OA563: Microsoft, Activision, and Monopoly Law!

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:01:17 Thomas: Hello and welcome to Opening Arguments, this is episode 563, I'm Thomas, that's Andrew, how you doing?

0:01:23 Andrew: I AM FANTASTIC THOMAS, HOW ARE YOU?

0:01:26 Thomas: Good, do we have AOC today? We must have another member of Congress.

0:01:31 Andrew: Eventually that will be every day. Congressional interviews scheduled up from here till the cows come home.

0:01:33 Thomas: Oh man. Well, we don't have that, but we have something perhaps even better, which is a classic Opening Argument deep dive, the Microsoft Activision monopoly. There's so much to talk about, I'm told this could last several days, this deep dive, but we'll probably try to get it down to one episode, you've got a lot, is the point.

0:01:52 Andrew: I Do have a lot, so uh, let's talk about the agreed upon facts first, which even the um, agreed upon facts aren't always agreed upon. So on Tuesday, uh, the Wall Street Journal reported, after having viewed an 8K filing, uh, that uh, Microsoft had agreed to buy Activision Blizzard for $75.5 billion dollars. Now you have seen that price, uh, reflected as $69 billion dollars.

0:02:24 Thomas: Yeah. Uh.

0:02:25 Andrew: Uh, yeah, to which I have resisted the urge to say nice, um, but the reason for that discrepancy has to do with uh, the cash on hand at Activision Blizzard, right? So yeah, you subtract that out from the, from the 75 and a half, that, that 75 and a half, uh, means that, um, it is uh, at uh, $93 a share, right? Put a, pin in that one. And then what you have seen is this would make uh, Microsoft the third largest video game company, after Sony and Tencent.

0:02:36 Thomas: Right. Yeah. Wait.

0:02:58 Thomas: 10 cent, as in like 10, like spelled how you would think. Wait.

0:03:01 Andrew: Like, like like one fifth of 50 cent. Right. Yeah. T E N C E N T.

0:03:06 Thomas: They own Epic, Epic Games. Okay, that makes sense. Okay. So Epic, that's interesting. You're like the top two and then one I've never, literally never heard of, but I guess they must own properties that we all have heard of. I'm sure. Okay gotcha.

0:03:07 Andrew: Yeah. Yes. Yeah. They own everything. Right. Right. So, we talked about the FTC settlement with Riot Games a couple of weeks ago that, well, they own Riot Games.

0:03:30 Thomas: Oh, they have ownership. I should clarify. It looks like they own 40% of Epic Games well, that interesting. So they own a lot of percentages of stuff. Maybe you add it all up. It must be more the second biggest interesting.

0:03:41 Andrew: Yep. Yep. They own eighty four point three percent of Supercell, which owns Clash of Clans. Right. I mean, you knows. So.

0:03:50 Thomas: Oh even I played that for for a minute. That was fun.

0:03:52 Andrew: Ah, yeah. No. Yeah.

0:03:53 Thomas: Then I realized it was painfully addictive and I was spending money on it and I quit. But when you work at a desk job, you start doing desperate things to get through the day. I'm just saying.

0:03:54 Andrew: Yeah. Uh, yeah, I understand and uh and empathize so and I will tell you that I have uh even I have played a Clash of Clans, that the little, the small one, right, where you only have to do a couple of things a day and yeah, you you know, do it for

0:04:12 Thomas: It's pretty fun. Yeah. Well, or you pay some money so that you can do some more things that day, Andrew. That's the key. That is how they get you.

0:04:20 Andrew: The micro transactions, yeah. Um, so, uh, my view, the relevant antitrust inquiry is not size of the combined company, right, but is rather the market over which you are questioning, is there a potential monopoly, and we're going to talk about defining that relevant market when we get sort of into the the legal breakdown of this, but, but, you know, first let's just make sure we're we're agreed on the facts. So, all cash deal, uh, at $93 a share.

0:04:24 Thomas: Oh, gosh.

0:04:33 Thomas: Here is something interesting. Apologies. I am looking at the Wikipedia. They own 5% of Activision Blizzard, $0.10. So do they get a payout? What happens there?

0:04:57 Andrew: Yeah, Uh, Yes, that's, they, exactly, uh, what would happen. Um, and the, and FTC has considerable powers to either pursue legal remedies if the parties don't agree, but also to suggest things that will get it to drop any disagreement that it might have. And, right, so you may recall I've talked about this at some length, the very first deal that I did when working for Covington and Burling as a first-year associate was, I was on the antitrust compliance for the ExxonMobil merger. And, right, one of the things that the DOJ made us do, that is made ExxonMobil do, was divest itself not just of certain assets, but to convey certain certain assets to other companies.

0:05:07 Thomas: Oh,

0:05:53 Andrew: And let me give you the example of what I did. This was my area, was I handled those companies' share of various pipeline capacity? So as it turns out, there are only a limited number of pipelines that ship crude oil across the United States. The most famous is the Trans-Alaska Pipeline Service. Right. Those pipelines in turn are owned various percentages by various oil companies. Right. And so at the time, like Exxon owned 13 percent of the Trans Alaska Pipeline Company and Mobil owned 11 percent of the Trans Alaska Pipeline Company. And so one of the things and, you know, there are a dozen other pipeline companies in which, again, all of the major oil companies owned various shares.

