The Vergecast - Google lost its first antitrust case, so what happens next?

Episode Date: August 9, 2024

The Verge's Nilay Patel, Alex Cranz, Alex Heath, and Lauren Feiner discuss a federal judge ruling that Google violated US antitrust law, X suing a group of major advertisers over an “illegal boycott”, and the rest of this week's wild tech news. Further reading: Judge rules that Google ‘is a monopolist’ in US antitrust case All the spiciest parts of the Google antitrust ruling X files antitrust lawsuit against advertisers over ‘illegal boycott’  The Global Alliance for Responsible Media is 'discontinuing' after Elon Musk's X filed an antitrust lawsuit against it Disney’s password-sharing crackdown starts ‘in earnest’ this September Disney’s streaming business turned a profit for the first time The price of Disney Plus is about to go up Logitech’s ‘forever’ mouse isn’t happening Google is discontinuing the Chromecast line The Google TV Streamer might be the Apple TV 4K rival we’ve been waiting for Humane’s daily returns are outpacing sales  Samsung’s Frame TV is finally getting the knockoffs it deserves  Microsoft says Delta ignored Satya Nadella’s offer of CrowdStrike help Hands-on with Google’s new Nest Learning Thermostat OpenAI won’t watermark ChatGPT text because its users could get caught 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

What's up, y'all. I'm Skyler Diggins, seven-time WMBA All-Star, Olympic gold medalist, and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years covering the biggest names and stories in sports and mom. And this is Am Mom, a community for athletes, game changers, and moms of all kinds. Dropping May 14th. Tap in with us. Hello and welcome to our podcast, the flagship podcast of pointing out that Elon Musk doesn't know what a contract is, how they work, or if they exist. that's it. I'm going with it. That's going to be a big part of today. I just want to be clear about that.

And if you need to do something else, that's fine. We're also going to talk about TVs later. So some real classic Vergecast stuff will be here, but I'm not going to shy away from knowing what a contract is because I know. Pass the bar in two states, people. I know what a contract is, and that guy doesn't. Hi, I'm your friend, Eli.

David Pierce is, once again, not here, which means there's literally no check on my power or authority. Although Alex Cranes is back. Welcome, Alex. Hey, I'm here and I'm your friend who is going to sue you because I want money and you said no. So to court. It's a lot. It's a lot. We have an additional Alex. Alex Heath is here. Hi. I'm also not using Bing. You couldn't pay me to use it either. Oh yeah. We could have, I want to be clear. We could have also been the flagship podcast of you can't pay me to use Bing. Another thing we're going to spend a lot of time on today.

It's a big week. Lauren Finer is also here. Hey, Lauren. Hello. There's a lot of news this week. I thought it was going to be a quiet week. We really thought it was going to be a quiet week. And then on Monday, the court released a gigantic ruling in the Google search antitrust case, finding the Google search is a monopoly.

We got to talk all about that. The assistant attorney general for antitrust, Jonathan Cantor, was on Decoder. There was just a lot to say about that case. Lots of about Apple in relation to that case. was paying Apple for default placements. So we got to spend time on that. Then we're like, all right,

we know what's going to happen this week. Then Elon Musk filed an X filed a lawsuit against advertisers, claiming antitrust violations because they refuse to advertise an X. I would say not as clear cut a victory for that case as maybe in the Google search case. We got to talk about that.

We have a lightning round. There's a bunch of stuff in the light around, talk about actually. And then, of course, Disney Plus is raising prices. A real, real Verkest. Oh, and I judged a TV competition, which I thought I was going to get a chance to write about, but didn't because everyone's suing each other. I read so many PDFs this week. Wait, you judged a TV competition? Yeah. The 20th annual TV shootout. What? The actual TVs. They put a bunch of OLEDs and micro LED TVs in a room. And I went into that room with a bunch of like high-end Hollywood colorists and compression engineers. And it was like all of them and then me as the judge.

And we looked at the TVs. We had long worksheets to fill out as we watched different like scenes of movies. And then we like rated. And I was going to write it. I was like, this was my week to finally let go of talking about the government and talk about what I love instead, which is how TVs look. And I didn't get to do a lick of it. Where did the frame TV rank? The frame TV was not.

It did not make it to the competition. What? immediately like booted. It wasn't even in the mix. Like it didn't even get into the, there were six TVs in the finals, and the frame was not among them. They're not really finals.

They just pick the six specs TVs in the market. And then I will tell you the two brands, we'll talk about it. But the two brands specifically said, do not include us in this competition. Just looking to thank you. We'll get to it. And I'll talk about it.

And I promise I'll write about it for next week. But that's what I thought it was going to do this week. Like, really and truly, I thought I was going to argue with people about whether microl-l-D TVs can compete with OLEDs. And I didn't do that because the sheer number of PDFs generated by the judicial branch of our government was out of control. Like, talk about a good time to buy it, Boox Palmer. Just PDFs for days. All right. Let's start with the Google search ruling.

This case's been going on since, what, 2020? It was filed under the Trump administration in the sort of like classic. classic Trump administration, like, I don't know, let's sue Google. Like, we're mad at them. But then it was actually Biden, right, that took it home? Yeah. And then obviously the Biden administration with Lena Con and specifically Jonathan Cantor at the Department of Justice who runs the antitrust division.

You know, Lena Con is the chair of the FTC. Cantor runs the antitrust division at the DOJ. They have been sort of like debating, arguing even who gets to take which antitrust enforcement action and Google ended up at the DOJ. Lauren, you have some color, like, even watching that. How do they decide who gets to do what? Yeah, so generally how it breaks down is it's somewhat based on just like the expertise of each agency. Like I think there's certain industries that DOJ tends to take and certain industries that FTC tends to take.

And it also, maybe they'll consider like, is this something where we might bring in the FTC Act, which obviously the FTC would use. And maybe that feeds into the determination. nation. But I think generally it's just based on, is this an industry that typically is a DOJ or an FTC industry? Yeah. So the DOJ had this one. Again, started under the Trump administration. The Biden, DOJ, carried on with it. There was a trial. We covered the hell out of the trial. Eddie Q was on the stand. Tim Cook was on the stand. Nadela was on the stand talking about her being could compete with Google. Was this the trial where they like just wouldn't let us see a lot of it? It was a lot of it was closed off. Yeah, that's right. Yeah. There was a period. where the judge, I think it was a result of some of the third parties in the cases that didn't want, you know, their business information just aired out in front of the press and the public kind of pushed for, you know, more behind closed doors elements of the trial. And the judge conceded to a lot of that in the beginning.

And then there was a lot of pushback from the press and it became a bit more open. So, yes, that was this trial. Yeah. And like the judge was like, well, I believe Google when they say these are trade secrets. And there was a lot of criticism. Lauren, from what I understand the judge took the criticism to Hartley, he was pretty stung by it. And then he opened up and we got to cover more of it.

We did cover the trial in an ongoing basis. And then it was pretty quiet while he was writing this opinion, which is 286 pages long. He was writing a book. It is a book about search. Yeah. It was interesting because I was just looking back at my stories from the days of the closing arguments in May. And I remember walking away from that thinking, like, you know, he kind of was holding his cards close to the chest, but, you know, made a few comments that seemed to dig at Google.

But reading it back now, having seen the opinion, I can see like, oh, he really was kind of probably already drafting this and thinking about a lot of these sections of the opinion, even back then. Yeah. So the ruling in the case, 286 pages, yesterday, I said to Sarah Jong, I thought it was readable, and she was like, you don't know what readable means. It is very long. You can read it. It's not like, at one point there, he's talking about how ad auctions work, and there's literally mathematical formula in it.

There's a lot in 286 pages. But the main holdings are Google Search is a monopoly, and he found that there's a market for general search engines. Alex, you and I have talked about this whenever there's antitrust cases, the tech companies try to argue that markets don't exist. Like, Facebook has basically held off an antitrust action by insisting that there's no such thing as a market for social networks, and Facebook is not in it, even if there was. And that has worked until kind of now when the judge found, okay, general search engines

are a thing. People understand what they are as distinct from TikTok search or whatever. So you found general search is a market, and Google is the only competitor. And there's a line in there. He's like, these are Fortune 500 companies, Apple and whoever else, and they can only turn to Google. There's nowhere else for them to go. really liked the way that he defined that. It seemed like it was actually the clear way to say it,

which is just a general search engine encompasses a lot of the web. It's not a silo like TikTok. TikTok you can, I mean, I've used TikTok for search to find things that I'm looking at, but it's only TikTok content. And I thought the way he just kind of clearly defined general search as being an aggregation of a lot of different sources of content was helpful, even like following the trial, not as in the weeds as Lauren, But the definition stuff was always pretty wonky to me, how they were defining different corners of search. And I thought he actually did a pretty good job in the opinion, the final ruling here laying it out. Oh, yeah. That was something that during the closing arguments, I remember the judge, I think Google was trying to make the case that, you know, Amazon is a potential competitor and all these other things.

