BI Analysts Discuss US Election Impact on TMT

The Forthcoming Conversation is part of the Bloomberg Intelligence Election series, covering the industry and company impacts of the upcoming election. On October eighth, Jennifer Ree, anurag Rana, and Matt Schuttenhelm discussed what the election might mean for the USMT sector. If you have any questions, please feel free to reach out to any of us on the Bloomberg terminal. Hello

and welcome. My name is Matt Schuttenhelm. I am a litigation and policy analyst focused on TMT with Bloomberg Intelligence, and joining me today are my colleagues. Jennifer Ree are senior antitrust litigation guru, and anurag Rana, senior equity analyst for technology. This is the second in a series of conversations across the month of October focused on the upcoming election.

Our first considered financials. This one tackles TMT. Subsequent calls will discuss tax, healthcare, industrials, and other topics, all to help get you ready to understand the potential impacts of the upcoming election. Bloomberg Intelligence is the investment research platform on the Bloomberg Terminal, consisting of over five hundred professionals

covering over two thousand companies. Uh We cover those companies from the perspectives of equities, credit, ESG, litigation, and policy and terminal clients can always reach out to us with questions about our research. And so with that introduction, let's get started today. How we how we've tried to structure this today is as a conversation between the three of us. First, we're gonna we're gonna focus on antitrust with with gen.

Then I'll take a deeper dive into the regulatory play playing field facing broadband broadcasters, internet platforms and how the election might change that. And then anarag Rana will bring it home for us and make it all a little bit more concrete and talk about how the election may have impacts on some specific companies. If you have questions today during this conversation, there there's a Q and A

box right here on the platform you can drop questions there. Also, feel free to reach out to us on the terminal over over ib or email. And so I think it makes sense to start with antitrust and you Jen, because anti trust has become such a big deal in the TMT space recently, so over the past three years, it's really had a big impact on these companies, not just in terms of all the lawsuits brought by the DJ and the FTC for monopolization, but also with respect to

these companies' ability to complete M and A son. Let's just start with a backdrop. Can you give us a backdrop for all of this and what has changed in the last three years in the anti trust world as we head into this election.

This is called the neo brandicean movement because it's inspired by the work of Lewis Brandeis, a Supreme Court justice in the early twentieth century. He believed that monopolies were harmful to workers and innovation and not just price and output. A price and output have been more of the focus

in the anti trust world since about the Reagan era. Now, the neo brandiicians believe that lax enforcements resulted in in a concentrated economy in which in many areas, not just TMT, we've allowed companies to grow way too large via acquisite, large and powerful, I should say, via acquisition, and that many industries lack sufficient competition, and this leads to a lot of societal ills, not just higher price or lower

quality or less innovation, but more than that. The anti trust chiefs at the DOJ and FTC that were appointed by Biden, they're part of this camp. They're securely in the middle of this camp. And as I said before, though, I should note that some of this more aggressive enforcement did start under Trump's presidency, but Biden's enforcers really picked

up that mantle and ran with it. So we began to feel the effects in the business community under Biden's anti trust enforcers, and they've made it their mission to revitalize enforcement, stop merger activity by large incumbent firms, and expand the law so that it's easier for plaintiffs to win monopolization suits. So in order to do this, they've

really rewritten the playbook that's been prevalent for years. This is both in terms of m and A review and enforcement, but also with respect to watching the conduct of companies with monopoly positions or dominant market share in markets or

in a market or markets. So The thing is this increased vigilance particularly impacts companies in the TMT sector because if you think about it, the large Internet platforms are the most powerful companies today and each one of them Meta, Alphabet, Apple, Amazon, have a dominant position in some market. Now, I should say this can kind of be debated because it depends

on how you define the markets. But they are dominant, they are powerful, and these are the companies that are under the microscope and are more easily pursued because as a threshold situation in court, the FTC or DOJ has to prove that the company has a monopoly position. If they can't prove that they're done, these are the companies that they're going that they believe they're going to be

able to do that for. But let me talk about M and A for a minute, because I think the bigger impact of this neo brandiician movement is with respect to M and A because it has prevented a lot of deal from being signed to begin with, and it's caused a lot of abandonments. I mean, we've always had abandonments of deals when they face pressure, but the number of abandonments in the last three years has skyrocketed, and this has really been felt in the TMT space. We've

seen little M and A activity. Amazon'squeaked by with the one Medical acquisition, but we know it had to abandon I Robot Quilecom, Auto Talks fell apart, Adobe, Figma fell apart, in Video arm fell apart. Microsoft did manage to acquire Activision, but that was with years of litigation, and by the way, the FTC is still fighting that one, even though it's closed and integrated. Same thing for Meta Within. They had to win in court in order to close that deal.

