The Vergecast - Big Tech is back on trial

Episode Date: April 18, 2025

We promise, this episode is only a little bit about header bidding. Nilay and David are joined by The Verge’s Alex Heath to talk about some big news in tech regulation: Google lost its ad-tech monopoly trial, which could reshape both Google and the internet altogether. And that’s not the only monopoly news! Meta’s trial also started this week, and Alex was there to see Mark Zuckerberg and others try to defend Instagram, WhatsApp, and the company as a whole. After all that, we talk about OpenAI’s plans to build a social network, and how this company seems to never run out of ambition. Finally, in the lightning round, it’s time for another round of Brendan Carr is a Dummy, and some news about viral cameras and the Switch 2. Which we’ll be yeeting into our homes as soon as possible Further reading: Google loses ad tech monopoly case FTC v. Meta live: the latest from the battle over Instagram and WhatsApp Meta CEO Mark Zuckerberg defends Instagram purchase in antitrust trial Zuckerberg defends his empire during FTC antitrust trial Mark Zuckerberg suggested spinning off Instagram Mark Zuckerberg tells court that Meta made WhatsApp, Instagram better Mark Zuckerberg once suggested wiping all Facebook friends lists to boost usage Meta reportedly offered $1 billion to settle the FTC’s antitrust lawsuit. Zuckerberg defends his empire during FTC antitrust trial Google, Apple, and Snap aren’t happy about Meta’s poorly-redacted slides Meta’s antitrust trial slide redactions aren’t actually hiding anything OpenAI is building a social network OpenAI debuts its GPT-4.1 flagship AI model OpenAI might finally get better model names soon. OpenAI’s upgraded o3 model can use images when reasoning ChatGPT will now remember your old conversations OpenAI is reportedly considering a $3 billion deal to buy AI coding tool Windsurf. Netflix is testing a new OpenAI-powered search Brendan Carr on X The Media and Democracy Project on Bluesky Trump excludes smartphones, computers, chips from higher tariffs Smartphone tariffs are coming back in ‘a month or two,’ says Trump admin TSMC is unfazed by tariffs. Microsoft’s Phil Spencer: “I want to support Switch 2.” In pursuit of a viral, five-year-old compact camera Email us at [e-mail] or call us at 866-VERGE11, we love hearing from you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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It's going to be a very short podcast if we have to attempt to explain what Facebook is. Or the world's longest podcast. The longest podcast ever. Yeah. Alex Heath is here direct from the meta antitrust trial. What's up, Alex? I'm just over here on Miwi guys. Come on in.

The water's warm. The best part of any antitrust trial is when the accused monopoly insists that insane things are true competitors. So Comcast will be like, yes, like infrared internet is a real competitor to our fiber network whenever. It's like, that's not. And they're always like, we're so helpless in week. And that's very much what Meta is doing in the courtroom with other networks like Meway. So we got to talk with that. Alex was in the courtroom with Lauren Feiner.

Mark Zuckerberg was on the stand for a long time. this week. We're going to talk about all that. But what's wild is that while all that was happening, the Google ad tech antitrust case got a decision and the court ruled that Google has a monopoly in ad tech. And I don't even remember this. We forced David to go to that trial way back when. David, just briefly sum up what that trial was like. Sure. I should I should say poor Lauren Finer had to go to a lot more of that one than I did. I just had to go for a couple of days because she couldn't or just didn't want to. I think at some point you spend enough time listening to people explain how ad exchanges work.

And you're like, I can't do this anymore and I have to leave. But anyway, so basically, this case was about three things. One was, did Google acquire its way into a monopoly in advertising technology? Two was, is Google basically putting all the different pieces of its advertising puzzle together in a way that is illegal? And three is basically does the sort of breadth of Google as a search engine, as a publishing engine for the rest of the internet, like, is Google so big that it should not have this much power over how advertising works? And they spent, I mean, just just like weeks litigating like the deep tech of the internet. ad stack. But what it really came down to is Google owns advertising on the internet in like a really real way. Wait, on the web. I want to be careful about it on the web. Because it's,

this is right up against meta and like advertising and meta apps. Well, and and a not in substantial part of Google's argument is that meta exists. Yeah. But yeah, for the for the open web in particular, Google essentially is the advertising engine behind everything. And it increasingly has controlled every piece of the advertising puzzle. It has controlled every market in this space for many, many years. And the overwhelming question was, is it a monopoly? And it actually turned into one of the more sort of straightforward monopoly cases we've had. I think, like, the question of is Google search a monopoly is really complicated.

The question of is meta a monopoly is really complicated. complicated in ways that we're going to talk about. But like just sort of definitionally what Google has and did with it is like right down the middle of what we talk about when we talk about monopolies, which is super interesting. And I think as part of the reason I think I certainly left the case being like, I think Google is going to lose this case. And we should also compare and contrast this to the other antitrust case Google lost, which was about its dominance and search. Right. So Google was. declared an illegal monopoly in search a while ago by a court.

That case is headed to a phase called the Remedies Trial, where you figure out what to do with it. Also this month. Also this month. The government wants Google to sell Chrome and maybe some other stuff. Google would not like to do that. And then this trial reached its opinion by the judge. Google has an illegal monopoly in advertising and various ways which we'll talk about. And then that will proceed to a remedies trial.

all of that is against while the meta antitrust case is like literally happening in real time. Like it's happening while we are talking. It will be happening while you were listening to this. It will always be happening. And then sometime down the line, there's going to be an Apple antitrust case. So this is a lot of like Lena Khan and Jonathan Cantor stuff happening all at once inside the Trump administration, which we can talk about. But Google in particular has now gone over to. Yeah.

In like big ways, big, meaningful ways. You will note Google also when Epic sued Apple and Google for antitrust issues, Google was the one that lost there, which I think is an apple kind of got away with it still on appeal in various ways. Does Google just have bad lawyers? Like, is that really the takeaway here? Again, I'm really interested to compare and contrast this with meta. My read on this is that Google's commitment to openness, and I'm putting openness in

quotes, but openness in Android on the web means that it has to influence lots of things that aren't Google. Right? So with Android, it has to convince Samsung what to do or whatever. With search, it has to convince a bunch of websites to like operate in search and be indexed or whatever. With ad networks, it has to convince a bunch of publishers and advertisers to play ball. And so it does that.

It, like, uses its influence. And there's emails. And then there's deals. And there's meeting notes. And there's contracts. And there's all the stuff you can go look at. And it's Google executives being like, if I turn this knob, the publishers will do that. And you have all this evidence.

They did the thing. Whereas with Apple or meta, Tim Cook or Mark Zucker is like, I don't, make number go up. And like some product manager does it. That's the end of that. And so I think Google is just like structurally at a disadvantage all the time because it has to make deals to get what it wants. The business success of Google over the last 20 years could really be tied to tying, this idea of monopoly tying, tying products together to get leverage. in another area, which is why the DOJ is pushing for Chrome specifically and changes to Android. We should probably also clarify, though, this ad tech case, this doesn't attack Google ads on Google search.

This is actually a much smaller part of their business. I think the status solves it's like 10 to 12 percent, right, of the ads that they serve on other websites. That's specifically what this case is about. Yeah. And that number is getting smaller too, right? Google makes its money on search. It makes its money in shopping. It makes its money on YouTube increasingly.

It's the part of the ecosystem where they monetize the entire web, which is what David was talking about. That number is getting smaller, but it's also under the most pressure because Google, well, now we know, Google has been a monopoly there. Right. But this is what I mean by it's a more sort of straightforward monopoly case. Because the thing that a lot of these other ones have run into is what is the difference between me doing something that is good for my business and a monopoly action? And that's actually a hard thing to put together, especially for something like a free product. So like if I make my search engine better and it hurts my competition, is that monopoly maintenance or is that good business? And it actually turns out the line there is very fine and really not obvious to figure out.

But in this case, it's like the basic finding of the case was, and I will attempt to do this without either being wrong or going way too deep on ad tech, both of which are very possible to do in this case. but that basically Google owned the part of the advertising sack that advertisers use, the part that publishers use, and the part that connects the two things. Those are three separate products, and Google owned them all. And basically the only way to get a good experience on any of them was to use all of them. And so everybody essentially agreed, and this was like the expert opinion over and over and over throughout the trial, that these products suck, but you have no choice but to use them, even though they're bad and more expensive, because without one or without them all, you can't get one.

And that is like, that's a monopoly. Like that is, that's just, that's just it, right? That's, that's railroads and trains. Like, it is, it is the oldest school version of how we talk about what monopoly tying is. And it's, and it's in such a more straightforward way than like, what does it mean that no one cares about any search engine except yours? Do you know what I mean? Well, there's that.

I mean, I'll just read you the conclusion from the opinion, which tracks with what you're saying, but in a more strident way. Here it is. For over a decade, Google has tied its publisher ad server and ad exchange together through contractual policies and technological integration, which enabled the company to establish and protect its monopoly power in these two markets. Google further entrenched its monopoly power by imposing anti-competitive policies on its customers and eliminating desirable product features.

It goes on. She's not happy. And really what, you know, it's so funny, I open a show with a joke about like, what is Facebook? So much of this comes down to like, what is the market? Is the market for search in competition with people searching on TikTok? And you end up in these like existential mind fields. And here, again, it's very simple because there's only three products that do the thing. You can't be like, well, I could replace this horse with an airplane. What is the market? It's like, nope, for here, there's three products, one that displays the ads, one that goes and gets the bids

from the advertisers about how much they'll pay and the systems that tie them all together. And you can't just replace those with anything. Like those are, literal software products you have to go and buy, and we know what the replacement products would be, and they don't exist because Google killed them all. Like, it is very straightforward in a way that makes it easy to talk about, but then it's also ad tech. And like, I'm confident we've already lost a bunch of people. But the issue is like, this is the money. Like, it's a small part of Google's money, but it's the money that funds the open web. And the open web is Google. Like, Google's search without things to search for is not a good product.

Google's AI training that everyone's doing across the entire open web doesn't work if you crush this entire ecosystem. And that is more or less what has been happening. And one of the reasons it's been happening is because now by this ruling, Google has been extracting more value than it's been giving back to these publishers. I should note, by the way, that we run a publisher. And we use DFP and our executives are very interested in the outcome of this case. We are far, far away from that.

That is literally, when you look at a Verge webpage, there's like the stuff we make and the ads, and the ads are run by another team, and they, like, literally other computers that are all tied up in Google systems. Shout out to Ryan Pauley, though, a Vox Media executive who appears in the decision a couple of times. Does he really? He does. Ah, that's great. Concert, baby. I'm going to go upstairs and find out. Yeah, we run a programmatic ad exchange.

It is all tied up in this. You know, the thing that really got me, and I'm going to try to, like, make this real or, at least tangible to people, because ad tech is really complicated. Like, complicated and full of, like, pure hacks to get around Google,

that Google then crushed like this cat and mouse game, which is kind of neat, but it's also just like a bunch of ad people doing ad stuff to extract pennies at scale and your eyes just glaze over. But the way, the essential way it works is that you load up a verge webpage,

and, you know, the story comes from WordPress. That's the system we use. And the advertising all kinds. comes from another set of systems, right? Double-click for publishers is the one that they're always talking about in this decision, DFP, that goes out and says, I've got this ad space. Does anyone want to buy it?