And I remember the judge saying something along the lines of like, well, you know, Amazon doesn't like index the web. Like it is a different thing. So I think that's something that he really took to heart. He points out that he had expert witnesses in the case who testified that the biggest advertisers on Google and Bing are vertical search engines. So like flight search engines or travel search engines or whatever, they advertise a lot because that's where the audience for their searches are. And he's like, well, they're obviously not substitutes. If you're trying to acquire audience for your vertical search engine and travel or whatever on Google, Google is obviously not substituted for that. So he lays out this case.

And, you know, if you want to get into the nitty, gritty legal analysis of it, you should just listen to Decoder with Cantor because we got into it. And part of it is understanding how the government is getting better at defining these markets. Because this is where they have gotten tripped up and where the tech companies have really won and pushed off a lot of this enforcement for years by just tying these like deep philosophical knots of like, what is even the market that Google is in? Even in this case, this is one of the funniest counter arguments that Google made. They said that Google is not in the market for search engines. It's in the market for answering queries. Just like broadly, just like if you have a question, that's the thing that Google does. And they're like, every place you might answer a question is a place that competes with Google.

And the judge was like, no. That's not true. If you search Amazon, you only get products. You don't get answers to questions. Google is just like very general search engine. So the government went there. They said they did a search engine. And they said that they're anti-competitively protecting the monopoly in search that they have

with the deals with Apple, which we should talk about at length. So Apple pays Google $20 billion a year on the order of $20 billion a year to be the default search provider on iOS and the Mac and other Apple products. There are some conditions, which are the thing that make those deals anti-competitive. It's not just the money. We should talk with those. And then they found that there's a monopoly for search text apps. ads, which is just the text ads in search, not general search ads, because there you do have competition from TikTok and Amazon and all this other stuff.

But search text ads, the ones that show up on the search engine results page, the judge said, hey, there's a monopoly here, and Google has acted anti-competitively. And this is, I think, the shadiest part of the whole trial. Google just slowly raises the prices of those ads without considering what competitors might do or arrivals might go, and they hide those price increases in the auctions. What the judge said, like, that was why he found that to be a monopoly, right? It was because they just didn't have to care about anyone else, and they could just raise prices whenever. And he's like, yeah, that's just the monopoly, guys.

I don't know what to tell you. Yeah, he did this in both in the advertising part and in the search engine part where he pointed out Google does stuff and it doesn't care that people might leave, which is, as we have noted on the show many times, like, The most essential truth of the Google experience right now is like, boy, you just blow stuff up, you cancel stuff, you shut it down, you make it worse, and there's nowhere else to go. And Google doesn't seem to care. And the judge pointed out, he's like, this is only a firm with monopoly power can get away with some of the stuff that they do, including raising prices by making it appear to the auctions. You know, when you buy an ad on Google search, they buy a keyword.

You buy like airline flights or whatever keyword hotels. These are like hotly contested keywords. You want to put advertising on those keywords in search. And so Google is raising the prices of those auctions, making it appear as though it's noisy, like there's more demand or it's fluctuating. But really over time, it's just raising the price. And that the judge found was that that was evidence of monopoly behavior and also just like wrong, right? So this is a huge decision.

There's stuff where the government didn't win. There's no monopoly in like there's no monopoly in general search advertising. The Google didn't get sanctioned for the way it treats its. like ad text stack, which you probably know is called DoubleClick and now has another name. And then Google deleted a lot of its chat history and the government wanted sanctions for that. And then Google deleted a lot of internal records and the government wanted sanctions for that. I didn't get that. So that's all cast aside.

But the main ones, the important ones are Google search monopoly. Google's acting anti-competitively. Google text ads are a monopoly. Google is raising their prices anti-competitively. It just feels like a huge deal. Cantor told me this case goes on the Mount Rushmore of antitrust decisions, which implies there's a Mount Rushmore. antitrust decisions. Like, I want to talk about a lot of the Apple stuff here, but you talked at Cantor.

Did he explain what they're going to do next? Did he say, oh, yeah, we're going to get him for this? Oh, so this is, yeah, this is important to note, Lauren, I'm curious if you've heard anything here. But the trial is what's called a bifurcated trial. So there's this part, which is, did you do it and is it wrong? Yes, Google Search Monopoly. Then there's what's called the remedies phase where the court lays out a process for how

but will basically hold a second trial where they'll figure out what the punishment is and how they will fix it. And that could be anything. The government could ask for anything. The court could impose anything. It could be fines. It could be structural. That's breaking up Google. It could be behavioral.

In other cases, there's like oversight of a company's behavior to make sure it doesn't do the bad thing again. They're kind of all in the table. And I can't her just, I mean, like, he's a government lawyer. I was like, answer the question. He's like, I'm not going to answer your question. Like, very directly, very troublingly, it was like, I'm super. we're not answering your question. But you can look back to history. You know, the Microsoft case comes up over and over again in this, and that was like a lengthy remedies phase, also a bifurcated

trial. They negotiated a settlement. Then there was a second trial to see if the settlement was fair. And then Microsoft was under the microscope with oversight for a long time to make sure it didn't do a bunch of Microsoft stuff. You can see that potentially happening in here. Yeah. Lorne, did you get any sense from like, I guess they're in D.C. people and how they're going to react to it, what kind of punishments they might want to do. Seeing his canter was like refusing to give Neely any of the good stuff. He was just like, nah. Yeah, I mean, I think that I know that a lot of the rivals to Google who have been, you know,

really cheering on this case from the DOJ side, they, you know, I think they're really cheering this decision, but at the same time are holding back a little bit because they know that what really matters here is what Google is made to do to respond to the finding of liability. So I think, you know, there is a little bit of hesitance that, you know, maybe there's going to be some sort of remedy that doesn't fully fix the problems, you know, maybe something like a search screen that we've seen in Europe that like doesn't really seem to do too much. So I think there's just a feeling of like, all right, we're really happy about this, but also we know it's not done yet.

Yeah. We should note Google has already said it's going to appeal the ruling. The statement from President of Global Affairs, Kent Walker, is, it's actually pretty funny. It says, this decision recognizes that Google offers the best search engine, but concludes we shouldn't be allowed to make it easily available. He's basically saying, this is not sensible. I don't know if that is what the decision actually says. It is true the decision says over and over again, Google is the best search engine, but then

is like, it's also the only one. I think it's also that, you know, I think the judge bought into this argument that the DOJ was making that, like, there's kind of this flywheel effect where, like, Google, you know, it gets all these defaults, like, gets all these people to use its platform and, you know, make all these queries, and then it has all this really good data. And then it uses that data to just make the search engine better and monetize that. And so I think, you know, he's saying, yeah, it is a really good product. But that's also because of these exclusive contracts that have gotten it to that place. Which like the, I think maybe you pointed this out, Neli, or maybe it was Sarah Jong online, that Apple is going to have to like, like Apple could have taken that $20 billion. It gives Google every time and gone and made its own competitive search engine for less than that. And that kind of factored into the judge's reasoning.

Yeah, we should generally talk about Apple, but Google pays Apple $20 billion a year, and Google has also internally estimated that for Apple to build a search engine will cost Apple $20 billion. Right. So there's only so many companies that can compete with Google. One of them is Apple. One of them, and there's like lots of reasons for that. One of them, the most important one, is that Apple can set the default on an iPhone. So it can collect all of this data and like a huge percentage of Google's queries for search come from default placements.

Right. It's like 50% of all Google's search queries come from default placements on mobile or desktop, whether it's Android phones or iPhones or whatever. So Apple has a massive share of those default placements, particularly on mobile. And so it could build a search engine. It can compete because it has all of that. And Google pays the money to keep them from doing it. and inside of that services agreement, it also puts in conditions that Apple agrees not to make things that look like search better at search. So Siri can't get better.

I think the agreement says it can't get better than it is today or it can't be meaningfully improved fast for it's day. Spotlight search can't get better. There's some documents that are, you know, as part of the exhibits, Apple considered putting some advertising into spotlight search on the iPhone. And they're just like, well, we got to talk to Google about that, but we don't want to renegotiate this Google deal. I guess we don't do that. And you can just see them. They're just held back by the existence of this deal and its conditions with Google. We've asked a million times, why doesn't Apple just build a search engine?