0:06:39 Andrew: And so the DOJ said, hey, look, if we're going to grant approval to this, one of things and there were hundreds of conditions, but one of the conditions was you've got to sell off your share of the Trans-Alaska Pipeline Company and not just to anybody, but you've got to sell it to Chevron, right, so that you would preserve kind of a mutual balance of of large players in the marketplace. This is this is something with which I've talked about on the show, I share sort of a fundamental disagreement with the Clinton era FTC, which was concerned about preserving relative competitive equity. And so what would happen is, you know, you would approve ExxonMobil and at the same time approve BP Amoco Arco, right?

0:07:28 Andrew: And So, and it was like, well, look, you the combined ratio of their market shares will be roughly the same, you know, post deal as beforehand, and it's like, right, but you've reduced the number of players from five to two. Like, yeah, from a public policy perspective, in my view, not well thought out, and I will tell you, uh, I think that we have, uh, a fairly robust FTC right now that may investigate this Microsoft Activision deal, which is why we're going into it in such detail.

0:07:28 Thomas: Yeah, yeah, yeah.

0:08:00 Thomas: Does it have to be approved or something, or does it just happen unless the government says something?

0:08:06 Andrew: So, great question. The deal is announced, made, right, public. And because these are publicly traded companies, you have to make certain public disclosures, including filing a Form 8K with the Securities and Exchange Commission, as somebody who has done, shout out to Morgan Stringer here, a much smaller acquisition by, you know, a lot of zeros on the end of it, that nevertheless took up all the resources of our our firm for the month of December. Um, the deal is not expected to close until July of 2023, so in other words, yeah, they're expecting that this is going to take 18 months, uh, to paper everything up and to look at all of this and to do your due diligence.

Um, and, uh, and this, this kind, kind of cuts ahead to the punchline, but now's a good time to do it. Asset purchase agreement contains, as liquidated damages clause, a $3 billion penalty from Activision, sorry, a $2 billion penalty for a Microsoft to Activision if the transaction does not close. Right. So, and, and, that reflects the fact that it might not close because the Department of Justice and or the FTC might say, no, you can't do this. And, right, so they have priced that risk into the deal.

0:08:41 Thomas: Wow.

0:09:27 Andrew: And I want to tell you sort of two ways in which that's relevant. Of The it, first is billion on a $69 billion purchase price is a pretty significant percentage. So that suggests that both parties view this deal as having a significant risk of not happening,

0:09:48 Thomas: Interesting. I was going to go the other way with it.

0:09:50 Andrew: No, no, no. I think that that reflects a tremendous amount of uncertainty. And will tell you, when we sort of go back through history, that compares to a previous deal that was blocked by the Department of Justice in which Microsoft just walked away. Um,

0:10:08 Thomas: Can I just ask you, though, just thinking about it. I don't want to take too much time on this, but game theorying it out. You know, if you're Microsoft, you're the big company buying them. If you are certain it's going to go through, you'RE more willing to agree to a high penalty if it doesn't. That's why my instinct would be that a higher kind of penalty on that would think more certainty. But are you going the other way that it's like insurance or something?

0:10:32 Andrew: It, that, that's exactly It's, it's like, uh, ensuring the deal, and if you're Microsoft, you start off with, you no penalty. If we don't close, the other side, you know, demands a huge amount, and you negotiate downward from there. And the reason you give in at a higher number is because, you know, the other side just sort of threatens to walk. Right. And it's like, look, we're not, you going to go through the tens of millions, maybe hundred million dollars in legal compliance that this is going to cost us. Not to mention the fact that, you know, it's going to be real hard to do our jobs over the next 18 months. Right. For Activision. And then, you Now, only to have us do all the the work and then the the Federal Trade Commission be like, yeah, but you know. Um, that

0:11:16 Thomas: Yeah, yeah, okay, that's interesting. I still just think that, like, like, hypothetically, let's say Microsoft had perfect information and they're like, well, this is 100 gonna go through, they'd be like, yeah, sure, 20 billion, who cares, 50 billion.

0:11:28 Andrew: That's Right, that's, but there are two things with respect to that. The first is, um, when a condition hits a certain threshold, um, we're going talk about this. It is, it is considered uh, like, and five percent of assets, that's where 5% of sales is considered a standard threshold of materiality. And that triggers disclosure requirements, right? So in general, you have a pretty strong interest in staying below that. And I will point out that, let's do three over 69. Let's do the math on that real quick. Thank

0:11:45 Thomas: Hmm. Nice. Well, it's It's good. Less than 5%.

0:12:04 Andrew: Right, it's 4.3%, yeah. Yeah. So that's four point three percent, which, again, you five percent is the presumptive level. But, when you're nosing up against that, you are now hitting the kind of territory where your auditors may say this is now a material condition. Right. As opposed to previous deal that we're going to discuss, the penalty was forty six million dollars on a two million on a $2 billion deal. So one thirty fifth the size, but one one hundredth the penalty. So I I think

0:12:04 Thomas: Yeah. Huh. Interesting.

