The Philip DeFranco Show - PDS 6.18 The Truth About the BIG AI Porn Bill, Kick Drama, How Algorithms Are Screwing You, & Today's News

Episode Date: June 18, 2024

Go to https://sundaysfordogs.com/phil to get 50% off your first order of Sundays for Dogs!  Go to  https://shopbeam.com/defranco and use code DEFRANCO to get 45% off for the next 48 hours. https://beautifulbastard.com June Flower’s Drop Is Live! Snag It While You Can! ==== ✩ TODAY’S STORIES ✩- – 00:00 - Former Kick Employee Accuses Company Staff of Racism & Discrimination 06:26 - Ted Cruz Introduces Landmark AI Deepfake Bill 8:56 - Federal Charges Unsealed Against Surgeon Who Leaked Health Records of Minors 11:26 - Sponsored by Sundays for Dogs 12:26 - CA Weed Found to Have Unsafe Levels of Pesticides  16:17 - U.S. Sues Adobe for Making It Difficult to Cancel Subscriptions  18:30 - Biden Gives Legal Protection to 500,000 Undocumented Spouses of U.S. Citizens 21:13 - Sponsored by Beam  22:14 - Regulators Set Sights On “Algorithmic Collusion” in Healthcare and Housing 28:40 - Comment Commentary LA Times Weed Deep Dive: https://www.latimes.com/california/story/2024-06-14/the-dirty-secret-of-californias-legal-weed  ——————————   Produced by: Cory Ray Edited by: James Girardier, Maxwell Enright, Julie Goldberg, Christian Meeks, Matthew Henry Art Department: William Crespo Writing/Research: Philip DeFranco, Brian Espinoza, Lili Stenn, Maddie Crichton, Chris Tolve, Star Pralle, Jared Paolino Associate Producer on Algorithmic Collusion: Jared Paolino ———————————— #DeFranco #JennaOrtega #Kick ———————————— Learn more about your ad choices. Visit megaphone.fm/adchoices

Sup you beautiful bastards, welcome back to the Philip DeFranco show, you daily dive into the news and I got an extra extra large show for you today. So how about you buckle up, hit that like button, otherwise we'll punch you in the throat and let's jump into it. Starting with, in big internet and business drama news, we need to talk about Kik. Right, and they're the streaming platform that's kind of known for two things. One, it's where seemingly a lot of people go when they get kicked off of the other platforms. And two, they have just thrown down so much damn money for streamers. I mean, we're talking about reportedly millions and millions of dollars luring some of the biggest names over to the platform.

But now they're in the news for a completely new reason. Because you had a former Kik employee by the name of Melissa posting a video with some serious accusations about the company's leadership and staff. With Melissa in the video talking about how hostile the culture of the company is as a whole. There was just a consistent disrespect to other people's opinions and beliefs. And this went as far as to just consistently hearing the F-slur. And not even just in jest, like as a joke, it was specifically targeted towards people that it was supposed to discriminate against. Even so much as to walk past the socials room, the guys that run the, you know, kick streaming and kick community,

and hear the N-word just dropped, hard R. And I'm like, what is this office? How, and they had the executive, like the upper management was in the room. But they're also claiming that staff members would do things like laughing as they deliberately misgendered trans streamers. So Melissa saying that her decision to actually leave

came down to two incidents that happened in her final weeks. One involved the case of a streamer with special needs whose contract was up for renewal. And when Melissa followed up with the streamer's point of contact at Kik to check how it was going, she said, When I asked about this streamer's contract renewal, he had a smirk on his face and goes, I decimated his rate.

And this was apparently hilarious because everybody else in the room laughed. I said, well, what did you put it down to? And he proceeded to then brag about the fact that he got him on a below market cent rate for an English streamer. Then as far as the other incident that led to Melissa leaving, she said it was in relation to a meeting regarding a specific unnamed streamer. Just for context, this particular streamer had been publicly battling cancer recently. So they decided to utilize that in their strategy to get this person over. The conversation very quickly became quite sinister.