I'm going to serve it to these demographics that I found on this website. And advertisers are supposed to bid on it, and that's an auction. And so, like, whoever bids the most for the space and the scale wins or supposed to win. And what has been happening here with Google is because, like David said, they own all the systems that interconnect, they just keep giving themselves advantages. So they run the software that delivers the ads to us. They run the bridge software in the middle, and they run the supply software that the advertisers buy into. And the two things that jumped out to me are these policies they had. So it's an auction, right? Like just think about you

at an auction. Google had a policy called First Look, which required publishers to give Google the first right of refusal for every impression. So you're like, I'm going to put this up for auction and Google, like, I want it. And that would just see the end of that. Right. And then they had a policy called Last Look, which gave Google the ability to see everyone else's bids in an otherwise sealed auction before it could bid. So you have this like sealed auction and Google can look at it and say, oh, that is worth

it and pay. Right. So they had the first look and the last look on the auction. Sounds like a great business. It printed money. Like where do you think? all the GPUs came from. They got slides in the office, man.

Like, all of that Google, you know, like, we can't figure out pixel phones. We can just not do that forever because of this is printing money. And every time a publisher would try to do something to stop it, they would do hacks, right? They would run their own auctions

before opening up the auctions to Google's ad server, and then Google would find a way to shut that down. Like, that's the level of cat and mouse game that was going on. Revenues just went down, and Google's search traffic is down.

You're like, oh, the web that Google built is dying. It's under all of this pressure that we can see, but it was also under this massive revenue pressure this whole time. If Google loses control of this ad plumbing that fuels and funds a lot of the web, like we're talking about, what happens next? Do we have an idea? I mean, the hopeful version is you get a huge teeming market of ad technology, right? that like there was this big push a few years ago now.

I don't know. What is time? But there was this big push towards this thing called header bidding, which was essentially the idea that actually instead of just Google being able to bid in real time for ads and everybody else had to like submit them ahead of. Like this whole thing is insane. That was the hack I was talking about. I did my very best to not say header betting.

I know. I'm really sorry. I know. But header bidding, the whole idea was like we can use one line of code to essentially level the field and give everybody equal access to this, which means the advertising. are going to get the thing that they want and they are going to pay the most money for it. And everybody wins and the money just keeps flowing.

And in theory, that's where this goes, right? Like the actual technology to make this stuff work is out there. It's just that Google has so thoroughly subsumed all of the supply and demand inside of its own system that if you blow it out in theory, advertisers will get better placements that are ads and thus better performance on their ads. Publishers will get more money for their content. Like, this is the thing you are trying to pry open is just sitting there. The question is, is there any actual reality in which that works?

Like, Google is so far ahead. One of the things they talked about in this trial over and over was how high the switching costs are. That, like, even these companies that know Google is charging them twice as much as some of its competition, which everyone agrees is a better product, you just, it's just not worth the hassle to leave because you're essentially just like throwing all of your money away while you try to switch ad platforms. So Google's bet forever has been people will stay because it's too annoying to leave. And even with all of this, it seems like there's a real chance that that is what happens. And Google ends up being forced to spin off either, you know, one part of that pipeline.

But I don't know. In practice, it seems very possible to me that not that much actually changes. First, I want to say that David did say header bidding. and I should have just said it first. And I did my very best to not say header bidding, which is if you ask the ad world and you say, if you go into ad world and you say header bidding, they all just lose their minds. Like that's when they lost.

They know it's when they lost. It's just this very weird, wonky thing. But there are quotes that really back up what David is saying here from the opinion. I mean, just straightforward. Like, again, this judge did not play around. Quote, direct pricing evidence shows that Google could profitably price significantly above competitive level. because enough customers would keep buying those products and not go elsewhere.

Right. They were just raising the price and the switching costs were too high. Which, by the way, is like the most classic monopoly move ever. Get everybody in and then once they can't leave, raise the prices. It's like that's the definition of monopoly. Yep. AdEx, which is one of the Google products here. AdX is relatively high market share viewed in conjunction with high barriers to entry and expansion that exists for other ad exchanges. is supports the conclusion that Google has had and continues to maintain monopoly power.

And then the last piece of the puzzle, which is really interesting, is that Google also has the demand, right? And they have the demand because of search, which they also have monopoly in per another court. So the court says, you can do all this switching, but this big volume of advertisers is already buying Google search. And Google's just like selling them this other product on the side. They're tying them together, like you're saying, Alex. So here's a lot of quote, Google has been able to amass this unparalleled group of mostly small and medium-sized advertisers in large part due to the dominance of search, which another district court has found to be the source of Google's monopoly power in the markets for general search services and

general search text ads. So even if you can build a better system that returns higher rates, Google has tied its dominance of the ad tech market to its dominance in search, and people are buying the search ads. And they said, do you want to buy ads across the web when you're on the shoe review website. People say yes, and Google extracts all of that money too. So you've reduced competition sort of across the board. And there's all this evidence because Google has to make deals with everyone. And there's all the evidence. But also to your point, Alex, that's, in that is the real threat to Google here, right? Because what you're saying is actually all of these things are so powerful in part because they are tied together. Because when you want to buy search ads, now you're in our

system and it's actually easier and faster and more efficient for you to buy AdWords ads on the rest of the web in the same way that you're building ads products for search. Now we have a big hole getting poked in the middle of search, big questions about what's going to happen there, and you have being forced to open up the ad tech stack. All of a sudden, if I'm Google, I'm looking at this as like, yes, it's a threat to that small piece of our revenue that is coming from this like open web advertising system. But this also, this rolls right back into search ads, which is that's where the real money is. Like if you're a Google, well, that's the money you're worried about.

And this is not exactly that, but it is right next to it. It's also, what are you going to search? Well, there's that. Like, what are you going to search? For real, what are you going to search? If you kill the web in this way, if you put the SEO pressure on it, you put the AI scraping pressure on it, the AI answers in search pressure on it, you've put this much revenue pressure on it.

Profitably making a web page, which disclosure is the business we're in, is crazy. Yeah. Like I've asked this question of so many different kinds of media executives, a platform executives, of the CEO of Squarespace comes on Decoder. I'm like, why would anyone make a website?

I don't know. And that's bad. Like, that is the thing that is worst for Google. The only answer any of those people can ever really give me is to do e-commerce. You start websites to do e-commerce because you don't want to sell your product on the TikTok shop. So you want to kick people to a website. So you don't have to pay a bunch of platform fees.

Bad. Like that is a nightmare for Google because the new information is getting published in the platforms that are decidedly closed to the Google search crawlers and the Google AI systems. It's bad for all of us because the open web is just under all this pressure that you can see every day. And all the new information is on TikTok, which doesn't talk to Instagram, which doesn't talk to X, which it's like there's a real thing here where it's like the future of Google's at risk. but the future of the Internet's at risk, because the open system has been kind of crushed out of being, I don't know what's going to happen next. If I was, if I was Sundar Pichai, I would call Larry Page and politely ask for permission to break up the company before the government does it first. That's what I would do. Like straight up, that's what I would do.

I would say, look, we're going to sell YouTube and let YouTube be at something, and we're going to try to fix this web problem so that we don't lose to close systems because our entire self-conception has been about openness. And if we lose openness because we crushed it out of existence, that will just be our fault. I don't think they're ever going to do that. We did learn in the meta trial that sometimes they think about splitting up their own companies. And I would just say to all these executives, it would be better for you to do it on your own terms and have a government do it for you. But it's kind of like Google might be at that point where it would be better for them to do it themselves before letting two different district courts in two different remedies phases come to their own conclusions. This feels like a make or break moment for Google. in pretty much every way.

So you've got them losing their monopoly power that they've used to build the best business in the history of the world over the last 20 years. You've got OpenAI and AI eating into search. You've got the internal cultural problems, which I've written about a lot over the last year. And yeah, it feels like Google has to rise to this challenge or this may be the end of Google as we know it.

Yeah, I think it absolutely is the end of Google as we know it. Right. It already is. Right. Structurally. But I'm saying in terms of relevance, in terms of power, in terms of Google, just being this on the Mount Rushmore or Big Tech, just always being there, it feels like they are vulnerable. I've been wondering recently if that happened a while ago and we just didn't notice. Because I think the certainly in terms of like relevance and sort of market power, it's still at the peak of everything. But I think I just think about sort of the company that Google was for a long time.

And like, I think a lot of people really rooted for Google because Google set itself up in a way that was like, okay, as the web, as an open, accessible thing wins, Google will win. Right. And I think most people saw that as like a net good. Google was like, okay, we want to help people get online. We want to give people things to do on the internet. We want to give people access to lots of things. We're going to make a ton of money. And that's a pretty good trade. And it was. Like, that was a pretty good trade. The mission statement was organized the world's information and make it universally accessible. And I think that last bit is what the industry at large loved and what endured a lot of goodwill to Google. And what these monopoly cases are showing is that once the money came in, it wasn't actually about making it universally accessible to everyone. It was about how can we benefit our constellation of products that we use and tie together to maintain dominance. Right, totally. And I think somewhere along the way Google stopped being good for the internet, and it just took us a long time to realize it. Yikes. I got to sit with that one for a while. That really does cut against everyone's conception of Google.

Including Google's conception of Google. I have been harsher on Google than anyone these past few years. There's still their idealism within the company. And I think the thing that Alex is pointing at is the must. side of the company stopped being idealistic a long time ago. Right? That is just a bunch of sharks. And like, that's advertising. Like,

you've ever met people in, like, there's sharks. Like, they're just trying to sell you nail polish in sports cars. And it's great. I love those things. But like Google's idealism to make great products and to funnel that money into

whatever wacky idea, with a contact lenses that could see, like detect health problems. Like all of that started fading because none of that started working. And they weren't, they didn't find anything else to make. money on except search. So they just turned the screws on search in this very specific way, and the openness became their weakness in these antitrust cases. Like I said, if it was up to me,

I would, you know, this is like the time for radical reinvention of Google. And in particular to say the open web needs to be protected because if it dies or the next new person who has an idea to make information will not do it on the web, that's death. Like I, that's just death. I think I even asked Sundar Pichai last year, like, why would anybody start a website? And he was kind of like, well, we have YouTube. And that's not great. Like, that's death. And you got to, you got to do something to protect that feedback loop so that the web persists in a way that allows search to exist, but also just allows more information to be published in open ways. I don't know what's going to happen. Like, there's a remedies phase. There's the search remedies phase. It's just wild that this

existential problem for Google is literally coming up the week that meta is also facing an trial. And they seem to be in almost the exact opposite position where the government can't even describe what Facebook is. It's so funny. We're talking about this. I've been looking at my notes because being in the courtroom, you know, you can't have a phone enough. So I've just been writing all these notes all week. And Zuckerberg actually talked a lot about Google because he was getting asked about basically, and I don't know if we're officially segwaying now, but the FTC was saying, do you think that Instagram and WhatsApp could have been as successful with another company? And Google was kind of the main example.

And I don't have the exact quote, but it was something along the lines of he said, well, I think ability and execution are different things. And he basically chat on Google's organizational structure. And he was like, look, I think they're technically excellent. I think that they often struggle. He was basically like, it perplexes. me, sometimes the decisions they make because they have the ability. And I think organizationally, I think he said they're challenged. And it's just funny in hindsight with like these two cases back

to butt. We should talk about the medicase now. I don't know what's going to happen to Google. We are going to get the two remedies phases. Google, by the way, says it's going to appeal. And in its statement said we've won half the case. I hate to be a scold. There were three counts. Google got one dismissed and lost the other two. That is technically one third. math. Just putting that out there. Just noting. And it turns out that losing by a little and losing by a lot don't actually matter all that much in cases like these.

