Pivot - Meta Shakes Off the FTC, and AAG Jonathan Kanter takes on Google

Episode Date: February 3, 2023

The Fed eases up on the brakes, Elon Musk looks for new ways to monetize Twitter, and Snap has another rough quarter. Also: Meta may have prevailed in a fight with the FTC. Today’s Friend of Pivot is Jonathan Kanter, Assistant Attorney General for the Antitrust Division at the DOJ. He stops by to discuss Google, antitrust, and his agency's fight against monopolies. Send us your questions! Call 855-51-PIVOT or go to nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

Daddy's a little hungover. Did you stay? I left my, we were in Florida together, weren't we? We were in Florida together. We were. And I left, I just left and came back to freezing cold weather and you just hung out in the Miami area. I hung out with, hola, me llamo Doug. You love that Florida. Daddy went deep in the paint last night.

Oh, Florida. I'm not a fan, I gotta say. It's the best. Are you deep in the paint last night. Oh, Florida. I'm not a fan, I got to say. It's the best. Are you kidding? The weather was beautiful. There's Florida, and then there's the largest city in Latin America, Miami. You got to discern between the two. All right, whatever.

Miami's incredible. Miami's awesome. I love Miami. That is true. It's really fun. I just have to say that. You've been to my place. You've been to my home. It's nice down here.

It is nice. It's nice, yes. It's also very nice in California where they have better rules, again, for people like me. And one-third of welfare recipients. Let me ask you this as a California resident. Okay, great. That's because you all throw them out. They're cruel. It's a cruel state. Everyone's on their own. I was thinking at one point of running for mayor of San Francisco, how did we take the most beautiful collision of sea, sky, and land, the most innovative culture in the world, the greatest concentration of wealth in the world, and fuck it up this bad? This bad. Oh, it's pretty bad. Have you been to L.A. recently? Yes.

L.A. has got a real problem. Oh, my gosh. I would have to agree. That mayor has a lot of – that said, it's a little more complex than that. But, you know, people in Florida would make to make it simple. They have all kinds of issues in Florida. And more crime, by the way. Just like, it's just ridiculous.

The fighting between these two states is ridiculous. Although, I find Florida to be a less kind, more humid California, essentially. Less kind, more humid. That's actually our Chamber of Commerce ad campaign. Less kind, more human. You know what I'm doing today? You know what I'm doing today after we leave? I'm getting my picture took by Vanity Fair. Something tells me it's going to be a puff piece. When they interviewed me, let me summarize the interview I did for you. They're like, is she awesome or really awesome? I mean, I was like, oh, God. And you said no. I'm literally

like, hold on. I need to go no. I'm literally like, hold on, I need to go throw. I just threw up in my mouth. And then probably proceeded to reveal all kinds of information. She has information about my compensation. I feel like that was you and stuff like that. But that's okay. I don't care. I'm an open book now, Scott. I'm so old, I could care less. That's the thing. We're going to be dead soon. That's right. We can care less. You have adopted a similar life strategy that I have. I'm like, when you're embarrassed or you fuck up, it's like, you and they are going to be dead soon. It really doesn't matter. I don't care. I don't care. I spent the morning, they're doing some paving of sidewalks in my area

and they don't have a speed bump in my neighborhood. And all these kids are on the street and these people come whipping around the curb. So what I spent my morning this morning doing is standing in front of cars saying, slow the fuck down. So that's how I prepared for my Vanity Fair photo shoot. When I grew up, speed bumps were unsupervised children of single mothers. I just made that up. That was pretty good. Oh my God. That was pretty good. What was that? I think that was the kid. I think that was the kid whose mother's a secretary. Before we move on to the actual things, we've got a big packed show, including a big interview with Assistant Attorney General Jonathan Cantor, who's an antitrust total gangster. What is your advice for a photo shoot?

Because I like soft pants and sweatshirts. Don't show up. That would be my advice. I know, but you take a lot of them. And you know, Joe Kahn did the mistake of lying on the floor doing the sexy shot. Don't let them do stunts, right? I've had more photo, quote, unquote, shoots than last year. You know what I do? If they tell you to do something and it doesn't feel comfortable, I'm just like, no. You know, put your hand on your head. And I'm like, no, I would never do that. Just wear what you like to wear. Yeah, soft pants and sweatshirts, say lesbians who tech on them.

But go ahead. And just be, you know, take their direction because they're great at what they do. But absolutely, when they ask you to pose in a thing that looks unnatural, you just wouldn't do it. Just like, no. Anyways, that's my big advice. And flirt with the assistant. I just think that's good workplace practice. Yeah, because I'm a good flirter.

I'm just a bad flirter. I didn't even know Amanda liked me on our first date. She had to tell me explicitly, yeah, because I'm not a flirter. I wasn't that she didn't like you. That's just good judgment. Anyway, okay, I'm not going to do what they say. Can I wear soft pants, do you think, for Vanity Fair? Soft pants? What does soft pants even mean? Yeah, I hate all those photo shoots where they have all these props and shit. You should wear,

I literally could dress you. You should wear your white jeans. You should wear a nice shirt and like a cool jacket. Basically, you should look like a 17-year-old boy whose mother dresses her. Yes, fantastic. All right, excellent. Thank you so much for the, so no heels. I, you should look like a 17-year-old boy whose mother dresses her. Yes, fantastic. All right, excellent. Thank you so much for the... So, no heels. I want you to look like the ad from the JCPenney's junior Brooklyn Boys section. Hefty. Hefty, what do they call them? Husky. Uno más de capa, por favor. All right. Today, the Fed eases up on the brakes. Is it reading the right signs? Also, Meta gives the market what it wants, money. It did very well when you did a very good prediction.

As I said, a friend of Pivot today is Assistant Attorney General Jonathan Cantor, who I've known for quite a while, and I'm very excited to talk to him. But first, let's talk TikTok. The CEO will testify before Congress. Shou Chu will appear before the House Energy and Commerce Committee on March 23rd. Next month, the House Foreign Affairs Committee will vote on a bill that could ban TikTok in the U.S. It's never going anywhere. And Senator Michael Bennett of Colorado, someone you know very well, both of us do, has called for Apple and Google to remove TikTok app from their stores.

It's all over. Michael Bennett doesn't do things like this. So what can the CEO do? This is not good. This is mounting pressure. And, you know, Facebook is thrilled. Between Elon and this, Facebook must be, like, doing jigs all over the place. So what does he got to say?

What do you think? I think, quite frankly, I think he's just got to sit there and take it. Because, I mean, this is just such a photo op for the senators. And not only that, when Senator Bennett is angry, it's like, I remember when I was a kid, there were mellow dads. And the mellow dads, occasionally, you know, you had your friends and their dads are just really mellow, like just barely hear anything that's going on. And they're just kind of on the couch. Hey, kids. Yeah.

When mellow dad got angry, you're just like, okay, shit got real. Run home. Yeah. Right? Yeah. Yeah. And, you know, Senator Bennett is mellow dad. He does not, you know, when he's upset or pursuing something, that means it's real. This

guy does his homework. Yeah, he doesn't need to be reelected. He just got reelected, right? That's right. And then when you think about, unfortunately, it's just going to be such a photo op for people on both sides, because the Democrats will focus on its potential as a propaganda tool. And the Republicans just love to be anti-Chinese. So they're just going to go, you know, they're going to ask questions that are impossible for him to answer. They're going to start with, can you guarantee us there are no members of the CCP who are engineers creating algorithms to determine what content 55% of American youth see. And unless he wants to purge himself, he's going to have to say no, or he's going to come up with these ridiculous bullshit answers that Vanessa Pappas had that when they

asked, where's your headquarters? She said, well, we're a multinational company with no real headquarters. He's actually quite good. I saw him at a deal book, but he avoided all the questions. And when you get Josh Hawley or Senator Bennett asking him questions, he's not going to be able to avoid questions. They're going to go, sir, you didn't answer my question. He can say to Andrew Osorkin, he can say bullshit answers like, that's a key issue we think about a lot. We have a team devoted to figuring this out. That's not going to fly in front of these folks. It's going to be great theater. Yeah, it should be interesting.

I think the Congress has to be very careful in not looking like they're just pandering. You know what I mean? Just like they have to do it surgically. Some of these people are good at that. And if they do it just for show and do stupidity stuff, I think that's a problem. And the question is whether they're going to actually do anything. If any of this stuff is going to pass, banning TikTok in the U.S. seems very drastic to me. I don't—a lot of money, a lot of dough.