The quote that I remember hearing was, we can get her on kick streaming stake for a relatively low price because she probably thinks she's going to die soon and she'll want to leave more money for her family. With Melissa then going on to talk about children's safety on kick and the way the company allegedly mishandled that and claiming they don't even know their own policies. Before I got there there was no verification process for if somebody was underage and so funny because by the time I left me and compliance had put together a process and because I was pushing it so hard. I'm like, we cannot allow anybody under 13 to stream. Now, nobody knew this, by the way, because I guess when you copy Twitch's TOS verbatim and then you just get

some random guy in the office to change, you know, the wording, none of the staff know the terms of service. So a lot of people were just like, nah, she can stream even if she's six years old because, you know, she'll have her dad near her or whatever. And it's like, no, that's actually not the case. She cannot be on the platform and she cannot hold her own account. Melissa also going on to allege how she was personally mistreated during her time at the company and afterwards, saying that it got to the point that she felt she had to post her resignation letter on X last week. The company's co-founder, Ed Craven, then even responded, then apologizing for not getting to know her better and asking for some examples of the issues that she experienced, saying that his DMs are open and HR is always available to her. Which Melissa responded that

he wasn't interested when her problems were actually happening, and he only cares now because he's in damage control mode. You know, following all this, we've seen some big reactions from some pretty big names in the streaming space. this including commentator and big streamer himself, Hasan Piker, saying, Here's the thing, everybody. Ultimately, the same test exists for kick as it does for every other streaming platform. Would people go there and voluntarily stream there for free? If the answer is no, then there is no, you know, there is no long-term commitment to growing the platform. It doesn't mean that Twitch doesn't have its fair share of problems. Of course it does. It's just that, you know, at least it's not a platform that is genuinely trying to market itself as the place to go to when you get banned out of every other platform for doing sometimes crimes like literal crimes oh when the bag dries up

you will see what streamers truly feel about this platform and then specifically regarding melissa's story regarding the streamer with cancer he said when you think about it i feel like that kind of like bloodless opportunism is like somewhat expected from any kind of corporation, I guess, you know, it's demon pretty gross. Notably, you also had other streamers on the other side of this, like XQC, who, I mean, it is a key thing, received what was reportedly a non-exclusive $100 million contract with Kik last year, him defending the platform, him linking Melissa's story about the streamer with cancer to the Twitch streamer Kaidei, with her having shared her experience with acute myeloid leukemia throughout last year. An XQC saying that Kik and Stake told him that there had been no talks with Kaide, saying,

I asked, there was no communication done to Kaide from Kik or Stake. I even sent people to go investigate on the Kik part, because apparently it could have been Kik. I even asked to go investigate if anybody at Kik ever said anything to Kaidei and I didn't get anything. Notably there for now, as of filming, we haven't seen any response from Kaidei. We have from the special needs streamer Melissa mentioned,

with that seemingly being JakeFuture27 who said Kik never lowered his deal. And Melissa then responding, I'm sorry for having you involved in this. I did, however, relay a conversation that was definitely had. I'm unsure if my video changed their mind or not, but I'm just glad you've gotten to keep your contract.

And we saw Kik's leadership also honing in on the fact that Melissa really didn't provide any hard evidence to back up her claims. If evidence is ever presented, we will 100%, we take the allegations seriously. We're continuing to investigate them internally. And this is with despite like, you know, evidence being presented. So that's something that's very, very important to this team that it doesn't matter that these are allegations. What matters is getting down to

is this stuff really happening? But he went on to say that none of these complaints have been brought up internally. You know, with all that said, I got to pass the question off to you. Where do you land on this? What do you think? And then if you're making or even posting fake AI porn in the very near future, you may be getting real life fucked. And that's because today you had a bipartisan group of senators led by Ted Cruz rolling out legislation that would crack down on deep fake revenge porn, with them wanting to make it a federal crime to publish non-consensual intimate imagery or NCII. And in addition to making it illegal to knowingly post this content online, the bill would also require social media companies to develop