And part of the reason for this is because one of the biggest changes in perspective of the enforcers today is that they refused to settle a problematic merger. You know, I defended deals as a lawyer for many, many years, and it was par for the course that if the deal posed some sort of antitrust problem, that companies would divest or agree to behavioral remedies, we'd get the underlying deal closed. It really wasn't about are we going to

get suit or not. It was about what do we need to do in terms of a remedy to get this deal closed. But today the agencies believe the problematic deal is simply one that shouldn't be done period and that remedies don't work, so they don't settle except in very rare circumstances, and that's why we have so many lawsuits to try to block deals, so many more than in the past, and that's why it's been really hard

for CMT companies to engage in the activity. So with that backdrop, I'll move into the area of how what do I think is going to change with the election?

disproportionate right revenue coming into them. How does regulation the authorities look at that aspect that they have funded these things which nobody else can, and they're going to get even bigger down the road.

companies have access. So I think it starts with an investigation to the extent that we have a law called the Heartscott Ridino Act, which says investments of a certain that reach a certain threshold that have to be filed with the government and that the deal can't get closed until the government's had a chance to review. Now I know that these investments are falling under that, but it doesn't mean that the agencies can't investigate the investment and

call the investment itself illegal. But again, the agencies have a hard time here right because they can't do anything on their own. They need a court order for any kind of action. So whether they don't like the way the assets that the company that on Microsoft or Google has invested in the way they're being handled, they still have to go to court to ask the court to step in if they don't like the investment itself, again,

they have to go to court. So I think probably in the way you're thinking about it, that industry is probably going to advance in the way you expect.

important to understand that things toughened under Trump. I think things will be different though. And let me start by saying, we're hearing a lot that some believe that it's going to be easier under Trump and stay just as aggressive under Harris. And part of the reason I think some people believe that is because the orthodoxy, the way we've always thought about a change in administration is that the Republican administrations were easier, let sing on M and A

than the Democratic ones. And I want to say that to the extent that's true, it's only slightly true. If you really dig into statistics, there are very few differences, you know. I took a look at the deals that were subject to in depth or review under a bunch of different administrations. The average under Bill Clinton was three percent, the average under George W. Bush was three percent, the average under Obama was three point four, and the average

under Trump was two point seven. I don't have good data yet for Biden because the FTC's data comes out very late, and I only have data for the first like eight months, so it's one point six. But I believe it's actually much higher than that if we had current data. That's not that different. If you look at the number of lawsuits filed a challenge a deal under George W. Bush in fiscal year FTC's fiscal six that was during his second term. It was two under Obama.

In the FTC's Fiscal twenty fourteen. Also in Obama's second term, it was one. Under Biden's fiscal FTC Fiscal twenty twenty two, it was twelve. That's where we see the big uptick. But this idea that Republicans are always easier isn't exactly right. And I don't think that these old rules apply to the Trump administration because the approach, at least during the first Trump presidency wasn't really traditionally republican. If you look at what happened anti trust enforcement of m and A

was unpredictable. Now, a lot of this depends on who he appoints at the FTC and DOJ. He will definitely appoint his own people.

Now under Harris, again, it largely depends on who's appointed at the FDCO DOJ, and we have a little bit of a strained situation there because there's been a push for her to remove Lena Khan. I think that she's in a difficult position with respect to that. Lena Kahan's term has expired and she can stay on until somebody new replaces her. Now Harris could just let her stay and not replace her. If she does try to replace her, I do think she's going to have a lot of

anger from the progressive wing of her own party. But the issue is she could really become under pressure to reappoint her because it's a bit unorthodox for an FTC commissioner to stay on for years and years after their term has ended. If she does that, Con will need Senate confirmation. We don't know what the makeup of Senate is going to be, although it seems more likely that it's going to be a majority GOP than Democratic, and there's no guarantee that they're going to vote her through.