100%. And you and I agree that they'll probably figure something out or come to some sort of accommodation because there's just so many—there's so much, not only money, there's so much American money at stake here. accommodation because there's just so many, there's so much, not only money, there's so much American money at stake here. It'll be fascinating to see, you know, what, I mean, what's interesting is that universities are blocking it. I mean, schools are deciding you cannot have it. I mean, just, there is a slow creeping ban of TikTok. Most of those are around addiction and time spent. But yes, yeah. It's not the Chinese thing as much as it is the usage. We'll see. But it is a lot of money.

So I always think money wins, but we'll see. Speaking of money, Elon Musk continues his search for more Twitter revenue. The company announced this week that it will begin charging developers for access to its API. And that's the data stream that powers tons of third-party services and apps like TweetDelete. Researchers also use API to track hate speech and misinformation.

There's certainly value to API. It probably is a better way to make money than the blue check mess. The company may finally start to include payments. We've been talking about this. It's an area of expertise of Elon's. It's been applying for regulatory licenses and building relevant software. Again, somewhere he's super comfortable. He also wants a system to allow for crypto payments. So that's not really something that everyone's clamoring for right now. So is that going to help? I mean, payments, sure, if you trust him. And certainly not advertising. I went on yesterday. My night's usage has dropped from eight or nine hours a week to 44 minutes a week.

It's crazy. And what are you doing with that time? Other than Vanity Fair photo shoots? Yes. I have another photo shoot on Monday in New York. Of course you do. I'm staying at your place. Of course you do.

I'm doing a fashion photo shoot. They decided I was fashionable. Argent. I'm sorry. What fashion magazine in hell? You'll see. It'll be good. It'll be good. Oh'm sorry. What fashion magazine in hell? It's called, you'll see. It'll be good. It'll be good.

I offered your apartment as a photo shot for taking pictures. Anyway, I'm not going into that. We'll talk about that later. Where do you spend your time? You're saving eight and a quarter hours. Where are you spending it? I was on post, texting you, texting a lot. 11 hours, texting a week.

It's crazy. You're reconnecting with people. Yeah, I guess so. Really given real time. So you, you just tweet to people via text. You're like, you're like, George Santos is an idiot. You just start texting it to people. That's funny. My own little Twitter, but I went back on, I literally got an ad for this crappy ads everywhere all over the place. I literally got an ad for this crappy ads everywhere, all over the place. And then the for you was stuff I do not want.

And I keep saying, I do not want. It was like, it wasn't even George Santos. It was like, I don't know. And I got off and I just got off. And so, and of course he's somehow managed to push my stuff down. Everyone's tweeting at me, like, I can't see you anymore. Like I said, I'm mostly not here, but I'm also, I think he's been pushing me down. I don't know. I don't care. I'm only here

40 minutes down to 20 minutes, 10 minutes a week, except just to market our stuff. That's what I use it for. So how can he make money, Scott? Well, just to go back. So I went off the Twitter for a month. I decided I'm just going to take a break and I want to pour some of that energy into post. And I found one, it's beneficial to your mental health. You hate to admit that this shit impacts you, but it does. There's just no getting around it. And I went back on and immediately on almost any tweet, it's not even, it's the comments. You get comments like- I block comments now, all of them. Yeah, I'm actually, I think I'm probably going to block my comments because you get

just constant tweets of, I put out a thing about population decline, which has started the shit storm. And people say, you know, Scott, you should really do, as an academic, you have an obligation to pursue the truth and your data is flawed. And I'm like, that's a pretty serious accusation. And I'll click on it and it'll be someone with three followers and a picture of a dog. and I'll click on it and it'll be someone with three followers and a picture of a dog. So it's clearly a fake account. And then you go into your head and you're like, who has decided to anonymously try and undermine my professional credibility? And you think, is it people who work for companies who are investors whose investments I've criticized? Is it the GRU? I mean, because I've been critical of Putin. And you go to these very weird conspiracy places and it's just not good for your mental health. And then people just say stupid, angry things. And then they say stupid, angry things at other people in the comments feed.

And the thing, and I realize this is, you know, ad brought to you by a post investor. People are just more civil. They disagree. They're like, I disagree, and this is why. What do you think? They want to have a conversation. And I don't mind that. Wherever you go elsewhere tends to be nicer. So, you go, now you're doing it regularly. I'm on 10 minutes a week. It's going to go to 10 minutes to just post our stuff.

I'm taking your advice. I use it to market my content. So, if I put out a No Mercy, No Malice podcast, when I drop a Prop G pod or when we drop Pivot, take a clip and post it on Twitter. But I don't use it to engage or to put stuff out. It's just what, you know, after a day, you're like, what am I doing? I'm spending 15, 20 minutes at night that I could be spending watching Netflix or hanging out with my kids or something because I think I've got something funny or interesting to say. And I just, why the fuck do we need this? I've stopped myself a lot. Yeah, I do. I'm actually enjoying post quite a bit. It's very

pleasant. It's a really pleasant. I just, the whole, so I've never been a big social media person, Instagrammer. So it's really nice to just have a nice, interesting place. We'll see how it develops too. But so payments, go ahead, payments, payments. Just makes all the sense in the world. There's a lot of people, a lot of higher income people, not younger people, but higher income people who are so comfortable with Twitter that if they can figure out a facile way to, you know, compete with Revolut or PayPal and just a quick, easy payment system that, you know, that A, brings speed, utility, and also for remittance in terms of avoiding some of those fees. And you know, he's technically one of the early founders of PayPal. So he has skill there. And if he plans to ever take this public again,

he needs a story outside of advertising revenue. And also just to be blunt, he's just not going to recapture the 80% or 70% in advertising revenue that he's lost. He's not. The ads are so fucked up on that site now. Would you trust him? You know, when we were talking yesterday, I was like, I'm not giving him any of my financial information. I'd rather give it to Apple. There's consumer dissonance around this, around privacy and trust. I think with payments, I mean, I'll give you an example. I think I have been shadow banned. All of a sudden, my engagements and likes has gone way trust. I think with payments, I mean, I'll give you an example. I think I have been shadow banned. All of a sudden, my engagements and likes

has gone way down. I think that most likely Elon winks at someone and gives them a list of people that aren't fans and don't support his lies and bullshit. And they just slowly but surely

get less engagement. That's a conspiracy theory. You can't, but it's very difficult to prove. Whereas with payments, if your money disappears or a payment doesn't get there, there is a digital breadcrumb trail. So I don't think you need to trust them. I just don't want to, I'd rather use other people. I'd rather use other

people. I'm not going to use this service. I'm down with that. I hear you there. It's always been shitty in terms of privacy, Twitter, and I don't think it's any better now. It's worse. I wouldn't have trusted it in terms of privacy, Twitter. And I don't think it's any better now. It's worse. I wouldn't have trusted in the previous administration, by the way. API? Charging for it? Sure. Why not?

Well, say more. I just, you know, Twitter, this is, I've written about this for years and years, and I don't even understand it most of the time when I'm writing about it. But, you know, they've given access to this API for various reasons over the years. And people use it, you know, they wanted to develop these third-party services. That's what they wanted. Now he obviously doesn't want to. So if people want to use, you know, pay me for like, he'll probably want us to pay for us marketing our stuff on there.

Like, that's a good argument. I'm not going to do it then, ultimately. But that's, he can make that argument. That's a decent argument. I'm not going to do it then, ultimately, but he can make that argument. That's a decent argument. I think the researchers should get it for free, for example. There's value to it. Sure, sure. That's all I got. The long ball, edge of edge case or moonshot here that could end up making Twitter, the only thing I could think of, people will say, is there any way he gets this thing back to $45 billion? Is there any way this isn't a loss for him and his equity investors? And the only thing I can think of to try and recover that massive value, and this is sort of a long shot, is that if the API and that data set

ended up being a really valuable unstructured data set to feed into some sort of artificial intelligence prediction engine that said the data dataset and the activities and the content that Twitter captures, and it is substantial if it gets fed into the right artificial intelligence machine, which is essentially a prediction machine, I think there might be a lot of applications, artificial intelligence applications, because over time, I think a lot of the big winners

in artificial intelligence, I mean, it's garbage in, garbage out. So what they need is they need great data sets. And I mean, for example, I was really moved. I heard a story, a friend of mine named James Roven, he's this incredibly agile entrepreneur, and he lives in Bangkok now, and he has this sort of AI, little app, AI for copywriters that he's been using that helps them edit their text. And his brother was in Ukraine and had a small business. These kids, you know, kids' brothers are really entrepreneurial. And he hired a bunch of engineers. There's a lot of tech talent in Ukraine. And he had about 12 or 14 people.

