Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I didn't get to what I think is a pretty
major story yesterday because of all the stuff that was
going on with presidential vice presidential politics. I didn't get
to the whole Google thing. And there are a federal
judge ruled that Google is effectively a monopolist, has an
(00:21):
illegal monopoly in the search market. And I will say
that finding people to agree with the judge is pretty easy,
and we're going to have one of those people on
later in the show. We're going to have the Attorney
General of the State of Colorado on later in the show,
and he can explain why he agrees with the judge.
Speaker 2 (00:43):
But to me, this case isn't.
Speaker 1 (00:46):
Very clear, and for a variety of reasons, it's not
always easy to find people who disagree with the judge
and know what they're talking about.
Speaker 2 (00:57):
But we've got one for you right now, and that.
Speaker 1 (01:00):
Jessica Malujin, who is director of the Center of Technology
and Innovation at the Fantastic Competitive Enterprise Institute.
Speaker 2 (01:07):
Their website as CEI dot.
Speaker 1 (01:09):
Org, and I have been a fan of their work
for a long long time.
Speaker 2 (01:14):
Jessica, thanks for making time for us. I appreciate good
to see you.
Speaker 3 (01:18):
Oh, thanks for having me. I'm thrilled to be with you.
Speaker 1 (01:20):
So before we get into what you agree with and
disagree with about the judges ruling, why don't we just
start at a slightly higher level and please explain what
this case was about.
Speaker 3 (01:32):
So this case was about the contracts that maybe many
people might not even be aware of, exist that Google
makes with Apple phone manufacturers, with some Android based manufacturers
like Samsung, and with some carriers too that also cell
phones like Verizon and.
Speaker 2 (01:49):
Things like that.
Speaker 3 (01:50):
And what Google does with these contracts is they pay
an admittedly a shocking amount of money to them to
have their search products loaded on the phones you buy
as the default, so you take it out of the
box and what's preloaded to help you search is a
Google product. They pay a lot of money for that.
(02:12):
And the question I think revolves a little bit around
does Google have this incredibly high market share of search
because of contracts like that, or because they make, in
many regards, a superior search product that people use and
people enjoy and people prefer. So I will tell you,
(02:34):
and you probably all know this, if you don't like
that default on your phone, it takes a couple of
clicks under a minute, maybe thirty seconds. If you've got
fast thumbs to change those defaults, it's free, it's easy,
get your duc dug, go on use being whatever you like.
There's probably about thirty browser options out there, so as
(02:55):
a consumer, you're not really being hurt by these contracts.
And I would argue, in fact, you're being helped because
that money that Google pays to these phone manufacturers probably
offsets the cost of your phone that you buy. But
the Department of Justice feels differently and says, oh, those
default positions mean that other browser competitors don't have a
(03:17):
fair shot to get big like Google does.
Speaker 1 (03:20):
Okay, I'm going to play Devil's advocate, as I like
to do from time to time, so I'll just I'm
probably with you on this, but I'm going to pretend
I'm against you for a minute here. So a lot
of these numbers, by the way, you talk about these
very large numbers, they were well hidden for a long time,
but now you know some of the stuff seems to
be filtering out, maybe because of discovery in these cases,
(03:40):
but it looks like Google spends ten billion dollar, pays
Apple ten billion dollars or something that kind of order
of magnitude.
Speaker 2 (03:47):
Does that numbers sound about right?
Speaker 3 (03:50):
Yeah, And you know, I wouldn't describe them as hidden.
There's a lot of numbers that private businesses don't have
any reason to release, so they don't care to do
so it's not in their interest. But when these cases
come up and there's discovery, all of a sudden, it's
public information, which is it's fine. You know, that's an
interesting fact of the case. Yeah, I don't know that
in terms of principle, it matters if it's one hundred
(04:10):
bucks or no.
Speaker 2 (04:11):
I understand, I understand.
Speaker 1 (04:13):
And to me, when I say hidden, I mean in
the sense that typically there there can be a good
amount of granularity in companies, corporate filings, in the in
the ten q's, in the ten k's, and all this stuff.