So this is kind of a strange situation. Con could also leave on her own accord, because that often happens when an administration changes, even when it moves from even if it's the same party. I think Canter at the FTC will most likely take another job, and Harris or Trump will name a new Attorney General, and that case will also name a new Assistant Attorney General in charge of antitrust, and it's these people that make the calls. I have a feeling that under the Harris administration things

will be a little bit more pragmatic and sensible. I don't think that's the prevalent feeling. I think most people believe the aggressive into trust enforcement will continue, and it definitely will for some time because Con will be there at least for some time unless she takes another job. But the position now is so rigid you can't get worse.

It can't get more rigid, and there are critics, even Democrats, that criticize the rigid position to just go after and challenge every single deal that has a problem in court. I think a slightly more sensible and pragmatic approach would be the pick and choose the battles a little more carefully and perhaps engage in more settlements that this administration has. And I have a feeling that that could happen onunder

either administration. But I again, I don't think we're going to go back to a time that we had for about forty years in which you just expected problematic deals mostly to settle and only a few challenges every year.

mean the list is long. When when when the Clinton administration sued Microsoft back in the nineteen nineties and one on liability it ended up settling under the next administration, under the under the Bush administration, is that going to be the course for for these lawsuits? Do they have a chance of settling under the next administration, So I tend to doubt it.

I would say definitely not. First, these cases are really advanced. We have DOJ has already won on liability against Google over search, right and it's just finished its trial against Google over the ad Tech stack. Search was the victory on liability for the DJ and now we're just working out remedies. Those are going to be final by August. The ad Tech suit could have a decision by the end of this year, or maybe even in one queue where we're also leaning toward the DOJ winning on liability.

So these are so advanced, and we certainly know that the Trump had been both Donald Trump and jdvans are no friend to Google, so I really doubt a settlement would happen there, and I highly doubt a settlement would happen under Harris administration. Now let's talk about Apple and Live Nation, because those are the DOJ's other suits. These are really new, we have years ahead of us. Apple is just in the motions to dismiss stage. They don't even have a trial set yet, and I would expect

it to end up in six. You have Live Nation that's set to start trial in March of two thousand and six, so there's a long way to go, and I would certainly think these companies are going to try if there are new people put in place at the DOJ try to settle these cases. Maybe the Apple suit

has a shot. And I say that because in the suit, the DOJ is targeting just this list of very specific conduct, which to me is kind of settleable because I could see Apple agreeing to change or to seize that conduct, and that makes it kind of a settable suit. So we'll give it a maybe down the road, especially if things don't seem to be going well for the DOJ and litigation Live Nation, I would say no, this is

a really pop dealersuit with consumers. From a political perspective, I don't see why either administration would settle so really quickly. On the FTC side, we've got suits against Meta and against Amazon. Now the one against Meta is in summary judgment stage. I do see Meta probably ultimately prevailing in this suit. They have a decent shot of disposing of it in some rey judgment, but if not in trial. No trial dates been set yet, by the way, so that's also kind of down the road. I do think

that it's too advanced to settle now. If some really drastic remedy is imposed, like forcing Facebook to sell Instagram, which I really doubt is going to happen, maybe there'd be a settlement to do something different there. But I don't think the case is going to come to that now. Amazon, to me is the one that's the most settleable, even though the judge mostly just denied the company's motion to dismiss. So that's moving into discovery and kind of the long haul.

And we've got the trial set for October and a twenty twenty six, by the way. And I say that because Amazon has settled really similar allegations in the UK and in the EU, and apparently they offered something along those lines to the FTC but they were rejected. But a new administration is going to have a couple of years to see how those settlements have been playing out and whether the merchants that are selling on Amazon's site are okay with them, are happier if things are going better.

And if that's the case, I would think that there's probably room for settlement in that suit.

lot of bandwidth left. I mean, you can already see the dj which has many more monopolization litigations on going, has fewer deal challenges than the FTC, and the FDC has more deal challenges or monopolization suits and I just don't think that they have the room left if they want to keep up the pressure on the M and A front, which I do believe they do, to file more suits. So I think we kind of see what's happening now and now the ones that are ongoing are

going to play out. So I think Matt is probably time. That's a lot on the anti trust and I think it's time to bring you in now to talk about something different. So we'll talk about we'll talk about the legal risks in the TMT space in the US beyond anti trust. So we're going to look at broadband providers, broadcasters, and internet platforms in other areas. So we have a really big question out there about whether broad broadband providers

will be regulated in the US. Can you walk us through how the election might impact that?