And all they would do is pull together data sets to feed into AI applications. And so, this has been going on for a while because these AI machines need data sets to start learning. And this is not the story. The thing that was so moving about it is that when Putin invaded, I mean, these are like 12 or 14 engineers in their 20s, you know, overweight, eating Doritos and drinking Diet Coke. And the day that Putin came across the border,

they didn't show up to work next day and they joined the Ukrainian army. I mean, he said, they've all left. They've all joined the army. And two are missing. Two are MIA. And I thought, Jesus, can you imagine something happening? I mean, it's just so unfathomable for us to realize what often happens in the real world.

Can you imagine you're a small VC-backed tech startup with a bunch of dopey guys and engineers? Can you imagine a small VC-backed tech startup with a bunch of dopey guys and engineers? The next day, you know, whoever invades us, and the next day they leave the company and join the army? I mean, it just, it was like a snapshot into what's going on. Anyways, I'm sorry, back to Twitter and payments. Anyway, I don't want to talk about him anymore. He's going to, he's whatever. Good luck, Elon, because one of the things he's blaming is the economy, which actually there's a soft landing going on.

All right. Let's get to our first big story. Fed raised interest rates again this week. By the time just a quarter of a percentage points, inflation has eased somewhat, but remains elevated. There's still signs of easing and yet signs of spending. Data shows customers are spending less. People, fewer people move last year, move to more affordable areas. There's the labor market still tight.

Credit card debt is up. Gas prices look like they may be up. McDonald's profits are up, meaning people are eating cheaper food. You have talked about this, this sort of softer landing and that inflation would go down as fast as it came up. I think there's, I'm sure there's a scientific term for it or a psychological term for it, but I'm convinced if you worry about something long enough, it doesn't happen. You know, it's the shit you're not expecting. How many of us were worried about a pandemic killing a million Americans?

Yes, that's true. Yeah, that's true. You know, it's the shit you're not thinking about that gets you. Remember all the hand-wringing over Greece's sovereign debt that if Greece defaulted on their debt, all of Europe was going to fall economically? We spent six or 12 months talking about this shit. We have been talking about the coming recession for so long. I'm now of the mind I don't think it's going to happen. What's interesting is polling is showing that many people think we're in a recession, even though they say their economic situation is good. That's the thing, like convincing them that it's not because it's been so

like relentless. Last night, I spoke at this thing called the Finding a Rose Club, and or they'd have this social and cultural club. It was very fancy. And I did one of my presentations and here's the thing. We have a media that needs to keep you engaged. CNN and Fox put out alerts to your phone every 30 minutes. Now, imagine that they could only put out one news story for the last hundred years. It's the cadence of media that creates catastrophizing and everybody believing, like 80% of Americans think the economy's bad, right? It's like everybody thinks Congress is fucked up, but they like their congressperson. But it really is a function of the media in the sense is if you could only have one headline for the last 100 years, I think that headline would probably be

Western democracies repel tyranny. We'd have to go, the big story of the last 100 years is we push back Hitler. If we could only have one headline for the last 50 years, it would probably be historic, unprecedented prosperity led by America and China the last 50 years. I mean, if you could only have one headline. But the thing is, because we have headlines every 10 minutes, we have to capture people's attention. And guess what captures me? You know what is a shitty headline that no one clicks on? Things marginally better today.

You're an optimist. You're just a cock-eyed optimist. Emphasis on cock. But the problem is, I look at the data. Here's the U.S. economy right now. It's growing. Inflation is plummeting. We've got here's the US economy right now. It's growing. Inflation is plummeting. We've got the Goldilocks economy right now. Jerome Powell, I think, has put on a master

class around leadership and how to ignore all these real estate developers that want to have zero cost financing for any project that works or wealthy people who want to maintain artificially low interest rates. Companies are incredibly agile in America. They're like, okay, we have too many people. Sorry, we're laying you off, and we're back to massive profitability. It's certainly contrast to Britain. The Bank of England raised rates by half a percentage point.

Hundreds of thousands of British workers went on strike, demanding better pay. Striking workers including civil servants, rail workers, plenty of teachers demanding a pay raise. Rishi Sunak has promised talks with the union. I mean, it's just a, it's a contrast, let's just say. Brexit. I mean, directly because of Brexit. So you feel good about the U.S. of A.

Well, the honest question is, distinct to the headlines, distinct to Fox and CNN trying to tell you, convince you how fucked up America is, who comes close right now? Who, what country on this green earth has nearly the economic growth, freedoms, democracies, ability to live the way you want to live, love who you want to live, letter of law? And with that, Scott and I announce our presidency, our run for the Republican nomination. Oh, I thought you were going to say we were engaged. No, we're going to run for the Republican nomination. Oh, I thought you were going to say we were engaged. No, we're going to run for the Republican nomination before Nikki Haley can get in. Swisher Galloway, a chicken in every pot of Cialis in every medicine cabinet. Yeah, something like that. Anyway, I think I would give you credit for

talking about inflation and this earlier. So you get the credit, but you're going to get credit for something else in our next big story. We're going to go on a quick break. I'm enjoying this podcast already. I know. And when we come back, some good news from Metis Investors, maybe not its employees.

And we'll speak with, as I said, friend of Pivot, Jonathan Cantor, about how to fight big tech. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer

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remember to only send money to people you know and trust. that make it easy to get home projects done. Out. Carpet in the bathroom. Like, why? In. Knowing what to do, when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. Scott, we're back with our second big story, which you get credits. Metastock is off to the races. This is a prediction you had. It's up nearly 26% as we record this, but the news might not be what it seems. We'll see.

The company reported that its revenue fell by only 4% last quarter. The market expected much worse. It announced it will spend $40 billion on stock buybacks, but he declared 2023, quote, the year of efficiency. I don't know what that means, which means taking the sign that more layoffs could be ahead, or also that he was cutting into the metaverse, which a lot of the money he said is not going to the metaverse, it's going to their core services. A lot of the research and development money, which I think was key, that was key to me. It's like $33 billion, some enormous amount of money

that was going to Meta. It seems not to be going to Meta. There may be more layoffs because of that. They've already laid off 11,000 employees last year. But people like what they see when he's talking not Metaverse. And maybe you can change the name back. What could he call it? Facebook, maybe. Scott, you called this. You had it in your predictions decks. You just mentioned it in London. We talked about it yesterday. So, I think these losses at the Reality Labs, that's the VR division, $4.2 billion up from $3.3 billion. Jesus. So, where do you go? But they also have good news. FTC lost a challenge against the company to stop it from acquiring VR games company called Within. They have a game called, I think it's Supernatural.

But the judge has already thrown the case out, according to the New York Times. We'll see where it's going. The decision is sealed. We'll see if the FTC appeals. It's a, I thought this was kind of a stretch for the FTC. Nonetheless, what do you think? What do you think? Because other earnings were not as good.

Shares of Snap fell 10% on a disappointing Q4 report. That's roughly three quarters in a row for Snap. PayPal announced layoffs of 2,000 employees. Electric vehicle maker Rivium will lay off 6%, which may be good news for later downstream, good news for all these companies. Anyway, Spotify had some stronger user growth, and Netflix, of course, did much better than they thought. But we don't have hard numbers on that, or people think they're going to do better. So talk about Facebook specifically and what's happening here. Well, there was a lot of good things, and there was one great thing in this earnings report. I mean, for example, for the first time, they crossed a milestone.