It's not like the scoreboard doesn't really chart. If Google has to sell adX and DFP, they have lost by a lot. And that's what they're staring at. But the medicase is fascinating, right? Not only because Mark Zuckerberg is apparently doing decoder bait live on stage in our nation's courtrooms, but because there isn't all of this contractual evidence that they were, influencing the thing, even though everyone knows that meta ties its products together to make a stronger ecosystem. Yeah.

Like if you breathe at Instagram, that content ends up on five different platforms before you even like finish pressing the button. But that's meta controls it all. So it's like fine. And I think the government is really, it appears the government has very much struggled in this case. Yeah, I would say so. First, I just want to talk about what it was like being there because there's something beautifully egalitarian about being in court for something like this. Because, you know, Zuckerberg, he rolls like the president, right? He's got a ton of bodyguards. He's a third richest man on earth. And, you know, it's kind of, it was cool and made me have some hope for America just watching

this all play out. So this judge, Chief Judge Boseberg of the U.S. District Court of D.C., during, like, one of the breaks, like 10-minute breaks, he filed, you know, that he was possibly going to hold the Trump administration and contempt over the El Salvador deportations and the illegality and question marks around that. So he's got a lot going on. Trump has called him a left-wing lunatic. The security in the court, beyond just Zuck being there, was very intense because of the fact that it was him doing the case. So it was really interesting to see this. And, you know, I expected, you know, I was there with a few other reporter friends. And the first morning, we expected, you know, throngs of cameras and lines of the public, because, you know, it's a public courtroom. Anyone can go in.

I don't know if people realize this in this country, you can literally just walk into this courtroom. There was a guy, fun fact, not to derail you, but there was a guy who sat in the courtroom every single day I was there for the Google search trial and read a book. I cannot explain to you why this man was there, but he just, he were like cargo khaki pants and read what looked like a like John Grisham novel every single day in court. Don't know why. I mean, the marshals are very serious. Like no electronics. Like, um, very funny Mike Isaac from the Times was wearing his meta ray bands at one point and he almost got thrown out, uh, because they were like, is that recording? Um, uh, but it was very cool just watching it play out and the, um, the pomp and ceremony of it all,

but also just like the, okay, this, this part of the government at least right now seems to be working. Um, and, you know, meta's got all these high price, fancy lawyers, uh, the FTC's team. was, I would say, fairly young. I was actually surprised to see everyone looked to be like kind of in their 30s. And it was, it was interesting to see the dichotomy of the two sides. But it's like, it's literally me, a few other reporters, like Joel Kaplan. I was sitting right behind Ferguson, the chair of the FTC the first day, would not talk to the press. Wouldn't really look at us. And so yeah, that was just like what it was like being in the room. It's this grand, you know, it's the chief judge's room, so it's just very grand.

And to watch Zuckerberg walk in, you know, he still manages to have like one bodyguard come into the room with him. But just to watch him be regulated to like a common man, you know, like he doesn't get to like leave first or come in last, right? He kind of filters out with everyone like shoulder to shoulder, you know. It was cool. But the case itself, uh, I left DC. really with the impression that our government does not understand how social media works,

which is a bummer, because I think there's a lot of really interesting questions you should be asking about, if you're the U.S., about meta's power, should one company own this much of social media, really control fundamentally speech at this level? And unfortunately, the way they're attacking it, I think, is, it just makes no sense. It's not, it doesn't, anyone who actually uses the internet would look at this case and say it makes no sense. So basically the way the FTC is, you know, because for an antitrust case, you have to define the market, right? And this is actually where this case has struggled and where it got thrown out originally is the judge found that the FTC had not kind of properly defined the market. So they narrowed it down to what they think is the market that meta competes in the U.S.

And do you want to know the only other apps that are in that market? Wait, no, before we even get to that, I want you to explain what they think that market is because I have read a lot about this now. Yeah. I couldn't explain it to you. But you sat in court, like, what is, how do they think about this market? They have narrowed it to what they call personal social networking services. So like, the hell does that mean? S and I don't know.

No one knows. I've covered social media for 15 years. I've never heard of this before. Wait, and can I just add one more piece of information to that? Because I think this is, it is, you just mentioned that this case got thrown out once before. Lena Kahn's FTC got this case thrown out. Judge Boseberg threw out Lena Kahn's version of this case saying the market was ill-defined and made no sense. Yeah.

Andrew Ferguson, Trump's FTC chair, is now in charge of this case, pursuing it even though Mark Zuckerberg is in the White House every day. And he's landed on whatever this definition is to cure the already muddled definition that Lena Kahn got through it. Yeah. And there's also a narrative out there that this was the Biden administrations like lawsuit. It actually got first filed under the first Trump administration. So this has gone through now three administrations. So that's their idea. So basically meta competes for sharing between friends and family. That's the market they're trying to say they should break meta up for. Okay. Okay, guess the apps that are in this market.

Sharing between family and friends. Yeah. Facebook. Besides Facebook. Like X? Seems like it would belong? Nope. Snapchat. Yes.

Snapchat's a good one. There's only one more besides. I keep thinking of messaging apps that Meta already owns, which is a bit of a problem. It's not messaging, right? It's sharing between. No, it's not messaging. But if we're sharing between friends and friends. That's where people share.

No, no, no, no, not according to our government. Oh, my God. Okay. Snapchat and one other. Tumblr. No. Is it Miwi? Is it the one that you mentioned at the top?

It's me. What is? Mewee. I don't even know what Miwi is. I just heard you say it before. Funny. Mehta's lead attorney asked Mark Zuckerberg that very question on the stand, and he said he does not know.

And he said, have you. ever heard of it before this case? And he said no. I checked my email. I've actually gotten pitches from Miwi over the last couple of years. Well, what have you been doing, Alex? The greatest threat to meta that exists. They have some kind of blockchain angle. Tim Berners-Lee is involved. Frank McCourt, who is also trying to put TikTok on the blockchain as an investor. So that's Meeley. They have about 20 million, I think, something like that, users worldwide. I have never used it. I have never met a person who has used it.

But that is the market, according to the FTC. So on its face, that's just ridiculous, right? And, you know, I was talking to some other antitrust reporters who know the actual, you know, how the mechanics of this play out better. And apparently the judge can define the market however he sees fit, you know. So it's not like the FTC's market is definitely going to stick or that meta's rebuttal of it will stick. The judge may just be like, you're both wrong.

And they probably are, although I do actually buy Meta's argument a little more, which is that, no, we compete across TikTok, I message, YouTube, X, Telegram, Signal, et cetera, et cetera. I would say Zuckerberg spent a lot of time saying that YouTube and TikTok especially were his main competitors. And a lot of time, I would say throwing like founder shade at Snapchat and saying like, yeah, I wish we would have made it work. I think they'd finally beat a billion users and they still aren't 10 years later, stuff like that. So because it came out in the courtroom and it's been well covered, but that he tried to buy them as well. So this is the FTC's argument. And, you know, I do think they're also looking at some interesting things around network effects, around what happens when you reach this scale and there's so many people on a network.

And the switching cost is actually your friends not coming with you. and they talked about that a little bit, but I found their examination to be fairly meandering. There was a lot of like, do you remember that you wrote this Facebook blog post in 2008 about sharing on the news feed, like stuff like that, and meta's argument about the market to be much stronger? Yeah.

It just feels like I just have a really hard time looking at this in any way that says Facebook doesn't compete with TikTok and taking that seriously. Like it just does. Yeah. It just does. Some of the most interesting evidence was actually in the opening arguments, META displayed some internal data.

And we have it on the site. We've got a stream that I'm Lauren Feiner, I've been contributing to everyone should go check it out. There's a lot in there. Meta actually showed data that when TikTok was briefly offline, you know, earlier this year because of the ban, traffic searched to actually Facebook a little bit more than Instagram. And then they had like Snapchat way at the bottom. Like Snapchat got like a percent.

And Snapchat actually got so mad about this that they had their lawyer in the courtroom a couple days later. Also because meta didn't properly redact the slides for the public saying like you're revealing our confidential information. Stapp's lawyer is like, don't tell anybody that nobody uses our products. The inside baseball, by the way, is that meta tried to threaten Alex into not publishing their unredacted slides. And I was like, that's not, it's just not our problem. Like, if you email us unredacted slides, we can publish that. Yeah, it's a tale as old as time. You know, this has happened in like every good case. The Apple's lawyer was in there, too, like saying we don't have faith. Meta will, you know, not disclose our confidential info,

which I'm sure meta would love to, right? They hate Apple. But yeah, and that's, that's, that's the high level of it. And I'm curious, like, I'm curious how much of this case is actually just naked politics because I was watching Ferguson on Fox business after the first day. And he point blank said, we are doing this to make sure 2020 never happens again. And he didn't say exactly what that meant, but I think it means, you know, the Trump administration has been very mad about how Zuckerberg funded voting drive stuff, mail-in ballot initiatives. During the election, he actually thinks that Zuckerberg somehow played a key role in him losing that race. And then you have Ferguson on, you know, the president's favorite news channel saying, you know, this case is to make sure that never happens again.

So I think that kind of shows the motivation here. I want to get to the substantive argument, but I'm actually fascinated by all of that aspect of this case in particular. Because, you know, the Google case we're talking about that was argued under the Biden administration. It was filed on their first Trump administration, argued under the Biden administration by Jonathan Cantor, who has been on our shows before. I'm trying to get him to come back and actually talk about it. But, you know, like, I've asked Cantor, like, you're the assistant attorney general for antitrust. Like, how do you run your team? And he had, like, answers.

You know, like, he's like, here's how I do decisions. Here's how I, like, prioritize. And they were very good, right? And that's the DOJ, which was basically a different law firm with a different boss. This case is the FTC, which was run by LinaCon. different law firm. Like, that's the way to think about it. Like, these DOJ and the FTC have different legal teams. The amount of the same theories or the same goals. Different lawyers, different legal teams, different relationships to the president, right? The DOJ is a law enforcement organization.

The FTC is a law enforcement organization, like, in a civil way, right? Like, they're just different. And Ferguson, in particular, is caught up the new chair of the FTC under Trump. His Democratic commissioners were fired. Like, Trump fired them. They're suing him. It will go to the Supreme Court and like a hundred-year-old precedent about whether the president can just fire FTC commissioners is going to come up for a review. So Ferguson is in this weird box, right? He has a boss who shouldn't be able to fire him, but has proven that he will and, like, break the law and, like, go fight at the Supreme Court. Under this conception that the president is a chief executive of the country and makes all the decisions, which is not true.

but kind of true. It's like very weird. He's just in this weird spot. And he's got this case that was argued by a bunch of his predecessors. And now everyone else got fired too because of Doge. So he's got all these baby lawyers. And he has to play the role of like the fire breather that everyone else has to play now. And so of course he's on Fox business being like the reason I'm pursuing this case is because Donald Trump didn't get a candy bar on January 6, 2020. Like whatever it is, right? But that's not why this case started. That's not why this case. was pursued under Lena Con and Biden. That's not why they kept the case going. That's not why they kept the case going, even though Mark Zuckerberg has been in the Oval office repeatedly saying that he'll make a deal for numbers that range from like $5 to like $3 trillion, like just numbers. Yeah. Like just a range of numbers.

