WSJ What’s News - Biden Antitrust Officials Plan Final Salvo at Big Tech

Episode Date: November 19, 2024

A.M. Edition for Nov. 19. WSJ’s Sam Schechner says that a number of big tech firms are in the crosshairs of U.S. regulators in a last effort to rein in the industry before Inauguration Day. Plus, a House Ethics Committee panel prepares to meet to discuss next steps for its investigation into former Rep. Matt Gaetz, Trump’s nominee for attorney general. And the WSJ’s Vipal Monga and Santiago Pérez discuss how Canada and Mexico are preparing for a more protectionist America under a second Trump presidency. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

What do Mattel, Banana Republic, ButcherBox, and Glossier all have in common? They power their businesses with Shopify. Shopify is the most innovative and scaled commerce platform on the planet. That also happens to have the best converting checkout on the planet. And that's no industry secret. That's Shopify. Learn more at Shopify.com slash enterprise. Top Biden officials ready a final antitrust salvo

targeting big tech. Plus a court in Hong Kong hands down strict sentences in a case that crushed the city's pro-democracy camp. And we'll speak with journal reporters in Canada and Mexico about the likely changes coming to those countries' trade relations with the U.S. What the Trump administration wants to do is ensure that Canada and Mexico are not used as a backdoor to get tariffed goods, particularly from China, into the U.S. It's Tuesday, November the U.S.

It's Tuesday, November 19th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. With the clock ticking down before Inauguration Day, U.S. antitrust officials are preparing a final blitz against the tech industry, involving more merger scrutiny alongside a potential investigation into Microsoft. We report the Justice Department's next move in the antitrust case, it won. Challenging Google's efforts to maintain a monopoly in search is also due tomorrow. Journal tech reporter Sam Schechner joins me now with more.

Sam, what are we seeing here? What we're seeing is that in the closing days of the Biden administration, they're pushing forward on what's been a pretty aggressive tech antitrust agenda. You mentioned the case against Google that the DOJ won back in August. That's about how Google has allegedly kept a monopoly in search, its cash cow. against Google that the DOJ won back in August. According to a document that was seen by my colleague Dave Michaels, the DOJ is arguing that Google might have to divest its Chrome browser or Android mobile operating system in some circumstances. It would also be forced to stop paying Apple billions of dollars a year to make Google

the search engine default on its Safari web browsers. But as you mentioned, there are other cases that the government is preparing to make. Indeed, and we should add, Sam, that Google has said that spinning off Chrome and Android would harm the free products, and its VP of Regulatory Affairs said the government was putting its thumb on the scale in ways that could harm consumers, developers, and American technological leadership. Separately, Microsoft declined to comment on the Federal Trade Commission laying the groundwork to open an investigation into Microsoft's cloud business.

Suffice it to say, Sam, this is a lot of potential antitrust action coming in the waning days of an administration and with little clarity about whether that action would continue beyond January. Well, what we have is a Biden administration that has put in place some pretty strident figures when it comes to using the government's antitrust powers against big tech companies, that has put in place some pretty strident figures when it comes to using the government's antitrust powers against big tech companies. The FTC chair, Lena Kahn, the DOJ antitrust chief, Jonathan Cantor. Pretty clearly they're going to be replaced under a new administration, or at least that seems highly likely.

Whether or not their crusade will change is another thing. one that the first Trump administration brought. up more deal-making in the tech industry, only time will tell. That was Journal Tech reporter Sam Schechner. Sam, thanks. Always a pleasure, Luke. Meanwhile, President-elect Trump plans to nominate former Wisconsin Representative Sean Duffy as transportation secretary. Posting on Truth Social, Trump suggested that Duffy's tenure would include a push to rebuild highways, tunnels, and other infrastructure, and to

end the diversity, equity, and inclusion efforts for pilots and air traffic controllers. A House Ethics Committee panel investigating former Florida Representative Matt Gaetz, Trump's pick for attorney general, is expected to meet tomorrow to discuss its next steps. That's as new details emerge about testimony given to the panel, including that a witness described seeing Gates have sex with a 17-year-old girl in 2017 when he was serving in Congress. That's according to the woman's lawyer, who said the woman and another witness also told the House panel that Gates had paid them for sex. Gates has long denied both allegations, and a Trump transition spokesman said he remains

the right man for the job and that the allegations against Gates were baseless and intended to derail the second Trump administration. The House panel investigating Gates had expected to release a report on its findings last week, but didn't do so after Gates resigned from Congress to pursue the Attorney General nomination. However, the report could still be released through a floor vote by the full House. And in Hong Kong, 45 ex-lawmakers and activists have been sentenced to between four and ten years in prison in the biggest national security case in the city under a Beijing-imposed law that crushed Hong Kong's pro-democracy

movement. The defendants were tried for their roles in an unofficial primary election that prosecutors said was aimed at paralyzing Hong Kong's government. One of the organizers, college professor Benny Tai, was handed the longest sentence of 10 years. Amelia Wong, the girlfriend of another defendant, spoke to reporters after the verdicts. Of course it will silence more people because you see how a primary can be illegal and lead to 10 years of sentencing.