They now have 2 billion daily active users. I mean, there is no religion. There is no society. There's no construct that attracts 2 billion daily active users. I would argue it's still, you know, for a while before TikTok takes over, it's the most successful product in the history of mankind. And then the word reels grew 20%. And I got to admit, I don't like to admit it. I'm watching a lot of reels. And here's the thing, you go to TikTok and then you're like

immediately register. Oh, TikTok's better. The algorithm's better. There's a depth of content there that's better. But here's the thing, because I'm on Instagram, reels is just very easy. I mean, it's sort of an argument for Jonathan Cantor, but reels was up dramatically. easy. I mean, it's sort of an argument for Jonathan Cantor, but reels was up dramatically. But the word that sent the stock skyrocketing was their focus on, and I'm sure they thought about this word and had a lot of very high-priced consultants determine this was the right word to use, was efficiency. Because what that's basically saying is, this might be the anesthesiologist bringing Mark back from his ayahuasca hallucination trip and saying, okay, you're losing over a billion dollars a month on this fever dream of yours. And if they took that

money, if they just closed the whole thing down and it immediately goes to the bottom line because they've expensed it all immediately. Just their savings on Reality Labs alone, just those savings would make it one of the 20 most profitable companies in the world. They would save 12 or 15 billion. They would increase their profits by 12 or 15 billion dollars a year. There's maybe a couple dozen companies in the world that do 12 or 15 billion dollars in profits a year. Maybe there's 50, but still, it's just the whole market went, okay, he's starting to wake up. He's put the meth down. Maybe, who knows, right? Okay, he showed up at practice. He's Mbappe, or the world's greatest

player. And I'm not saying Mbappe has a substance abuse problem, but he showed up to practice and he's not drunk. We're going to win this game. The year of efficiency. The year of efficiency. It's so boring, isn't it? But you're right. They love it. They love the idea. It's not clear. I think it doesn't mean layoffs. I think it does mean, I think he's talking about cutting back. He loves to double down, this guy. And he does like pushing through, but I, he loves to double down this guy, but I think, and he does like pushing through, but I think he's smart. He's also a very canny young man. He's still a young, younger man. He's a great business person. Yeah, he really is. He's kind of Bill Gates-ian in that way.

He's also a bit of a sociopath and very immature, but other than that, he's a great business person. No, look, compared to so many we know now, he seems very lovely. Let's just say. I love that the best thing that's happened for him is so many shittier people have come on the scene. TikTok and Elon. It's like anything else? Like he's had a good year. Mark? He's been the ultimate heat shield for every other tech company.

And then TikTok and Elon showed up. Yeah, it's true. I mean, it'll be interesting what the year of efficiency means. But that word is such a dull word. The year of efficiency. It's so unsexy and so perfect for this. We'll see. So, where do you, you did say the stock was going to go up. Very good call. What about the other companies? Any of the others? You know, Snap really got kicked in the teeth, even though my kids use it all the time. Another prediction was that the subscale ad market, and I called out Snap, was going to have a terrible

year. They can't. There's subscale in it. I love Snap. I think Evan Spiegel is just such an impressive young man. And I do think he has a much broader sense of the world than some of the, quite frankly, the men running these companies his age. But here's the thing. With TikTok, and with Apple, and Amazon, and Netflix now showing up and trying to get advertisers to spend money on their platforms, he can't compete. He's subscale. He can't make the types of investments. And there's all the streaming, all the things are so, he's got to sell that company. It's a good product. Good product. 100%. Good product. My kids love it. Yeah. They hate Instagram. You know, a lot of people depend on it.

Speaking of a communication system, but time is not on his side there. Speaking of which, I mean, Instagram's been a real boon to Facebook. And by the way, Kevin Systrom started a new company. Maybe we'll talk to him at some point. I heard about that. He's starting a new service. Yeah, Artify. It's a news delivery service.

It's like a Twitter competitor, isn't it? I have just started using it. It's more like a newsreader. Anyway, there's been a lot of these attempts. It's like a Twitter competitor, isn't it? I have just started using it. It's more like a newsreader. Anyway, there's been a lot of these attempts. He's so clever. We'll see. And he seems to have gotten a lot of media partners. So we'll see.

I think people are looking for a place to do newsreading too. It's purely newsreading, it feels like. It feels like so far. But I haven't used it enough to know, so I'm not going to comment on it. I don't have time. I do have time. I'm not using Twitter very much not going to comment on it. I don't have time. I don't have, I do have time. I'm not using Twitter very much. Hello, Vanity Fair, in this way, please.

Welcome, welcome to Scott Galloway's apartment. Kevin, Kevin, you sold that company for too little money. Kevin's a really wonderful entrepreneur too. Mark Zuckerberg owes his debt of gratitude to Kevin's history, a wonderful entrepreneur who founded it with Mike Krieger. And it ended up being the best acquisition and the most underpaid. I would agree.

And I think Mark knew it at the time. He went on a walk with Kevin Sister, as I heard about this, where he turned to Kevin right after the acquisition and said, I really took you guys. Like that. I really took advantage. Can you imagine getting a bit like... They paid 19 billion for WhatsApp. I mean, yeah, they got a great deal. That was probably as good. The close second to that is probably YouTube. Anyway. You know, Twitter tried to buy Instagram and then Kevin sold it to Facebook instead. Twitter would have fucked it up.

It's a great story. Actually, it shall be in my book. It shall not be recounted in Vanity Fair, but it shall be in my own book about that. That was some time. I remember that very clearly. With Rivian, it just doesn't have, it takes a lot of money to build a car company. What was the Civil War like, Mommy? got run over. Him and Dorsey got run over by Mark Zuckerberg in that. Sorry, Dick, but that's what happened. Electric vehicle maker Rivian thing, that was interesting. I was reading a lot of stories on them, super interested in the EV sector. I think it's just expensive to build. They got to build manufacturing. Elon took that pain a couple of years ago. The whole stack is expensive to build a car company. And if you don't have it in place, it's a great car. From what I understand, truck, I understand. But it's going to be hard. And they're going to struggle because it's costly to build plants and to get them going, et cetera, et cetera, and have that stack you need to start to really sell. There's certainly

going to be demand out there for all these cars. I just got an update. You know, I bought a Rivian or I put a deposit down. I'm going to look so ridiculous in that thing. I'm just going to look so ridiculous. I'm so excited. We're going to do a cross-country drive. Do you know that? So it's either the Bolt or your Rivian. You always promise these dates. That literally sounds like hell to me. No, we're doing, I have a new idea.

I have a new idea. You and I, remember when Gail and Oprah went on a cross-country trip in a car and then they argued the whole time and they had a little camera in like the dash cam or whatever? We're doing that. Okay. We're driving around the country. We'll do it in the Rivian. I cam or whatever. We're doing that. Okay. We're driving around the country. We'll do it in the Rivian. I don't care. We can switch cars.

That's one of the ways I can tell I'm getting older. The idea of a cruise or a trip in a Winnebago doesn't sound as horrific as it used to. Oh, Winnebago. You and I will visit people, wave. Well, you know what we could have? Oscar Mayer had the wiener mobile. I'm sorry.

I'm sorry. A lesbian and a guy with erectile dysfunction are going to roam the country in a wiener? I think it's perfect. Let's see if we can find the wiener mobile. You know, I made a penis joke earlier. You missed it. I called you a cockeyed optimist. Emphasis on cock.

And you missed the entire joke. I didn't. Yeah, I didn't get that. See above hungover. Yeah. OK. But thank you. All right.

Anytime. I'm moving into penis jokes. I'm trying to muscle. I appreciate that. Sidle into your penis joke area. Anyway, let's bring in our friend of Pivot. Jonathan Cantor is an assistant attorney general at the U.S. Department of Justice. He oversees

the department's antitrust division, including its new lawsuit against Google that claims the tech giant illegally monopolizes the online advertising industry. Welcome, Jonathan Cantor. Thank you for having me. It's great to be here. Thank you. Finally. I'd be remiss. I've known Jonathan for a long time when he's been a lawyer and various things that he's worked in the tech industry a lot. And so we've talked many times over the years, but now you're in a very new and important position, which took a while to get there, correct? Explain where you came from so people can understand. Sure. So I started my career actually at the government working for the Federal Trade Commission.

Then eventually I went into private practice where I worked on both sides of the V, as they like to say, meaning I represented both defendants and plaintiffs. And then over time, I built somewhat unique practice for Washington, D.C., which was representing companies who were advocating in favor of antitrust enforcement. And through that process, I became very familiar with the arguments and the ideologies that surround the importance of antitrust enforcement. And it's an area of deep passion for me. So why is that? Explain, like, this is something that has not been, I guess, renovated or fixed in 100 years. Is that about right? Hasn't been shifted in our country? Yeah, well, it has. So about 40 years ago, it took a shift in a very different turn.

It was Bork, correct? Exactly. And so sometimes people call that Chicago School Economics or the Bork Revolution, which put forward a frame that antitrust should be viewed through a very narrow lens. And we should only enforce the antitrust laws when there is a very high degree of certainty regarding anti-competitive effects. And that high degree of certainty is even higher than what the law requires because of a concern around things like error costs and chilling innovation. And as a result, antitrust took a turn to be very narrow, and enforcement was dialed down, particularly in the area of monopolization, where we stopped seeing the kind of old trust-buster type cases that people associate with the antitrust laws back from

the old Teddy Roosevelt and Robert Jackson, Thurman Arnold days. But there was Microsoft. There was Microsoft. For people who want to get, I'm getting to Google in a second, but there was Microsoft, which was mixed, correct? Am I correct? Like when you look back at it? No, it was a success for the Department of Justice.