And the answer is $20 billion a year. That's just fully the answer. And that's actually the thing that's anti-competitive, not the default placement, right? Not buying the default. It's the conditions. It's also cannot compete with us. But Apple doesn't want to, right? Like, they said, no, we don't want to use Bing.

We don't want to put something else in. So one of the absolute funniest conditions of the agreement with Google is that Apple is required to defend the deal against regulatory actions. So like, yep, Apple said a bunch of stuff in this trial, but they're legally obligated because of their contract of Google to co-defend the deal in the face of regulatory efforts. That's not shady. That's totally normal way to do business. That's fine. So yeah, I mean, it's true that Apple says that I want to, they don't need to. Apple repeatedly said that Google is best.

There are some incredible quotes here. Eddie Q testified. They said, would you ever use Bing? And he said, there's no price Microsoft could pay to make a set Bing as the default. And then he said they could give us the whole thing for free. They could give us the company. And we wouldn't use Bing. Like Microsoft, you could just have Microsoft.

And he's like, no, Google is the best. And it's like, maybe you believe that, but maybe you have a contract that says you have to say it. Like, I don't know. But if you rolled up to Tim Cook, you're like, here's what we get, Microsoft. I feel like he'd be like, we should talk about this. I mean, Bing is notoriously awful. Maybe just like Eddie was trying to, like, find some good flight deals. Obviously, he has to say that.

I think it's interesting that this contract was also done in 2016. So Apple and the most recent search contract between Apple and Google, which means that they knew in 2016, that this deal looked bad. And they put a clause in saying they both needed to defend themselves against regulators. That's just a massive red flag. I don't know about you guys. I always felt like Google was going to lose this case just because of how mafia-like this arrangement has been.

And the problem with Google's core argument at a very high level is this inherent contradiction of their argument was, we're winning because we're the best. We're the best search engine, right? That was their at the highest level legal argument. But then you're also paying a lot of money to win. So what is it? Is it actually because you're the best or because you're paying money? And Google was never able to address that contradiction because I think they know that this contract is anti-competitive.

I think all sides know this. And I don't think it started that way. Like, I don't think it's an over-exaggeration either to say that this contract has shaped Silicon Valley maybe more than any other contract between two companies in the sense of how Google and Apple grew together and have been kind of weirdly joined at the hip since, you know, the iPhone with Steve Jobs and Eric Schmidt coming on stage together. And they've kind of let each other grow and not, you know, there hasn't been a turf war because of this very lucrative deal. So you've got things like Apple uses Google Cloud a lot. We found out that Apple intelligence was trained exclusively on Google's TPUs instead of Invideo hardware.

Google helps serve advertising through Apple's integrated iOS placements. That's been happening for years. They've just like become very interjoined in a way that, yeah, Eddie could say, you know, we're not going to like do this for the whole company. But it's also like that's because they kind of already are doing this. with Google. So they really did just kind of carve out and say like, okay, you get this. I mean, not on paper, but they really did just kind of carve things out and say, okay, you get search.

We're going to take phones. Yeah. Well, I think there's like teams inside of Google who do not know that anyone who's like, you get phones. But, you know, it's fascinating. The phone piece is really interesting, right? Because obviously Android exists. And I agree with you, Alex.

I think the contract of Google has shaped a lot. lot of thing. I agree with the Oaks. I think the Apple Google contract in particular has shaped a lot of things. It's like a black hole. It's like just distorted the fabric of tech space time around it for a long time. But Google has these same deals with tons of other companies. It has these deals with carriers. It has T-Mobile and AT&T and Verizon all have similar default placement deals because, you know, the carriers provision, apps and services on the phones they sell. And Google knows that's like a very powerful mechanism of distribution. And if they didn't pay Microsoft would,

and then Microsoft would have slightly more distribution. There's a study in the case, the judge cites from inside of Google. It's very small. I'm going to warn you now. The sample size is tiny. It's like 26 people. But Google did a study of 26 people, and they found that half of them did not know when Google was switched out for Bing on their iPhones.

They just like didn't notice because no one notices. That seems real. Right. And like these defaults are super powerful. The government, Cantor told me, he's like, the thing we did for the first time in any an actress case is we put a behavioral scientist on the stand to point out that no one changes the defaults and habits are powerful. And the judge bought it.

Like, he comes back to the testimony from this behavioral scientist several times. At one point, I think this is like the most Virchast thing ever. You might recall that Verizon owned Yahoo. They did. That was a real thing that happened inside of a company called Oath that they made that combined Yahoo with AOL. This isn't important except to say the verge was born out of

AOL's bullshit, so it's very personal to me. The Verizon made oath at one point, but Verizon owned Yahoo, and it wanted to preload Yahoo search on its phones. And they looked at the opportunity cost of doing that and how much it would work, how much it would cost and what it would take, and they looked

at the check from Google, and they picked the check from Google. They took their own product that they had bought, and they're like, we could make this good. But putting it in front of more people and getting that clickstream data and making the search engine better. Or we could just take Google's money. And Google's like, what if it was more money? And then Verizon caved and they flipped Yahoo.

And you're like, whoa, why didn't anyone ever try with Yahoo? It's because Google just made sure it couldn't get the distribution. Also very virtuous. One of my favorite parts of this whole decision, there's a lengthy conversation about bloatware and Android phones. And I don't know if I believe this. But there's all this evidence that people won't accept three browsers on their phones or three search widgets, but they will take two because Samsung has two. Right. So there's like internal Google emails and evidence and like meeting notes where they're like, we're not so worried that our deal with Samsung for distribution where there's our browser and Samsung's browser is under threat from Microsoft because no one would ever accept three browsers.

And it's like, I don't know, man. I feel like Samsung is like one minute away from doing three browsers. Samson is going to do like four different browsers. Yeah, it's like we're very close. And like no one, they're like absolutely not. Two search widgets on the home screen, heaven forbid. And it's like, I don't know. Have you met these carriers?

Yeah. Like if not for your exclusivity contracts, like they would put two search widgets on the home screen. They're minutes away from doing this. They just forgot bloatware. They just like forgot how bloaty phones were before Apple. There's a lengthy discussion of bloat. in this decision and how Google sort of like use the threat of bloatware to make sure they were an exclusive provider of search on these devices.

And you just see it up and down the stack. They find their angles to make sure there isn't competition and they press their advantage on those angles. And to me, it's, well, that's why we don't have other search engines. Like there's Bing and Bing just isn't good enough. And like the judge basically says Bing isn't good enough. Apple maybe has required to say it says Bing isn't good enough. Google is out there running benchmarks saying Bing isn't good enough. And then sort of knowingly making their product worse.

And it's fine. What was the number? There was one number in the decision that was like it would take Bing 17 years to get the same amount of click data that Google gets in a day or something. So basically in this opinion, the judge says that 13 months of user data acquired by Google is equivalent to over 17 years of data on Bing. Right. And that's like the amount of use Google gets in 13 months is it would take being 17 years.

And all of that feeds back into the ranking model. It's like a really interesting thing in this opinion is the stuff he dismisses. Right. He says, TikTok is not a competitor to Google search. And then he's like, I know you all want me to talk about AI and how AI might like de-through on Google search. But we're not there yet. It hasn't happened yet. I don't see it.

And I've got all this evidence and testimony from Googles on people. saying they need the user data even when they try the AI tools. Even when Google puts its AI models up to make the search results, it's the click data that actually helps them refine the search. They need the feedback loop, right? Yeah. And this is what I hear talking to like meta and other companies. Like they really think that the people who win at large scale network effects

businesses like this just have the feedback loop. And AI search, if it just gives you the answer, you're not learning a lot about is the answer good, how can we improve it? Because you don't have an interface where people are browsing, clicking the links, going from pages. And yeah, it's smart of Google. You know, they recognized early that search was a network effects business, an aggregator business, and they went out and bought all kinds of distribution.

They did Android purely to get Google search out there on phones. They realized they didn't own a phone. They bought an OS and scaled it and did all these funny business, you know, deals to basically bundle. And this is like, this is a tale as old as time. I mean, Microsoft will get into this. I'm sure Microsoft 20 years ago got its hand slapped by the DOJ for doing almost the exact same thing. And the characters that come up in this case have a fascinating background in that case. Like Kent Walker, who's running legal at Google, was the general counsel for Netscape.

during the Microsoft antitrust trial. Like, he understands. Like, he understands bundling and what it does to smaller players. You can't see this if you're listening to this, but I'm wearing a Microsoft logo shirt from the early 2000s in honor of this. So, yeah, I just find it interesting that, like, if you look back at the last time a case like this was brought was Microsoft, and Microsoft was so dominant, so ascendant.