procedures to remove this kind of content within 48 hours of receiving valid notification from a victim. With it also mandating that the platforms make, quote, reasonable efforts to remove copies of the images. And in the press release outlining the measure, lawmakers argued that this bill is necessary to close enforcement gaps and create a uniform federal process for removing AI porn and prosecuting those who post it. With it explaining that while almost all states have some kind of law protecting people from revenge porn, only 20 explicitly covered deepfakes. And even the states that do have laws on the books, they have different classifications for the crimes and the penalties resulting in uneven prosecution. And this is the victims of AI porn have repeatedly struggled to have images removed without specific federal rules for social media companies in place. And beyond that, you have the sponsors of this new

proposal arguing that the laws that are in place right now at the federal level, they do not go far enough. Because Congress passed legislation two years ago creating a civil cause of action for victims to sue people who publish revenge porn. But this bipartisan group, they argue it's ineffective. And there, I mean, it's hard to argue that the laws aren't inadequate. I mean, it feels like every other week we're talking about another celebrity who's been the target of AI porn. It seems like everyone's been hit. Taylor Swift, Billie Eilish, Jenna Ortega, Pokimane, but also it's not limited to just famous people. Regular everyday people and even minors have fallen victim. And this isn't like anecdotal. It's not just perception. There are actual stats that back up the recent boom of this kind of

content. For example, an analysis done by Wired finding 244,625 deepfake porn videos being uploaded to top websites in the last seven years. So a key thing there is nearly half of all those videos were uploaded just in the first nine months of last year. And a report from Home Security Heroes finding producers of AI porn increased their output by 464% year over year, just in 2023 alone. But here's the thing, this is just a bill. It is being proposed. We do not know bill. It is being proposed. We do not know if it's going to pass. And I say that because up to this point, lawmakers have really failed to address this in a meaningful way.

And in general, what we've seen are them introducing competing bills and stepping on each other's toes. I mean, literally just last week, one of the Republican sponsors of this new bill blocked another bipartisan proposal that would have allowed victims of non-consensual deep fakes to sue people who had created, possessed, or distributed the content. So there seems to be an agreement that something needs to be passed here, but what? Is it this? Is this the winner? Or is this just another part of the cycle where we just say things and then we fight and then nothing happens? And then, is this man right here a courageous whistleblower or a law-breaking right-wing hack? That is what a lot

of people are arguing about right now, and your answer is probably gonna depend on how you feel about the controversy surrounding Texas Children's Hospital in Houston. Because back in February of 2022, State Attorney General Ken Paxton declared that gender-affirming care for minors is child abuse under the Texas Family Code in a legal opinion. And although the courts blocked him

from investigating parents for getting their trans kids treatment, the threat of all this was enough to scare Texas Children's Hospital, which is the largest pediatric hospital in the US, to announce that it would cease gender-affirming hormone therapies, with them citing potential legal liability. But then that is where Dr. Eitan Haim comes in.

Because Haim, who was doing his residency there at the time, claims that the hospital continued prescribing puberty blockers to minors, despite its public pronouncement. With him the following year, logging into its online portal and accessing the personal health records of patients who were not under his care. Because he wasn't involved in the transgender care program, he was training to be a general surgeon. With him then taking these documents, which reportedly included patients' names,

physician names, and treatment codes for several children, and gave them to a conservative activist by the name of Christopher Ruffo. And then, without naming Haim, Ruffo published this story. With him leading with the angle that this hospital was secretly ushering kids down the transgender conveyor belt toward irreversible mutilation. It's a process of psychological, physiological, and metaphysical manipulation. With us then seeing the next day, the Texas legislature voting to ban gender-affirming care for minors. With Haim eventually revealing his identity in January and making it very clear that he is opposed to all gender-affirming

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that growing up is hard, and they can grow up to be something amazing. They're telling them to adopt this false identity that is based off their own self-hatred. But now what we're seeing with all this is that he's been indicted on four counts of violating HIPAA because he allegedly acts as private patient records under false pretenses and without authorization,

with him then handing them over to a media contact, though he claims he redacted any personal information, and he argues that he's just a whistleblower being politically persecuted by the Biden administration, which is also the line being taken by a long list of conservative media outlets that are having him on their shows to talk about what they describe

as the horrors of transgender healthcare. But this is on the other side, you have people arguing he is not a whistleblower, he's just a criminal. And with that, saying that whistleblowers, they expose illegal or unethical behavior, but he did neither, right? Because at the time, gender-affirming care was perfectly legal. And arguing that even if the hospital contradicted its public statement, that doesn't prove that it acted with any malice toward children. So of course, I'd love to know your thoughts and your opinions on this, but either way,