Should the most important product from AT and T Comcast Charter, should it be subject to regulation the way broadcasting is, the way cable is the way? Why wireless service is it? And and and so you know, and we've seen this back and forth between the administrations from Republican and Democrat taking different approaches to that. And now we have a big advance in the courts, and in that the courts are getting they're sort of tired of this whole thing. And and so that we've seen the demise of the

Chevron doctrine. Uh, that goes to all of that. So where are we now? So so basically we we are in a place where the the Biden administration at the FCC has moved ahead, tried to push ahead with full speed ahead. We're going to regulate, We're going to squeeze it into the Communications Act. They've adopted rules to do that. That's in litigation at the earliest stages right now. The courts hit hit have stayed those rules, but we're at

the early stages of a challenge to those rules. What happens if there's a change in administration, So let's say let's say first Biden Harris wins this election. I think a Harris FCC is going to press ahead as much as possible to try to squeeze broadband into the Communications Act.

And this really means aggressive net neutrality rules. This really means what's known as Title two of the Communications Act is is is trying to treat broadband as a telecommunications you serve a service, basically a utility, and trying to do that if they can get away with it in the courts. So they're going to press full speed ahead. I think they're going to run into a brick wall in the courts, and I both at the Sixth Circuit where the case is now, and then at the Supreme Court.

If Trump wins the election, he controls the FCC, he will appoint the chair chairman or chairwoman, and that person

will speed up this deregulation process. We won't have to wait for the courts, because there's a pretty much consensus at the FCC that we don't need this sort of title to utility style regulation of broadband, and so using the way we regulated the phone networks in nineteen thirty four doesn't make sense for broadband networks today, and we shouldn't be giving a regulator like the FCC the open ended power to say this is reasonable, this isn't reasonable.

You can set this rate, but you can't set that right. Forget all of that. Maybe there can be a consensus on sort of a light touch, you know, Okay, what we agree to some basic net neutrality principles, but not none of this open ended. Okay, the regulator gets to say what's reasonable and what isn't. And so that's how I basically see the in terms of broadband direct impacts. If a Trump FCC is calling the shot, it speeds up the deregulation. It adds clarity much faster. We don't

have to wait for years of litigation. I think the companies are going to do pretty well in that litigation either way, but this speeds it up, gives them certainty much more quickly. If you have a Republican controlled FCC. And let me just just a footnote on that that I touched on Chevron a little bit. We have a deep dive on the Bloomberg terminal looking at how really this The developments in the court have totally changed how

this plays out going forward. That regulators used to be able to get by with finding uncertainties in the federal law and it's not really clear. Okay, FCC gets to decide that we're past that now, and that's when when people say the end of Chevron, that's what that means. Anytime there's uncertainty, it's not the FCC or the regulator that gets to decide. It's the courts that get to decide. And the courts at the top at least are very business friendly and they're not going to give tie breakers

to the regulator. They're going to give tie breakers to the companies. And that's really the defining issue in the broadband regulation space. I just think a Republican controlled FCC is going to speed that up and give the company certainty more quickly.

ownership cap. Uh. Nationally, Democrats have have fought aggressively to enforce those limits. Republicans that the SCC have have almost universally been on the other side and said, look, the world has changed since we we adopted you know, all these limits for broadcasters. Look at all the new competition we face from from the internet today, and and and making broadcasters like like next Star and Sinclair the deal with with all these owners limits, it's impossible for for

these companies to keep up. So if the Trump UH, if Trump wins the election, his FCC is going to go in a deregulatory direction on this as well, in my view, and so M and A like an acquisition of Tegna, I don't think, you know, I don't think that's going to be a problem under under that FCC the way it was surprising it the way it was under Jessica Rosen Worsol. You're not going to see a

Republican controlled FCC block a deal like that. You're also going to see those local market media ownership caps for radio stations and for TV stations, those are going to be loosened. They can, they can. They're going to start a rulemaking to ease those those limits, and that's also likely going to be driven by the courts. Right now, the Biden FCC has said that we're sticking with all those limits, and they adopted rules to say, okay, we're

in some cases even tightening or making them tougher. That's in the courts right now. Very likely the SCC loses in that. As we talked about, the courts are tough for this stuff. They're going to throw it back to the FCC. And if it throws it back to a Trump FCC, that could be a great, great story of deregulation, because that's going to be the catalyst for them to move ahead with easing these rules in twenty twenty five or twenty twenty six. So I think also you could

see a rule making. There's the thirty nine percent US ownership cap, and when the first Trump administration was in office, a GPI took the position that, look, we can change by rule that thirty nine percent US cap. We could raise it to seventy eight percent, or we could get rid of it. And so I know there are legal questions about whether that's right, and so that that could get tested in the courts, but you're you won't see

a Democrat FCC test that. You will see a Republican FCC look look seriously at moving ahead with a rule making to raise that level. And so I would expect you to see real action in that space to really let broadcasters catch up and not be hamstrung by these historical limits in both the TV and radio. So it certainly radio. I think there's there's almost bipartisan consensus that that radio rules should be eased. But I think you'd see it as well on the TV side if there's a Trump FCC.

