00:00 Speaker A
Just look at Alphabet, you know, the stock, it’s it’s dipping today, Rebecca. It’s down about 1.3%. Federal judge just say, okay, it holds an illegal monopoly in some online ad tech markets. Your response and reaction, Rebecca. What what did you make of the judge’s decision?
00:21 Rebecca
Well, this is a really big win for the government. You know, this is their second major victory in a monopolization case against the company. Um, and I think that it’s, you know, has to really be something that Google’s worried about and looking at. On the other hand, the fact that it’s only down, you know, a little over 1% seems about right. This company’s gonna it’s gonna emerge from this just fine, I think.
01:02 Speaker A
And so, when you’re thinking about who could possibly benefit from uh this ruling and and possibly some constraints on Google, any any idea who is who’s best positioned to to take advantage of some of these efforts by the government?
01:29 Rebecca
Well, you know, you’re asking an antitrust professor, so my answer is consumers. You know, people who buy and sell buy uh and sell on these platforms that um Google has dominated are going to be better off. I think though you’re asking like what other major tech companies could benefit from this. Um and I suppose there you’d be looking at the other uh competitors of Google in these spaces, other ad exchanges, other um uh servers in the in the ad tech space. It’s going to make potentially depending on the remedy, it’s going to make this market more competitive, which means it could lower prices for for um these these these uh for consumers, but also could open up competition in these markets. So you might see some entry there.
02:36 Speaker A
Rebecca, you mentioned potential remedies. What what what could those be?
02:46 Rebecca
Well, I think that you’re going to see just like you do in the search case, you’re going to see the government asking for divestiture or that’s another way of saying a breakup and behavioral remedies. So, the core of the case is this uh this tie that Google did between two of its products and it’s self-preferencing. So you could see an order that says, you have to stop tying your products in this way, and you have to stop preferencing yourself, you know, making your own products better off. But the other part of this is a uh vertical integration. You know, Google has deeply integrated itself into the ad tech stack. And so you might see, I think this is maybe less than 50%, but you might see a divestiture along those vertical lines where Google has to sell off some of its ad tech products.
03:56 Speaker A
And Rebecca, for investors listening right now, what what’s the kind of general timeline you would give to all this being finalized? I mean, are we talking is it months, Rebecca? Is it years?
04:17 Rebecca
It is years. Maybe not many years. So, I think there’s going to be a hearing on remedy. We’re actually in that phase with the other uh monopolization case against Google. There’ll be a hearing on remedy. This court will impose a remedy and then both the decision from today and the remedy will be appealed. And likely whatever the judge says at this stage will not be made final until that appeal is heard. So, it could be a year and maybe two, but not outside of that, I would guess, but there’s no particular timeline. There’s no rule about how quickly this has to move.
05:07 Speaker A
You know, for an administration that has come in and talked a lot about deregulation, uh and essentially letting the private economy run, what are your thoughts about how this gives any indication about how other deregulatory efforts will or won’t proceed ahead?
05:30 Rebecca
Well, antitrust is kind of a funny kind of regulation because there’s a way in which antitrust itself is deregulatory. Basically what antitrust does is it says, you guys have to compete. You have to actually like work hard to get something to consumers that they want and have them spend, you know, as little money on it as possible, which is kind of the heart of, you know, a libertarian deregulatory perspective. So I think it’s, you know, it’s just it’s hard to extrapolate from this to other areas of of regulation or deregulation. I just think we’re starting to get smart about letting markets be competitive and work hard for our dollars.