And the question was, will Microsoft control the consumer and point to the Internet? right? And now 20 years later, as a result of that decision, Microsoft didn't get broken up, but it changed a lot as a result. We've got Eddie Q in court saying, you couldn't give me all of Microsoft to use big. Right? And it's like, what does that mean for Google in 20 years? Yeah. That's what these cases do, and this is why it's such a big deal long term. So this is what Cantor said to me on Decoder. Again, I won't get too into the weeds and legal stuff, but his takeaway, his big consumery takeaway was this case is a consumer. continuation of the Microsoft case. The opinion itself, the judge, makes endless references to the

Microsoft opinion. He says, I'm using the same analytical framework as the Microsoft case. And Cantor's point to me was that case was about the application model moving from Windows to the web, which it definitely did. Now, whether or not you want to ascribe that to antitrust action or not, a lot of people have a lot of arguments. But a thing that really happened is we run apps and web browsers now and not natively on Intel processors on Windows. It's like we just run web apps. We're making this podcast in a web app right now. A very cranky web app, I would add, that only runs in Chrome.

There's your antitrust problem. But the application model moved to the web. It allowed a company like Google to exist because Microsoft wasn't able to bundle Internet Explorer and force out other browsers. So you had browser competition, which many had application model competition on and on and on, and now you get to Google. And now the government has cases against not only Google, but also Apple, basically alleging the same thing. And Cantor's like, we have to make sure the next generation of applications

is allowed to exist. And it's at these moments when everyone can see the change that the incumbents try to crush the insurgent models. And his point is Google is trying to do that potentially with AI search. They see it coming. So they're trying to lock down their advantage and make sure no one else gets distribution. And they can capture that market. And he thinks Apple is trying to do that on the iPhone too. I don't know if they're going to win the Apple case, but that's the sort of his theory of the situation is a direct continuation for Microsoft. The Microsoft case is generally interesting because, you know, it's been 20, they started that investigation in 1990 and they reached resolution in what, 2001. So that took a long time. And, you know, Bill Gates is out there

being like, yeah, that distracted me so I didn't do smartphones. And it's like, yeah, like, that's one way of thinking about it, but you also made Windows phone, which was bad. That's what he likes to say. Like, he's just like, it distracted me. It's like, no, it didn't distracts. you that much because you made a phone. You just made a crummy phone and you don't want people to talk about it. Well, it makes these companies, especially at this scale, just super skittish, right? And I do think there is an argument that Microsoft missed the mobile wave and didn't do it right because it was skittish, because it was on its back foot. It was subsumed by litigation and regulatory response internally. And it's hard to not see that maybe playing out with Google here.

And you can see Google already reacting this way in that, like, the way that they fake bought at Character AI last week, for example, which is totally wild. It came out after the Vergecast last week. I'll just quickly recap it. They basically bought this AI company without doing it. And they paid all the investors and the employees as if they bought the company. But they only took the AI people and they're leaving the husk, the flaming husk of what they left behind and saying good luck. but not a M&A events because they didn't buy equity. But they're doing deals like this because they already feel this antitrust scrutiny.

And they're not able to take the kind of big swings that they took to get to where they are now, which is buying YouTube, buying double-click, buying these things that fortified their monopoly. And there's a really strong argument to be made that in the same way this kept Microsoft from being able to be so aggressive in the early 2000s, that could happen again with Google here. Okay, but here's a counter-argument to that. Microsoft was distracted and lost in compliance efforts, and I don't know, Bill Gates was drinking tequila and screaming at the moon about the Department of Justice or whatever he was doing

instead of inventing the iPhone. Jumping over chairs. Do you believe that? Fine. Maybe you believe that's 100% true. Google exists. Apple was allowed to be resurgent because they put out the IMAC with the web browser on it. Like, the iMac running OS9 when it came out was not like there's a suite of great OS9 applications for the Mac. It was, this is the computer.

It's easiest to get on the web with. That's how they marketed it. Because the web was the application environment. It was the thing everybody wanted. It wasn't a bunch of weird Intel CD-ROM Windows applications or whatever was happening before. And Carta was not the thing, right? It was the web. And that worked.

like here we are in 2024 and we're like Apple and Google are dominant companies because Microsoft was forced or coerced or distracted away from foreclosing that competition. And it's pretty hard, like you can look at that in hindsight

and I promise you a bunch of old head VCs and investors will like and X Microsoft executives in particular will litigate and relitigate whether it actually happened or whether Apple was just better or whatever. But it is true that Microsoft was turned away and the web was allowed to be dominant and the dominance of the

web is what enabled the iMac to be successful and now we're here with the iPhone right like that's the line yeah i think that's what a lot of advocates for antitrust enforcement would say is just like yeah maybe you know with microsoft we saw Microsoft bogged down and um it's legal woes for a while but you know what would have been a bad outcome was like never getting the rise of apple and google in the first place never getting those products. Not that Microsoft wasn't the one to invent those. And also, Microsoft is doing just five. They figured it out. Yeah, right? Like, it forced them to be competitive. It forced them to think. That's why they invested in Azure. And they built up this huge cloud computing business. Yeah, Microsoft is, Nadell is like, I want to make a dance. He's having a

good time of his life. Like, competition is, in fact, good. And when these companies get so big that they don't compete, we do see things like this. And I'm, I'm, I'm not. Not just saying that because I just bought a car with Google inside and it's hot garbage. And I can really feel how their monopoly is affecting me personally. But you do feel it. Like everybody feels it. Oh, you feel it. Google's stock price in the last five years is up 177 percent.

Do we feel like search has gotten 177 percent better in the last five years? It's actually, they've just canceled 177 percent of their products. That's all they've thought. They've just, they've just end of life, 175. of the things they invented. But I think this is a part that's really hard. And I, you know, you couldn't have guaranteed in 2001 that Apple would be resurgent or that Google would come to be dominant on the web that they're dominant.

And I think it's really hard to sit here in 2024 and predict that OpenAI will now have a chance to become the next Google. Open AI, which I will remind everyone, Microsoft that's 51%. You can't predict that 49. You can't predict that Microsoft will, or you can't predict that TikTok will actually turn into a search engine because it has some designs on larger search applications that might get banned. Like there might be some startup that, you know, next year is going to take off and grow at the scale. It's really hard to make the forward-looking argument, especially when we don't know what the remedy is going to be, right? If the government shows up and says, break up Google and the only way to fix this is to, I don't know, break.

break up YouTube and Google. And the first thing YouTube is going to do is build a general search engine because it's obvious if that's what they should do. And the first thing newly broken up Google will do is build a video platform. Because like, sure, but is what they're going to ask for? We don't know. Lauren, yeah. I was going to ask Lauren this. Do we think the DOJ actually wants to break up Google?

I think they actually just want Google to not be able to spend $30 billion a year buying their distribution. I mean, I think the strongest signal we have is just the statements. from Cantor himself about how he thinks about remedies generally. And that's that he prefers structural remedies, aka breakups. And so I think how sweeping will that structural remedy be that they ask for? I don't know. But, and, you know, will they, is there a chance that they decide it's better to go with a behavioral remedy, aka, like, ask them to stop doing something, ask them stop putting certain

terms in their contracts? Maybe they think that's more appropriate in this case. But I think we have to seriously consider that, you know, this structural remedies are something that Jonathan Cantor tends to like. Yeah, sure. I guess my point is like negotiating 101 as you always ask for more than you know you're going to get. I think they will. Give me the whole company. Give me all of Microsoft.

They will obviously ask to break up Google. I think in Cantor's heart of hearts, he would actually be okay if all that came out of this case was what happened in the Microsoft case, which is the government went for a break. up. They didn't get it. But Microsoft was foreclosed from doing these bundling anti-competitive contracts for distribution. I have to think the DOJ would be happy with that. And that would be just as, I think, impactful on all of tech if Google just can't buy out its distribution. But would it? Yeah. I think so. Because I think if you think of, okay, how do they do that? How do they change that? Well, then first thing, how do you change it on the iPhone? How do you change what that default? is because there's always a default. Well, so inside of that question, I think, is a very weird thing, which, so inside of that question, I think, is a hard problem to grapple with, which is right now Apple collects $20 billion here from Google.

If it can no longer collect that money, will it spend money to make its own search product? That's weird. Right? Yeah, it's not going to take the money from Bing. As we know, Eddie Q won't. There's no sum. He's unbiable. Integrity is unimpeachable by Bing specifically.