Because that's my background is in investing and reading.
Speaker 2 (04:30):
This kind of stuff. So those things.
Speaker 1 (04:32):
Were I'm not saying everybody had a right to them,
but they definitely didn't want them to be known either.
Speaker 2 (04:37):
Now, but the reason that I think there's.
Speaker 1 (04:39):
A difference between one hundred dollars and ten billion dollars
it is and this this will kind of hinge on
what you were saying about how easy it is to change.
But nobody else, literally nobody else could afford to pay
ten billion dollars to make their their search engine the default.
Speaker 2 (04:59):
I maybe I'll tell you that's probably not your Microsoft. Microsoft.
Speaker 3 (05:02):
Probably competitor and beneficiary to this case is Microsoft. Microsoft
being is a trillion dollars bigger in marketcapeh than Google
and is the big search competitor and had bid for
these things. But Apple chose not to go with things
because Google is a better search product and they want
their customers to be happy with that kind of one
(05:24):
stop product.
Speaker 1 (05:25):
I was just I was just correcting myself there saying, yes,
there's one there's one competitor who could and and that's
and that's Microsoft.
Speaker 2 (05:34):
But I think that.
Speaker 1 (05:36):
As a as a capitalist, I like the idea of
an environment where small competitors can enter a market and
become medium sized and become big. As a general matter,
do you think that it's an extremely anti competitive situation
where the way to become a default is to be
able is to be able to be able to spend
(05:59):
ten billion dollars a year on this That does strike
me as at least anti competitive.
Speaker 3 (06:07):
I think that you know, Duck Duck Goo certainly sees
it that way. But I will just note that Google
wasn't the first search engine. It displays the two leaders,
and I think that it arrived at its dominance very
fairly and out of merit. And I think that some
of the supporters of this cause would say that, you know,
the scale of Google is really anti competitive, But scale
(06:29):
is just one aspect of a business. It's not a
legal antitrust harm that should be fixed. And I think
the best example of that is just that it's free
and easy to change. So there's no problem with word
of mouth getting out about the next big, great search engine.
We have lots of other channels for that. And if
it's free to people and it's available to them because
(06:50):
of the miracle of the interwebs, I just can't imagine
that this sticky point rises to the level of literally
a federal case. I think that duc Dugo certainly isn't
as big as Google. I don't think it's as good
a search engine.
Speaker 2 (07:08):
Unless you really care.
Speaker 3 (07:10):
About privacy, then it's the best search engine for you.
And there's no one here in America who can't get
access to duckdung Go. And I think that the claims
by some of those competitors that said, well, you're you know,
we don't just get to slip into that big scale,
so we can't have that data to improve is a
legitimate problem for them. But not every problem means that
(07:32):
something illegal is happening. Right. I can't go to Microsoft
and say, you know, Microsoft, I really just can't compete
with you guys, because I don't have billions of dollars
for R and D like you do. That's not Microsoft's problem, right,
that's a problem for me as a competitor. Right, But
there's not a consumer harm in that, and that's not
you know, that's not a place where the government should
be intervening into markets.
Speaker 2 (07:54):
It's funny, I never thought about on my phone.
Speaker 1 (07:57):
I never thought about changing my default search engine at home.
On my desktop, I most often do change away from Google,
just because something in my brain doesn't like the idea
of them hoovering up all my data. But as you
were talking, I picked up my phone and this particular
browser I'm using is Mozilla Firefox, and so I go
(08:19):
to settings and like, the first thing under the general
setting says search, and then it says Google. It has
an arrow and I can click on that, and I
can choose from one of a few others, and I
can add others if they aren't listed, So it is,
in fact very easy.
Speaker 2 (08:34):
I never I never looked at it before.
Speaker 1 (08:36):
How important is it to the case that we're talking
about that it's very.
Speaker 2 (08:41):
Easy to switch? That does strike me as pivotal.