None of that's the real reason, but I think to keep Trump from firing him or making a deal or undercutting this populist antitrust movement that is pretty bipartisan. He's got to say this is about censorship. Or Andrew Ferguson has fully converted to MAGA, like our buddy Brennan Carr, and it's about censorship. Like, I truly don't know, but that's just the weird uncertainty inside all of this. He is very much doing the thing you have to do no matter how you feel about it. Like whether he is just a zealot who wants to win this case or is just actually purely in it for the politics, you would do the same thing, which makes it weird. Like, that is the speech you give on Fox business.

matter how you feel about actually what's going on in this case. Yeah, I mean, he tells the world it's to keep, you know, J6, you know, Trump getting kicked off from happening again. But like, inside the courtroom, there was nothing about censorship. Nothing. It was not in any of the FTC's arguments because it's not, you know, private companies can do whatever they want as it relates to speech. That's the constitution. That's how that works. At least for now. And like me, we, censorship never came up once in the three days Zuckerberg was on the stand. Interesting. Yeah, because the case is fundamentally about did you perceive Instagram to be a competitor and buy it to preclude competition?

Right. Did you perceive WhatsApp to be a challenger and buy it to preclude competition? And they absolutely did. I've been covering this company for a long time. Some of the emails they were showing and internal documents, like I actually like scooped back in the day. It was actually wild to watch like internal documents that I remember first publishing being shown in this courtroom. And it was all about that. And it's totally true that, yes, they saw Instagram and WhatsApp as competitors.

They weren't direct competitors, but they foresaw them becoming that to the point that, you know, there's words like neutralized that Zuckerberg said, you know, that these famous emails that have now been out for a while. I was expecting the FTC to show some new evidence. And there were a couple things. I would say the only time inside the courtroom where like you could feel the meta trial team bench kind of just like sit up a little bit, when they started reading, they started having Zuckerberg read this memo to his exact team in 2018 where he said, I think we should spend off Instagram and literally said that companies tend to do better after they've been spun off. I'm telling you, man, do it before the government does it for you.

If you think you're so much smarter than all these government flunkies, you probably are. Mark Zuckerberg, smart guy. Do it in a way that meets your interests that makes everybody money before the people you perceive Dumbar to you, do it to you on behalf of the American people. Just do it first. I continue to believe that it is the smartest answer for most of these companies to do it in a way that satisfies the optics of all these people but preserves the business. Yeah.

And like, I don't think they will learn that lesson. I think we're going to see a bunch of weird breakups coming. But it's just very funny that Mark saw it. Yeah. He was like, oh, I should spin this out and let it become its own thing. Yeah. Because it'll go faster. Yeah.

I mean, you can't deny when you look at these not lengthy like exact memo. he writes inside the court. Like, he's a brilliant strategist. And in 2018, ahead of the Biden administration, he was writing to his team. I think, especially with the Democratic administration, big tech's going to get broken up. We should be thinking about this seriously and planning for it. And, you know, he saw all this coming. And so at the same time, though, he's like grinning and saying, I would totally buy

WhatsApp again. It was awesome. Like, and that's the tension, right? is like you have him acknowledging and the FCC presenting evidence that he knew that the company was going to face these calls to get broken up. And then I'm sitting in the courtroom and I'm watching the argument for doing it. And I'm looking over at the meta people and they're literally like sometimes high-fiving as they walk out on breaks. Like they feel like this is a layup. Like they're just going to crush this case.

And that's it's a bummer. It's a bummer for like taxpayers. It's a bummer for holding power to account. Like, there is actually power here that needs to be addressed in some way. I think there's more interesting arguments to be made around interoperability. Why is there so much energy around the Fediverse? It's because people feel the actual cost of these platforms, which is taking your speech and your network with you. Should a platform as large as meta have to allow interoperability?

That's something I would love the government to look at. But instead, they're like, you're competing with Miwi. It is very strange because I'm so torn between like, my principles in how I feel about technology and the internet. And like I would like using WhatsApp more if it weren't owned by meta. Like that's just how I feel. A lot of people feel that way. Yeah. Yeah. And yet every single thing I have seen and read about this trial makes me agree with meta. And there's just so many moments. Like so much of this discussion seems to have been basically the FTC saying to Zuckerberg in the other words, witness is like, you bought these companies because they were threats. And, and they're sort of like, sure. Like, we, we thought that they might be. But also, they are only as successful as they are because they are part of this company. And I, like, again, I hate how compelling I find that argument. The evidence is, it's irrefutable. It is. And, and I think the WhatsApp piece of it is

is my absolute favorite because there was a bunch of evidence presented that, uh, basically, the WhatsApp guys were just happy. They were just like, they, they remind me of like when Microsoft tried to buy Nintendo and Nintendo is like, what do we want with your money? Like, leave us alone. We're having a great time over here. But basically, like, you heard this more than I did, Alex. But my impression was basically, like, Zuckerberg goes to talk to the WhatsApp co-founders. And he's like, don't you want to have lots of features and sell ads and take over the world and you're going to be huge?

And they were just like, not really. No. No, they said they wanted to be Craigslist. And Zuckerberg was like, hell yeah. And Zuckerberg was like. And then the judge is like, how does Craigslist work? Muzhuk is like, well, Bozberg feels like a Craigslist guy. I have to say, if I had to pick one platform for Judge Bozberg, it would be Craigslist.

Yeah. And Mark was like, or next door. And Mark was like, I didn't want them to be Craigslist. Like, I saw this being a billion plus user platform. And he literally called Yang Kuhn, the CEO of WhatsApp, unambitious after he met with him the first time. And that really cuts at the FTC's argument because intent alone does not prove you did something to become a monopoly. As far as I understand it, the government has to show that meta degraded the marketplace by buying competition. That basically these apps, these services got worse.

Prices went up. They can't argue that because it's free, right? Although they're trying to make some ad load argument that's not really even sticking as they're saying it in court. And then Zuckerberg can just say, no, like we and they're showing the board decks where like they projected to get to X user milestone. They way surpassed it way faster. nearly three billion people use WhatsApp now, which is the first time I've heard a WhatsApp user stat in years, something Zuckerberg said on the stand. Instagram, he was like, Kevin Sistram and I, we thought we could get to 100 million users. And if we did that, that would be a success.

And it got to a billion within a few years. And so it's hard to argue that Instagram and WhatsApp became meaningfully worse. Now, I know everyone is listening and going, come on, what are you saying? Like, I hate Instagram. I love it, but I hate it, right? And that's the tension of the case is that people do feel strongly that these apps could be better if meta and its incentives weren't behind them. But if you look at the marketplace, it's like there was a lot of time spent on PATH, right? Which, like, I had not thought about PATH in so long.

I was just going to mention PATH. Path caught so many strays in this trial. It was so brutal. And it was because Zuckerberg also looked at buying PATH. And PATH is an example of a startup that he didn't buy. And it died and it's been lost to the, you know, to tech history. And he talked about it in exactly the same way, which is I think why Meda kept bringing this up, that it was like, it was the same like, this is growing. People really love it.

Maybe it's a threat. Like he talked about it in the same terms he talked about Instagram. And it's like, look at the one that they bought and look at the one that they didn't. And it is, uh, I'm not saying those two things are like predictive, right? Like correlation causation, but, uh, one is Instagram and one is not. Well, okay, so I will, I'm going to try to use Zuckerberg's own argument against him. Okay. Because it is true that Zuck's strategy memos, even if it's like dashed off emails,

where he like emails a random engineer and it's like, I have this idea. And the engineer is like, help, you know. Like the ideas are always really good because he's smart and he's ruthless. And there's an email, it's one of the emails you scooped back in the day, Alex, where he's like, my insight is that every generation comes up with a new sharing mechanic. and I need to buy the sharing mechanic. Yeah. So we had friends and family updates on Facebook.

Instagram is photo sharing. And then he clearly saw that messaging was the next one with WhatsApp, right? Yeah. And this tracks everything Facebook and Instagram say about themselves. Yeah. All the action is in the DMs. They say this all the time. So you just see, Mark was like, okay, I had this mechanic.

I see the next one is going to be photo sharing. I'm going to buy that mechanic. What's the hottest thing there? Okay, the next one is obviously private messaging. I'm going to buy that mechanic. What's the hottest thing I can buy there? And he just did it. And I could not tell you what that thing is as it relates to Path.

Checking into place. Like, what? What? I don't even remember what it was. But it wasn't something where I'm like, oh, there's some core mechanic here that will undercut the entire promise of Facebook. I think it was their idea that the graph would be artificially limited because Path was like you could only add so many people.

They based it on that. There was like a theory. That's not a sharing dynamic, right? That was past theory. And even by Zuckerberg's own like framework, it would never be a thing. The location-based check-in thing was real. That was four square. I know, but it was all sitting right there, right?

This sort of real-life geographic thing was like, it was almost that. Sure. Bring back path, David. You could check in on Facebook. Federated path. It's the future. You can have six friends and all of them are like, why am I here? But the next turn, the one that they almost missed, was what if we show you videos from people you don't know?

Truly, that was the next turn. That was TikTok. And they immediately, they could not buy TikTok. And they even said, there were all these Chinese issues, Chinese ownership issues with why we couldn't buy music. Again, he looked at it before anyone else. He met the founder before it was even in the U.S. because he knew this was coming.

And it was like, I couldn't do it because of the China stuff. And they had to hard pivot Instagram and they had to compete. Yeah. Whatever you think of Instagram Reels, it is a better competitor to TikTok than YouTube shorts, right? Yep. Because they absolutely had to compete. And they are worthless and they're very good at and they'll just do it.

and that's the market distortion that the government hasn't been able to articulate. Like, if Facebook had actually had to compete with an Instagram that actually had this new dynamic that Mark Zuckerberg had identified, things would be different. Both of those companies would be competing with each other. Yeah.

But it's still illusory. To David's point, you will never know. And meta's argument on the other side is pretty good, which is, well, I don't know, it's Instagram. Here it is. I am not an expert on the edge cases of antitrust law enforcement and maybe the FTC will finally get something through throughout this trial that makes sense.

I have looked at an absurd amount of internal Facebook documents over the years and their data analysis, how they view the market, and not stuff that like it's been PR sanctioned, like stuff leaked to me. I feel like I actually have a under the hood real assessment of how they view the world. They think maniacally about time spent, about they talk like the UN. It's like population density. It's like we are at X density in X country. they're thinking so much broader than the FTC.

They're thinking like, how can I suck time away from Netflix, etc., right? It's like the Reid Hastings quote is like, I'm competing with sleep, who was on the board of Facebook for like 15 years. That's how these companies operate because that's the business model. And I don't think the FTC understands how the business model informs the strategy, which is that if you're an advertising business model, really all that matters is eyeballs and getting as much of those eyeballs for as long as possible. And the only real monopoly meta has is its network, is its network effects.

And the thing Zuck is constantly trying to fight is a new thing coming in and eating into those network effects, whether it was Google Plus back in the day, which got an insane amount of airtime in this trial, was very fun. I really felt like I was getting like a Stanford business like seminar, like Silicon Valley tech history class. It was really fun. Google Plus, path like OpenAI, which we'll talk about in a little bit. snap, these things that come in and like potentially siphon people away from the network, which leads to a thing called network collapse, which they did talk about in the courtroom. That he just, like you said, he recognized these formats and goes, I can graph this onto my

bigger network. I'll scale it faster. And that will make sure that the startup that invented that form, whether it's stories or whatever, can't reach a billion users. He kept saying over and over, he's like, once you get to a billion users, like, the world is your oyster. He's like, he's like, I really, like, there's very few companies to do that. Very few do it on their own. He's like, he actually made the case that none have done it on their own, that they all have big parent companies, YouTube, TikTok with Bite Dance. Snap is close to a billion. Yeah, I feel like, is this more Evan Spiegel's shade. He can't get to the magic number. It was around the SNAP acquisition questions. Yeah, is when he said this. And that's, he knows that's his competitive moat. And that's, it's strong and it's durable. And there are monopoly questions there. But it's not. like time. It's not like what Google does with its products, where it's just like he recognizes

if he can get to something and strap it on to his scale, he'll kill it. And he's done that very well over the last 20 years. We'll see what happens with this one. And again, I don't want to overdo it on the legal inside baseball piece of it. But you got like a doged up FTC that fired everybody run by a guy who has to be a fire breather on Fox News to please his boss who is absolutely shown that he will come right up to the edge of the law and ask the Supreme Court to overturn a hundred-year-old precedent and fire people that he's not supposed to fire. Like, that's not a recipe for great lawyering, right? And, like, I think the DOJ under Biden can't turn specifically, like, having talked to him about how he ran what was effectively a law firm, I was like,

oh, they're doing good lawyering. I think they had a, they had better cases to deal with because Google does have all these deals. I'm very curious. The DOJ has the Apple case, which has the same dynamics as meta here in big ways, right? It's just Apple. They're just like, well, we have the iPhone. We just do whatever we want, eye message.