But, you know, Cantor told me that he thinks that AI turn is a big inflection point. And he wants the remedy to be forward-looking, right? He's not like, he's like, I can't fix 15 years of anti-competitive behavior. I need to make it so the future has competition in it. So if you prevent the money, if you prevent the $20 billion from an Apple, does Apple invest more in Apple intelligence? Does it start answering more questions directly? Does it make, you know, right now it's Open AI is the sort of general search product built into Apple intelligence, but we know they're going to make a deal with Google too. Maybe there's more choices there, right? And like Apple's going to more providers.

And you can see, like maybe that creates a different outcome. Like, for me, it's like, is it going to make Siri better? I think we're underestimating the power of money and the power of when you're, so, yes, it's 20 billion, but it's actually. More than that, it's a meaningful percent of Apple's profit margin because the Google check is 100% margin. So when you subtract the Google money, Apple services business, which is the narrative for the future growth of the stock that Tim Cook has been spending for 10 years collapsed by a quarter, it's significant. And I think we're underestimating the just capitalistic inherent drivers here of when you are not getting a check to not do something anymore, you may go do that thing. and for the last, you know, 10 years, Apple has been getting paid an ungodly amount of money to just like, don't look over there. Yeah.

Just to end on this, we've talked a lot about the decision and the mechanics of Apple and what might happen next. Heath, you're, you know, you're sourced inside all these companies. What's the vibe inside of Google right now? Are they afraid? Are they worried? Are they watching their stock price? Like, what's happening? They're always watching the stock price.

I think that what will really start to change things is when we get closer. into this remedy phase and there's an actual sense of, uh, is it a breakup? Is it Apple can no longer, uh, you know, just be our default? Do we have to like make this a fair playing field? We have to open up our distribution lanes. We can't bundle, uh, Android and search. When that stuff starts becoming more concretely, um, explained, which Lauren, correct me from wrong, but it sounds like will be this fall. This is happening pretty soon, right? So I would say by this fall, all what will happen if the Microsoft case is any indication is there will be a ton of scrambling inside Google. There'll be a whole division spun up to address this, whatever structural changes

they need to make should they lose this on appeal. And it's going to be messy because it's hard to, I've been thinking about this. Like, who does this hurt more in the short term, Apple or Google? Because Apple gets the money, which will hurt its stock price. But Google's not going to have its distribution, which will also hurt its stock price. I have to think that Apple already has the scenarios mapped out of what it will do, should it lose this case. The vibe I've gotten inside Google is that they've actually been kind of gritting their teeth and just praying that this won't happen, which was the Microsoft approach 20 years ago.

Microsoft had other businesses, though. Google, no, Google does too. Like Google Cloud is huge. Like Google and YouTube is huge. But not huge compared to search. I think YouTube and Google cloud together are as big as search, if not bigger. Neely, you don't think the pixel is going to come around. XR is about to, like, blow us all away.

I'm just saying Google has all of its eggs are in this basket. Well, all of its eggs are in Gemini. And I think, you know, we saw this this week with, like, Gemini in the new nest lineup, right? They are putting Gemini everywhere. I thought it was really interesting how we were at I.O. and Gemini was such a big part of the Pixel Android experience, and it's only going to be on Pixel. I think they really are betting on Gemini being the thing that kind of makes them something that consumers willingly pick again, because they didn't have to worry about this for the last 10 years with Search.

And Gemini for them has to work as a thing that makes people interested in Google as an actual innovator again. And I think that is their big bet to survive this change, should they lose the Apple deal. Yeah. All right. We'll see. Again, we're not at the Remedies Phase yet. If you want to read all 286 pages of the opinion, it's, we'll put a link in the show notes. And if you want a deep dive onto like the legal mechanics of it, we'll link to that episode of Dakota where Shaolin Cantor, because he, we got very nerdy. And at one point, I think he was like, what are you doing? Stop it. But we'll link all that in the show notes. We got to take a break. We're well on our way to going over already. We'll be right back. Hey, I'm Matt Bouchelle, comedian, writer, and floating head you may or may not have seen on your 4U page. And I'm starting a brand new podcast. Wait, wait, don't swipe away. It's called, That Sounds Like a Lot, as in that feeling when you check your phone in the morning, you read through headlines, and you immediately think, oh, that sounds like a lot.

I can deal with all this. But guess what? I can deal with it. And I'm going to get into it every Friday. I'll break down whatever chaos is happening in the world. Then I'll sit down with a comedian. You can be progressive and not be, like, fucking annoying. Maybe an actor.

They go, feminism has gone too far. You go, why? because of the Sadie Hawkins dance happened? Maybe a filmmaker. Since leaving that show, I'm challenged sparing. I just got to hang out and try to do stuff. You're the one with a charmed life. Could be a politician, basically anyone who responds to my cold DMs.

We're recording the whole thing in a beautiful studio, so yes, you can watch it on YouTube, or you can listen wherever you get your podcast. This is not the place to get the news, but it is the place to feel a little better about it. That sounds like a lot, part of the Vox Media Podcast Network. All right, we're back. I apologize because we're going to talk

another court case. We're going to keep this one short because it's stupid. I feel very confident in saying that this case is stupid. X, formerly known as Twitter, has filed an antitrust lawsuit against the World Federation of Advertisers, a number of giant advertising X, the platform formerly known as Twitter, has filed an antitrust lawsuit against the World Federation of Advertisers, which is a marketing trade association, and a bunch of big companies. lever and Mars, which makes candy bars, for, quote, withholding revenue. Keith, can you quickly, I can't even get through it. Can you quickly explain what's going on here?

What's really going on is that X's revenue has collapsed under Elon Musk in North America. I think the Times recently reported, it's collapsed by more than 50% year every year. And I think there's a lot of pressure on Linda Yaccarino, the CEO-ish of that. to find revenue. And Elon hates this trade group and probably said we just need to sue them like he did with OpenAI, et cetera. And it's a trade group. So, you know, it's not the companies that spend the money. It's a thing that, it's an entity that is a middleman that helps them decide how to spend the money.

But the idea that any trade group has the ability to keep union. Lever from spending on a platform shows a fundamental misunderstanding of the advertising ecosystem. Well, isn't X also a member of the... And they are a member, and they tweeted that they were proud to be a member last month. So, yeah, Linda Yaccarino posted a very... A hostage video. She's a hostage. She's not a hostage.

She's not bad at making videos. Well, it could have been AI. I don't know. The necklace saying Mama and then free speech makes me think it wasn't AI. These are all choices she made in her dumb bubble where people think that shit's cool. There's nothing about her that's a hostage or unwitting. Like, we have, she was at code last year. We saw her.

She's real. She's doing this because she wants to. Yes. I think, so I think there's a big part of where people at X, this is just from like my sources and Kylie's like really feel. the fading of their relevance as a company. It was really funny, like Linda held in all hands after filing this lawsuit that our Kylie Robinson was, was, uh, getting info from from a source.

And, um, when journalists started like posting what was happening to this all hands, she said in the all hands like, look, this shows that were important, which I think is just like a sign of the vibe, which is like X is thrashing around trying to be important. And I think litigation is a very classic Elon way of feeling important. And this is also has like, it has Jim Jordan wrapped up in it. Lauren, I just, I, I, this makes me just want to like roll my eyes. Yeah, because he was upset, right?

Like he did a thing last year. Yeah. Lauren, can you explain the, the Republican Congress, Jim Jordan aspect of this? Because it's, it's like brainworms, but it's probably important to explain. They are important brainworms. Yeah. Yeah. Yeah. Well, oh, yeah, I forgot that Jim Jordan did send this letter to companies in this group asking about this boycott.

And, you know, this is like the kind of thing that Jim Jordan likes to get involved in. You know, he did a whole thing around the, you know, what he has termed like censorship or collusion between the Biden administration and tech companies. So I think this is, you know, right in that sweet spot of like X being this like free speech platform in his eyes that's being harmed by, you know, this group of other corporate entities. So I think like this is just like right in that kind of wheelhouse. And I think I just want to say something very clearly. And look, I know I went to law school. I'm not saying I'm an expert on every aspect of the law. I just know this one thing.

Wait, you went to law school? There's no constitutional duty to spend money on advertising. You don't have to do it. And in fact, most of our speech law, like, depends on the functioning of a market. Right. We're like, actually, like, you know, there's a cliche phrases, like the cure for bad speech is a more speech that we use. We're like, oh, we'll just like shovel more into the market and people will make their own choices. And one way you can make choices by spending money.

famously our Supreme Court has held that money is speech. Disclosure. The holding in Citizens United. Disclosure. The verge makes money through advertising. Right. I'm confident we're a part of whatever like GARM initiative. So like big platform

companies, it's hard to hold them to account. So the advert, it's like crazy that Unilever can't roll up to Meta and be like, don't put our ads next to racism. And meta's like, yeah, I don't know. We'll take it. We'll like have another meeting. So they form these trade organizations to be like, hey, together we have enough power in the market to make you

build the tools or ads don't show up next to racism. That's like that is the thing that is happening here. And underlying all of this is this, and I'll just say it. It's like the Jim Jordan committee and the Elon Musk and the Linniacarino, they're like, we should be able to do racism. And like, you can't. You should, you should put the money near the racism. Well, no, no. They're mad that you don't. They're mad that these companies won't do it. No, there's, yes, they want to do that, but they also think they deserve money for it. And what you're drawing the distinction on is X has every right to operate its platform in the same way that Garm has every right to tell its clients, this is what we think.