Speaker 3 (08:45):
I mean, I would say it's more important than the
judge found it to be. Google certainly made that case
and demonstrated how easy just what you just did to
the court. But obviously it wasn't enough for him to
outweigh outweigh his decision. But I think, you know, living
in the real world, and is a practical matter an
(09:06):
I trust can get into the weeds. It can become
a political budgeon. It can become a very technical matter.
But I think it resonates with people when you say, oh,
you know, this is what Google's doing illegally, and someone says,
but I can change that with three clicks and it's free.
There's something to that too. And private companies contracting with
each other, I think you should exercise the highest level
(09:30):
of caution before you start letting the government micromanage what
those private contracts can entail. Even if you know, you
might not like politically some of these companies involved, or
they are very very large. All those things stipulated private
property rights still matter. And if these two companies or
multiple companies with Google decided came to a mutually beneficial
(09:53):
agreement with each other that said you pay me for
this and I'll do that for you, you would really
be hard pressed to find the consumer harm in that.
Speaker 1 (10:00):
We're talking with Jessica Malujin, director of the Center for
Technology and Innovation at the Competitive Enterprise Institute CEI dot org.
Just a few seconds of reminiscing, I was really upset
with the government for attacking Microsoft. Way back in the
(10:21):
day when they bundled their browser with Windows. Microsoft was
giving people a product for free. You could still go
down go download a different browser if you wanted to,
and I always did.
Speaker 2 (10:34):
I did not like them. I didn't think the Microsoft
browser was.
Speaker 1 (10:37):
Very good, but they were. They were attacking a company
for giving consumers a product for free, and I just
thought it was nuts. And and maybe this is along
those lines. So that was just a comment. Let me
move to another aspect here. My background is financial markets
(10:59):
and trade and investing. I noted after this judge's ruling
that Google stock only went down a little bit, as
if the market was saying, well, Google's going to win
on appeal or some other thing. Why do you think
the stock market at least didn't take this ruling as
(11:20):
being as big a deal as the news seems to
think it is.
Speaker 3 (11:25):
Yeah, I think that, first of all, we're a long
way from the end of the road here, so this
is going to be in court on appeals for years,
So I think that might have something to do with
not the.
Speaker 2 (11:34):
Day to day value of the company.
Speaker 3 (11:36):
And I also think that, like you were saying, much
like the Microsoft trial, by the time we got to
the end of that big fight about browsers and our desktops,
oh my gosh, the whole world was on their mobile
phone right. There was a whole revolution, and this fight
about Netscape seemed really like there's dust on it. Nobody
cared and they had any reason to. And I think
(11:58):
with the introduction of all artificial intelligence progress in search,
we might find ourselves in a similar situation. There a
lot of things are about to change in search, so
you know, and another reason it's not a great case
that Google's a monopolis is they're spending a whole lot
of money keeping up with that AI progress, and that
is not how a monopolis acts, right, If there's no innovation,
(12:21):
if there's no competition, you don't have to dump all
that money into R and D, but they sure do so.
I think maybe sometimes there's wisdom and Wall Street that
it isn't always articulated. But again, there's a long timeline
here for this case. And also, you know, Google will
probably retain its performance in a lot of ways until
then in the EU, that body mandated these choice screens
(12:45):
for users in Europe, and so they had to pick
the browser. There was no default browser. There were all
these options, and it did not affect Google's market share
for search one bit. You chose Google just the same
as when it was a default. So maybe that's what
investors are expecting would happen.
Speaker 2 (13:00):
Fascinating, that's a great answer.
Speaker 1 (13:02):
Jessica Malujin is director of the Center for Technology and
Innovation at the Competitive Enterprise Institute CEI.
Speaker 2 (13:11):
Dot org is their website.
Speaker 1 (13:12):
They are a fabulous organization that does a lot of
great research, a lot of great policy positions, and I
encourage you to check out their website and maybe even
make a contribution, as I have done in the past
as well.
Speaker 2 (13:24):
Jessica, thanks so much for your time today. Really appreciate it.
Speaker 3 (13:27):
Oh my pleasure and privilege. Thank you so much.
Speaker 2 (13:30):
Ron all right, glad to have you. We'll do it again.