Heim is currently facing up to 10 years in prison and a $250,000 maximum fine. Though notably there, he's already raised more than $650,000 from his supporters to pay legal bills. And so for now, we're gonna have to wait to see how this plays out. And then, I'm a dog person and our dogs are a huge part of our family. And just like I care about the food that my kids eat,

the same goes for my dogs. And the fantastic sponsor of the PDS, Sundaes is fresh dog food that we use. Co-founded by a practicing veterinarian, Sundaes is made from a short list of human grade ingredients containing 90% meat, 10% veggies, and zero synthetic nutrients. I mean, seriously, our dogs are obsessed with this food. They see the box, and it is the same response as when we give them treats. And the treat for us is the convenience of home delivery.

It is just so helpful. And get this, Sundae's uses an air-dry process, so unlike other fresh dog food, it doesn't require refrigeration. You just pour and serve. And it's super easy to store. And dog parents have reported noticeable health improvements in their pups, including softer fur, fresher breath, better poops, and more energy when switching to Sundays. And also, did I mention that it costs 40% less than other healthy dog food brands? Y'all, just go to SundaysForDogs.com slash Phil to get 50% off your first order of Sundays. Yeah, that's 50% off your first order of dog food with human grade ingredients. Sundaysfordogs.com slash fill and your dog will be happy you did. And then ever since legalizing recreational marijuana,

California has prided itself on ensuring that the stuff is safe, it's regulated and ideally got that good stank. So that when someone goes, oh, smell this, I go, oh yeah, I guess it's good. It's an indica. It's a tea of it. It's going to put me to sleep. Now, an investigation by the LA Times alongside industry professionals found that weed across the states actually plagued with dangerous chemicals that far exceed legal limits despite

stiff regulations on paper. This including stuff like chlorphenipyr, which is an insecticide where any amount is considered unsafe in weed, as well as biphenazate, which was found at 237 times the safe limit and is believed to cause reproductive issues and mess with endocrine receptors. And those two were just the tip of the iceberg. In total, 29 chemicals were found that far exceeded safe limits

and 45 toxic chemicals were found overall. But also, one of the wild things here is that California regulators have actually known about these results for a while now, but actually not because their labs caught it. Instead, it's because private labs like Infinite Chemical Analysis Labs, they had been testing the products on their own

and complaining to the department about how contaminated the weed was. They tested 42 products that were previously deemed safe and they had drastically different results, causing their CEO to try and get regulators to act last year. But the end result there was that out of the 42 dangerous products tested, only a single one was recalled

and three others were just quietly removed from shelves. And so the CEO then tried to escalate the issue by directly emailing Governor Gavin Newsom, saying those failing products alone represented 150,000 packages of flowers, vapes, or pre-rolls for sale to unsuspecting consumers. With that then resulting in another recall, but everything else was still out there on shelves, despite the brands now for sure knowing the dangers of these chemicals. Take Stizzy, for example. They're the biggest weed brand in the state. We saw them defend their products having dangerous compounds at extremely unsafe levels by saying, we adhere to all standards and limits

set by the state of California, which is some of the strictest testing requirements and pesticide limits in the country. Which, yeah, is kind of true. Like on paper, California definitely has those rules. But as we've seen, regulators were lax about testing. Not to mention, they haven't kept up with the times. Right, they're currently required

to test for 66 different chemicals. But that list hasn't actually been updated since 2018. And that's despite requests from pesticide regulators who have more actively kept up with how cultivation practices have shifted over the years. Which is to say there are now new chemicals that are on that list. You've got things like the fungicide fenvalerate. That's got the fun proven side effect to lower sperm count. It's actually been prohibited in the US since 2008. You've also got pimetrazine, which was found in Stizzy products at over 60 times the legally safe limit.