Here it is, but it's done. We'll see. Right? A lot of this is once you own a platform, how dirty can you be? And is that illegal, right? And some of the stuff with Apple is like, we all know it.

App developers are like, they call me and yell at me to start in-app subscriptions because that's where they make the money from. sadly, I don't know. But that was started under one administration, and now it's come to this one, and Pam Bondi is going to pursue Apple? Like, there's just an element of that, which is like, is it the government's case? Is it the law that's bad? Is it that meta's legal or Apple's legal?

Or is it just a bunch of Doge kids don't know what they're doing? And they're up against meta's lawyers, right? Yeah. And I think there's also an element, they're leaving D.C. and talking to a lot of the meta execs, you know, because they're all there and, you know, it's off the record. but just the vibe I got is like, I think there's a consensus that Trump is going to be harder on all these companies than they thought.

And that if they thought, if they could just kiss up, that things would be easy. And I think Trump is a little smarter than they maybe gave him credit for in terms of leverage. And I think META would have very much liked to settle this case, not necessarily because they were worried about losing it, but because it's a massive pain.

And it's a bad headlines. It's Zuckerberg's time, a ton of money, et cetera. the discovery process, which is very embarrassing. But, yeah, I would hope, I would think that, and you know, the journal had a great story about this, that how Zuckerberg pushed to, you know, settle this. I think he probably thought that he might be able to because of the January stuff that we talked about, all the MAGA changes that they made.

And Apple's going to go to DOJ. And like, I think all these COs are in for a kind of a leopard face moment in the next year or so. that photo that everybody has of all the CEOs standing on the dais behind Trump at the inauguration is going to end up being iconic for reasons that none of those CEOs like is my ongoing thesis. Actually, can I respond to that in it like just a slightly different way? I agree. That photo will be very embarrassing for all of them because the leopards are eating all their faces. It's happening.

Trump wants these wins and then he wants to settle. Like he wants to win the trials so that he can negotiate the settlement that ends the appeals, right? That's what you do. The tariffs on China are 5 billion percent. and then we're going to make a deal. Trump. The thing that kills me at that is the expectation they had going into that photo was corruption. Right?

Tim Cook is going to personally donate a million dollars to Trump's library and that'll take the DOJ case away from Apple. Naked corruption. That is a nakedly corrupt thought. There's nothing about, and that's fine in the sense that, like, a lot of people believe the government is corrupt. and so like Trump being even more corrupt does not offend them. But it's not fine in the sense that like even when we were covering the Google case today, people on Blue Sky were replying to me being like, they'll just buy them off. What?

Like that means that the system is collapsed. Like you don't believe in it anymore. And maybe you didn't before. But like the level to which we have accepted that just naked corruption is how this works is a little more dangerous than I think people are giving it credit for. Like, if you believe that Google can do like, oh, screw it, write them a check and it'll go away. And that is, maybe you don't think that's right, but you think that is possible. You are, it's gone. You have to not believe that's possible. You have to actually hold everybody to account and say, actually,

that's corruption. So I'm not saying call your senator and tell them to break up Google. Just an idea that you could do. I'm saying, I'm saying you can't, if you give into nihilism that the corruption is already won. You've just given it. Like, you should not feel helpless. You should feel outrage. The expectation of that photograph was corruption. And there's, Talek said, there's a little glimmer of hope that it hasn't been just overt

corruption from the jump. Like, they at least have to go to trial. I don't know what's going to happen after that, but they at least have had to go to trial. I think Trump is more savvy about power and leverage than the CEO's thought and knows that the moment he just starts taking him. Or most of his staffers, as we will come to. Yeah. Yeah. And the moment you just start taking any check to kill anything, you've lost power.

And I think Trump cares about power. Yeah. All right. We got to take a break. We're going to come back. We're going to talk about opening eye, which is also making some moves to scare Mark Zuckerberg. We'll get back. Support for this show comes from Shopify.

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No more ad tech for the rest of this episode, I promise. I'm not making that promise, Dave. All right. In the middle of all of this, Alex, you and Kylie delivered a pretty big scoop about Open AI, that they're going to build a social network, which I will not say people reacted to with warm thoughts. Tell us what is going on here. Yeah, I would say it was mixed. I saw a lot of the obvious, like, oh, great, more AI slop stuff. And then I actually, you know, I think people who work in tech get it and understand what's happening here.

But yeah, Open AI has been for the last several weeks showing off this internal prototype that is a kind of X-like social feed with a bunch of AI stuff in it. Apparently they're calling the post Yeats, which for early Blue Sky users was the name for posting on Blue Sky affectionately before Jake Ever killed that. Well, no, they were skeets on Blue Sky. Oh, wait, they were skeets, which is worse. Not Yeats. Somehow slightly worse on Blue Sky. No, it's not slightly worse. It's horrible.

It's a joke that is fully out of it. of control. Oh my God. And people still call them skeets even though I believe Blue Sky would prefer you didn't. No, Liz Lapato calls them skits. No one else calls them skits. More people than you want call them skeets.

Does yeat come from something else, though? Yeats like a gamer term. It means like throw a thing into the ocean. Yeah. Yeah, okay. So they're yeating and... Oh. They heat myself off this podcast.

That's right. See, that's... You understand what you. No, so they're... Sam all. has been going around to conferences and in private dinners, etc. And talking about how he wants to compete with Elon and X. And they have a prototype.

And we skip some of the details. It's very early. It's like it's early. But the way Open AI works is like something that's very early could actually ship within like a few weeks. So especially after I think the reaction to this and all the headlines. And I think the story got a lot more attention than maybe we even expected. So maybe that pushes them to ship faster. called Kevin Wheeler, CPO, who was the former head of product at Instagram, gave an interview

to Bloomberg shortly after the story saying, like, we need to find a way to let people share stuff that they do with chat GPT more easily. So they're already starting to hint at it. This puts them on like a direct, you know, collision course with Elon, obviously, but also Zuckerberg, who is adding a feed-like AI social network to its assistants later this year. They're actually going to turn the meta-rayban app, the companion app, into the meta-AI app. So you'll still have to have it to pair with the glasses, and they're going to ship new glasses later this year. But they're going to have a feed as well in there. So this is like a grok in X merged, right?

They're the same company. If you're on X, you'll see Grok, you know, suggesting things and the responses. It's everywhere in the app. And now the product teams are merged. So this trend is happening across the industry. So it kind of makes sense for Open AI to go here. you know, chat GPT has been a, you know, a single player experience. And I think open-eyed recognizes that to, you know, they're probably not thinking about this way, but really to justify this,

and, you know, incredible valuation they have and all this money that they've raised. They, they need to make money beyond just selling chat GPT subscriptions, though. I don't think they're going to do advertising anytime soon. I think this would be a natural, this is why I said we may still talk about ad tech. Wait, what's the money if they don't do advertising? They start a social network and there's an advertising. What's the money? What's the money? Yeah. Just running ads in the feed. So it is, it is advertising. But it's not advertising in chat GPT. It's advertising in social

GPT or whatever. In the feed that will probably, they may do a standalone app. The prototype is standalone, but they may just merge it with chat GPT. Their CFO, Sarah Friar, was the CEO of Next Door, which sold ads in a feed. Like, they have a lot. I mean, they could do this. It would make sense. And it begins to explain to me, why Zuckerberg has been so focused on them beyond just the model competition, I think. And he was, it was kind of interesting, like publishing the story when I was in the courtroom, like the same day, I'm like watching him on the stand saying like, look, once you get to a billion users, you know, really like it's very hard to compete. And you can fan out and spread out, I think,

was his words and do a lot of different things. And I think he probably saw this coming. So Open AI is is approaching a billion users. They'll probably hit it this year. And they're just in this huge expansion product mode, right? So they're going in a bunch of different directions, but I think the social piece really makes the idea of chat TPT being more than just a Google killer. Potentially now they also want to be a meta-killer. So this is like the kind of ever-expanding ambition of Sam Aldman, I think.

This runs into one of the big trends right now that I'm I find like completely befuddling, which is that everyone is now convinced that lots of people really want endless feeds of AI generated content. And maybe they do. Maybe I'm the one who's wrong here. But like, you know, listening to Mark Zuckerberg sit on stage and say, people really love ads. People love ads so much that we've actually considered at one point having a feed of just ads because people like the ads as much as they like the content, which to me it reads not as we have great ads, but we have shit content. You should take that as an insult, not a compliment.

But anyway, and then, like, everybody's building these creative tools so that it is easier and easier to make stuff with AI and share it on your feeds. And we're, like, running headlong into all of my social feeds are going to just be absolutely overrun by AI content. They already are. And it seems to me what's happening is Open AI looked at, like, the studio Ghibli thing, right, that, like, took over the internet for two days. And everybody was sharing the stuff they made in.

in chat GPT somewhere else. And they look at that and they're like, okay, no, we need to own this whole cycle. And to me, I'm like, no, it's just AI all the way down and this is a disaster. And so I'm like, I'm so, I don't know, I'm just lost between these two different things that both seem to be happening and it doesn't not seem like a thing anyone should want. I mean, Eli, what you said on blue skies right? Everyone wants their own distribution. I don't think they want, yeah, these images and the value and attention around them being just monetized by Elon Musk. who is actively suing them and trying to literally keep them from existing.

Dude, why won't Sam Altman quit X and join Blue Sky? Like, you want to compete with Elon? You've got this big problem. He's still on his platform every day. Like, just do it. Stand up your own Mastodon server. I don't. Do something other than that.

The open-Aid people are constantly, yeah, complaining about Elon. I'm like, you're just giving him training data. Like, your entire company is posting nonstop on X all day long. And as a result, the AI industry, is very active on X. Like X has lost a lot of audience, but I would say the AI industry remains one of its core audiences. And I do think Open Eye would have a pretty compelling pitch

to take that audience with them on a different surface. And it could end up being like even more split, right, where you just have like people who like Elon's version of AI on X and the audience has fractured even more. I think we're just going to continue to see this constant fracturing. Yeah. It's just like, it's funny to me. Like, you can stand up your own social network.

You can do all this stuff. Or you could just stop using the one owned by the guy who hates you, who's your competitor. But you still got to eat. Where are you going to eat? Threads. Like, anything. Like, find some obscure European Mastodon server and be like, I live here now. And, like, a bunch of people will come with you because you're Sam Altman.

Here's where the news is going to be. Yeah. Right. Like, here's where I'm going to lowercase sad boy tweet of how no I'm liking. Like, you can do it anywhere you want. But like he chooses to do it at X for some reason. And I'm assuming that reason is the absolutely bizarre relationship between those two men. I think it's also network effects.