I didn't get to what I think is a pretty
major story yesterday because of all the stuff that was
going on with presidential vice presidential politics. I didn't get
to the whole Google thing. And there are a federal
judge ruled that Google is effectively a monopolist, has an
(00:21):
illegal monopoly in the search market. And I will say
that finding people to agree with the judge is pretty easy,
and we're going to have one of those people on
later in the show. We're going to have the Attorney
General of the State of Colorado on later in the show,
and he can explain why he agrees with the judge.
Speaker 2 (00:43):
But to me, this case isn't.
Speaker 1 (00:46):
Very clear, and for a variety of reasons, it's not
always easy to find people who disagree with the judge
and know what they're talking about.
Speaker 2 (00:57):
But we've got one for you right now, and that.
Speaker 1 (01:00):
Jessica Malujin, who is director of the Center of Technology
and Innovation at the Fantastic Competitive Enterprise Institute.
Speaker 2 (01:07):
Their website as CEI dot.
Speaker 1 (01:09):
Org, and I have been a fan of their work
for a long long time.
Speaker 2 (01:14):
Jessica, thanks for making time for us. I appreciate good
to see you.
Speaker 3 (01:18):
Oh, thanks for having me. I'm thrilled to be with you.
Speaker 1 (01:20):
So before we get into what you agree with and
disagree with about the judges ruling, why don't we just
start at a slightly higher level and please explain what
this case was about.
Speaker 3 (01:32):
So this case was about the contracts that maybe many
people might not even be aware of, exist that Google
makes with Apple phone manufacturers, with some Android based manufacturers
like Samsung, and with some carriers too that also cell
phones like Verizon and.
Speaker 2 (01:49):
Things like that.
Speaker 3 (01:50):
And what Google does with these contracts is they pay
an admittedly a shocking amount of money to them to
have their search products loaded on the phones you buy
as the default, so you take it out of the
box and what's preloaded to help you search is a
Google product. They pay a lot of money for that.
(02:12):
And the question I think revolves a little bit around
does Google have this incredibly high market share of search
because of contracts like that, or because they make, in
many regards, a superior search product that people use and
people enjoy and people prefer. So I will tell you,
(02:34):
and you probably all know this, if you don't like
that default on your phone, it takes a couple of
clicks under a minute, maybe thirty seconds. If you've got
fast thumbs to change those defaults, it's free, it's easy,
get your duc dug, go on use being whatever you like.
There's probably about thirty browser options out there, so as
(02:55):
a consumer, you're not really being hurt by these contracts.
And I would argue, in fact, you're being helped because
that money that Google pays to these phone manufacturers probably
offsets the cost of your phone that you buy. But
the Department of Justice feels differently and says, oh, those
default positions mean that other browser competitors don't have a
(03:17):
fair shot to get big like Google does.
Speaker 1 (03:20):
Okay, I'm going to play Devil's advocate, as I like
to do from time to time, so I'll just I'm
probably with you on this, but I'm going to pretend
I'm against you for a minute here. So a lot
of these numbers, by the way, you talk about these
very large numbers, they were well hidden for a long time,
but now you know some of the stuff seems to
be filtering out, maybe because of discovery in these cases,
(03:40):
but it looks like Google spends ten billion dollar, pays
Apple ten billion dollars or something that kind of order
of magnitude.
Speaker 2 (03:47):
Does that numbers sound about right?
Speaker 3 (03:50):
Yeah, And you know, I wouldn't describe them as hidden.
There's a lot of numbers that private businesses don't have
any reason to release, so they don't care to do
so it's not in their interest. But when these cases
come up and there's discovery, all of a sudden, it's
public information, which is it's fine. You know, that's an
interesting fact of the case. Yeah, I don't know that
in terms of principle, it matters if it's one hundred
(04:10):
bucks or no.
Speaker 2 (04:11):
I understand, I understand.
Speaker 1 (04:13):
And to me, when I say hidden, I mean in
the sense that typically there there can be a good
amount of granularity in companies, corporate filings, in the in
the ten q's, in the ten k's, and all this stuff.