So of course it will silence more people. Coming up, we'll unpack how Canada and Mexico are preparing for a more protectionist America and how the countries could navigate potential trade roadblocks laid down by Washington. That's after the break. What do Mattel, Banana Republic, Butcher Box, and Glossier all have in common? They power their businesses with Shopify. Shopify is the most innovative and scaled commerce platform on the planet that also happens to have the best converting checkout on the planet.

And that's no industry secret. That's Shopify. Learn more at Shopify.com slash enterprise. As countries around the world ready themselves for what a second Trump presidency means for trade, security, and international relations, America's two immediate neighbors are bracing for a more protectionist president. Our Daniel Bach spoke with Santiago Perez, the journal's deputy Latin America editor in Mexico City, and journal Canada reporter Vipal Manga to see how the countries are preparing

for four more years of Trump. Santiago, I want to start with you. The U.S.-Mexico-Canada trade agreement is up for review in 2026. And Trump has said he'll look for more protections for America. He's also threatened to slap steep tariffs on Mexican imports. How worried are Mexican officials? Well, there's a significant degree of concern, of course, but they believe that China will be at the center of concerns for both the US and Canada. of concerns for both the US and Canada. And they also believe that if the US is to create a competitive trade bloc against China, the option would be to have a competitive USMCA.

So essentially, we could see more regional content rules, which are the rules that determine how manufacturing is done in the US, Mexico, and Canada, and how much North American content these goods must have. The thinking that I'm hearing is that what the Trump administration wants to do is ensure that Canada and Mexico are not used as a backdoor to get tariffed goods, particularly from China into the US. So it seems that any agreement that would be signed with those USMCA countries would require them to impose tariffs on all non-signatory countries, which could

include European companies, which would almost certainly include China to close those back doors. That is a risk to a country like Canada, which is a major trading nation and depends on trade relationships with Europe and Asian countries as well. So that might be a bitter pill that they would have to swallow if they want to make a deal with the U.S. But the alternative would also be painful, right, Vipal? Do you have a sense of how officials in Ottawa are bracing for this? So about 78% of Canada's exports go directly to the U.S.

A 10% tariff across the board on all those would send Canada into a recession. Clearly auto sector is a major part of the exports that Canada sends, but it's not the only thing. There's also things like oil and gas, and Canada's hoping for some exemptions. The other thing that Canada's doing to prepare

is they have this thing that they call the Team Canada approach, where they send their US ambassador, premiers from the provinces, cabinet ministers to meet with governors and people in Washington and the Trump team to sort of reiterate how important Canada is and sort of send the message that tariffs would also hurt US consumers. Santiago border security, a major element of the US Mexico relationship. Will they be able to put pressure on Mexico to stem the flow of immigrants? And what is the concern there for the Shine bomb administration? Yes, for sure they will. Mexican officials

now say that the border enforcement policies implemented by Shane Bowne's predecessor, Nationalist President Andrés Manuel López Obrador, is working now. Illegal border crossings have dropped by 74% so far this year at the U.S.-Mexico border. The problem is that the Trump administration is also likely to remove some of the and eliminate some of the policies implemented by the Biden government and That may create more incentives actually for migrants to rush to the border Especially before he takes office. He will likely increase pressure possibly through tariffs

to have a Mexican government implement tougher policies at its own southern border with Guatemala to prevent the migrants from crossing in. HOFFMAN Lastly, Vipal, a story that always gets play in Canada around elections as it did following Trump's victory in 2016 is people who don't like his vision of America saying they're going to migrate north of the border. How do Canadians see this and is that actually a thing?

VIPAL So I've talked to a few immigration lawyers in the past week or so and they are reporting more calls from Americans trying to move to Canada than they've ever had before. It's not that easy to get into Canada and I think that the expectation is that it's a wave of concern that might ebb in the next few weeks. Of more concern to them is a potential flood of migrants leaving the U.S. and going north to Canada. The Canadian law enforcement forces, the RCMP, and the Canadian Border Patrol are preparing for what they expect to be a major rush to Canadian borders in the next weeks and months. It's unclear that the Canadian system can handle the influx, so it is a major worry. I've been speaking to Santiago Perez, the Journal's deputy Latin America editor in Mexico City, and V. Paul Monga, the Journal's reporter in Toronto. Santiago, V. Paul, thank you so much both.

Thank you. Thanks. And turning quickly to markets now, shares of Supermicro Computer have jumped more than 30% in off-hours trading after it submitted a plan to allow it to keep trading on the NASDAQ. The AI server maker had missed deadlines for providing financial reports to investors. And shares of private equity company Blackstone will also be in focus following a journal report that it's nearing a deal for Jersey Mike subs that would value the closely held sandwich chain at around $8 billion. The deal could be announced soon, assuming talks don't fall apart.

And if you're wondering what to make of this earnings season as it draws to a close, we'll be releasing a special bonus episode of the pod tomorrow looking at some of the big themes from the latest round of financial results. Check it out tomorrow afternoon between our usual AM and PM editions and let us know what you think. And that's it for What's News for Tuesday morning. Today's show was produced by Kate Bulevant. Our supervising producer was Daniel Bach.

And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.