0:12:37 Andrew: Of this as as pretty significant. And Yeah. The other indicator, I think I said ninety three dollars a share. It's ninety five dollars a share. If you if you do the math after the deal was announced, shares of Activision went to eighty two dollars a share. Well, they went they went up.

0:12:51 Thomas: Like they went up or down? Up. Okay.

0:12:54 Andrew: They went way up. Right. Which is what happens when, you Microsoft says they're going to buy you out. But here's the thing. If you think there's 100 percent chance of Microsoft buying out the shares at ninety five dollars a share in under economic game theory, you should be willing to spend eighty ninety four dollars and ninety nine cents a share. Right? Right. Like you should drive the price as close to the acquisition price as possible. And the fact that it didn't, that it drove it up, but not up to the level that Microsoft is willing to pay for it, is a pretty strong indication that institutional investors are pricing in some risk of the deal not going through. So, yeah.

0:13:35 Andrew: That's the deal. Um, let's talk about the legal environment, and to me what makes this interesting, I was telling you this off the air, is, um, you know, when you think about, uh, the traditional audience for gamers right now, which is, you know, uh, young, young men in, uh, their late teens and uh, early 20s, right? I play plenty of video games. We have female and non-binary listeners who play video games, I'm not saying only men play video games. I'm saying that their marketing materials define their key markets as in their 20s. If you're a gamer, if you're that key market, Microsoft has been doing, and Bill Gates in particular, particular has been doing a tremendous amount of pro-social work over the past two decades.

0:13:34 Thomas: Yeah. Yeah,

0:14:27 Andrew: And you're probably tempted to, you know, kind of think of Microsoft as, the nice monopoly. And Bill Gates says, and it's true, you know, the liberal billionaire. Those things are true. But it's worth pointing out that Microsoft was considered the epitome of of predatory, uh, monopolistic practices in the 1990s, and it lost, very, it lost two very high profile uh, antitrust cases in the 90s, um, that follow this pattern. So first, the laws that apply here are sections one and two of the Sherman Antitrust Act, we've talked about those on the show show before, but it's 15 U.S.C. section 1 and 15 U.S.C. section 2. Um, 15 U.S.C. 1 makes, uh, says every contract or combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce is declared to be illegal.

0:15:19 Andrew: And any person who shall make any contract, uh, or conspiracy, uh, to restrain trade, uh, shall be punished by a fine not exceeding $100 million and imprisonment not exceeding 10 years if an individual, or both, in the discretion of the court. And then section two says it's illegal to monopolize or attempt to monopolise any part of the trade or commerce by and among the several states, with the same penalties. So the question is, right, is Microsoft buying Activision Blizzard attempt, monopoly, or attempt to monopolize a particular market or a contract in restraint of trade? And the answer is, maybe.

0:15:59 Thomas: Yeah it almost seems like any action that makes you bigger is an attempt to monopolize. I mean attempted murder. What is that? Give out the Nobel Prize for attempted monopoly. Oh,

0:16:07 Andrew: Well, that's an excellent sideshow, Bob, reference there. Well, that's right. So let's look at cases on attempted monopolization that Microsoft lost in the 1990s. And the first one, and I have to tell you, I needed my recollection refreshed on this one, was Microsoft's efforts to buy the company Intuit back in the 1990s. So here's what happened. Microsoft grew up in an era in which were actually developing business killer apps, right? Microsoft was the killer app for operating systems, beginning right? With Microsoft DOS, MS-DOS. And they were the killer app for Basic that came on all of the 6502-based personal computers of the 1980s. Those were almost all licensed versions of Microsoft Basic that were were tweaked for, uh, each of your computers.

0:16:35 Thomas: I didn't know that.

0:17:09 Thomas: When you say they're the killer app, it's that like you want to make something that becomes so familiar that people don't use any other software for that type of thing. Is that what you're saying?

0:17:10 Andrew: Yeah.

0:17:20 Andrew: That's exactly right and and by and extension that it becomes the reason you buy that computer in the first place, and in particular, the reason I'm prepared to defend this, uh, that people bought, uh, the IBM PC, um, despite its outrageous cost at the time and, uh, minimal, uh, performance advantages, and in many cases disadvantages, versus, uh, way cheaper competition uh

0:17:21 Thomas: Okay. Yeah.

0:17:49 Thomas: And what specifically was that? Was it Windows or was it DOS or what?

0:17:52 Andrew: No it was it was a program called Lotus 123. Yeah.

0:17:55 Thomas: Oh, Right. So Excel precursor.

0:17:57 Andrew: Lotus 123 was the first spreadsheet, uh, the first spreadsheet killer app. OK, so when we say all of these, they're not necessarily the first, but they were the first one to become synonymous. Right. And so Lotus 1, 2, 3 was the Excel of its day. It was the first mainstream. Right. That was the idea. WordPerfect became the first kind of cross-platform mainstream word processing program that would let you, you know, change your italicized words. Words, right, it still didn't display them in italics on the screen, it displayed little codes right on the scene, uh, because uh, you know, we didn't really have, um, the uh, graphical environments, uh, particularly the Macintosh, um, you know, that had, uh, what was called WYSIWYG, right, what you see is what you get, um, you take for granted now, but back then you had to memorize these codes in WordPerfect and, like, slash I, and anyway, um, the first killer app for personal household accounting, balancing your checkbook, was Quicken, right? Just still still a product today, right, a multi-billion

0:17:58 Thomas: Right, yeah. Yeah right oh yeah yeah yeah I

0:19:06 Andrew: Dollar market leader product today.