Because that's my background is in investing and reading.
Speaker 2 (04:30):
This kind of stuff. So those things.
Speaker 1 (04:32):
Were I'm not saying everybody had a right to them,
but they definitely didn't want them to be known either.
Speaker 2 (04:37):
Now, but the reason that I think there's.
Speaker 1 (04:39):
A difference between one hundred dollars and ten billion dollars
it is and this this will kind of hinge on
what you were saying about how easy it is to change.
But nobody else, literally nobody else could afford to pay
ten billion dollars to make their their search engine the default.
Speaker 2 (04:59):
I maybe I'll tell you that's probably not your Microsoft. Microsoft.
Speaker 3 (05:02):
Probably competitor and beneficiary to this case is Microsoft. Microsoft
being is a trillion dollars bigger in marketcapeh than Google
and is the big search competitor and had bid for
these things. But Apple chose not to go with things
because Google is a better search product and they want
their customers to be happy with that kind of one
(05:24):
stop product.
Speaker 1 (05:25):
I was just I was just correcting myself there saying, yes,
there's one there's one competitor who could and and that's
and that's Microsoft.
Speaker 2 (05:34):
But I think that.
Speaker 1 (05:36):
As a as a capitalist, I like the idea of
an environment where small competitors can enter a market and
become medium sized and become big. As a general matter,
do you think that it's an extremely anti competitive situation
where the way to become a default is to be
able is to be able to be able to spend
(05:59):
ten billion dollars a year on this That does strike
me as at least anti competitive.
Speaker 3 (06:07):
I think that you know, Duck Duck Goo certainly sees
it that way. But I will just note that Google
wasn't the first search engine. It displays the two leaders,
and I think that it arrived at its dominance very
fairly and out of merit. And I think that some
of the supporters of this cause would say that, you know,
the scale of Google is really anti competitive, But scale
(06:29):
is just one aspect of a business. It's not a
legal antitrust harm that should be fixed. And I think
the best example of that is just that it's free
and easy to change. So there's no problem with word
of mouth getting out about the next big, great search engine.
We have lots of other channels for that. And if
it's free to people and it's available to them because
(06:50):
of the miracle of the interwebs, I just can't imagine
that this sticky point rises to the level of literally
a federal case. I think that duc Dugo certainly isn't
as big as Google. I don't think it's as good
a search engine.
Speaker 2 (07:08):
Unless you really care.
Speaker 3 (07:10):
About privacy, then it's the best search engine for you.
And there's no one here in America who can't get
access to duckdung Go. And I think that the claims
by some of those competitors that said, well, you're you know,
we don't just get to slip into that big scale,
so we can't have that data to improve is a
legitimate problem for them. But not every problem means that
(07:32):
something illegal is happening. Right. I can't go to Microsoft
and say, you know, Microsoft, I really just can't compete
with you guys, because I don't have billions of dollars
for R and D like you do. That's not Microsoft's problem, right,
that's a problem for me as a competitor. Right, But
there's not a consumer harm in that, and that's not
you know, that's not a place where the government should
be intervening into markets.
Speaker 2 (07:54):
It's funny, I never thought about on my phone.
Speaker 1 (07:57):
I never thought about changing my default search engine at home.
On my desktop, I most often do change away from Google,
just because something in my brain doesn't like the idea
of them hoovering up all my data. But as you
were talking, I picked up my phone and this particular
browser I'm using is Mozilla Firefox, and so I go
(08:19):
to settings and like, the first thing under the general
setting says search, and then it says Google. It has
an arrow and I can click on that, and I
can choose from one of a few others, and I
can add others if they aren't listed, So it is,
in fact very easy.
Speaker 2 (08:34):
I never I never looked at it before.
Speaker 1 (08:36):
How important is it to the case that we're talking
about that it's very.
Speaker 2 (08:41):
Easy to switch? That does strike me as pivotal.