in theory turn that off. It could say, look, all that data you're collecting, you can't use it anymore, or you can't use it unless consumers say yes, yes, yes, yes, yes I want that, and so it could reverse. Right now, the default is pretty much go ahead. You know, they can use data unless consumers click through a bunch of boxes to say no. And no one does that, and so in theory, Congress could flip that. And that's why

data privacy is potentially significant. Now Congress has talked about this, as you said, for years and they get nowhere on it, and I don't really think that will change, at least in a material disruptive way. You might see data privacy legislation. You've seen lots of states adopt data privacy legislation that's pretty light touch. It doesn't really change the playing field. You're very likely to also see kids focused legislation. I

think there's a bipartisan consensus on that. Again, I don't you know, the companies are really moving in that direction on their own, and so we're talking about those, you know, kids thirteen to sixteen, thirteen to seventeen. The companies are kind of lessening how they use data for advertising in that space. Anyway, I think you'll see something past there. I don't really think Congress under either administration is going to pass disruptive data privacy legislation like you see in

GDPR stuff Aisle the risk. The one place where you need to watch, I think is is Lena Khan's FTC. So she has proposed a rule making that and she calls it the surveillance advertising business and not really spoken very positively about that business model, and she's claiming the power to make rules to target that business model, and so that hasn't advanced under her under the first Biden term. I think there's a good chance she tries to advance

it in a second term if she stays around. As you talked about Jen and and so again, this is really problematic in the courts. I think she'll run into if she goes really aggressive with this rule making. It's not easy to see the courts saying okay, good like, go ahead. I think they shoot that down. But it's not a certainty. It's it's never a good thing when a regulator is adopting, you know, business model disruptive rules, and then you're left to try to win in court.

So that's a risk I think more than Congress. On the data privacy side, Section two thirty. Section two third, just briefly is the liability shield that it has protected these companies from lawsuits for since nineteen ninety six. Basically, it says that that Internet platforms aren't treated as the publisher or speaker of content posted by everyone who uses the Internet. Just because my user are posting things on my site, you can sue the user. You can't see meta,

you can't sue Google because of that content. And so but that Section two thirty has sort of become the least popular law you know, in the country. I think bipartisan consensus, you know that maybe we went too far in just shielding these companies from liability. At the same time, there's not really a clear answer in Congress on how to change it. No one's really very excited about eliminating it. I don't really see that changing. I think there's more

risk if Republicans control Congress and the White House. I think they're more likely to go aggressive on this stuff. I also think they're FCC under someone like Brendan Carr, just as they did under the Trump administration, would start a rule making to try to urge the courts to narrow the liability shield. What that means is is the companies are going to be able to be sued more often and have to you know, cases are good. You can't file a motion to dismiss right at the first

round and throw the case out. It's going to go into discovery. You're going to be more costly to settle. So if you really cut away section two thirty, the cost your litigation costs sore. You're you're settling cases, many more cases for much higher amounts if you cut away at it, you know, you move in that direction. But it's something that companies can can handle. So it's an

issue to watch on both sides. I think bigger risk if Republicans are in control because of concerns about bias from big tech, and there's there's a political momentum behind going after that, and Section two thirty is often the tool they used to go after that, you know that issue.