It's what we're talking about with meta. It's just the AI industry is there. It's where companies still announce news, tech companies especially. And I think open eye sees an opening because they are the hottest tech company in the world right now to take that audience. And I think the idea that if you're Sam Altman, people will follow you to your obscure Massadon server. I'm not sure that's true. And I know for sure that if you're Sam Altman, you're not sure you want to find out. If you have the confidence to just like roll up to the richest people in the world,

make here's what I need a trillion dollars. Like, you should find out if people will follow you to a mass on server. Like there's one person who has the sheer audacity to be like, I need a billion, I need a trillion dollars to buy every GPU in the world. I mean, Elon Musk spent $44 billion to make himself cool on Twitter. Like, it's a harder thing to do than you think. Stargate is just to fund the biggest Macedon server in the world. There's this quote in your piece, Alex,

it's by somebody who runs a different AI company. They're not honest. The GROC integration with X has made everyone jealous, especially how people create viral tweets by getting it to say something. The next thing I said was about to be in this quote. It's very good. It's an incredible quote.

It has just made me think about AI art and how people react to it, and the feeds being full of art and, like, why people are into it. And we've written a lot, about this. Like, Adi and I have, like, spent a lot of time being, like, AI, it's like, why are we? It's very much like someone telling you about their dream.

Like, that's how I always feel. Like, has someone ever excitedly told you about a dream they had? And you're like, cool. And it's like the most important thing that's ever happened to that person. And just the disparity in experience is just too vast to be overcome. Like, you, were you riding a dolphin? Great. Like, that's, like, how I feel every time.

Sick. I see AI art. It's, like, very good. And I think the studio Ghibli stuff hit, because of the incredible juxtaposition of the art style and the creator hating it and then you're making Guantanamo Bay memes with it. Right?

Like there's something in there that was wrong. Like on a fundamental level, the thing itself portrayed the great conflict of our time. And then you turn to the next one and you're like, oh, you made an action figure of yourself? Is that, oh my God, is that your MacBook?

Who gives a shit? Like, who cares? And I think the AI industry has really misconstrued what the interest was. It's not people talking about their dreams. It's people stealing artistic expression and that driving a wave of conflict

and then people being able to participate on either side of that conflict in ways that drive the conflict forward or amplify it. Like, no one was outraged when people made their weird action figures. Like, no one felt bad. No, it's just boring.

It was just like, here's some stuff. There's even diminishing returns on the outrage, right? Like, you can't run the Studio Ghibli Playbook over and over and over again. And I think, like, I'll be honest that the novelty factor of I asked chat GPT to do something and look at this wacky thing

it came back with has lasted a lot longer than I expected. It's still very much there. This is the thing that a lot of these companies are trading on is, like, people think GROC is silly, and they like that. And maybe that'll last forever.

No, but even the GROC one, the conflict of the GROC is really obvious, right? GROC is often like, yeah, yeah, Elon's pretty racist. And that's hilarious. Right. Like, it's subversive. But it's not. Like, I too can type Elon as racist into a text box and then screenshot. But you're not a robot controlled by Elon. Like, there's nothing subversive about us to do. We just do it all the time. Right. But is that, is that going to be funny forever? Like, this is my point. I just, I don't know how many versions of that thing we're going to get before it. This just stops being interesting. I mean, OpenAI's user base doubled after it launched that chat, the upgraded image. generation. So you can argue. Right, because it's a new capability. Can we say that differently? A lot of people went to a

website after that happened. That's what happened. A lot of people went to a website. It's just not the same thing. Like, there are a lot of people and the numbers are crazy. I absolutely agree with that. But like, a lot of people went to a website. Yeah, I just, I just, I too have a problem with like, the Studio Ghibli thing in particular, like the fact that they picked the style of the guy who called, what did he call AI? He said it was like a, the studio Ghibli founder.

Didn't you say something about how it's like a, it's like a crime against humanity? The fact that that was the style that went viral feels, feels wrong. But I don't think we can discount the interests people have at scale with this stuff. And Open Eye sees it in their numbers. Sure, maybe it's like fleeting. or maybe it's a gimmick that can only be replicated so many times, like you're saying.

But I think, look, I think we're professional writers and we... I'm sorry, insult to life itself. Insult to life itself, yeah. We're professional writers. We like, it's our jobs to say things on the internet. I think most people look at X or threads or Blue Sky or whatever and they don't really know what to say. And I think the tech product view of this, just talking to the people inside these

labs is that like we see a a demand for people who want to engage and don't necessarily know how to or scared to and AI will help them. I will give them ways to express themselves that they could not before. And it's reflected in the metrics of how people are gravitating towards these products. So yeah, like the, I think the culture class is going to continue to have, you know, a lot of like hand-wringing and like rightful criticism of how these companies approach things like IP. But I also think we can't deny. that this is a trend that is here to stay.

I at least think so. I do buy that. But I think that's actually a really great definition of AI as a tool in a way that I really like. Like AI is an enabling tool for lots of things. I think is actually really exciting. Yeah. But what I see so much of the bet here being is that AI is going to keep being sort of the main character. And again, it has been for much longer than I expected.

So maybe I'm just wrong. and maybe this thing is so funny and silly and weird and unexpected that people will keep wanting to interact with it forever. But that just does not feel right to me. I don't know. I don't think the open eye social network is going to be just like an endless feed of only people's like CEO Gibby photos. I think like it's a jumping point to build a AI native social network

that uses AI throughout the entire posting and editing and publishing and recommendation process that like every other established company is now trying to retrofit. And OpenAIA has this insane, highly engaged user base that I think they think they can fan out and take this opportunity, especially with what Google's going through like we were talking about and the fact that these other companies seem to just not get product in this way. So yeah, I think it's going to be a disaster, but it's also the future, which is like, kind of AI managerial. The verge, everybody.

There's other stuff going on, AI World. Open I debuted GP4.1 and then Sam was like, I promise I'm going to clear up these names. God, they're so bad. What is going on here? Like, it's better, right? I personally feel so vindicated by this because I've been complaining about the names on this show and elsewhere for forever that when you go,

it's like a drop down of nonsensical numbers where they don't even go up in order in the way that you think that they should. And so to have Sam be like, yeah, we know the numbers are ridiculous. Please make fun of us. We're going to fix it. made me feel a lot better. Something else, OpenA and Google share besides their bitter AI rivalry

is a horrible naming convention. But, Alex, am I crazy or is Open AI on like a pretty wild product run here? Like it's really, there was Deepseek, and then they were like, oh, we're going to launch some stuff and like, boy, have they. It seems unprecedented to a degree where it's like hard to even keep up

as someone covering it. My understanding is this model architecture is their first. And I still feel like I'm trying to understand really what this means practically, but like agentic model that has now, it's the first one that does the deep thinking stuff, but also can hook into all of the chat GPT products. So it can pull in web results, do multimodal. It can like, apparently like do really interesting weird things with images and like edit them and turn them around. And like people are dropping an image in to like have it reverse engineer where it was taken. So like the YouTube like Google Earth guy,

like viral stuff, but like with AI. So it's just a, it's a smarter model that now hooks into all of the product, whereas the models have so far been fairly sequestered to certain aspects of chat GPT and what it can do. That's my understanding of it. But they're on such a tear. It's really hard to keep track. I mean,

it's interesting because the tear seems to be more related to making better products out of all the products. Yeah. Or like attaching. capabilities between products to each other to get to the next step, as opposed to here's the next new model, which is smarter than the last model by however many percentage. I do wonder if that's because Kevin Wiles there, he's the product guy, and he's like, make the products good. But there's also a part where it feels like the frontier model is not going to get so much better that it drives usage. You actually have to make products.

Yeah. I've been writing about this for a while. The competitive nature now is at the product layer, not the model layer. The malls are commodifying. Yes, like, they still feel different, like, when you use a new one. But I think chat chbt, they're trying to make it like an operating system for your life. I think they want to be Google, meta, you know, all productivity software. It's this, it's one of the grandest visions I've ever seen in, like, consumer tech in terms of like we are going to use AI to try to do everything.

And then he's working with Johnny Ive on hardware, right? That, like, you tie that into your own hardware over time. What if humane but good? What if you mean, and to be clear, this is the story you have to tell in order to raise the amount of money that they have raised. It is. But you look at what they're doing to chat GPT and that is clearly the goal is like to encompass more of your everyday life. Yeah, I mean, there was the was it this week that they announced the thing where it'll remember all your past conversations? Yeah, the memory stuff.

I feel like that didn't get talked about enough that that's like all of a sudden if you can have this thing be sort of accumulating over time as you use it. the possibilities of stuff it can start to do for you is really powerful. It's lock in too because it knows more about you and it's way easier to, it's way harder to want to switch to another product because Chashi-Ptee knows everything about you. Totally. I realize I'm saying this is a guy who's been on a podcast for 15 years, has made a lot of YouTube videos and I just don't want to be perceived in this way. Like I don't want the computer to know me.

It already does. It's already showing you ads for like random car stuff. Oh man. And my computer so believes that I'm going to buy a Volvo EX90. Like whatever, whatever's going on in here, it knows one thing. And it's going to sell me a goddamn Volvo EX-9. I feel like your computer's wrong about that. It's so wrong.

Yeah. It's not correct. Also, a Ranger Rover. It really believes that what I'm going to do is buy Range Rover Sport. That feels closer. It's not. I've looked at the reliability records of that vehicle. I just want to like...

Do you guys use the voice mode on ChattyPT? all the time. I was actually just looking at my history to be like, what would this thing think about me? And it will think that I'm a six-year-old girl who occasionally asked for pickled red onion recipes.

And that's, that's like, those are the two things that happened. When I was in D.C. We use it all the time. Like, Jackson and I used it all the time. Yeah.

When I was in D.C., I was like, before I was the first day of court, I was like laying in bed and I was like, I'm going to court tomorrow, this court, like, I'm not exactly sure how it's going to work. Like, what do I need to know about going in? Like, what can I not bring? And like, it was,

it was amazing. Like it was like, this is, I can't believe it just, it works. Was it correct? Yes. It was correct.

Yeah. And that's like, I don't know if they're doing better grounding with like real data that they're stealing or what, but it's, excuse me, buying licensing. Now I have to disclose it.

Yeah. Licensing deal with our company. Somewhere on the back end, it's there. Yeah. It has nothing new with us. Yeah. But no,

I think like the combo of like the, the desktop product really, starting to encompass all the productivity, the voice being very good, and then doing hardware with Johnny, I think is like this insane play for everything. The vision is really big, and I think you're right that it is,

the shift has really happened away from, I think pretty quickly we're going to start to have conversations internally at the verge about whether we cover new models. Because it's rapidly getting to the point that it doesn't matter that much. It's like covering new versions of AWS software. Like, it's just not meaningful

to most people in these specific ways. I don't think we're there yet. We could just do a story stream where it's like new model came out. Yeah, like new model came out. It's 4% better. Well, I mean, you got to cover the new models because they're all cheating on the benchmarks

and that's actually the story. Well, agreed. Agreed on that front. But yeah, we are very much moving toward like what can you build to have people do with these things. And that's going to be the only thing that matters. I continue to believe.

I mean, the whole industry has been chasing what is the new input paradigm that overtakes multi-touch forever? Like, even Apple has been chasing. I'm constantly joking about Apple introducing the Apple Watch of the digital crown because they, in their head, they have like a system, like an equation that makes good products. And they just learned it from watching old Steve Jobs keynote. It's like they reversed engineer to Steve Jobs keynote. And he's like, well, he did a click wheel. He did, U2 was there.