That's a fun known carcinogen that causes hormone problems as it mimics their shape in the body. And it's gonna really stress how important proper testing is on the final finished products. Because the reality is that a lot of these chemicals enter the market due to how weed is sourced in California. So while sometimes legal suppliers use those chemicals, it's most often weed sourced from the gray and black markets

which flatly ignore rules about what pesticides to use and whether they're even legal. And for them, they often wanna use the most efficient pesticides, even if they are extremely dangerous for humans, which is why they smuggle them from China. And one of the biggest issues surrounding all this is how the agencies are set up,

as well as the breakdown of inter-agency action. California has an agency that does some of the most rigorous testing about pesticides, but they point out that the ability to recall products and test products themselves, that rests solely on the Department of Cannabis Control. And you've got insiders within the department telling the LA Times that there's a general lack of willpower to rock the boat too much because of the importance of not disrupting the market.

Though I will say there is some good news here. This report now seems to have sparked some sort of action. Because shortly after it came out, the deputy director of lab services left the department. Now, officially, they didn't say why, but it seems pretty fucking damning. And on top of that, when these outlets started asking the agency questions back in January as part of their investigation, dispensaries started getting notices about new recalls. Although that kind of missed the mark as those recalls were because of mold and misleading claims, not because of their dangerous chemicals. Also, for the Californians out there, or if you got your hands on any Caliweed

and you wanna see how dirty it is, I'm gonna link down below, they have a table that you can search and it'll tell you what chemicals are in there and whether it's beyond safe limits. And as for the agency, I mean, we're gonna have to wait to see what happens from here

because it seems like their job, right, keeping consumers safe, it appears that they have fundamentally failed at that. And then, Adobe has trapped its customers and we are going to make them pay for it. That is the message the Department of Justice has now put out there. Right, and Adobe, for those that might not know,

is the company behind just so much creative software. Right, photo, design, video, Adobe's got it. Though it's also not just Adobe getting sued by the US government. You've also got execs like David Woodwani, as well as Maninder Sahni being named as defendants. Though there, most of the allegations related to the individuals have been redacted

from the version of the complaint that's been released to the public. Though notably there is a connection to the core story. The public version still identified Woodwani as one of the chief architects behind Adobe's pivot to a subscription-based model. And that's a key thing because Adobe's allegedly deceptive practices around its subscription model,

that's what this is all about. The DOJ and FTC alleging that for years, Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms. Which, you know, if you've ever had an Adobe subscription and you tried to cancel it, you'd know exactly what they mean. But for everyone else, basically, when you sign up to a monthly subscription to Adobe software, you're agreeing to a year-long commitment. If you want to break that commitment, you'll get charged an early termination fee or an ETF that could amount to hundreds of dollars.

And according to the complaint, Adobe clearly discloses the ETF only when subscribers attempt to cancel, turning it into a powerful retention tool that traps consumers and subscriptions they no longer want. The document also noting that when you sign up, Adobe hides these terms in the fine print and behind optional text boxes and hyperlinks. With one of the big claims there being that these disclosures are intentionally designed to go unnoticed. And then going even further, they claim that Adobe quote, "...deterrs cancellations by employing an onerous and complicated cancellation process." Including by surprising you with that ETF that you probably didn't even know you agreed to. Right, so another side effect of this whole complicated process is that you have subscribers believing, hey, I successfully cancelled this, but then they just continue to get charged.

With them then only realizing that they're still getting charged when they look at their bank accounts months later. Of course, on the other side of this, you have Adobe denying, denying, denying, releasing a statement saying we are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process, and saying that they plan to fight the allegations in court. Though also, I'll say an important thing with this whole situation is to know that this is not the first time this has happened to a company. Right, last year, for example, the FTC sued Amazon for making it hard for customers to terminate their Prime memberships. But we'll have to wait to see what happens, though.