0:19:08 Thomas: Just love that you say killer app given the app did not exist, like the word app didn't exist back, yeah. You're

0:19:09 Andrew: Right yeah That's right, well, I'm borrowing that from, uh, retro gaming.

0:19:18 Thomas: Trying To make the Gen Z-ers understand what's happening. Well, done yeah, that makes sense I

0:19:21 Andrew: I'm hip with the youth. Yeah, thank you. And so Microsoft looked at Quicken, they had two ideas. The first was, it would be really great to own the killer app for personal accounting. And the second was, and also, right, this is the early 1990s. And also, so we're kind of thinking about online transactions and stuff. And by the way, if we get access to and own, you know, the killer app for personal accounting, we will own an awful lot of people's financial information as well. And we're not entirely sure how that's going to play out, but we think that could be super useful to us. And turned out would have been, they known exactly how useful it would have have been, uh, maybe the outcome would have been a little different, um, so Microsoft built a competitor to Quicken, to QuickBooks, in 1991. That competitor was called Microsoft Money, as you may infer from the fact that Microsoft Many is, uh, not a part of your, you know, enterprise suite of applications, applications, uh, Microsoft Money was not, uh, a success. Yes.

0:20:29 Thomas: Have a confession to make, I still use Microsoft Money for personal finance. It's there. It has a feature that none of the other ones do that I cannot live without. I still use it. It gives you a statement of cash flows in a way that I could not get any of the others to do. And it's been pivotal to my being able to manage my money effectively. I'm telling you, maybe there's a way to get the others do it, but I couldn't find it. I tried a few others when it went out. I think it lasted until 2011, I want to say. And then they just just stop. They're like, we're done with Microsoft money. And I'm like, oh no, we are not. We

0:20:31 Andrew: Wow great and and what is that and what is that

0:21:03 Thomas: Are not done here.

0:21:04 Andrew: Well That's a great, that's a great, uh, kind of addition to the story. So, it, look, um, that was '91 when it was introduced. In '94, Microsoft announced that it was going to buy Intuit, right? Right. And Intuit's major product was, was and is, Quicken.

0:21:18 Thomas: QuickBooks, which, well, Quicken and QuickBooks. Yeah, I used QuickBooks back when I worked as an accountant. I love it. Wow. I Maybe I'm liked. It's the Montagues and Capulets here within me. I can reconcile both software the packages.

0:21:19 Andrew: Yep.

0:21:28 Andrew: So Now at the time, right, in the market for personal accounting software, Microsoft Money had 22 percent of the market share. Quicken had 69 percent. Nice. So, yeah, add that up, that's 91 between those two software programs, um, and so Microsoft was like, hey, uh, we're gonna, we're the second largest, we're going to buy the largest, and, uh, the DOJ said no, we we think maybe you will not, and so, so Microsoft said, oh, oh, oh, this Microsoft Money thing, we have, yeah, no big deal, we'll sell that as a as a precondition, right, we'll sell it to Novell, which at the time was a a major manufacturer of business software. And the DOJ said, yeah, that's still not good enough. Because you are buying the market leader in this market, which is you are acquiring a monopolistic stake even if you are divesting yourself of the software you created.

0:22:31 Thomas: Well, that's interesting because on the other hand, hypothetically, nothing's changing there. Like someone then owns the 69% and someone else owns the 22%. So nothing really changes.

0:22:32 Andrew: Yeah, exactly right, unless you think that Microsoft can leverage that monopolistic competition in a way that Quicken could not. And the DOJ thought, and I would say correctly thought, yeah, well, no, but put a pin in that because that's Exactly right when it comes to Activision Blizzard, right?

0:22:48 Thomas: Yeah. Hmm. Right. Yeah. Okay. Yeah. No, I agree. I just was putting up the hypothetical. It's kind of interesting. Hmm.

0:23:06 Andrew: Right. Like the question is, what can Microsoft do with the assets of Activision Blizzard that Activision blizzard couldn't do by itself? Right. And and we're going to get

0:23:14 Thomas: Right. And it also tells us that there's more to the decision than just the sheer numbers.

0:23:21 Andrew: That's exactly right. We'll And get to the precise legal standards in a minute. We have so rarely described the government stepping in to protect consumers and it working that I want to tell you, the DOJ said, we're not going to approve this deal between Microsoft and Intuit, And there were about six months of negotiations by and between Microsoft and the DOJ. And eventually Microsoft said, OK, got us. We're going to pay our forty six point two million dollar penalty to Intuit and we're going to walk away. We're gonna blow up the deal.

0:24:03 Thomas: Wow.