And he said it was small. And then they got to the Apple Watch and like, okay, it's going to. a wheel, you too is here, and it's small, like, that's just how their brains work, you know. Everyone has been trying to move on to say, okay, this is the new input, this is the new user interface paradigm that's going to drive the next form factor, that's going to drive the next wave maps, whatever it is. And it is true that with AI in particular, what you have is natural language voice. You can just talk to the computer. It'll talk back to you. It's a very compelling. And then we still don't know how any of that's going to make.

And then at the same time, right, there's the big cursor deal, which seems like a really big deal. Yeah. And then Open AI is going to potentially buy this company called WinSurf for $3 billion. Yeah. There's this whole enterprise set of applications that has kind of nothing to do with, is this a new input paradigm. It's much more, oh, we're going to make everybody vastly more productive in this specific way. And that's where all the money is. And that's, it does feel like we're all the money is.

Yeah. Yeah. But I, the part where Johnny I was like, I can take the new input paradigm and make the next great product. it's even if it's Johnny Ive, even if it's Sam Altman, even if they have direct access to the next model from opening out, like it's still uncertain

because it hasn't been proven that that's what you want to do all the time. I'm actually very excited about this next moment because I wrote a feature for Wired like 10 years ago now, basically proclaiming the beginning of the voice era. You were a little early. I was right and I was wrong.

Right? Like it was, it happened. Everybody started doing voice, in much more limited ways than I think I was expecting. Yeah. But we're now at the point where the tech works. Like it's not perfect, but it works. The basic can I speak and be spoken to with a computer in a useful way? It works.

And now the open question is, so what? What do we do with that? And that no one has good answers to that yet, right? Like it's fun and interesting, but we're sitting on more. And if there's going to be more, it's coming. I think we're going to be talking about the Johnny thing with Sam Altman and the coming year or two years. I really do. I think Johnny's biggest funder for his new company is Loreen Pell Jobs. And he's hired all of the original Apple team, design team. If you're going to bet

on anyone coming in as like a wild horse and doing something interesting, I would be paying attention to that. Yeah. And meanwhile, Apple is going under whatever series shuffles that's undergoing. Right. Like, who knows? Who knows that they can pull it off? But, you know, Apple, we started by talking about opening and starting a social network. Apple still has the most. important distribution of all. Yeah. Right? It's just like in your pocket.

Like Oprah at the Apple TV launch being like a billion pockets. Yeah. If they can get it together, like maybe they'll get there. But it's interesting that they're wavering and Google was wavering. And then Sam Altman's like, I need a trillion dollars. Yeah. And I just don't know how that plays. All right.

All right. All right. We've got to take a break. We're going to come back with a lighting round. We'll be right back. If you're tired of database limitations and architectures that break when you scale, It's time to think outside of rows and columns. Because let's be honest, you didn't get into tech to babysit a broken database.

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Start building at MongoDB.com slash build. Support for the show comes from LinkedIn. If you're a small business owner, you know that every hire counts, but time and resources are limited. Finding, connecting with, and screening the right candidates takes up valuable time you could be giving to your customers. That's where LinkedIn Hiring Pro comes in. It's built to be your hiring partner,

helping you find the right candidates faster. That way you can hire with confidence without turning it into another full-time job. Hiring Pro streamlines the entire process from drafting your job to shortlisting candidates and conducting AI-powered interviews for initial screenings. Its updated conversational interface lets you describe what you need in plain language.

Nearly 60% of hirers find a candidate to interview within a week. With hiring pro, you spend less time searching and more time connecting with the right talent. And instead of getting buried in resumes, you get a focused shortlist that actually moves your hiring forward. Join the 2.7 million small businesses using LinkedIn to hire. Get started by posting your job for free at LinkedIn.com slash track.

Terms and conditions apply. Complex and unprecedented, the Spanish Authority. parties are calling it. Before the disembarko, asymptomatic. Passengers who'd been stuck aboard the Hanta or maybe Hanta virus-stricken Dutch cruise ship disembarked in the Canary Islands this weekend, prompting the highest stakes game of where are they now since maybe COVID? Some of the evacuees, American and French, have since tested positive for the virus.

And yet public health officials seem remarkably calm. We do have one individual who was taken to the biocontainment unit early, early this morning. And we assessed that individual. They are doing well. Possibly because this is not the one to freak out over. Today, Explain drops every weekday afternoon. We're back. It's time for a lightning round, which, as always, begins with America's favorite podcast within podcasts.

David? We're doing this. We're like 19 hours into the Vergecast. We've talked about ad tech. Now it's time for what everyone is here for. One of the two best podcasts within a podcast. And we've gotten a fair amount of feedback that suggests that we've got to, are number two. And I'm not interested in that feedback. It's time for Brendan Carr as a dummy.

It does feel like we should say thank you to everyone who voted for us in the Webby Awards. Oh, yeah. There's not a category for podcasts within podcasts, but we have issued a stern letter to the Webby people. And we're coming for you. If it comes up next year, it's going to be us against Munch Squad, and it is going to be a battle to the death. It's pretty good. All right, it's time for Benincar's a dummy. Brennan Carr, real dummy this week. Brennan Carr is the chairman of the FCC. He was a regular old commissioner, our owner, or buyer. He wrote the Project 2025 chapter about the FCC. Trump made him chairman of the FCC.

He's been done for weeks. He's just not a smart man, but he is a naked political animal. Like, that's what he is. That's what this segment is about. Every week, this man does something nakedly political to curry favor of Donald Trump and threaten the speech of Americans. Those are the two things that he has every week. And this week, it is particularly bad.

Like, particularly bad. So Brandon loves to threaten or even file what he calls news distortion cases, where the FCC, which licenses the nation's airwaves to broadcasters, can say to various news organizations, the broadcast news organizations, NBC, CBS, Fox, hey, you're distorting news. You're taking the spectrum or giving you and doing something misleading with the news on it. They are not supposed to do this in most cases, right? The First Amendment protects those broadcasters,

and you can air what you want to air as long as you're not being willfully misleading in particular ways. And it is true that Fox owns a bunch of broadcast stations. Sinclair broadcasting, very conservative, owns a bunch of broadcast stations. And yes, NBC and CBS and ABC also own a bunch of broadcast stations. So you can see already Americans have choices.

But this week, the Trump administration is under tremendous amounts of criticism and controversy because it mistakenly deported a man to El Salvador, Kilmar Abrago-Garcia. It did this with basically no evidence. It has admitted to the court that it had no real evidence and that this was a mistake. I call it an administrative error. And instead of bringing a man back, which the Supreme Court ordered, it had to facilitate, it has doubled down now on calling him a terrorist and a gang member.

The evidence, by the way, this man being a gang member is that he was wearing Chicago Bulls hat and a t-shirt with dollar bills on it, or a sweatshirt with dollar bills on it, where the presidents on the bills had their eyes covered, their ears covered and mouth covered. And somehow that indicated that they were in a gang. I don't know, man. That's the evidence the government has proffered this week

for evidence that he's being in a gang. It's not great. It's nothing, is what it is. It's nothing. It's nothing. I mean, this is a, he was in the country legally, but he had a court order saying he couldn't be deported because he was in danger, if you want to El Salvador from other gangs there.

So the court, the Trump administration has mistakenly deported him. They've gone up to the Supreme Court, which has rule that has to facilitate his return. They've gone to the court again. The court is very angry with him with the Trump administration now. I don't know how this is going to play out. But news organizations around the country have been covering it. And covering in particular fact that there's no evidence that this man was actually in MS-13. Like none at all outside of a hat and one confidential informant that nobody has ever been.

You were good at none at all. That was you were set there. That's not at all. So Brendan, this week, has decided to threaten Comcast. Disclosure Comcast is an investor in Vox Media, but truly they dislike me. He decided to threaten Comcast this week. He said, Comcast outlets have spent days misleading the American public, implying that Obrigo Garcia was merely a law-abiding citizen, just a regular Maryland man. When the truth comes out, what is the truth, Brendan?

They ignore it. Comcast knows that federal law requires its licensed operations to serve the public interest. News distortion doesn't cut it. Abregal Garcia came to America legally from El Salvador. It was validated as a member of the violent MS-13 gang, a transnational criminal organization, and denied bond by immigration court for failure to show he cannot pose a danger to others. Why does Comcast ignore these facts? Because they're not facts, Brendan.

They're just not facts. And actually the job of news organizations, we run one, is to question the government, is to take the political figures of our government, to take the attorney general, to take J.D. Vance and say, is that true? Is it true what you're saying? We've given you the power to jail people. The state has a monopoly on violence in this country. You have that power. Are you using it well? Are you using it with justification? Are you using it in the name of justice? they're not. Like, whatever you think about this case, whatever you think about deportations, in this case, they've not given this band due process. They shipped him off to El Salvador,

and the only evidence they have actually proffered is that he is wearing a bull's hat. Great. That is a controversy. You can cover it the way they're covering on a Fox. You can cover it the way they're covering out on newsmax. You can cover it the way they're covering out MSNBC. But the government doesn't get to go threaten the news organizations covering it.

Brendan Carr doesn't get to show up and say news distortion doesn't cut it. And the only reason he's saying it is because NBC owns some broadcast licenses and he has the authority to say it. He can't say it to us, we're on the internet. He can't say it to MSNBC or Fox, which are cable stations

that he doesn't have control over. This is just naked political posturing because some of these stations run over the broadcast airwaves. And even in his mentions, I will point out, even in his mentions, people are calling him an idiot.

Like, this is just wrong. It's wrong for the person who runs the nation's communications infrastructure to say that not supporting the administration's lies is news distortion. Actually, what I be saying is I support our vibrant broadcast networks which reach most Americans pushing hard on the truth. Whether or not you agree with mass deportations, whether or not you agree with the Trump administration coming down really hard on everybody who was illegally in this country. fine, you can think what you want. But in this case, the lie is obvious. In this case, the evidence has not been produced and it is not news distortion to say the government has not produced this evidence. I just, he's such a flunky. It drives me bananas. It is nice that people are starting to calm out on it. I will say that. But it is just obvious that just like Andrew Ferguson, there are things he has to say.

And there are lines he has to accept from the rest of the administration in order to preserve his job. And Brendan does it with such glee that you have to just accept that he wants to. I think that gives him too much of an out to say. These are things that he has to say. I think all evidence about Brendan Carr suggests that he is oh, so, so happy to be saying and doing all the stuff that he is saying and doing. He's like, Mr. I'm out here having the time of my life guy. Like wearing the head of Donald Trump. Yeah.

None of this is making him sad on his insides. So then here's the loop closing, which I think is even more dangerous. As he does, President Trump was watching television late at night. It's the thing he does. Yeah. Presidents, they're just like us. He watches 60 minutes a lot, Donald Trump, it appears. So this week he's watching 60 minutes, and he gets real mad and he posts this long rant on truth social about how they're talking to Kamala Harris again.

They mentioned the word Trump and they're not nice to me. And at the end of this long rant, he says, says they should lose their license. Hopefully the FCC is headed by its highly respected chairman, Brendan Carr, will impose the maximum fines and punishment for their unlawful and illegal behavior. CBS is out of control, and they should pay a big price for this. When you become the flunky, the president of the United States can say, I want to punish the speech of this company, and my guy is going to do it for me.

That is just a violation of the First Amendment. Straightforwardly, no matter how you think about the legal mechanics of who owns a broadcast licenses, the president watching TV, getting mad at the coverage, and then directing his flunky to punish the company is not how it's supposed to work. Like, at all, they work for us. Like, when I watch these press conferences, the thing that I want some reporter to say sometime is, do you realize that you work for me? Because they've all forgotten it. Brendan has forgotten it. He works for us. And I think it's probably times someone reminded him of that. And Brandon, I would happy to do that if you just want to come on Dakota or the verge cast. There's always the doors open. I don't think you can do it because I don't think you can take the heat. I know people are starting to tweet these segments at you. It's pretty good. So if you think you can do it, if you think of the intellectual rigor to show up in the show and justify your actions, you're welcome. That's been Brennan Carr is a dummy, America's favorite podcast within a podcast.