I don't know if there's going to be a lot of people rooting for Adobe right now. It's just based off of a few other things that have happened recently. I think they have lost a lot of goodwill with their customers. And then watching President Biden try to handle immigration and what's happening at the southern border right now, it feels a little bit like watching someone lose their virginity. He seems to be trying his best, but he is all over the place. I mean, we talked about it a few weeks ago,

but you know, we saw Biden doing kind of a 180, signing an order, allowing him to temporarily shut the Southern border and cutting off longstanding protections for asylum seekers, things he had previously condemned during his 2020 campaign. You know, it was widely seen as an effort to court voters on a hot button issue that Republicans have been slamming him on.

But that decision got a ton of backlash from progressives and immigration activists. Are you people accusing him of betraying campaign promises for more humane border policies? And so now what it appears he's doing is he's trying to strike more of a balance on immigration and appease those voter bases as well. Because just weeks after imposing what the New York Times described as the most restrictive border policy instituted by Mr. Biden or any other modern Democrat, the president has now enacted a policy that the outlet called one of the most expansive presidential actions to protect immigrants in more than a decade. With just today, the president announcing sweeping new protections for nearly half a million undocumented immigrants who are married to U.S. citizens but haven't

gotten a green card, which, you know, is a process that is lengthy and complex, especially for people who initially entered the country illegally. And if you're not familiar, under American law, immigrants who married Americans but entered the U.S. without a visa are required to leave the U.S. and return to their home countries for up to 10 years before they can apply to come back, something that puts their lives in a limbo for as long as a decade and separates them from their families. But under this new executive action,

eligible undocumented spouses would be allowed to apply for green cards without leaving the country, with the Biden administration giving them three years to apply and granting them permits to work legally in the U.S. in the meantime. Though very notably here, not everyone is eligible, because this actually only applies to folks who have lived in the U.S. for 10 years, been married to an American citizen as of June 17th, and do not have a criminal record. But still, we're talking about a lot of people. With administration officials estimating this will apply to roughly half of the estimated 1.1 million undocumented immigrants married to

Americans. And also big, it'll apply to around 50,000 non-citizen children of undocumented spouses under the age of 21 who have become stepchildren of U.S. citizens. And then even beyond that, Biden announced that he'll also be enacting a work visa program for DACA recipients, right? Dreamers, people who were brought to the U.S. as children. But that making it easier for dreamers to get work visas if they have higher education degrees and have been offered a job from an employer in a field related to their degree. This is some absolutely major moves on Biden's part here. And notably, it's a move that experts say could actually help Biden in swing states like Nevada, Arizona, and Georgia. Each of those home to more than 100,000 voters in households with

mixed immigration status. And so with this, we've seen different reactions like that of Nevada Senator Catherine Cortez Masto, who wrote an op-ed this week arguing that protecting undocumented spouses will help the economy in her state. Also adding, it's the right thing to do. It's the smart thing to do. And on the other side of this, as you'd expect, a ton of conservatives are mad about this move. Something potentially undermining any goodwill Biden may have garnered with his decision to temporarily close the border earlier this month. And then I'm just going to open up with a headline here that the fantastic partner, the PDS, Beam Dream, has the best offer going on for a very short time for you beautiful bastards. 45% off for the next 48 hours. You know, I've been using

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maintain, or stabilize prices or price levels. But the key thing about that being it is illegal, because it undermines competition and innovation and it just hurts consumers. But a big part of this conversation now is that thanks to pricing algorithms, it's much easier for companies to engage in this type of behavior. And that's because competitors,

they no longer have to meet in secret to hatch some price fixing conspiracy. Hell, they don't even have to communicate. They just have to use a common pricing algorithm. And to give you a better idea of exactly how this works, let me tell you about some concerns that were laid out by Senator Amy Klobuchar. She sent a letter this year to the Justice Department and the Federal Trade Commission. And in it, she specifically emphasized the issue

of algorithms in the healthcare marketplace, describing how firms may be using algorithmic tools to undermine competition and push additional costs onto patients that receive healthcare out of their insurance. And with that, highlighting recent reporting by the New York Times on a firm called Multiplan, which is this little-known data analytics firm that works with major insurers like United Healthcare, Cigna, and Aetna. And notably, it promises to help contain medical costs using fair and independent analysis. But in reality, Klobuchar, as well as experts in antitrust law, say that Multiplan has an arrangement with health insurers that could amount to price fixing. But rather than having to compete to offer better coverage, insurers can use the prices recommended