went very poorly for TikTok. And so we're waiting for that ruling. Now. If TikTok loses on that ruling, they can run to the Supreme Court before January nineteenth and say please, you know, stop stop this. But I'm not sure the Supreme Court will. I think TikTok is in real trouble on this issue. So that's great news for its competitors, you know, Meta and Alphabet and Snap in particular. And so we're looking at a ban by January nineteenth. How does the election play into that, I think it

really there's not much. You know, Trump has come out and said, look, I'm actually for TikTok now, even though he tried to ban it the first time, he's sort of reversed course. Well, it doesn't matter. Congress already did this, and he's not going to turn Congress's ship around on this. He's not going to spend his political capital to pass

a new law to bring back TikTok. Where he could be relevant is if TikTok were to win in this court case that's pending now, the court would throw it back to Congress and say, look, you need to fix this, and then Trump, you know, whoever's the next president, would need to sign that new legislation. I think President Harris would sign that fix, and TikTok would get banned a second time. Congress would fix it and that would get

through the courts. President Trump, maybe he wouldn't sign it if this is truly his position now that he doesn't want to help Meta by banning TikTok, maybe he wouldn't sign a new fix. But I'm not even sure we get to that. Right now, TikTok's in real trouble based on the law that has passed, and you know, there's a chance they went in the courts, but I'm not sure they will. And so January nineteenth, there's a real,

real possibility that TikTok is going away. And I don't think people are appreciating that as much as they should be.

let's let's create a new agency. Like you know, we had Lindsay Graham and Democrats all coming together and let's go do this, and then nothing happens, and and then nothing has happened in two years since then, despite a lot of talk about it. And I really think I don't see the election being a big driver of the shape of future AI regulation here. I think there's a can erarned from both parties that that they don't want

to be the EU on this. They don't want to get in the way of AI's development in a way that drives AI outside of the United States. And I think that's true for both Democrats and Republicans. I think I think the Republicans are even more aggressive and sort of being hands off here. So I think, you know, on the whole, I think a Trump uh, you know, Republican controlled Congress is a better thing on AI. But

big picture, I don't really see much concrete. Congress is still trying to figure out which questions to ask on AI, and so it's so far away from actually adopting answers in terms of regulation or in legislation that I don't see this as a big driver. So so let me leave it there, and then let's just transfer. I want to bring in on Iraqi's He's survived his fire drill, I think, uh, and and made it back into the

New York office there. And but but with that, with that big picture overview of the law in place, you're you're our senior equity analyst on technology and and I really I want to look to you, Honor aright to make this more concrete. And as we think about the election and really talk about some some specific companies, and Apple is a company you know better than just about anyone can can can you walk us through how you

think about the election impacting the company? And I'm talking I'm thinking regulatory challenges, AI, acquisitions, use of capital, How do you think let's just start with Apple, how would you think about Apple in terms of your your view?

their dominant position to get their products across. So so from that mindset, when we look at Apple, I think the near term risks really are around the app store fees and what could happen there, and there are several you know places around the world you're looking for it. EU has done some work. If that happens in the US, I mean that could harm their business. Frankly, that is an area of concern. Then the other part is what happens to the dominant iOS platform. I think they've opened

up a little bit of that. There is a question about their payment systems that's going to keep on lingering over the next you could say, several years. Apple's argument

is their closed system is far more secure. They talk a lot about privacy, and I think that really is the you know cornerstone of what they are trying to say, and in fact, you know, we think, for example, the issue that was faced between Microsoft and CrowdStrike recently, where because of crowd strikes update the Microsoft operating system had an impact. I think that's the kind of stuff that Apple's claiming. You know, they don't want anybody to go.

are concerned. You know, luckily for Apple, they really don't do a whole lot of large acquisitions, so that's not going to be it's going to be immaterial for them. So what we can see at least in the near term is for Apple, there is an overhang of fees that they're charging in terms of CAPEX. They're not going to see a spike in capex because of AI investments, unlike Microsoft and Amazon that are expanding very rapidly into

data centers or AIDATA centers. So for Apple, what we envision at least for the next three four years, that majority of the free cash flow that they generate is going to go back into buying backshare. So that's not you know, that's not going to change. As I said, there is some overhang about the very profitable revenue stream coming from Google. We'll see how that, you know, shapes up. The second company that I have seen a lot of

this stuff coming around is Amazon Web. Amazon in total now that includes their retail business, and Jen's talked a lot about it. Happy to hear Jen, if you have any discussions around there. Power as the e commerce platform and and and you know what you think is happening there well on the.

area the FTC is looking at. The second area is that theoretically Amazon requires the use of its fulfillment services in order to give these third party merchants prime prime eligibility goods, give them the buybox where they need to be in order to make their sales on the Amazon website.

So again, I think in the UK and EU, Amazon kind of said, what, We're going to stop doing that stuff, and that probably opens the door for some third party merchants to sell products at a lower price on their own website or on some other website outside of Amazon, and I certainly think that could impact Amazon's e commerce platform, it's e commerce revenue. I think down the road on rog we're probably going to see that in the US, whether it's the court or whether it's a settlement, we're

probably going to get there. And so you know, I love your thoughts and how that impacts them.