Speaker 3 (08:45):
I mean, I would say it's more important than the
judge found it to be. Google certainly made that case
and demonstrated how easy just what you just did to
the court. But obviously it wasn't enough for him to
outweigh outweigh his decision. But I think, you know, living
in the real world, and is a practical matter an
(09:06):
I trust can get into the weeds. It can become
a political budgeon. It can become a very technical matter.
But I think it resonates with people when you say, oh,
you know, this is what Google's doing illegally, and someone says,
but I can change that with three clicks and it's free.
There's something to that too. And private companies contracting with
each other, I think you should exercise the highest level
(09:30):
of caution before you start letting the government micromanage what
those private contracts can entail. Even if you know, you
might not like politically some of these companies involved, or
they are very very large. All those things stipulated private
property rights still matter. And if these two companies or
multiple companies with Google decided came to a mutually beneficial
(09:53):
agreement with each other that said you pay me for
this and I'll do that for you, you would really
be hard pressed to find the consumer harm in that.
Speaker 1 (10:00):
We're talking with Jessica Malujin, director of the Center for
Technology and Innovation at the Competitive Enterprise Institute CEI dot org.
Just a few seconds of reminiscing, I was really upset
with the government for attacking Microsoft. Way back in the
(10:21):
day when they bundled their browser with Windows. Microsoft was
giving people a product for free. You could still go
down go download a different browser if you wanted to,
and I always did.
Speaker 2 (10:34):
I did not like them. I didn't think the Microsoft
browser was.
Speaker 1 (10:37):
Very good, but they were. They were attacking a company
for giving consumers a product for free, and I just
thought it was nuts. And and maybe this is along
those lines. So that was just a comment. Let me
move to another aspect here. My background is financial markets
(10:59):
and trade and investing. I noted after this judge's ruling
that Google stock only went down a little bit, as
if the market was saying, well, Google's going to win
on appeal or some other thing. Why do you think
the stock market at least didn't take this ruling as
(11:20):
being as big a deal as the news seems to
think it is.
Speaker 3 (11:25):
Yeah, I think that, first of all, we're a long
way from the end of the road here, so this
is going to be in court on appeals for years,
So I think that might have something to do with
not the.
Speaker 2 (11:34):
Day to day value of the company.
Speaker 3 (11:36):
And I also think that, like you were saying, much
like the Microsoft trial, by the time we got to
the end of that big fight about browsers and our desktops,
oh my gosh, the whole world was on their mobile
phone right. There was a whole revolution, and this fight
about Netscape seemed really like there's dust on it. Nobody
cared and they had any reason to. And I think
(11:58):
with the introduction of all artificial intelligence progress in search,
we might find ourselves in a similar situation. There a
lot of things are about to change in search, so
you know, and another reason it's not a great case
that Google's a monopolis is they're spending a whole lot
of money keeping up with that AI progress, and that
is not how a monopolis acts, right, If there's no innovation,
(12:21):
if there's no competition, you don't have to dump all
that money into R and D, but they sure do so.
I think maybe sometimes there's wisdom and Wall Street that
it isn't always articulated. But again, there's a long timeline
here for this case. And also, you know, Google will
probably retain its performance in a lot of ways until
then in the EU, that body mandated these choice screens
(12:45):
for users in Europe, and so they had to pick
the browser. There was no default browser. There were all
these options, and it did not affect Google's market share
for search one bit. You chose Google just the same
as when it was a default. So maybe that's what
investors are expecting would happen.
Speaker 2 (13:00):
Fascinating, that's a great answer.
Speaker 1 (13:02):
Jessica Malujin is director of the Center for Technology and
Innovation at the Competitive Enterprise Institute CEI.
Speaker 2 (13:11):
Dot org is their website.
Speaker 1 (13:12):
They are a fabulous organization that does a lot of
great research, a lot of great policy positions, and I
encourage you to check out their website and maybe even
make a contribution, as I have done in the past
as well.
Speaker 2 (13:24):
Jessica, thanks so much for your time today. Really appreciate it.
Speaker 3 (13:27):
Oh my pleasure and privilege. Thank you so much.
Speaker 2 (13:30):
Ron all right, glad to have you. We'll do it again.
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Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.