They not only won monopolization case, they won it in a dynamic tech industry and set forth a really important precedent. Problem was that that precedent wasn't applied very often because there weren't many cases after US v. Microsoft. And so the last major case that the United States government at the Department of Justice filed on monopolization grounds after Microsoft was when the Department of Justice filed against Google. Against Google, which was during the Trump administration, correct? Correct.

Relating to search. So relating to search. And yours is related. So tell us where the government is right now. But tell us, lay out the case. Sure. And obviously, we have two matters in active litigation against Google. And so there are significant limits in terms of what I can say regarding cases in active litigation. But let me just give you the lay of the land

briefly. We have two cases. One relates to search and search advertising. That case is here in Washington, D.C., and it's scheduled for trial in September. That's the case that was initiated around 2019, 2020, sorry. That case is pending, and we are preparing to litigate that case. And your argument is? They're too big. They monopolize the search industry, and they monopolize the search industry, among other things, through a series of agreements that locked up default search positions on things like Apple and browsers and elsewhere.

And then there's a second case, which we recently filed, and that the attorney general had the pleasure and privilege of joining him at the podium to talk about this case about a week ago that relates to ad technology. And this is the kind of the pipes and plumbing that are used to sell, distribute, and present ads online. So these are the services that websites, news organizations, and others use to buy and sell ads. So they're on both sides of the equation in that regard. In that case, yeah. We talked about this during our press conference and in our complaint, but online ads are sold more like commodities or stocks

than they are like Mad Men-style ads. And the allegations in our complaint is that Google has the dominant position as the exchange. They represent the buyers, they represent the sellers, and then they buy and sell on their own exchange. And that they've engaged in a wide range of conduct, including exclusive deals, tying, and manipulation of auctions in order to monopolize that market and build a moat around that business. First off, nice to meet you, Jonathan. Thanks for your good work. Can you give us more insight into what it is exactly

that Google is doing to kind of lock up the online advertising market and how it impacts advertisers and consumers? Sure. So as the attorney general explained during our press conference, the conduct cuts across a broad range of categories. So the first is they own ad server, and they tie that ad server to their ad exchange,

for example. Others are exclusive deals. So saying that if you want to get access to the Google advertising demand, you have to use their advertising technologies and tools. and you have to use their advertising technologies and tools. Others relate to auction manipulation and creating auctions so that it either punishes folks who use competing technologies or disadvantages rivals. And how does that just raise... I've always said that Google is not a service. If you have, if everybody has to pay an organization and there's, it's impossible to establish

differentiation, it's not a service, it's a tax. Do you, and I would argue that Google has become a tax because everybody has to use it. What, what specifically, if I'm an advertiser, why do I ultimately, and as a small business person, I feel this, you ultimately all pass lead to paying Google at some point. And Facebook, correct? Well, I mean, between Google, Facebook, and Amazon, 40% of all VC flows through one of those three toll booths. But specifically at Google, my sense is they've been especially adept in making it nearly impossible to have an online business without paying the piper at some point. Aren't they on both sides of the market, both buying, selling, and making the market?

Exactly. And so in our press conference, we talked about a document, an internal Google document that analogized this ad tech market, we call it, to as if Goldman or Citibank owned the New York Stock Exchange. This is an internal Google document that made that analogy. And that's exactly the kind of concerns we have. But Scott, to your question, the impact here is substantial, right? So we're talking about going back 200 years, newspapers, news industries fund the creation of content reporting through advertising and advertising revenue. And when that advertising revenue starts to decline or the content gets commoditized, it becomes really difficult to sustain the kind of high-quality journalism that is foundational to our democracy and our political

discourse. And so, in our complaint, we talked again about this during our press conference, Google talks internally in its documents about how it takes at least 30 cents of every ad dollar, and in some instances, much more. So, when they're doing that, focusing on the larger ad business, because that's where Google's going to go, is that they're only a small part of the ad business. How do you push back on that with them, even though they are the game in ad tech, for example? Yeah, so I'll step away from the specific case.

You know, antitrust law focuses on marketplaces, right? And so who's buying the products that are at issue in an antitrust case? And so one of the things we look at are relevant markets. And so, you know, in our complaint and the ad tech case, we talk about publishers, online content creators who need tools and technologies to sell ads. And so who are the set of competitors that are available to sell those ads and to serve those ads and to target those ads? Google, correct. Okay. I'll leave it to you. Okay. So when you think about how you divest this, because some of these things do tend towards big companies, right?

That's what the argument from Silicon Valley is. They need to be this big in order to be able to serve things. And these things tend to go to networks like this, where there are big networks that allow them to do this. How do you get more competitive? Is there divestitures? It changes the way ad tech is sold? Because you think about a lot of different industries like this. Especially in tech, how do you create a situation where there is competition now at this point? Yeah. So I'll talk about it more broadly outside

the context of any specific case, because I think these are principles that can apply broadly. First and foremost, we have to get better at earlier intervention. And so markets that have huge network effects, scale effects, feedback effects, whichever phrase of choice you like to use, are highly prone to tipping. And they can evolve in ways that are competitive or they can evolve in ways that are not. And so if we see violations of law and the facts in the law-supported case, it's important that we act appropriately to enforce the antitrust laws. And part of that is understanding the market realities that are present in tech.

And so one of the things that I've talked about publicly is how a lot of our antitrust laws grew up with poles and wires rather than ones and zeros. And we need to understand that, you know, ones and zeros lead to big moats and building, you know, for example, digging the moat in front of the castle is not a separate act from digging a moat in the back of a castle. And these are dynamics and marketplaces that we need to appreciate better. they're thugs, you need to get them out of this now before it's too late. And this was the Obama administration, as I recall. And then it continued, it continued and continued. There was no action then because they didn't want to squelch innovation. So how do you get that to happen? So we can't go back and do the time machine and say, oh, President Obama, maybe you should have

not been so cozy with the tech companies. Yeah, I think we can have an honest conversation about what we see in front of us. And I think that starts with a real understanding of where the opportunities are for tech, but where the problems might arise as well. And understanding those market realities. But there's a persistent political tendency not to do that. It continues to this day, whether it's anything,

even today, things that need to be AI or things do that. It continues to this day, whether it's anything, anything, even today, things that need to be AI or things like that. So, in this case, what has to happen, because you cannot go back in time, you can unwind, I assume, or you force sales, correct? Yeah. Remedies, and this was the principle in the case against Microsoft, because it wasn't just the violation of the law that was litigated, but it was also the remedy that was litigated. In that instance, the court said, when you have a technology market, it's important that remedies are forward-looking and that they not just consider erasing the conduct that occurred in the past,

although that is an important part of the equation. It's also really important to think about how do you restore competition in the future. And in network industries, that might mean things like interoperability, understanding those market realities. It might mean things like a whole of government approach, which is something that through the president's executive order we've undertaken and has changed the conversation in Washington and has allowed us to think more holistically about how we approach these competition problems. I do think your point is well taken, Kara, but I also think that the conversation has shifted. And I think, and I,

yes, I think it is shifting and we're experiencing that now. And I think there's a greater appreciation, perhaps more so than any other moment in my lifetime, as to why we need competition in all markets and including digital markets. And so this is not a conversation that's just happening here in the United States. Well, the EU Digital Market Act wants to force interoperability. Correct. Chat apps, for example. Correct. Correct. So, tech looms disproportionately large in our lives and also just in terms of attention that it gets from the media. But there's other industries that slowly but surely, because of a decline in actions filed by the federal government around antitrust, have gotten increasingly concentrated, maybe even

more concentrated than tech. Are there any industries you look at, Jonathan, whether it's big pharma or big health or big chicken, what have you, that you think don't get enough scrutiny in terms of the concentration and the resulting increase in prices and market power? Yeah. So, we have a wide range of industries where we enforce the law. And so, we have a very vibrant program in the agricultural space, where we enforce the law. And so we have a very vibrant program in the agricultural space, including in meatpacking and seeds and a wide range of areas that we think are-

Book distribution. Book distribution, thank you. There's only one. There's only one. And so we're thinking about healthcare. One of the areas that we're seeing is- Yeah, hospital networks, yeah. Yeah, but it's not just hospital networks,

it's payers and providers consolidating. And so we are actively thinking about how to be forward thinking and understanding the impact of those shifts. So you're absolutely right, Scott. This is not a problem that's confined to tech. I think tech is a problem that many people relate to because their products and services that they see in their daily lives. But we hear from so many different

stakeholders across so many different industries, agriculture being chief among them. So, I would agree with you that the mood has changed. It does feel like there's a tectonic shift in the support for some of these actions. But the actions have declined consistently. And whenever you're at a conference, you're talking to economists, there's general agreement that many markets have become too concentrated. The government, to be blunt, just hasn't been that effective with remedies and enforcing these types of actions. Hopefully, that's changing. But why has that – why over the last 30 or 40 years has the power so asymmetrically swung to the incumbent monopolies? Is it that you're outgunned in terms of lawyers? Is it that money has washed over Washington and politicians get this great deal of I'll give you money, all you have to do is nothing, just ask continued thoughtful questions and never do anything. How did we get here? How did we get so far down the road where it feels like the abuses have gotten so brazen?