0:24:03 Andrew: We cannot persuade you that this deal is in the interests of the American consumer. And that's a pretty positive story. Hold on to that positivity, because we're going to talk about another case that they lost, the political implications of it and that is the Netscape allegations regarding Internet Explorer. Floor, and um, a little bit of disclosure, I, I did some work on these, these cases back in my Covington days. I represented Microsoft, and when I say I represented Microsoft, I mean that in the way that any second year associate ever does, like my names aren't even on the brief, my my name is not on the briefs.

0:24:13 Thomas: Yeah.

0:24:25 Thomas: Internet Explorer. Yeah.

0:24:39 Thomas: Oh. Yeah, I get it. You ate dinner with Bill Gates. You sure can't, you know, you're a wheeler dealer here, uh,

0:24:47 Andrew: Yeah. Yeah, yeah. I sat in a darkened basement and wrote a paragraph and billed, you know, 11,000 hours. And I mean, I worked those legitimate 11,000 hours on that paragraph.

0:24:55 Thomas: Windows.

0:25:07 Andrew: Because, you have to revise it 86,000 times. Yeah, but yeah, the partners that I worked for are on those briefs. Um, so, so here's what happened. Uh, the DOJ filed suit in May of 1998, um, alleging that Microsoft was engaged in uh actions in restraint of trade in the market for internet browsing, right, for the, the browser that you use to access the internet, and and the action that was in restraintive trade was uh bundling Microsoft Explorer in with Windows, right.

0:25:37 Thomas: Yeah, yeah.

0:25:37 Andrew: And that is called, it was alleged to be an illegal tying arrangement, right, and a tying arrangement is when you own a very desirable product and you make people buy the dogs, you own a terrible product and make people by the terrible product in order to uh access the product that they really want. Um, and and I do not know the legal answer to this, but but the metaphor that I always give that, you know, will work for you in so many ways, Thomas, is like buying packs of cards, be it baseball cards or Magic the Gathering cards, right? Like you buy 60 cards in the hopes that you're going to get the one you really want. And then, you got a billion copies of, you know, uh,

0:25:51 Thomas: Yeah. Fair.

0:26:25 Thomas: Enough, but for, you know, for Magic the game wouldn't work if every single card was somehow equally amazing though, like,

0:26:31 Andrew: Sure. But you know, a your billionth copy of a land card or whatever, I don't, I Yeah. How about that yeah I listen, that's a shout out to my son on that one, um, you know, and same thing, right, like I, I get it, different people have, you know, different favorite players, but like I doubt too many people want the, like, you know, backup catcher for the, the Anaheim Angels or what have you, right? You know, so, so think about an illegal tying arrangement as buying a pack of baseball cards, right? You got to buy all of this other stuff in order to get the thing that you do, and here it was, um, uh, you don't have to by Explorer to get, to get Windows. Um, that there were part of what was key to sort of the trial, uh, and there was a, there was a very famous scene watching uh Judge Thomas Penfield Jackson uninstall uh Microsoft Explorer uh in the courtroom, right,

0:26:31 Thomas: Yeah, yeah. No. That's that's not that's good example yeah Yeah. Yeah.

0:27:23 Thomas: Oh

0:27:23 Andrew: With with people there, and well, that, that's right, is that Microsoft uh made it very very difficult to to uninstall it because their argument was no, no, no, these aren't two different products, this is a feature set of the operating system, and you know the operating system won't work in the same way, you're just, you're you're disabling a feature. And so uh the government was like, yeah, and they hired somebody basically to like pull out all the artificial roadblocks, and once you did that it was trivially easy to uninstall it and install, you know, Netscape, Opera, you know, whatever the browsers at the

0:27:23 Thomas: God. It was impossible.

0:27:36 Thomas: Uh, yeah.

0:28:04 Thomas: Netscape

0:28:04 Andrew: Time. Yep.

0:28:04 Thomas: Navigator, baby. I remember.

0:28:06 Andrew: I was a Netscape Navigator user for a while.

0:28:08 Thomas: Yeah. The compass was the icon.

0:28:10 Andrew: Indeed. Yeah, a little ship's wheel. Yeah.

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0:30:37 Andrew: So it led to three a three part ruling from the U.S. District Court for the District of Columbia, be a judge, Judge Thomas Penfield Jackson, um, November 5th, 1999, fact findings, uh, which was essentially the relevant market is for, uh, browsing the internet, uh, yes, these are two separate products, they are illegally tied together, that's how, uh, Microsoft is illegally using its monopolistic power, uh, and, that, that last line was not present, right? So the November 5th, 1999 was just the fact findings, then April 3rd of 2000 were the legal findings, right? So in light of what the court has found about the market, about the products, about the use, the interoperability, uh, we now just decide as a matter of law that this is a violation of sections one and two of the Sermon Antitrust Act. You have monopolistic power, and you are engaged in anti-competitive behavior by tying these two products together.

0:31:36 Andrew: Uh, part three then is the remedy, which came out June 7th of 2000, and, a um lot of of people forget this, the remedy that, uh, the U.S. District Court for the District of Columbia came up with was to break up Microsoft, right, was to split Microsoft into multiple entities, which would have no, uh, no interlocking of directorates, right, uh, that would then, uh, compete, right, and one, uh, would develop operating system products, and one would develop, develop internet browsing products. And this, right, by the way, followed the breakup of AT&T in the 1980s, right, this was considered to be a viable remedy for antitrust violations. Again, up until, really, up until this fell through.