And these are the platforms you think we should, we think you should spend on, et cetera. Until we got to this extremely weird point in American history where people are like, what if, what if racism? Like, what if we did some more racism? It's a weird moment. Up until recently, a thing like Garm that was like, we know these platforms are open and anyone can post whatever they want, but we want the advert, like, they're very relevant for the advertisers. So we want all the platforms, the advertisers that come together in a committee and have

boring meetings and talk about brand safety guidelines. And then we'll all make money together. Like, that is, I don't know if anyone, like, probably a lot of our listeners have been to like marketing conventions. Like, I've been, I've talked a lot of advertisers at my time. Like, they're the money. They're very boring and safe. Like advertisers do not want to be near a bunch of Nazi stuff.

So they're like, we're going to go work with the platforms and we're going to build these guidelines. And Twitter was in it. And what you're finding out now is like, Twitter doesn't want to offer those controls. The owner keeps tweeting weird racist stuff, which makes the platform seem not safe and then boosting his own reach. You don't have to spend money next to that. And it's, you know, they filed it in Texas. We're going to get a favorable judge. I'm sure they're going to get some weird favorable ruling.

But eventually you're going to have to contend with the idea that not spending money somehow harms the free speech of racist on Twitter. And like, I don't think you can get that far. I think you can force a lot of people to spend a lot of money defending that action. I think you can scare a lot of advertisers the way that people have scared Bud Light. Right. You can scare the World Federation of advertisers, the trade organization, into dissolving GARM, which is two people in a conference room. And they just, they're done with it now for a while. Their slack room is closed. You can do a bunch of weird, threatening stuff. But at the end of the day, the thing you are arguing for is platforms should have racism on them. And advertisers should be okay putting their ads next to that racism. And if you don't offer those controls, you still have to spend the money. If you don't, it's like a problem. Under this, I would. would say under this notably rumble also filed an antitrust lawsuit alleging that garm yeah they're trying to get other people to do it and the only ones who want to do it are the ones who want to do racism and are mad that nobody will fund their races i would just point out that

twitter before all of this was not like Disneyland yeah there was some racism YouTube makes a lot of money there's a lot of weird shit on YouTube meta uh notable provider of Facebook to old people. Weird. Trim Jesus all over Facebook today. Right? Like the money's still flowing in because they're playing the game in the market. And Mark Zuckerberg is like, you know, he might be cozying up to Peter Thiel and saying

Donald Trump is a badass. But his public persona is like, I grew up my hair and I'm drinking a beer on a surfboard. We should all make money together. And that's more or less all you need to do. Not Elon must sit at the deal book conference with Andrew Sork. and tell Bob Iger to go fuck himself. And so you can't bribe me with money. And now he's like, wait, you're not spending the money?

I'm going to sue you. Exactly. And that's what this is totally about is it's a denial on Elon's part that he has been self-destructive. He has been destructive to X's business. And he wants to blame everyone but himself. I think that's ultimately what this comes down to. He's just a litigious bully.

He's just like, how can I bully people legally? He's done it plenty of times before. This isn't the first time he's done it. This is probably just one of the. stupidest times he's done it. Like, you know, okay, so that's like on the, on the top level, it's done, right? You don't have a constitutional duty to spend money. You just don't.

Then there's the lawsuit itself. And I don't, I don't want to pull it. It's done. He didn't even get his usual lawyers to file it. He had to go get other lawyers, like Quinn Emanuel. His usual law firm is not. Oh, they aren't? Yeah, yeah.

This is like a real rando. You had to get someone else to do it. In classic Elon Musk's fashion, this. complaint centers around a contract that doesn't exist. He just loves to find contracts that don't exist. So you will recall when he sued OpenAI, it was for a contract that didn't exist. He has withdrawn that lawsuit. He refiled it in federal court recently, and now he's claiming it's fraud.

He took out the contract claims because he realized you can't sue over a contract doesn't exist. In this case, he's saying there's antitrust, there's collusion, and the way he finds it is by inventing an enforceable contract with this ad trade organization. And he has to go find it somewhere. He has to say that it's a contract and it's enforceable. And it doesn't exist. There's no penalty if Unilever spends the money. Like they might get an angry call from someone.

But like there's no penalty because there's no contract. So he says the agreement buying among Garms advertising agency members to enforce brand safety standards is memorialized in a number of places other than the FAQ and the charter. So if you're like, this contract is in an FAQ, you're already on your bed. You're wrong. And you're like looking at other places. And then it says, for example, in new member applications, Garm explains that members must agree to work with industry partners and category peers in a collaborative, non-competitive way. That's the application.

There's no contract. So you have this like big collusion in underlying it is nothing. And I'm telling you, this is just there to threaten people. And then there's a devastating. We can only be described as a devastating cell phone. The advertising boycott of Twitter now X is contrary to the economic self-interest of the boycotting advertisers. Due to the boycott of Twitter, prices charge for advertising declined substantially in November 2020 and remain well below those charged by X's closest competitors in social media.

By refraining from purchasing advertising on X, boycotting advertisers are foregoing a valuable opportunity to purchase local. priced advertising. This just sounds like an ad for X advertising. Also, that's hilarious. It's also hilarious that Linda posted this video on X where the advertisers she's trying to talk to are not there.

They're purposely not there. She was there saying it's your voices, right? Like, I was calling on the users to effectively attack all of these folks. So there's like... And that's like the Bud Light moment, right? Like, we're mad at Unilever. Go.

weirdos. Yeah. And like, I personally think there's a lot, on the other side of this lawsuit is a lot of powerful advertising money. And they're going to say, actually, we don't think your platform is brand safe. And it is our money is our speech. We can do whatever we want. And there's no contract here saying we can't do these things.

There's a trade organization that we rely on so that we all act in a collective way to prevent the monetization of racism. And that's fine. And I, it's really hard to gin up a lot of outreach. It's a really strange concept that, you know, it's like Linda is asking users to be mad that they're not getting advertisements from specific companies. Like, I don't think anyone's ever been mad to not get that. You need to be curious the Charmin Bear is not in your feed right now. God.

Is what she's saying. It's just goofy. It's also funny that they've gone X premium. They're now advertising it has no ads. It's because you don't have any ass. Alex, how much longer do you think this iteration of X has to go? Like, to be clear, it is popping off during the election. Because in the lectioneer, there's a lot of activity on the platform.

There's a lot of people coming to threads because Elon keeps posting insane nonsense. But it's still vibrant in its way. Is it going to be able to sustain itself over time? I think it's very hard for a platform with this level of scale and network effects in social media to just die quickly. I think it's like we're talking like, or Elon pulls the plug, right? Elon could have a episode

and decide to fully pull the plug or sell it for parts. But barring that, I think it continues to live on. It dwindles an influence. If I had to guess their percentage of users who are regularly posting has gone way down

based on just scanning it. Like my feed is just a lot of the same accounts now. It's just less interesting, less varied. But it still has that twitchiness. And for oddly, like in the tech community, the AI world especially, it's just still where everyone is, it is and hanging out. And like the open eye, the open eye people are like, they're just feeding training data at a grok every day.

It kind of blows my mind. But so, yeah, threads doesn't quite have that kind of real-time juice and, uh, It's like, yeah, it's missing that still. It's going to tell us about the lawsuit next week. Don't worry. Yeah, exactly. Yeah, we'll find out about it last week or next week. I think, you know, he's betting big on payments.

I think we're going to see that relatively soon, this whole banking play where you can exchange value with other Nazi supporters on the platform. I mean, I don't know what that's, you know, he's, I think they're building that stack from scratch. I would hope so because I could imagine Stripe. turning that off after a while when you realize like what's happening with that. But yeah, it's kind of just turning into this like, it's a reflection of Elon. It's a reflection of his psyche. It reminds me a lot of like Rupert Murdoch and Fox. And especially how he's using it in this election cycle. It's in stark contrast to Meta and Zuckerberg. Yes, you've got Zuckerberg on the edges with the Trump stuff. But meta is like, we're out of politics. We're not, we're not

recommending it even, right? And so it's just very different. Murdoch is successful with Fox. Fox is like the most successful news network. And he's really good at it. But Elon's not. Well, I think X will start to look more like that. I think it becomes his media empire. I mean, it's already become that, right? It's already become his place where he can go and spell the most transphobic, racist stuff imaginable and not get yelled at and then sue people because they don't want to advertise next to that transphobic racist. It's just very...

