he maybe there's some you know, it's not clear yet hearing testimony about this deal from outside from interested parties in

the American Medal Association, American Interest Institute. And that's the point. Why are these parties going to enter into these settlements with the d o J after a year a year and a half of investigation and then close a deal. If a judge can just come along and second guess that have an entire new hearing on the concepts and on the harm and and pull apart the deal, how would they undo that deal at this point? Well, this

is what happened. They did close, but ETNA agreed, CBS agreed to hold those assets separate, so they're operating independently. If they had to put unwind they would. I don't think ultimately that's what's going to happen here, but you know, it remains to be seen what this judge tries to do and whether they have to go into an appellate route. Now another unusual, perhaps unprecedented move, this time by the d o J. It's shall we say, it's buddying into

an FTC case over qualcom. Yes, it's another thing that has the antitrust community. Really, you know, kind of very exciting years, very exciting with Elizabeth Warren and everything else. You know, what we have as a Federal Trade Commission lawsuit alleging that a company attempted to monopolize a market, that they violated our monopolization laws, actually section five of the FTC Act. They had a trial, they did, I think very well, and now they're waiting for the judge's decision.

This is Judge Lucy co in the Northern District of California. And what has happened is that Qualcom has tried to settle this case and they haven't been able to settle it. They need a majority vote of the FTC Commissioners. They only have four because Joe Simons, the chairperson, has refused himself. And it could be that what they have as a partisan block. There two Democrats and two Republicans, and when they tie, there will be no settlement. When there's a tie,

they need the four to one. So what has happened is the Department of Justice has come in and weighed in with a motion to the judge asking for a separate hearing on remedy if she decides against qualk m and if so, essentially to go easy on them. It's how I'm trying to think, how would a judge react to that, because in one sense, they're saying, you know, you shouldn't do this because and she might feel, Hey, I heard the case. I know what I'm doing here.

I think that's exactly right. I heard the witnesses. I'm the trier of the fact. I'm the one who saw this and was in the position to wage the credibility of the documents of the testimony, went through this long trial and has sorted through all of the exhibits that have been put in. This is my decision, and so I'm not really so sure it will sway the judge very much in what she does here. But it really is kind of an interesting quirk only about sixty seconds here.

But Qualcom has benefited from the Trump administration prior for this. Yes, at one time, Broadcom tried to acquire the company, and under the Committee on Foreign Investment in the US, our Executive Office weighed in and said, no, we think that there's a national security problem here. Now they are allowed to do that. The President has the last say on syphia's decisions, and when a non US entity is going to acquire us asset. Syphias has the right to investigate

and to determine whether they want to block that. And that is what has happened, what happened previously. Always a pleasure, Jen, You make antitrust law fun. All right? That's Bloomberg Intelligence Senior Litigation analyst, Jennifer. Where you can get more of Jen's analysis by going to be I go on the Bloomberg Terminal. 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