0:32:24 Andrew: So how did it fall through? Um, in a, in a political way more so than a legal way, so what happened was, uh, Microsoft appealed that those decisions to the D.C. Circuit, and the D.C. Circuit, and we do not have time to go through, uh, it's 119 page decision, uh, but essentially the D.C. Circuit reversed and remanded on the, the application of the law, and they said two things. First, at some length, they criticized, uh, Judge Jackson, uh, for conflicts of interest, um, so much so that they requested, uh, request is the wrong word, uh, they required on remand that the case go to a different judge. It went to Judge Colleen Kollar-Kotelly uh, on remand. So they, they removed, the D.C. Circuit was like, yeah, uh, you are impartial when it comes to Microsoft.

0:33:16 Andrew: You've engaged in inappropriate behavior. So we're sending it down to a different judge, and with instructions to apply the same fact findings. So they didn't disturb any of the factual findings, under a slightly different standard. And let me be fair, under a higher standard, to prove monopolistic behavior. It was not clear to me, and it remains, I think, a valid argument, that Judge Kollar-Kotelly easily could have said, OK, under the standard promulgated by the D.C. Circuit, breakup of Microsoft is still the best remedy.

And indeed, this is a little bit more of limb, I think, it is not unlikely, I don't know that I can say it is the single light largest outcome, but I think it's not unlikely that Judge Kollar-Kotelly could have reached that conclusion, but by the time this got remanded back down to Judge Kollar-Kotelly, uh, no longer 2000, it's now September of 2001, and as we all know, uh, because a subsection of idiots voted for Ralph Nader in 2000, something that I'm sure people would never make the mistake of doing again. George W. Bush lost the popular vote but squeaked out an electoral vote victory on the basis of 537 votes in Florida that were upheld by a partisan divided Supreme Court. And is put in the settlement that was ultimately reached, the Department of Justice was quote, no longer interested in pursuing a breakup of Microsoft, right? So in other words, yeah, we elected Republicans, and they came in and, uh, were far more favorable, uh, and so, uh,

0:34:23 Thomas: Yeah.

0:34:57 Andrew: You know what they you

0:34:56 Thomas: I mean, why though? I, you know, like it doesn't necessarily make any sense. They should, if you're the party of business and free market, like wouldn't, this is better for the free market to fight this monopoly.

0:35:09 Andrew: Would think, but, um, I, I think businesses fall prey to the same thing that, like, like, you know, people do.

0:35:16 Thomas: Is it just corruption? Is it? Just, uh, yeah.

0:35:17 Andrew: Yeah. Well, The like, you know, every business thinks of itself as the next Microsoft rather than the next Netscape, you know, just like every coal miner in West Virginia thinks of themselves as the next billionaire. By the way, hate I to break it to you, but you're not. So in any event, regulatory regime changed, a a laissez-faire kind of attitude of, uh, prevailed at the Bush DOJ, which said, "Yeah, antitrust laws, like, like we're going to enforce those," uh, and what Microsoft had to do, uh, was give away certain, uh, API calls, uh, in order to, uh, go forward, and also to disable the most egregious aspects of making it hard to to uninstall Microsoft Explorer, which, by the way, they've been slowly adding back in, right?

0:36:07 Andrew: Like you'll notice with every version of Windows, you know, there are more of those where like if you accidentally click on X, you can all of a sudden have an Edge window now installed. Yeah, and it's terrible. Like Edge pops up two-thirds of the time when I'm trying to read a PDF. So So some of that may be old man yells at cloud. So I'll back away. That's the history. That is, again, two wins by the FTC, one of them largely undone by a change in politics. You match up those timelines. And we're talking about a potential early 2023 decision by a court in the event that the FTC sues to block the merger, that we could get that lawsuit filed this year and we could gets a result by 2023. twenty three, there would be appeals and, you know, how the presidential election goes in twenty twenty four could, you know, we could see

0:36:17 Thomas: Oh God. It's awful.

0:37:09 Thomas: Yeah.

0:37:09 Andrew: A replay of The of the Netscape situation all over again. Now, is this the kind of thing that the FTC might want to block? And I think the answer to that is is yes. Right. Right. So when you look at the most recent. So lot of the activity in the online space has been preoccupied with social media, right, has been preocupied with Facebook and Twitter and that sort of thing. But is a more old school attempt at monopolization.

The question is what qualifies as the relevant market, right, and in order to determine what qualifies us the relevant market, right, if it's not just, you know, making video game, right, like if it, if it just making video games, that will probably not be sufficient to trigger a monopolistic power analysis, but where I think this might trigger is if the relevant market is, um, and and the way that I I've seen analysts within the video game industry put it is, um, you know, sort of like Netflix for video games, right, like right now Microsoft through the Xbox has a Game Pass, pass, right, and the Game Pass is 15 bucks a month, right, and so you pay just like Netflix, you pay your 15 bucks per month subscription and you get access to any of the games that are on Game Pass, right, and and I had a, uh, I don't know, somebody gave me a, uh, a game that had a like three month free Game Pass subscription to it, so I had it for a couple, and that was super cool, right, like you could scroll through and play lots of different games on that Game Pass.