He's a free speech, absolutely. Well, yeah. And that's the thing. Like, he said, we need the internet needs its digital town square, and that's what X was going to be. And it turns out, like, no one wants to be hanging out with a bunch of people yelling crazy, insulting, vile stuff. It turns out digital time square sucks. Yeah, Times Square is like, you never want to be there unless you're a tourist and you got conned into a guide thing there. So, like, yeah, I am.

I feel like it's just reflecting him more and more. And that's going to make it smaller, but it will live on. I think it stokes his ego. And I think he likes having a platform that has a media element to it that also feeds his other businesses. Which gets acquired by the other one first. True, social or X? I just summed that. I'm sorry.

I feel like after we got to wrap this up. We got a whole lightning round. But I feel like that that is like a supernova of garbage. that after this election, we will see. Right? Those things will collide into each other after this election. But yeah, there's just a, there's a moment happening here where it feels like whatever platform, we've talked about this so much on the show, whatever platform era we're in,

with big search in Google, with Twitter dominating public discourse, with Instagram being where all the influencers are, like, all of that is just sort of winding down. Like, people are tired of a lot of it. And like, we'll see what happens next. But you can feel it. like, oh, a bunch of stuff that we took for granted is changing. And one of them, in particular, is the dominance of Twitter in the conversation because he's just tearing it to shreds.

I will end by reminding everyone you do not have a constitutional duty to buy advertising. I don't, like, it's not, you know, like, I don't know if I can make this argument to Clarence Thomas. Like, George Washington never said that out loud. You know, it's like... Except if you have a lightning pun with your business and you are going to sponsor the lightning round. Then you have a constitutional duty. All the reason. Only reason.

Yeah, that's true. George Washington did say that. All right, we got to take a break. We'll be right back with lightning around. Buzzwords like progressive and affordability are thrown around all the time in politics. But what do they actually mean? For me, being a progressive means at least two things. One, being willing to unite lots and lots of people,

all of the folks that are getting screwed over against the powers that be that are making your life worse. And then second, being progressive is essentially a hopeful enterprise that you think, I think that the world can be much better, that we don't have to settle for crumbs or settle for the status quo. And is there a difference between what it means to the elected officials and what it means to the people? So money is essentially the root of everything. I don't care if you're gay.

I don't care if you have all that. That's like secondary, third. Like that doesn't, that's not a priority. That's this week on America Actually. Let's begin. We're back. And it's true that the Lightning Round is once again unsponsored. And I believe most of our founding fathers should be disappointed in you.

We're talking to lawyers right now. Yeah. The lawsuits are coming, though. Sue every Vergecast listener for not sponsoring the Lightning Round. This is good. We have, there's just like a lot in Lightning Round. Cranz, let's just start with Disney real quick. Because all that's really happening here is they figured out that the way that you make money in streaming is by raising prices.

They did. Yeah. Disney is doing fine. They figured out that it does cost money to put content out on the internet. And that in order to get that money back, you have to increase prices. And they're also, for some reason, kind of copying Peacock and Paramount, even though they are famously not very as popular, by adding in like ABC News is now going to be live.

You'll be able to watch ABC just on Disney Plus. And I'm like, that's really smart. I'm really excited about that as someone who doesn't pay for cable. But yeah, Disney's just. jacking the price is up and it's going to keep happening. I'm sorry, folks. And they're going to do, they're cracking out a password sharing in September.

So they've just figured it out. They're like, we're going to charge everyone a lot of money. Yeah, like everybody knows exactly what to do, which is make everybody pay you a lot of money for things, which is what they were all doing before streaming. And they're just like,

oh my God, what if we did what we did with cable. But now we can control. It turns out there is a constitutional duty to pay a lot of money for Disney. Yeah. That's just baked into the fabric of America. I still wait with bated breath for the lawsuit or the antitrust suit against Disney for just buying all of pop culture and owning all of it except for like Taylor Swift.

Hey, I'm going to go see the Wolverine movie tomorrow. We're close to spoilers already. I don't want to spoil it. I don't want to spoil it. But it is the entire Disney Uvra is like in that movie. All right. So that's Disney. Lauren, what's your letting around?

Yeah, so I've got Microsoft and Delta just going at each other for, you know, who was the issue with Delta having to cancel a bunch of flights after the crowd strike issue? And this whole story is basically the Spider-Man meme. They're just pointing at each other. And it seems like maybe Delta, Delta CEO missed an email from Satya Nadella, offering help. It's very good. Yeah. It's just a lot of really mundane things like missing emails except that. Well, Delta Wi-Fi does suck, so I'm not surprised. It's really bad. I'm not surprised that he missed an email. He's probably on one of his planes. Yeah. Delta Wi-Fi is horrible, really. Yeah. Yeah. Actually, it seemed like maybe the CEO was like flying to the Olympics. So, yeah, it definitely could be the Delta Wi-Fi.

So CrowdSvac went down, Delta went down catastrophically. And then, it was definitely. It's definitely could be the Delta Wi-Fi. And then, it's a lot of And then Ed Bastian, who's the CEO of Delta was on TNBC, and he said, when it was last time he heard of the big outage of Apple, which apparently just made everyone mad. Like everyone got, except for Apple. I think Apple is thrilled to hear that. And so Microsoft sent this letter. And they're like, our software didn't cause your problem.

CrowdStrike did. And CrowdStrike is kind of like, don't, we're, can you guys fight? Yeah. It's all very good. And they keep saying they've been offering to help Delta. Delta apparently had it worse, like other airlines came back faster. Yeah, Delta was like days later. They were canceling, like they just canceled their unaccompanied minor program during all of this.

They were like, yeah, minors, you just don't travel anymore. And so kids were like stranded in random airports and stuff. They shit the bed and are looking for someone to blame. Yeah, so Microsoft is saying Delta has apparently not modernized its IT infrastructure. And that said, is rapidly becoming apparent the Delta likely refused Microsoft's help because the IT system that was having most trouble restoring crew tracking and scheduling was being serviced by other providers such as IPMs. And it's like, I've never seen an IT vendor look at a client and be like, no. No, absolutely not. Wasn't Southwest not impacted because they were still running on like such an old version of Windows?

No, that's a meme. That's right up there with JD Vance and the couch. It's like it's so good you don't want to check it, you know? Wait, J.D. Vance and the couch isn't real? Damn it. It's like, there's a long list of too good to check, and Southwest wasn't affected because it's running on Windows 3 is like right up there. You just ruined my week. I'm sorry. That's fine. Southwest is great.

All right. Alex, what's yours? Heath, what's your lighting around? Yeah, so mine is a great scoop that Kylie had on the site about Humane, a company that we obviously have been obsessively chronicling since the dirt disastrous debut of its AI pin. She found out, based on some internal sales data, that she got that more pins are being returned than sold. It's very good. Which I'm not running a hardware business, but I think that's bad. And the piece is great. She's got a lot of color. I just want to call out humane spokesperson Zos Kukyas's statement to us, where she said,

we do not comment on financial data, but we'll refer it to our legal account. council. Okay. And it's just ridiculous. It's a ridiculous response to a story like this. But Humane is very much on the defensive. There's talks, rumors of them,

you know, trying to sell themselves to HP. They raised over $200 million and sold $9 million worth of product-ish. So not good for them. And if you do the math at $9 million, whatever, the pin was $700 bucks. So they sold like 12,000 units.

They wanted to sell $100,000 in the first year. Right. So they sold like $12,000. and I think highly has it, there's only 7,000 left in the wild. Yeah. That's bad. That's just generally bad. If you have one, you should save it and put it in a box, it's going to be a great.

Honestly, it'll be a great collector's item. If you have one and haven't returned it and actually use it, just hit me up. I want to know everything about you. I want to understand your world. Someone right now is touching their pin and being like, email Alex, Alex, email Alex. Nope, no, the pins on fire. Oh, that was the other thing. how he's a piece, which I think is one of the worst pieces of the puzzle, they haven't figured out

how to refurbish the pins. Yeah. Because some limitation on T-Mobile, which I'm guessing is related to reprovisioning the ESM inside the pin. So they're just stuck with this and they hope they can figure it out. Just bad all around. I will say to Heath's point, once you start waiving lawyers at me, I've learned something about you.