Yeah, I'd just point out the government hasn't successfully prosecuted a monopoly since Microsoft, as you noted, 21 years ago, 22 years ago, and it hasn't broken up a company since AT&T. Yeah, well, part of... 1984. Right. When you don't use muscles, they atrophy. I know that from my own personal life. And so, you know, we have to be willing to use the tools that Congress gave us. And if you're not bringing cases, you're not going to get outcomes. And so, you know, start- But why? He's asking why.

But isn't it more than that? Is it money? Is it that consumers love these companies and there isn't enough public support? I mean, it just, it feels like antitrust just slowly but surely lost its mojo. Well, it goes back to the conversation, the beginning of our conversation, which is, you know, there became this sort of movement against enforcement. And it led to, and I've talked about this publicly, a mood that erred toward under-enforcement even when violations of the law were clear based on, you know, key longstanding principles of antitrust and sound economics.

And so what we see now is, I think, more courage in the willingness to use the law when it's the appropriate tool. Again, I want to be very clear, we follow the facts in the law wherever it takes us, and we look at every case on its own merits. But we have to be willing to use the laws that Congress gave us in order for those laws to be effective. And I think that's what we're doing here. And I think we're being successful. We're bringing cases. We brought more monopolization cases in the last year than we had in the prior 25 years before that, including two criminal monopolization cases. We blocked a large publisher merger. This is Simon & Schuster and Penguin House, randomness.

Yeah, on a theory that was not just focusing on what people pay for books, but was focused on the ability of authors to have advances and to get the kind of compensation they deserve to fund the creation of the content that's necessary for that important market. We've blocked two shipping mergers that relate to supply chain, including one that would have allowed a Chinese company to control a significant portion of refrigerated shipping containers. These are, and we are taking a more principled and sound approach toward merger remedies, where simply, where we're always happy to listen and entertain remedies for mergers, but we're not willing to accept remedies that present unnecessary risk for the American public. We're also revising our merger guidelines. These are a tool that the agencies use to sort of set forth and explain to the world, businesses, their own staffs, courts,

how we enforce the law. We did a public comment period for our merger guidelines, and we received over 5,000 comments from the public. By way of comparison, the last time around, I think we got about 100 about 15 years ago. And so we're actively taking steps to redefine and rethink how we approach the law so that it's more faithful to precedent, more faithful to Congress. So there's also, though, the heft they have. Now, there's two things I see that you have a problem. One is big tech has a lot of money, as Todd just noted, but they also argue, talk about innovation almost constantly,

that they need this. That's always their argument. They're already being regulated by the marketplace, and let's believe in the marketplace. You know, Facebook can say, TikTok, look, they're suddenly out of nowhere and now they're a huge hit. Apple's app tracking transparency did a lot of damage in a single update than the regulation has done in years.

Although I've asked Tim Cook about this and he said, I don't want to be the chief regulator of the United States. I really don't. This is not my job. And, you know, even Megan Delrahim, your predecessor, had said the slow roll of these companies of how much money they have and how much time and how long these cases take to happen is problematic for the government. And related to that, it's that maybe judges are not so amenable to this, that you have a real problem with judges. And this just happened to Alina Khan this week with Facebook.

happened to Alina Khan this week with Facebook. Got pushed back on a purchase of an Oculus-type developer that they bought. It's supernatural to make it better to use VR. So how do you look at those two twins, this idea of slow roll and the money they have, and hey, the market's already taking care of it, and having judges being open to this idea? So these are challenging questions for us, but ultimately it's our responsibility. And I think the only way for us to have meaningful impact is for us to use the laws that Congress gave us and to use them as effectively as possible when it's the right thing to do. What do you say to their marketplace? Lobbyists are lobbyists, and they've got a lot of them, obviously, and there's nothing to be done about that on some level, although there certainly should be. But their idea that the marketplace is taking care of it. Now, look at Facebook's down this

much percent. There's lots of competition here, etc. AI, they'll have the same arguments going on. We're viciously fighting each other. It's all giants fighting each other, but they're fighting each other. Yeah, well, I think it goes back to what you're saying earlier is that, well, one is it really depends on the market. We have to look at each market on its own merits and its own facts. But this idea that somebody can just use the word innovation and then magically think that they can convince antitrust enforcers not to act, I don't know that that was ever the case, but it's certainly not the case now. The fact of the matter is, you can't have competition without competitors. And we're looking around the economy and we're seeing more concentration than we have

in generations. And I think that's something that the public understands. And judges, I mean, can you comment on the Facebook decision, the most recent one? So I haven't read the Facebook decision. It's still under seal. That's a different agency. I look forward to reading it. It's the FTC. Yeah. One of the things I will certainly be looking for as I read it is not just the outcome, but it's also the reasoning that the court used to reach that outcome. And so, from a forward-looking perspective, there are instances, for example, where courts will not agree on the facts, but perhaps endorse a legal approach that an agency took or reject

it. And I think we need to see that. My view is if we see a violation of the law and we think it's appropriate to act, we have to act. And it's our job to figure out how to bring those cases to courts, to judges, and to juries. And that act, we have to act. And it's our job to figure out how to bring those cases to courts, to judges, and to juries. And that's what we need to do. Is losing a fear, though?

I mean, Lena Kahn has said we have to go out there even if we lose, even if we lose some. That's something I think she said publicly. Yeah, we bring cases to win. I get it. Yeah, and so that's our job. And when we file a case, it's because we believe we will win and we should win. And in instances where we don't, we understand, we assess the outcome, but we're also not afraid to move forward and bring additional cases if we think it's the right thing to do. But we play to win.

So just to bring it down to kind of a worker level, and this is something close to my heart as I've been subject to them, we talk about anti-competitive behavior in the context that it's a bad thing. And yet in almost every acquisition, dozens if not hundreds of employees are subject to something actually called a non-compete. And I was really heartened to see that the FTC is talking about action or legislation to eradicate non-competes. I'd love to hear your thoughts. I know it's not the DOJ, it's the FTC here. I'd love to hear your thoughts on non-competes and what you think the likelihood is that they'll be outlawed. So, I'll let others run the assessment on likelihood there, but we've made labor and the rights of workers and to benefit from competition a top priority here at the division. And so we've brought cases, wage fixing, no poaching agreements. We filed amicus briefs.

We focused on the gig economy. Competition benefits everybody. Competition benefits everybody. Competition benefits people. That includes people who buy things, but it also includes workers. When you have more options to go work somewhere, you get a better salary. You get better benefits. You get better opportunities. You get better choice of where you want to live.

These are things that affect real people. And we absolutely have to focus on that. To me, it's a centerpiece of our enforcement agenda. This week, the Department of Commerce issued a report criticizing the control of app stores, Apple and Google, and calling for more antitrust action. What do you make of that report? And where are those actions? Where is with Apple?

I think is Amazon with the FTC? I forget how you split it up. Yeah, I can't comment on that, but I appreciate the question. We read that report with great interest. What does that mean? Whatever you want it to mean, Kara. Would you like to refer? Jonathan behind him has an obsession with a hippo in Cleveland named Fiona. Cincinnati. Would you like to refer to that? Cincinnati, excuse me. I will defer to my friend Fiona the hippo, who is a whimsical and wonderful hippo in the Cincinnati Zoo. Do you have any broad thoughts on that idea of app stores and if there are remedies for those?

Because it's very hard because there are only two phones. There really are. And that's it. Yeah. Well, that report, I think, not think, that report was the outgrowth of an executive order by President Biden to look at that issue. And I think it's a very important issue. It's one that we're very aware of. And beyond that, I can't confirm or deny the existence of any investigations or actions.