0:37:10 Thomas: Yeah.

0:38:51 Andrew: Well, if now you are greatly expanding the number of games that you can put behind Game Pass, right, well, that gives you the ability. It's why we went through the tying arrangement cases, right? Right. If people say, hey, Microsoft now owns Call of Duty. The only way to get the latest Call of duty is to have Game Pass. Well, that's tens of millions of people who are going to sign up for Game Pass who

0:38:57 Thomas: Well.

0:39:21 Thomas: Not to mention the console itself too, only exclusive to Xbox versus PlayStation. I'm more of a PlayStation guy, so I didn't know about this Game Pass. Well.

0:39:26 Andrew: Yep. Yep. And that's exactly. And so your competitive analysis, your competitive instincts, I think, are right on the stock price for Sony fell. Once this deal was announced. Right. Because, again, market analysts just took a look at it and was like, oh, yeah, well, this is this super bad for the PlayStation ecosphere. And so, yeah. If you're thinking about sort of long term anti-competitive effects. Right, it's why I went through sort of that killer app idea. Right. It absolutely could affect whether people buy the next generation Sony console or the next generation Microsoft console. So I think this is an area it really will depend on.

0:40:15 Andrew: So, you know, look, this was just announced. It really will defend on the kind of investigation that the FTC does and how well they are able to define sort of the relevant market for, uh, online subscriptions to video games or, you know, or something like that. Yep.

0:40:33 Thomas: And it does, so it also seems to depend on the personnel involved, right, and how much they, you know, are motivated or or even know anything, thing about video games or care about the whole issue, um, I'm curious when the, when Bush administration takes over, is it, it a simple question of whoever's at the helm, whoever's at the, that Netscape Navigator helm that we talked about, whoever's that, that, you know, the head Uh, It's not the kind of thing where like the people who are still career civil servants in these places are still doing the work, but it's just the case that like whoever's at the top can just be like, "Nah, we're not doing this anymore."

0:40:53 Andrew: Whoever's Got the Wheel. Yeah, it Is both, right, like it, the the work gets done, uh, by the career folks, but the the direction veers, if if I rephrase your question as does the direction of enforcement at the FTC and DOJ, which have overlapping responsibility, responsibilities under antitrust, um, those change radically, uh, and more so than just typical prosecutions at DOJ, when you move from a Democratic to a Republican administration and vice versa, the answer to that empirically, historically has been yes, right, like it is, uh, Democrats sometimes enforce the antitrust laws, and Republicans basically never enforce them. And so, yeah, if if if this follows that route, it will be very, very interesting to watch, the connected Bill Gates, somebody who is personally vilified. Right. Like when when you listen.

0:41:42 Thomas: Wow.

0:42:03 Thomas: Well, but he's not the CEO anymore just because he still owns.

0:42:06 Andrew: Yeah. No, he's not. He's not the CEO. But I mean, he owns an unbelievable ton of Microsoft stock. Right.

0:42:14 Thomas: I just wasn't sure if he's still, is he still out there advocating for Microsoft?

0:42:16 Andrew: No. I don't know. I'm using him as a proxy. And the reason. But you're right to call me out on that. Right? Like it. Microsoft has a has a new CEO. There's no indication that Bill Gates is sort of making the the day to day decisions. Not just no indication. He's not making the day-to-day decisions. He is not in that position. My point is, here is somebody who will be put into the situation we talked about in episode 562, where we know where his personal politics are. Right. The Bill and Melinda Gates Foundation has done enormous amount, billions of tens of billions of dollars of good work. Bill Gates has donated hundreds of millions of dollars to Democratic candidates. Right. This is and this is somebody who is reviled as the Antichrist among Trump supporters.

0:42:20 Thomas: Okay.

0:43:08 Andrew: But if it comes down to a close election in which billions of dollars of his personal net worth are at stake with reelecting a Democratic administration bent on stopping the Microsoft Activision Blizzard merger versus an incoming Republican administration that almost certainly would not, you know, will be an interesting act to follow. So that's one of the things that I that would just keep my eye on, what Bill Gates is doing between between now and the midterm elections and the the presidential elections.

And, you don't have to go out and donate money to pro Trump forces, you just have to give less to Democrats to, to subtly put your thumb on the scale. Hopefully that doesn't happen, it absolutely, the FTC is thinking about these issues right now, which is why I I flagged them for you. Um, I will tell you the other thing is, uh, the Ftca chair Lena Khan, uh, and uh, assistant attorney general for antitrust Jonathan Canter, uh, a press release two days ago in which they announced that they would be revising the FTC and DOJ's guidelines for mergers. So this is an issue the FDC is already looking at independent, right? The Activision Blizzard news dropped the very next day. So FPC is looking at it, have said that they're revising their guidelines, which again, you know, the Trump era guidelines are, go for it. It will be interesting to see, an that has made a lot publicly out of opposing mega mergers. It'll be very interesting to see what they do. Will keep an eye on that. The last thing that I wanted to kind of bring together in this story is

0:44:51 Andrew: What about the status of the DEFA and DOJ investigations against Activision Blizzard? Those continue.