Yeah, yeah. Yeah. I'm not going to say what. It's the ultimate tell. Yeah. It's just like, it's like, oh, I know something. And we do this a lot. People have a lot of lawyers have emailed me.

The verge still exists. That's almost we're better out than you might think. All right. I'm going to talk. Can I quickly talk about the TV competition? Tell us every story that I didn't write, a thing that no one knows that I did. There's a very famous TV store in Westchester, New York, called Value Electronics. They've been doing it forever.

They sell a million TVs. Robert Zahn, the guy who owns it. He runs it with his family. It's just a little mom and pop. And they sell more high-hand TVs than anyone. Like, Sony allocates high-end TVs to this one store. And so every year they run, and he's a former broadcast engineer. So every year they run this thing called the TV shootout.

They've been doing it for 20 years. And literally, like, the CEO of Compression Houses and, like, the head colorist for movie studios, Like a Warner Brothers discovery encoding person is like they're the judges. They have master calibrators coming and calibrate all these TVs. And then there was me because I'm a consumer reviewer. Which is great. So I was like honored to do this. I felt completely out of my depth.

I think my scores were on with everyone else. And I will write this up over the weekend. But I will say one, my TV, the one I bought, the Sony A95, it won. Yay. Congratulations. That was the winner. And then the mini-LAD TVs, I think I said micro-E-D earlier, but the mini-LAD TVs, the new Bravia 9, there's a Samsung one, there's an LG1, they're not even in the running yet. You can just obviously tell, like, they're going to get there, but there's so much more to go on the mini-LAD side before they compete with the OLEDs.

The OLEDs were just like, it was like a sigh of relief going and looking at the OLEDs after the NLED's. So I will write all this up, but it was fascinating to be a judge and a TV. picture quality con. Like, first of all, I was in heaven. Like, pure heaven, just joy. For two days, I did nothing but look at TVs with other TV nerds and talk about things like posterization in like fields of color. Did people, who brought the like colorimeter? Did anybody bust it out? So that we were, I got to write about this, but we were judging the TV. It wasn't a subjective evaluation. They had $40,000 Sony reference monitor. by each bank of three TVs.

Oh, my God. And the judging was how much the TVs were deviation, how big of a deviation from the reference monitor those TVs were. Oh, so of course the Sony one. Right, because there was a Sony reference one. It's like, does the Sony reference monitor? But the reference monitors were like, this is what the mastering people wanted the movie to look like

or wanted the content to look like. And then if you calibrate the TVs, how closely can you calibrate the TV to the reference? This is what I want. It's not like a what looks better, totally subjective thing. It was how close is this to the reference, which made it like a very different kind of exercise. And then obviously everyone's like a huge nerd. Like people were up there like staring at pixels and like intently.

And we had to be reminded. The judges were like, you can't collude. I was like purely in heaven. No antitrust here. For two days over a weekend. How many times did you have to watch Harry Potter? Or Avatar. Oh, man.

So we watched a movie called Doctor Sleep several times, which is insane. So you have to find things, like we were judging things like low-light performance, or fast SDR motion, or like bright HDR sports. So they had to find clips to play. All of the clips were being run off an Op-O Blu-ray player. I'm so happy. Or off a kaleid escape, which is a really high bit rate streaming. So there were all these like specific.

specific clips that were there to show like specific things that we were to judge. And I had like 60 numbers per sheet and there were like four sheets of scores. And it was it was a 10 point scale. And I was like world of no sevens like the whole thing. It was great. You can go look at the press release. You can see the scores. The Sony won.

The LGG4 came in second more or less. And the Samsung came in third. in the OLED and then the Sony million a video came in first in the 9080s. So the scores are public. I'm not revealing anything. You can just go look at that press release. I will write up the whole thing because there's more to say. But I have to say, like, I thought I was going to spend this week arguing about TV stuff with people. And I super did it. I was very much distracted about other stuff. But I had the time of my life. It was really fun to be a judge. I hope I get to do it again next year. And yeah, I'm like, I, and I, the

interesting thing is that the head room for those many LADs to get as good as O-Leds is obvious, but it's nowhere close. Like, yeah. Not even in the same ballpark. Was it the brightness and just like that, that difference in the range? No,

it's like, it's called, I mean, they're LCD TVs. Yeah. So they're still, they're like washed out. The colors are all wrong.

Like the LCDs are all pinker than the OLEDs. It's like bananas. I will post up my scores like my, my score sheets. I'm like, Neil, I just want you to file this story. I just really want to read that story about.

That's what I thought I was going to do this week. and I had to read PDFs all day long. Please, no one else release a major lawsuits. I started in this whole career to not be a lawyer and to look at TVs all day long. No more lawsuits. We're done for the week. Also, justice for the frame TV.

I'm really sad. The frame TV was not even in the picture. Like, I brought up the frame TV with a bunch of people. Oh, the manufacturers all had representatives there. So I met a bunch of very nice, like, Sony engineers and product managers and all the companies were there. And I kept asking, like, do you think the frame TV is a harbinger of doom? And they'd be like, no.

no comment. I don't, who are you? I'm a professional color calibrator. Well, we got more of them now. Yeah,

there's, there's a competition for the frame TV from who is it? It's TCL and High Sense. So like, like, race to the bottom on TV quality there.

No disrespect. It's a real something. TCL and High Sense, by the way, opted out of the competition. They declined to participate. It's just pretty good. All right.

Cranz, what's your lighting round? All right. So my lightning round is Chromecast is dead, but Chromecast is not dead. Just the dongle is dead. I saw there was some confusion out there at the world. Chromecast is like the protocol that you can go and like cast things to your TV or whatever. That still lives. The little dongles are gone. They're done. It's all over. It's all over. The picture we have in our Chromecast has gone is a picture I took of the first

generation Chromecast in 2013 plugged into my pioneer curro. And in the background, you can see my three component cables plugged into it because it was 10 years ago. Component ruled. I'm pretty sure my cable box was plugged in with RCA cables via a component. It's very good. It's very good. It's kind of, you know, the Google's whole idea of the Chromecast was you're just going to use your phone to watch video and send it to a TV. And we all realized that sucked.

Yeah, it didn't work. And then the TVs all have the software in it. And the new streamer box, Alex, I'm very curious for your perspective on this. They told Chris Welch that their North Star, what they were competing with, is the NVIDIA shield. Yeah. Look, we love to rip on the NVIDIA shield. I personally still use the Apple TV myself. But the NVIDIA shield is the most powerful steptop box.

It is the highest quality. It is the one that, like, if they had been using a streaming box at the shootout, Nelai went to, that's what they would have been using. They used Apple TV. I just want to be very clear about it. But Apple TV is, that's the one that installers all like to use, because that's what the client It's more prefer. Yes. So those are the two.

So, like, chasing the Nvidia shield is awesome. The Nvidia shield could probably do to chase itself a little because I don't think it's had an update in, like, two years. But it's like, it also is like, I think it has different priorities now. Yeah. Right now they're like, we're just going to like generate buckets of money with AI. We don't care about these little. If we ever interview Jensen Wang and Dakota, I'm going to be like, Jensen Wong.

If we ever interview Jensen Wong and Dakota, I'm like, AI, whatever. Tell me about your plans for the Nvidia sheet. And then we're going to see if he even knows it exists. He's just going to be like pocket sand, throw it at you and like disappear out of France. Just absolutely not. Oh, Alex, I've got to tell you, one of the tests we did at the TV shootout was an ATSC 3.0. We watched the Olympics broadcast from NBC, New York, in 1080P HDR to something called the Zapper box, like a tuner box with Atmos audio. It was like barely compressed because it was just full quality broadcast.

it looked incredible. Yeah. I was like, I got to get an antenna. And I was like, no, I don't. You don't need money. I truly do not have to get the only station. And you won't get any joy out of it once the Olympics are over. There was a very funny miscommunication moment where I was like, where is this coming from?

And someone very earnestly was like, it's in Paris. And I was like, no, that's not what I meant at all. Bonjour. I was like, no, I met what station is. Fine, whatever. It was very good. All right, we are way over. I'm sorry that we talked about Elon Musk,

but he's not good at knowing what a contract is. I'm just telling you that's the truth. Lauren, Peth, thanks so much for joining us. This is great. Thanks for having us. Thanks. I think David Pierce is back next week. He's back.

We'll see if this show gets back on the rest. It won't. We're going to be too busy suing each other. All right, that's it. That's her chest. And that's it for the verge cast. week, hey, we'd love to hear from you. Give us a call at 866 Verge11. The Vergecast is a production of the Verge and Box Media Podcast Network. Our show is produced by Andrew Marino and Liam James.

That's it. We'll see you next week.