All right. What about partisanship? How do you feel? There's always been a problem around, obviously, the Supreme Court's going to hear a 230 argument very soon. There's all kinds of things happening there. But each side has a different opinion of Section 230, although they all seem to want it gone in some fashion. Does partisanship really affect this, or are the sides together? And will that, if that happens, what will that mean for your cases and everything else? Because liability opens up, and then... Yeah. So, I'll stay away from the 230 issue specifically, but in terms of partisanship, I've been really heartened by the broad continuum of support across the political continuum. I have wonderful discussions with people on all sides of the aisle about these issues. I think there's a greater appreciation that free markets require competition.

And so I think the work that we're doing is, in my view, law enforcement. And again, in my lifetime, I don't think I've ever seen the level of support for the work that we're undertaking from so many different corners of the country and in so many different points along the political spectrum. So, if we're talking about, I agree, competition, full stop's good. And if we're talking about an assault on the middle class through a lack of competition, and that's resulted in an increase of prices of 1400% over the last 30 or 40 years, I would argue that higher education or 40 years, I would argue that higher education is literally makes OPEC look like a weak cartel. We all raise prices exactly the same amount every year. What a coincidence we raise prices 4% and every other university raises prices 4%, not 3%, not 5%. We have accreditation

run by the incumbents that basically says which students at which universities qualify for federal funding. I mean, isn't higher ed the monopoly or the anti-competitive structure to end all anti-competitive structures that has just been horrible for middle class households? Do you agree with that? And if so, does the government have any plans to potentially file an action against higher education? Yeah. Well, certainly if we did, I couldn't say so, Scott. So, I'll pause and let your comments speak for themselves, and they're duly noted. I will say I do want to kind of point to your point about the middle class and competition working for people. This is why I'm here. I grew up in as middle class as you can get,

in Queens, in an apartment, and school teacher parents. And I have a deep belief in the American dream. And to me, the American dream is about opportunity. It's about the opportunity to build your own business, get an education, pick your own path. And so I do believe that you need a competitive economy in order for that opportunity to exist, regardless of whether you're growing up in Queens, Iowa, San Francisco, or Austin, Iowa, San Francisco, or Austin, or Dallas. It doesn't matter. And so, I think it's important that we are very focused and thoughtful about issues that affect economic and opportunity for everybody. I love that, but just a more pointed question. Do you think higher education reflects the type of competitive market we want to see? I'll defer to Cara and my hippo Fiona on that question.

Oh, no. Oh, dear. I have a final question about AI because obviously it's getting a lot of attention now with ChatGPT, which is doing an excellent marketing job of seeming like it's changing the world when it's still very small. But you can see it happening that way. You can see that trending in a way that looks like early search or early ad tech. Is that something you need to be looking into now before, you know, OpenAI was created, so there would be competition, right? That was the concept when Elon Musk, in fact, funded it. Is that a problem now that Microsoft now is going to own this thing

or is going to be a big part of it? Is this something you need to be looking at now or doing something about? So let me zoom out a level. I've talked a lot about the importance of new technologies disrupting, and I think we need to preserve opportunities for new technology to change the competitive paradigm. But one of the things I remember giving a talk about this 10 years ago is that if you look at revolutionary theory, after a revolution, what does the new leader care about most? The next

revolution. And so it's important to make sure that we preserve those inflection points. But if we've learned anything from the last 30 years is that we have to understand those market realities and make sure that we enforce those market realities. And so just because something new and competitive comes along, let me say that's great. We want to encourage that. But on the other hand, we need to make sure that the next platform is allowed to give rise to future platforms and to future technologies and competitors. And so when it comes to AI, we are hiring technologists, which we've never had here before. We're hiring AI experts. We are understanding the market realities that flow

from the feedbacks connected with machine learning, which are those positive feedback effects are more powerful than we've probably ever seen in our lifetimes. And they're only going to get stronger. And so we have to understand that. And we have to be willing to have an enforcement program that's tethered to those realities. Early on, early on. Absolutely. If appropriate. final question is about China, one of the other things they put up all the time. And obviously, there's a lot of China activity in Congress with their China Commission Committee. Is that a good excuse by the tech companies? I've heard it from Mark Zuckerberg directly, you know, or various people. How do you respond when they say we've got to, you know, we got to be national winners here because we got China? The way to compete against China is not to look more like China. It's to look more like ourselves.

And we have, you know, the foundation for our economy and for our democracy and our nation's success is innovation. It's freedom. It's openness. It's opportunity. And we will be best and we will be most competitive when we allow those values to shine and rise to the surface. What can consumers do? Or what would you ask of Americans who buy into this notion that competition is good and a lack of it has hurt workers, the middle class? What would you ask of us? Speak up. Speak up. Does it matter? Yes, it matters. So, one of the problems that I believe has happened over the last 30 years is antitrust has become the domain of the elite class.

And we've stopped thinking about how it affects real people, but instead have made it into this laboratory experiment that is often detached from reality. And I think we need consumers. We need market participants, we need workers saying how these things actually affect real people in order for us to be more tethered to that reality. And so, yeah, it makes a difference. And it is making a difference because we're listening. time in a while, at least what we are doing affirmatively is making sure that we're going out and accessing a broader range of opinions. We're speaking to broader portions of our country. We're speaking to different communities, not just folks who can hire lawyers for $2,000 an hour to come talk to us. We think in order to be effective, we have to engage with farmers. We have to engage with folks from across the country, all different ways of life and stripes. And I would note that you have the anti-monopoly game behind you, which is kind of cute, but the antitrust bill did not pass

Congress. Do you need that? We were full-throated in our support for that bill, and we will continue to support or provide technical assistance and abuse. I'll leave that to others. In this job, my job is to enforce the laws that Congress writes, and so we're going to use— Were you surprised it didn't pass? I'll leave that to others. Again, we were supportive. The Attorney General is supportive.

We think it would have been helpful, But in the absence of new legislation, that's ultimately, it's up to Congress. They have to make that decision. They write the laws, we don't. And so we just enforce them. One of the things that had been talked about when you came in is that there were mugs about a law firm. I think it was Cantor, Wu, Kahn, or something like that, which was the three-year names. That's Lena Kahn, your name, and Tim Wu. Tim has left the White House. I did an interview with him recently. Lena is at the FTC.

She's working on a number of cases. How closely do you work together? Is that something that happens, or do you work separately or figure out, just split things up and go that way? So our work on enforcement is independent. So we investigate our cases independently and pursue our cases independently. And the FTC, there's a lot of coordination with respect to policy issues. For example, the merger guidelines is something that we're doing with the FTC. We work on policy initiatives with the FTC. We have some degree of overlapping jurisdiction,

so we have to work out who's going to investigate what. But ultimately, when the rubber meets the road, we're focused on our own investigations. And so there is some degree of collaboration with our enforcement partners at the commission. In terms of enforcement actions, though, I should be very clear, are done independent of the White House or... And so the attacks by tech on all of you, actually,

especially you and Lena, that you're against tech, et cetera, did they land in any way from your perspective? I keep my head down and focus on doing the job. I mean, that's, you know, that's all I can do. And so, you know, again, I think the most important thing we can do is just really follow the facts and make the right decisions for the right reasons. And so, you know, and try to fan out the noise. All right. Thank you. Is it Honorable Assistant Attorney General Jonathan Cantor? It's really just Jonathan.

Okay. All right. Thank you so much. We really appreciate it. What a fascinating time. Thanks for fighting the good fight, Jonathan. What a fascinating time. No, I'm so delighted to be with you.

First time, long time. Okay. All right, Jonathan. Thanks so much. Take care. Bye-bye. All right, Scott. One more quick break. We'll be back for wins and fails. All right, wins and fails. You go first.

My win is just the agility of the U.S. economy. And that is, you know, I've always said the faster an economy can fire people, the faster can hire them. We have between what I think is a master of all the criticism Chairman Powell gets, the whole world holds their breath to see what he's doing. And it looks like he has aggressively raised interest rates, some of the most unprecedented historic increases in interest rates. And what do you know? Inflation is starting to come down as fast as it went up.

These companies, capitalist American capitalist companies, read the tea leaves, they are not afraid to make crisp, aggressive moves. And we have effectively, again, potentially we might avoid a recession. It looks like we're growing again. The markets appear to love this. It looks like Chairman Powell has done his job and might be able to slow the increase in interest rates. They're even saying by end of the year, maybe beginning of next year, he might actually bring interest rates down. I mean, there is just no economy that has the leadership at a federal level, that has the amount of capital innovation, and quite frankly, the agility. We're just, in Europe, there would be strikes and government would weigh in and say, you can't fire these people. And they would turn it into some big drawn out soap opera that got in the way of

these private sector companies making these hard, but important and probably correct decisions. And by the way, what is the technology that everyone is talking about right now? Oh, open AI. And where is that? Oh, it's in the U.S., of course. So, just the agility, the innovation, the leadership at a federal level. I just think we are the triangle of innovation and agility and capital. And we're at each other's throats at the same time. But that's what's so sad. Yeah.