by Multiplan's algorithms, knowing that their competitors are likely doing the same. And so notably with that, Multiplan's reach is massive. Because in addition to UnitedHealthcare, Cigna, and Aetna, the company reportedly works with Kaiser Permanente, Humana, and some Blue Cross Blue Shield plans, with the firm estimating that its reach extends to more than 100,000 health plans covering more than 60 million people. And one of them, for example, was a woman by the name of Gail Lawson, where she got left with a $100,000 bill after a complex surgical procedure, with her doctor only getting reimbursed by her insurer for around $5,000. And that's despite the fact that she is paying hundreds of dollars every month for insurance precisely to avoid this type of

situation. And so to be clear, the people that are affected in this specific situation are people on employer-sponsored healthcare plans getting out-of-network coverage. And to that point, I should note that there are a lot of reasons that someone might want to go to an out-of-network provider. The most commonly reported reasons being that the provider is in a more convenient location, is higher quality, or is perceived as being more affordable. But notably, it is often people with chronic or complex conditions that need to see out-of-network specialists, as well as people seeking mental health or substance abuse treatment. And what Multiplan does is using its proprietary algorithms is help the insurer figure out how much of the bill will be footed by the patient

and how much will be paid by the employer. And so the difference between the total bill and how much the patient pays effectively amounts to a savings for the employer. And both Multiplan and the insurer make money by charging employers a processing fee that is a percentage of those savings. With Multiplan making notably almost all its revenue from these kind of fees. With there being this quote large and mostly hidden financial incentive to reimburse out-of-network medical providers as little as possible. So if a medical bill is $1,000 and Multiplan advises that you and your employer split the bill 50-50, they make around $35, while the insurer would make maybe $175. But if they instead say that you should pay $800 of the bill, then Multiplan and

the insurer's profits soar. And actually, because of that incentive, the fees paid to an insurance company in Multiplan sometimes far exceeded the amount paid to providers who treated the patient. In one case, for example, Cigna took in nearly $4.5 million from employers for processing claims from eight addiction treatment centers in California, whereas the centers themselves, they received only a little over $2.5 million. And again, with these profits facilitated by an algorithm. And in particular, it's this algorithm-based tool called DataEyeSight, which is known for consistently producing the lowest payment recommendation, and which has fueled Multiplan's growth more than anything. With that, what makes it potentially illegal, and not just unethical, is that it could be considered an act of collusion. And to that point, three hospital systems have already sued

Multiplan, accusing it of colluding with major insurers to set unreasonably low payments for medical care. And while one, the firm has denied the allegations of collusion, and two, in a statement to the Times that it was committed to helping make healthcare transparent, fair, and affordable for all, there is a real case against them. And that's because according to the Times reporting, as Multiplan became deeply embedded with major insurers, it pitched new tools and techniques that yielded even higher fees. And crucially here, it also told insurers what unnamed competitors were doing. With one UnitedHealthcare VP, for example, meeting with a Multiplan exec

and then telling her colleagues that their competitors were using Multiplan's aggressive pricing options more broadly and they could, quote, catch up. And according to law professor, Barak Orbach, this should trigger an investigation by the agency. There seems to be a really strong case. And to that point, while the FTC and Justice Department

declined to comment on the Multiplan issue, both agencies have raised concerns in the past about similar arrangements in other industries. And so really, I mean, this multi-plan case, it just highlights growing concern among these agencies as well as some in Congress about algorithmic collusion. And actually with that, in March, the DOJ opened a criminal investigation into the property management software RealPage, which notably has been accused of facilitating price fixing in the housing market through its algorithms. And that company, along with its owner and dozens of property owners and managers, are already the target of a class action lawsuit brought by renters. And an important note is that

other class action suits have actually been filed in other cases alleging algorithmic price fixing in the housing market and hotel industry. Also, I'll say as an aside, we're seeing things like the Italian government investigating the use of pricing algorithms for airline tickets. But in any ways, the government's position has become clear, with one statement filed by the DOJ and FTC saying this, Firms have evolved the mechanisms they use for reaching unlawful price-fixing agreements. In-person handshakes gave way to phone and fax and later to email. Algorithms are the new frontier.

