0:00

The Meta Monopoly case

0:02

goes to trial. From

0:05

American Public Media, this is Marketplace

0:07

Tech. I'm Megan McCarty -Corino. It's

0:18

been a big week for antitrust.

0:21

The federal judge on Thursday

0:23

ruled Google's advertising business

0:25

is a monopoly. This

0:27

is the second judgment against Google

0:29

after its search business was ruled

0:32

a monopoly last year. Meanwhile,

0:34

the Federal Trade Commission case

0:36

against Meta kicked off in

0:38

court. The FTC alleges the

0:40

social media giants' acquisitions of

0:42

Instagram and WhatsApp constitute illegal,

0:44

anti -competitive behavior. It's a

0:46

case that's been in the

0:48

work since the first Trump administration. And

0:50

here to dive into what we

0:52

learned in this week's proceedings is

0:54

Anita Ramaswamy, columnist at The Information.

0:57

The fundamental court question at play in

0:59

this trial is, really, did Metta

1:01

make these acquisitions of Instagram and

1:03

WhatsApp in order to stifle competition? Or was

1:05

there something more to it? And

1:08

what I got from a lot of Mark Zuckerberg's

1:10

testimony is really that Metta is trying to

1:12

paint the picture that TikTok is the

1:14

big competitor to Instagram. you

1:17

know, they're trying to paint an image that Instagram

1:19

might not have even done as well as they did

1:21

had meta not acquired them. So we've

1:23

seen a lot of back and forth. We've

1:25

seen some emails from Mark Zuckerberg in 2018

1:27

that was kind of expressing concern about the

1:29

company potentially violating antitrust laws. It just goes

1:31

to show this has been a running concern

1:33

for meta for a long time. And

1:36

politically, this is an

1:38

interesting case because in the

1:40

time since the Trump

1:42

administration first moved on this way

1:44

back in his first term, Meta

1:46

CEO Mark Zuckerberg has pivoted

1:48

to, I guess you could say,

1:51

a much friendlier stance toward

1:53

Donald Trump. He donated a million

1:55

dollars to the inauguration fund. Does

1:58

that seem to be having any effect?

2:01

No, in the sense that Mark

2:03

Zuckerberg did donate. However, the

2:05

case still went to trial. part

2:08

of the issue was that Zuckerberg

2:10

offered this $450 million. The

2:12

FTC basically said, no, they

2:14

initially asked for $30 billion for

2:16

the company to avoid the trial.

2:19

Then Zuckerberg upped his offer to a

2:21

billion dollars. But a billion

2:23

is not quite 30. So they

2:25

couldn't really come to a consensus

2:27

there. And even after Zuckerberg made

2:30

some really visible appearances

2:32

along with Trump administration

2:34

officials, it still hasn't resulted in the

2:36

outcome that he wanted. Interestingly, just

2:38

as we were starting to

2:40

tape this, the headline came out

2:42

about the second Google antitrust

2:45

case of a judge declaring that

2:47

Google is a monopoly in

2:49

its Advertising business already, a judge

2:51

had determined that it has

2:53

a monopoly in its search. There's

2:56

been a lot going on

2:58

with antitrust. It seems to kind

3:00

of be carrying over to

3:02

a certain extent during this second

3:04

Trump administration. I mean,

3:06

when it comes to this meta case,

3:09

could we see Instagram spun off from

3:11

meta at the end of this? It's

3:13

certainly a possibility. You know, at the same

3:15

time, it's been so many years. They

3:17

bought Instagram in 2012. So what

3:19

it would pragmatically look like to unwind that

3:21

kind of transaction is another huge question

3:24

that I'm sure the judge is going to be considering. We'll

3:27

be right back. You're

3:31

listening to Marketplace Tech. I'm Megan McCarty

3:34

Carino. We're back with

3:36

Anita Ramaswamy, columnist at The Information. All

3:39

right, now on to how

3:41

the trade war is affecting the

3:44

darling of big tech, the

3:46

chip maker NVIDIA. This

3:48

week, the government put more

3:50

export controls on semiconductors

3:52

that include NVIDIA's H2O chip,

3:55

which it had been shipping

3:57

to China. This was reportedly

3:59

used in the models from DeepSeq.

4:01

Even though there were already

4:03

export controls on its most

4:05

advanced chips, it had been

4:07

shipping these H2O chips to

4:09

China. Now Nvidia

4:11

says this move to require

4:13

licensing for these chips would

4:15

cost the company about five

4:17

and a half billion dollars.

4:19

Anita, what did you make

4:21

of this? It's hugely

4:23

significant for Nvidia. The

4:26

expectations that investors have out of Nvidia

4:28

stock are really sky high. So

4:30

that's why the second that

4:32

Nvidia disclosed this new restriction to

4:34

investors, their stock price fell

4:36

10%. And roughly 15 % of Nvidia's

4:38

revenue came from China last year.

4:40

And there's also the matter of

4:42

other Asian countries that also could

4:44

have tariffs put on them. A

4:47

lot of chips are manufactured in Taiwan, which

4:49

would also not be great for Nvidia. So

4:51

all in all, it's really just not a great picture.