It's ridiculous. The biggest threat to America is not an external force. It's not an invading army. It's not the CCP. It's not Putin. A little bit China, but go ahead. It's that we have decided through our media and our algorithms to pit one another against each other. Yeah.

And that is the biggest threat. It's like the call is coming from inside of the house. And we catastrophize everything, everything, and then blame each other. Although Putin's still a rogue. He's turned into a rogue, as your friend Ian Bremmer talks about. Putin's still a rogue. He's turned into a rogue, as your friend Ian Bremmer talks about. Yeah, but you have one party who wants to cozy up to him because they see an opportunity to pit them, to make Democrats look bad.

It's just, okay, that makes no fucking sense. If we can't unify around a murderous autocrat, what can we unify around? Okay, you stop doing the Hunter Biden thing. We'll stop doing the whatever, George Santos thing. Hunter Biden thing, we'll stop doing the whatever, George Santos thing. You stop doing that. We could have like a thing where we give in and we just have to say bygones on that. No? You don't think that's going to happen? So my loss or my fail is, I don't know if you saw the clip of Kevin McCarthy, but he has passed in the House a repeal of the increase in funding to the IRS. And it just shocks me that the Republican Party has been so effective. It's not going anywhere.

I'm sorry? It's not going anywhere. He passed it. It doesn't mean the Senate's not going anywhere. I know, but yeah, the Senate's not. I think it'll hit a brick wall in the Senate. It'll be a partisan vote just as this one does. But he stood up there and he said, promises made, right? First off, the speaker is supposed to be somewhat apolitical. You just don't say that shit. You're just supposed to take the votes and sit the fuck down anyways. But this notion, the Republican Party is so effective. They essentially they represent the top one percent full stop. And they managed to convince people on the lower income side that they're representing them. And the notion that the IRS has is some sort of like demonic force here to harass American households. Defunding the IRS is nothing but a tax increase on lower middleincome homes. Because here's the thing, the rich have figured out a way with their lobbyists and corporations to take the tax code from 400 pages to 4,000. So to audit a wealthy person or a corporation takes an army of skilled auditors that are expensive. So what happens? All the technology and all the automation has increased the audit rates of lower middle-income homes who cannot get away with any sort of tax avoidance, but they don't have the resources to go after the top 1%. And it's estimated that every year, the top 1% avoid about $160 billion in taxes because there's no

cop on the beat. And it just amazes me that the American people and Republicans feel like they have brilliantly positioned the IRS as some sort of invading army. No, they're not. When you defund the IRS, you are raising taxes on the lower and middle income household. Because if the 1% and corporations don't pay their fair share, by the way, 50% of all profits from U.S. corporations have been offshore to lower tax domains. corporations have been offshore to lower tax domains. It's a zero-sum game, folks. Small and medium-sized businesses and lower and middle-income households, if big business and the top 1% don't pay their taxes because there's no enforcement, then guess who pays more? I'm still riveted by his Osempic face, Kevin McCarthy. His friend Elon must have given it to him. Elon's talked publicly about taking Wagovi and Osempic and fasting and stuff. But Kevin McCarthy's clearly borrowing some of his or something. I keep staring at it.

I'm like, okay, sure, sir. I'm sure he's counting his calories. I have no idea what you're talking about. He's skinny. He's lost enormous amounts of weight. You haven't noticed it? I find that luxist. If you said that about a woman, you'd be triggered.

No, I'm going to comment on it. I think it's very strange, this sudden weight loss. But nonetheless, it looks great. It's performativeness. It's performativeness on behalf of the Republican Party. It's the same thing, which is my fail, which is Governor Sarah Huckabee Sanders endorsing legislation limiting drag performances. Really, Sarah, is that a huge problem in Arkansas? Let's enrage, let's demonize the other side rather than focusing on real issues.

Yeah, it's ridiculous. Why don't you focus on things that matter to actual people? It's like, I know she's going to say this matters. This is not legislation. This is not legislation. Legislation helps people. Anyway, she endorsed this bill, these bills, and it's just, they haven't passed them yet, but it's just insane that this is what they're spending their time on. You know what? Again, it's going to happen the same way with this red wave thing that they thought was coming. People care about their pocketbooks. They care about their families. They are not obsessed with the things that these people are obsessed with. I am certain of this. I am certain of this. I am certain of it. And we'll see where it goes. But this is also a state that elected Bill Clinton. So it

certainly can go lots of different ways, this state. In any case, this is not what makes you a great leader, this kind of thing. I mean, I don't know if you've heard the rumor, but supposedly Governor DeSantis was at some point a drag queen. He went by the stage name Misinformation. I'll be here all week. Try the veal. This is a joke. Let's label this a joke. God, he'd be not.

I'm not down with him. George Santos, though, was very good at karaoke. Did you listen to that? Very good, good karaoke. I'd like to say something nice about everybody. I think George Santos is literally the best thing that's happened to the Democratic Party in a long time. I don't know. Oh, my God.

Every day, you're like, what? Huh? What's my drag name? You know my drag name? Stage name? Oh, no. What? Jenna Talia.

Oh, that's good. That's Zazacapa speaking. God, now I'm about to talk about my three-year-old and Peach Pie. Oh, that's good. That's as the cop is speaking. and I baked a peach pie out of, I found frozen peaches in the fridge that I put in there this summer. They looked like a hunk of nothing and I defrost them and Claire and I made a delicious peach pie from scratch and it was delicious and fantastic. And it was so good.

I was like, I made something. I even called Louie and I said, I made something as good as you made. And it was, Louie's my older son who's a cook. And I have to say the peach pie is my win of the week. And Clara, it was my helper in it and it was delicious and it made me happy. And I wasn't on Twitter. I'm almost so much happier than making peach pie and not being on Twitter. That's really the goals in my life. So. You know why I married a drag queen? No. Because they say makeup sex is the best. married a drag queen? No, no. Because they say makeup sex is the best. I'm sorry. On that note.

I got to pull us back from the peach pie win here. I was trying to be wholesome, but nonetheless, you drag us back into filth and degradation where we belong, really. Did you enjoy seeing me? We were together yesterday. That was nice, right? We were actually... Yes, I did. I liked it. I've got to spend more time. We've got to strategize. You and I went to Tiger 21. We went to therapy for rich people. It was good. You know, I had I had one question on that thing from someone. It was really unpleasant question from a gay.

It must have been a gay man about don't say gay. And I just didn't answer it. What I would like to say is like, I think it's a great thing. I'm like, yeah, covering up books is a great thing. It's a great lesson for kids, just because there's one picture of gay parents in it. Like, please, I'd like to take your children from you, but

I can't. So, anyway, I had a great time with you, though, on the other hand. I had a good time. We had a nice time. I like doing things together. We're going to be doing more. More is coming. Live Karen Scott is coming to your town soon. Where should we go first? Where should we go first?

Let's go to Arkansas. Arkansas? Let's go to Arkansas and drag. I've never been to Arkansas. Let's do a casual fall in Arkansas. I used to wear drag all the time, and then the father of a trans person asked me not to, and so I stopped. I know you did. If I put on a dress, it would seem like drag.

That would seem stranger than me putting on a dress. I'm going to go out on a limb here. That would seem so strange. Let me just say, we're coming to Arkansas, Governor Huckabee Sanders. And we'll say Latinx whenever we feel like it. And we'll do all kinds of things. We'll talk about how much Black Lives Matter and all kinds of things like that. We'll have fun.

We're coming. We're coming. We're so excited to go there. We're going to bring Hillary kinds of things like that. We'll have fun. We're coming. We're coming. We're so excited to go there. We're going to bring Hillary and Bill Clinton, too. That'll be real. They'll be our friends at Pivot. Let's have some fun. We're going to do things like that.

I'm on for it. We're going to plague people across the country. Okay, Scott, that's the show. We'll be back on Tuesday with more Pivot. This was highly enjoyable, very long show. John Cantor is so impressive. He's really impressive. I really am.

I like public sermons that are like that. All right, Scott, read us out. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Intertott engineered this episode. Thanks also to Drew Burrows and Mia Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown

of all things tech and business. Peach pie. Peach pie.