I mean, I'm amazed at sometimes I would place an order and within four hours you'll have it at your doorsteps. So it is that element of value versus price is what you're getting, and I think people are becoming priced and sensitive about certain things. We have seen that actually from some of the research that there are certain products

that are cheaper on Walmart. But that doesn't mean that there is a there's the growth rates in Amazon's online business as have been impacted because of that so we we don't think that's a major hang up for their e commerce business. Now as far as the AWS business is concerned, now that's another place where we think they need some I would say more acquisitions, perhaps in the security aspect of it, some on the AI side of it.

I think that's they're not going to do it. And you know, you and I've talked a lot about the I robot one, which was such a small, tiny acquisition and yet Amazon could not get.

get through without getting a lot of flak. I mean they did get some you could say, more news articles than reality because their strong investment in open ai gives them, you know, I would say considerable influence about what's happening there. Now. I do not know under the legal framework where that lands. Because currently open ai is using a lot of the infrastructure from Microsoft run their operations. I think down the

road that will change. It just just a matter of time, because you know, a lot to evangelize open ai software, they do need to work with other providers in a much closer way. And the second one is when they actually hired an entire team from a AI startup without really acquiring it, and then they paid some money to that. So I was a bit surprised at those two elements. I do know where it falls. I mean one of you can perhaps tell us how it shapes up. But

those words the surprising factors. They're finding new ways of dealing with, you know, cooperation anad with with other startups. And in the case of Microsoft, I think they are spending so much in data centers over the next few years. I think that's going to be the big focus rather than a big acquisition. We anticipate that to be the the neartom cash outlay for them.

I think if there are other questions, please feel free to reach out to us. I think there is one in the chat let's let's let's so yeah, I let me tackle this one. So discontinuation of the Affordable Connectivity Program was a surprise to people. This is the and and how does that change going forward in an election? That's a great question, and and we didn't talk a lot about it, and and here if that that's exactly right.

So this program expired in April of this year. This is a thirty dollars subsidy program for low income broadband subscribers that that Congress put forward actually originally before COVID, then changed it in COVID. A lot of people bipartisan consensus, both both parties wanted to get this approved and extend it past April May, but they could Congress again couldn't get it done. And and and I think the reason why they couldn't get it done is because Republicans in

Congress don't like they like the ACP. They don't like the broader FCC Universal Service Program, which is an eight nine billion dollar program that's you know, known for having a lot of waste in it, and and they want a substantial, comprehensive reform of that. And so once that gets done, I think ACP becomes part of a solution going forward that that Republicans and Democrats will agree on.

Now here's the big thing to watch here. There's there's a big catalyst coming forward, and that is the Supreme Court is about to grant a case on this. I think they're going to grant it next month in November. That that strikes down that whole nine billion dollar program. And so companies AT and T, Verizon, Luhman, telecom carriers,

they actually defend the program. They they they benefit from this Universal Service Program because even though they pay into it on their telephone side, they get a lot of money out on the broadband side. And they don't want they want the certainty of having that program in place. But this court is really interested in in, as we said earlier, striking down limits on you know, loose language

for regulators. And there's a there's a challenge to this nine billion dollar Universal Service program that says the whole thing's unconstitutional because Congress was too vague about it, and and so we got to throw the whole thing back to Congress to fix. I think there's a real chance that happens. I think you'll see headlines on it in November, you'll see an argument in the first quarter of next year, you'll see a decision in June that could strike down

the whole nine billion dollar program. Then Congress is going to have to fix it, and then you're gonna there's going to be conversations about how to fix it. I think ACP will be part of that fix. That will probably you know, it's going to take a year or two to get you know, figure it out, but I think ACP will be part of that fix. There's also big push from a Publicublicans to make big tech companies fund the Universal Service Program in a way they never have.

It's always been paid by a search charge on phone company bills, big big quesh to make Google and Alphabet pay for it. I've even seen some people say online gambling there should be a tax on that to pay for it. So lots of moving pieces to fund rural broadband going forward, to fix the FCC Universal Service Program. But watch for that catalyst at the Supreme Courts. I think it will start happening as soon as early November. You'll see headlines on this. So that's where we stand now.

If there are other questions, please reach out to us at any time over the Bloomberg terminal. Thank you so much for joining us today, and hope you have a great day.