Jingle, TK. It's funny. Like I'm just becoming like an angry talk radio show host, you know, but that's you got to fight fire or fine. It's okay. I like to think we just need to get it out of your system once a week. It makes you like a happier person. afterwards. The number, it's like, what you want most of all is just feedback from the audience, you know, like, anybody who makes something just like is desperate, you know, like, read my novel. And now we get a lot of the feedback, but the feedback only enrages me because it's just stuff Brendan has done that other people notice. I, the feeling of, like, you work for me.

I had in the Meta trial earlier this week when, like, Ferguson was, like, looking down at all of us, like, who were there with the press and, like, would not make eye contact with us. and then his like comms lead who used to, I think, worked for the Washington Examiner was also like just pretending we didn't exist when we were standing right in front of him and trying to like ask basic things. It's like really bad for the comms people, right?

It's like, you know, like, that's what you're here. But like, I mean that like the highest level. Donald Trump works for you. Whether you love him or you hate him, that's the whole point. He works for us. We get to fire him at the end. Right?

Like this whole administration completely forgotten this, like, very important piece of the puzzle. But that said, Brendan isn't far enough to make it through the whole 40 years. So we'll see what happens. All right, pallet cleanser, David. Okay. We're going to skip right over tariffs because that, that doesn't count. That's a power. And also, nothing has changed. Tariffs happen. Well, the numbers have changed. The numbers have changed. But it doesn't matter. Yeah, but who cares? They'll change again by the time this podcast goes up. Like, the numbers have changed. There you go. That's the news. We figured out the G. 27x story,

Nelai. Allison Johnson went and answered our question about... There's like two answers to this question and one of them is so confusing

and the other one is like also confusing in a very different way. So, okay, so I want you to explain this story because actually the story

originates with you. Fun fact, I did the final edit on this story and I made Allison take out the line where she says I'm writing this story

because Neelai made me do it. We definitely put up a Liz story today that contains like a very similar line. It's great. That's what being an energy is about. It is true, however, that other people on our staff also saw the story. Okay, so

the Canon G7X3, a camera from 2018 has gone totally viral. You cannot get this camera anywhere. If you can get it, it's even like a used one is selling for like $300 over MSRP. This is not normal. Like there's lots of pocket

cameras with one inch sensors that do a good job of just taking photos, but it's gone viral on TikTok, and so it's sold out everywhere. And there are TikToks now about how to get one, like when in the middle of the night to wake up and, like, power refresh the target website. So I see all this, Allison and the crew and I talk about it. And we had the first idea, which is we should buy one and see if this camera's any good. And then Allison is like, it's been three weeks and I can't buy it. Like, I've been trying to buy one.

Like many people have been like setting up weird bots for her to buy, like, Antonio de Benedetti. I know on our team was like, I'm really good at buying stuff. Like, I'll help you. So we could not get one. Crazy. If you have one, let us know if you like it. But then she talked to all the creators who are using it. And it turns out, one, it's just an answer, which is fascinating.

Right. There's still enough choice in that market that just an answer is useful. Right. So, yes, you could just buy an RX100. Yes, there's like various Fuji cameras that, like, do the job. But this is just the answer. Yeah, like it takes it takes pretty good video, it takes pretty good pictures. It's a reasonable size that you can carry around with you.

And it looks cool, which is important. Sold. Yeah. So that part is like confusing in the sense that like who knows how things become the answer. Do you know what I mean? Like, and it's not like Canon has stepped up production. It's just here's this thing everyone wants. And Canon's like, it's a five-year-old camera buyer, new camera instead.

Like very much, Canon's like, would you like to buy the new camera? And people like, no, old camera. One of the things Allison found is that there is like a newer camera in that line. I think it's called the Powershot V1 that like just relatively recently came out. You can buy it so easily. It's just right there. You can just have it. But no one wants it.

They want the five-year-old one. Yeah, because it's just the answer. So that's confusing in the sense that like why do things become popular? You know, it's like some art and science. Confusing. The more confusing thing is the reason people like it is because apparently it shoots great flash photos. So all the tips for using it are like open the flash, even in like broad daylight, just like fire that flash out. It's, it's, it's 1999 again, Eli.

It's great. I gotta love it. I've started popping the flash on my RX100 to be like, baby rave. It's like a good time. Wait till these kids figure out how to shoot with slow shutter. So you get the nice background and the flash. It's so funny. Yeah, Flash was just like you, it was, it was embarrassing to need Flash for so long.

Oh, yeah. But it was cool before that. Now it's the trend. And this one camera, like literally the conversation, the discourse is you need to buy this camera because of its flash. That means all these kids are like looking at their parents' photos from college being like, oh, that's so vintage. And those are the pictures they want to take. And I'm realizing those are the pictures that I have from college because I'm 100,000 years old. So when we were like early 2000s moved out to Chicago, we were in the bar every night.

my friends and I had those like cannon power shot else and they only worked with flash in the body like they unusable have low light capabilities and those flashes are really harsh and really direct and really cold and we would always hold our miller light bottles in front of the flash and shoot through those because they would both diffuse the flash and then tint them like miller lights brown you know and then people we were like oh my god what if we use a high naked bottle like we should sell filters for flat and this idea died like the iPhone came out the next day. We're like, well, that's over.

That's how we solved the problem back in the day. We just held the beer bottles in front of the camera flashes. I have a lot of very weird photos taken that way from about like 2004 to 2007. I love this for you. It was great. Anyway, the mystery is solved. And the mystery is it's just the one. Like, it just became the one.

It's just the thing that's popular. And the thing specifically popular about it is the flash. Right. Yeah, it is like the virality has fully taken hold on that thing. It's like it can happen with anything. It can happen with a weird Fleetwood Mac song with a guy drinking cranberry juice. And it can happen with five-year-old cameras. Like, no one knows.

And it can literally happen to anything at any time. Do not turn on the flash on your smartphone. No. It's not as good. I just, I need to tell you this. Do you think we can make the phrase, it's not as good? When you pop up the flash, you're yeeding the flash?

No, unless you ripped the flash off the camera and like threw it into another room. No. That's not what that word would be. Bro, let me get a picture. Just let me yeat the flash real quick. I feel like we can make this happen. Is Yeat going to be in the title of this episode? We can't do this.

We can't do this. We can't do this. We can't keep saying, Yeat is already old slang. It's like five-year-old slang already. And now we're just talking about like a bunch of old dudes. Like, yeat this is what I'm saying. How about Yeet the monopoly? That's the new title of the Verge cast. All right.

We'll accept Yeat to Monopoly. Do you have one more pallet, Clenser, David? Yeah, should we talk just for a second about Phil Spencer, saying Microsoft really wants to support the Switch. too, which a bunch of gamers that I know and talk to found a mix of very exciting and sort of odd. Like, basically what he said is, you know, Microsoft's whole plan is they want to have Xbox stuff everywhere, including on the Switch 2, right? And they've like, they're launching these games for

the PS5. I think Indiana Jones comes out like today as you're hearing this on the PS5, which would be very exciting for some people. But he said he was like, we want to have our franchises, are games on the Switch 2 also. Seems like great news. Lots of gamers are like sick. This is one of the reasons people don't get things like the Switch 2 is because it can't play some of those games. So the idea that it might is very exciting.

But then there was an interesting backlash to it of people being like Microsoft is just going to squeeze Nintendo and ruin this beautiful console for capitalism. And I just think it's kind of funny. Like the way everybody talks about all of the gaming industry that isn't Nintendo. is increasingly sort of ruthless and brutal and not beautiful and artistic. And then Nintendo is this just like beautiful flower child over here that we cannot allow

to be ruined by these other companies. Well, I mean, Nintendo is the only company that can look at something like Zelda and be like, yeah, it's done. We're done. The story's over. We have no more story here. We're going to start a new story over here. Like very few companies can look at Breath of the Wild

and be like, yep, this version of this has come to its conclusion. Most companies are like, have you heard of DLC? There's more of it. And then I think for Microsoft in particular, they lost this console generation. I don't know what they're going to do

with the next one. They're like we bought all these studios. We're going to monetize the games with advertising. Yeah. So we're going to put the games everywhere so we can get multiplayer. It's kind of like network effects. So if you want a big multiplayer games

full of advertising, you just need a lot of players. So of course you're going to be on Switch. And I think that's the thing gamers in particular are responding to is like every game is becoming some like open world advertising paradise full of things to buy. Yep. And Nintendo games are like, would you like to have fun?

Yeah. And that's the end of that. Like, yes. Yes, I would. I will play tennis with Bowser for five hours. Yes. Thank you. I think that's my people, we've been playing a lot of Astrobot.

Nice. Like, that game is great. I don't feel like someone's going to ask us for money while we're playing. Like, there's very few of those. games left and when they come out, people love them. But I think I think Microsoft has to put advertising on the Nintendo Switch. I think that's what people are reacting to. Yeah. The other funny Switch thing that happened this week was, uh, Switch Nintendo had another event just to show off more of the new Mario Kart game, which looks sick. Like, I'm so excited about that game. And

the whole chat in the whole thing was just about the price. A bunch of people were like, A, like, tell us what the actual price is. Why won't you let us buy this? Lower the price. How dare you and then a bunch of people being like, oh, games are expensive. And it just all anyone cares about at this point is like, what is this thing actually going to cost and when are you going to let me buy it? And anytime Nintendo does anything else, that's the only question left. And that is also the question I have because the pre-order date has come and gone. They have not even announced when it's going to happen. I would like to throw my money at a switch two, please. It's going to end up costing like $1,500 to buy the switch too.

honestly like you can either wait a year and get it at normal price or buy it now for a thousand dollars like it could happen I mean there's all the you know high-minded like trump really began with Gamergate and to have it come full circle to you can't buy Nintendo is very funny I'm just gonna I just needed to say it on our show one time I think Nintendo will figure out a way to get this thing on sale I actually really I talked to a the CEO of a very large company that makes a lot of stuff this week. And he was like, I don't think anyone understands we're all going to solve it with smuggling. He was like dead serious. Just like Tim Cook like flying planes like out of like Vietnam.

Yeah. Like we're going to all the parts will like all the parts will go to Mexico for a final assembly. And that final assembly is like a sticker that says made in Mexico. And then that will come in through that terror regime. Like the amount of that that is going to start happening, The thing specifically it was described to me is you have all these export controls in these various countries that like you have to check the list. And he's like, yeah, we just set up 15 shell companies so that it completely obscures where things are going. All those people get to make money, but that money is less than the tariffs.

And I was like, is it smuggling? And he's like, yeah, smuggling. It was just very direct. So do we pay tariffs or do we pay bribes? Yeah, he was very straightforward. It was like, yeah, I understand he was smuggling. So I'm excited for Nintendo to figure out smuggling, basically. It's the next great Switch 2 game.

Smuggle a Switch 2. Yeat the Switch 2. I would play that. We're done. That's it. That's the Verches, everybody. Rock and roll. And that's it for the Vergecast this week. And hey, we'd love to hear from you.

Give us a call at 866 Verge 1-1. The Verge cast is a production of the Verge and the Vox Media Podcasts Network. Our show is produced by Will Por, Eric Gomez, and Brandon Kiefer. And that's it. We'll see you next week.