4:54

Investors are expecting Nvidia is going to

4:56

increase their revenue by, I think,

4:58

55%, 56 % this year. That's

5:00

what the Wall Street expectation is. And that

5:02

is a lot. And so any

5:04

sort of nick in that story,

5:06

any sort of crack or some

5:08

hole that can be poked is

5:10

going to have a huge impact

5:12

on the stock price. And this

5:14

has just kind of been a

5:17

generally unsettling week in the world

5:19

of chips, whether you're a chip

5:21

maker, whether you use chips. I

5:23

mean, semiconductors were, of course, not

5:25

included in the initial rounds of

5:27

tariffs. But this week, the administration

5:29

announced that it's opening a national

5:31

security investigation into chip imports that

5:33

could very likely result in tariffs. I

5:35

mean, what would this mean for all

5:37

of the tech industry here? It would

5:40

mean that... out AI is

5:42

going to get a lot more expensive and

5:44

companies are going to have to make the

5:46

decision about whether or not it's worth hoarding

5:48

tons of Nvidia GPUs and whether that's actually

5:50

going to create a return on investment for them.

5:52

I mean, I also think there's an aspect of this

5:54

that's kind of funny timing similar to what we

5:56

talked about with Metta and the FTC and the

5:59

lobbying that went on there. Nvidia actually earlier this week

6:01

had pledged $500 billion saying that they were

6:03

going to use that money to build their chips

6:05

in the US for the first time. And

6:07

even then, the following day, we got

6:09

this announcement from Nvidia saying that there

6:11

are new export restrictions being put on

6:13

the company. So I think all these

6:15

companies are going to see their costs go up. They're

6:17

all going to be concerned about optimizing their supply chains

6:19

to make sure that they're not paying a ton of

6:21

money to build out AI. All

6:24

right, now we want to dip

6:26

into the discourse on X, which is

6:28

always a dangerous thing to do.

6:30

But this is a topic that raises

6:32

a lot of questions in tech. So

6:35

last week, Twitter co -founder, former

6:37

CEO, Jack Dorsey, started this

6:40

big debate on X with a

6:42

post that said, delete

6:44

all IP law.

6:47

We don't know exactly what he was talking

6:49

about, but Anita, what might he have

6:51

been talking about and how did the internet

6:53

respond? You know, it's possible that

6:55

he was talking about the data that's been

6:57

used to train some of the biggest AI models

6:59

in the world. You know, a lot

7:01

of it has been taken from online. There are tons

7:03

of lawsuits going on. There's one between the New York

7:05

Times and open AI. And a

7:07

lot of content creators and

7:09

media publications have been suing

7:11

for the right to their

7:13

property, which they're saying is

7:15

being used improperly. One of

7:17

the more notable responses was

7:19

from professional ex -gadfly and

7:21

owner Elon Musk, who said

7:23

he agreed with Dorsey's anti -IP

7:25

law take. Musk also

7:27

happens to own an AI company, and

7:29

he's, I guess, a pretty influential

7:31

guy in policymaking these days. What did

7:33

you make of that? I

7:36

personally wasn't too heartened by

7:38

any of that discourse or that

7:40

conversation, just because intellectual property

7:42

law is the bedrock of the

7:45

internet that we've created, it

7:47

would be great for these companies to be

7:49

able to use data and train their AI models

7:51

without having to get permission. But

7:53

at the end of the day, that's up to the courts to decide,

7:55

and those laws are in place for a reason. I

7:58

think some of the discourse around this is

8:00

just Jack Dorsey saying that there are gatekeepers

8:02

who are gatekeeping access to data. At the

8:04

same time, if you don't have IP laws,

8:06

then How will creators actually get paid and

8:08

how do you ensure that somebody who comes

8:11

up with an idea is going to get

8:13

compensated for that idea and not have it

8:15

stolen from them? Yeah,

8:17

a lot of AI

8:19

companies are arguing, some

8:21

in court, that this

8:23

is basically a foundational

8:25

principle for the entire

8:27

AI industry. Section

8:30

230 was for the kind

8:32

of foundation of the internet

8:34

that they cannot be sued

8:36

for what they are calling

8:38

fair use of copyrighted materials

8:40

in the training of AI.

8:43

But yeah, this kind of

8:45

promises to be an unfurling

8:47

issue that we have not

8:49

seen the last of, right?

8:52

Yeah. I mean, at the end

8:54

of the day, it is important. I don't think

8:57

we would be having a conversation a couple of

8:59

years ago about the significance of this kind of

9:01

conversation going down on a social media platform. But

9:03

it's really important and it could have some implications

9:05

for policy down the line. That

9:07

was Anita Ramaswamy at the information. This

9:10

conversation was part of our tech week

9:12

in review segment. You can

9:14

find it on our website, marketplace

9:16

.org, slash tech bites. Hey,

9:18

Susie Alvarado produced this episode. Daniel

9:20

Shin also produces our show. Gary

9:23

O 'Keefe is our engineer. Daisy

9:25

Palacios is the senior producer. Kelly

9:27

Silvera is our executive producer. I'm

9:29

Megan McCarty -Corino, and that's Marketplace Tech.

9:38

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