And given the amount of information an algorithm can access and digest, this new frontier poses an even greater anti-competitive threat than the last. And adding, it makes no difference that prices are fixed through joint use of an algorithm instead of by a person. Automating an anti-competitive scheme does not make it less anti-competitive. But importantly with that, that is just the legal position of the Justice Department. And what we're seeing is that judges don't necessarily agree. And in fact, some cases have been dismissed. So basically, the laws that we have in place may not be up to date with this so-called new frontier.

Which is why you see Klobuchar telling The Times, It's not clear whether current antitrust laws are sufficient to stop this practice. It is much better just to clarify this and to close the loophole. And that's why she and other lawmakers have introduced the Preventing Algorithmic Collusion Act this year, which would do things like presuming a price-fixing agreement when direct competitors share competitively sensitive information through a pricing algorithm, as well as requiring companies that use algorithms to set prices to disclose that fact and give antitrust enforcers the ability to audit the pricing algorithm. So it's going to be very interesting to see where these lawsuits and these investigations and where the legislation in Congress ends up. Because there are two things that are abundantly clear right now. One, the attention on this issue has recently stepped up.

And two, that needs to increase. We need to see action because you and I, we are the ones truly paying the price. And then finally today, let's talk about yesterday. A little comment commentary where we dive into the comments and talk about what y'all had to say. Starting with the leaked I'm Alex videos and the other allegations. With the top comment being, I'm Alex is 100% my, finally, I have a reason to justify my previously vibes-based dislike of a person. Others saying the situation didn't shock them at all and saying after the false allegations I'm Alex pushed against Slazo, I pretty much knew he was a terrible person. The fact that content creators like Mimulus, among others, stood by him after that is insane. And finally, you had people talking about the ex-girlfriend saying, people who

say, why did you stay? Why didn't you just leave? Have never been in an abusive relationship. Saying they threatened to kill you, or ruin your life, or threaten themselves. It's so difficult to get out once you're too deep. Could have heard to try and stop this from continuing to happen. And while most agreed with that statement, you had others chiming in saying, I'm 100% sure being threatened to be hurt or actually being hurt should be more than enough reason to leave any bad situation. Like, what more do you need than that? Though most of the reactions are that, calling them a victim blamer and saying it's not simply leave, boo-hoo, it takes serious planning and support. Try leaving when you have no one to fall back with. It's near impossible.

Talk on something you've done before instead of belittling something you very clearly don't understand. Also, another story that got a lot of attention yesterday was that deep dive into the PSYOP. You know, saying things like, as a Filipino-American, that Reuters story was upsetting and disturbing as hell to hear. We have so much family and many family friends that were affected by anti-vax nonsense, and knowing that at least a portion of it came from the Pentagon, while not surprising, I was still astounded by their complete disregard for Southeast Asian public well-being. Then, regarding the Caitlin Clark situation with the WNBA, many of y'all have put the blame on the media, saying things like Caitlin Clark has repeatedly responded to these calls with

that's part of the game and a desire to move on. The fact that the media refuses to do so shouldn't be put on Clark or anyone she plays with or against. Does the media go ballistic with calls like this in the NBA, or are they trying to keep attention on the WNBA by any means necessary? And Heiko Wait saying, I've been a WNBA fan for years. What this feels like is that they've captured lightning in a bottle with Caitlyn Clark's popularity, and media outlets are trying to stir up controversy to try and continue the WNBA's popularity, although it clearly causes more harm than good. And then, you know, there's actually a lot more. There was a good spread of comments about all the different stories. So also, if you haven't checked out

yesterday's show, I highly recommend it. But I've already filled your brain with enough bad, bad for the day. So that's where we're going to end today's show. Though do not worry, I will be back with your daily dose of brain poison tomorrow, because my name is Philip DeFranco. You've just been filled in, and I love your faces.