0:44:56 Thomas: Yeah. What happens there? I got to imagine that's priced into the deal too. There's penalties, there's potential penalties, right?

0:45:05 Andrew: And you would imagine that, interestingly enough, the deal and the public disclosures, that 8K that I referenced at the very beginning of the segment, Do not mention the pending investigations at all. And if you're wondering how can they do that, I'm going to read you the relevant section. Right. This is from page 47 to 48, which is section 3.19 of the 8-K public disclosure that Activision Blizzard filed in connection with the proposed merger and 3.9F says no allegations of sexual harassment, sexual misconduct or retaliation. Now, if you're sitting there thinking opening arguments has covered an awful lot of

0:45:21 Thomas: Hmm. Yeah, just those

0:45:58 Andrew: Those allegations, Let's see what they say. "To the knowledge of the company, the company and each of its subsidiaries have not been party to a material settlement agreement entered into since January 1, 2018, with a current or former officer or employee resolving material allegations of sexual harassment, sexual misconduct, or retaliation for making a claim of sexual harassment or sexual misconduct, in each case that was alleged to have occurred on or after January 1, 2018, in the United States by either a current, one, officer of the company or any of its subsidiaries, or two, employee of the company holding a position at or above the level of senior vice president." OK, so let's unpack that sentence for a minute. First, you will notice that that phrase, and we introduced it earlier,

0:45:59 Thomas: Those things. Yeah.

0:46:46 Andrew: Material is doing a lot of work in that sentence. It says there are no material settlement agreements. Well, that by the way, that tells you that the $10 million settlement. Yeah, it is.

0:46:59 Thomas: Oh yeah. That, that they're not wrong.

0:47:02 Andrew: Yeah. Is below the threshold of materiality.

0:47:02 Thomas: That isn't material. That's not enough.

0:47:05 Andrew: Yeah, It tells you there is no settlement impending in the DEFA case, because if the Riot Game settlement of $100 million is our benchmark, that probably does rise to the threshold of materiality. Um, so they would have, they would have had to have disclosed that. And then they say, uh, we, we have, uh, the, parties have not been party to a material settlement agreement, um, with respect to, uh, allegations after January 1, by either a current officer or senior vice president level or higher. Um, of course, since most of the allegations are at the, uh, programmer level, level, uh, that has sort of defined out of existence an awful lot of, uh, of those claims. Let's read the next sentence, which says, there are no, and since January 1, 2018, there have not been any material allegations of sexual harassment, sexual misconduct, or retaliation for making a claim of sexual harassment or sexual misconduct, in each case that was alleged to have occurred on or after January 1, 2018, by or against any current officer, director, or employee holding a position at or above the level of senior vice president. Uh, in each case.

And so, you know, what, what you've done there is defined, uh, the bulk of the cases out of existence because they're not SVP level or higher, uh, and then bracketed, because I am sure that some of the claims probably do, uh, are asserted at that level or higher based on the documents that I've read, uh, you bracket those with a materiality threshold, uh, and so you're able to say, yeah, we're fine.

0:47:05 Thomas: Yeah.

0:48:40 Thomas: Well, but let's just make it clear that that's a reminder of how insufficient these penalties are, right? Cause they're Not wrong. It's like, yeah, it's like a, Oh, uh, what's the settlements, sexual harassment, all that. Oh, don't worry. It's barely, it's a blip on the radar doesn't even, it's not even enough to be priced into the deal to acquire Activision Blizzard.

0:48:41 Andrew: Out exactly right, you

0:49:02 Thomas: That should tell you that it's NOT going to be enough to do anything.

0:49:02 Andrew: You I love that you expressed in that statement the definition of materiality, which is materiality means would it affect a hypothetical objective reasonable investor's price of acquiring the stock of that company. And so when you say this is not material, right, that means, and again, it's easy to think of things that aren't material, right, like how much petty cash is that, is is in the drawer at each and every Activision Blizzard office. Well, you know what, it really doesn't matter, no one cares. Uh, Microsoft is not going to be like, oh, well, you know, we were going to pay $69 billion for that, but like, uh, you know, if the petty cash drawer is full, uh, we're gonna, we're going to knock off a billion but no, right, that's not material.

Saying this does not affect the business operations of the company, um, is exactly, and it's it's why I wanted to end with that, right, like that, that should be your guide for, uh, listening to how Activision Blizzard navigates through, uh, the the DEFA lawsuit, because, uh, they're going to to complain bitterly about the remedies that DEFA is seeking, uh, and this, this, they, they've either perjured themselves in the 8-K or they will be perjuring themselves then When they say this affects our operations, what you just said publicly, no, this can't affect our operations. It's not material. And at some point they're

0:49:12 Thomas: Yeah. Yeah.

0:49:49 Thomas: Can you

0:50:34 Andrew: Going to have to decide whether it is. So I am very, very confident that, that the fine lawyers at the California DFA have, have been paying attention to this and, and will be using that as leverage in, in moving forward. And we'll continue.

0:50:55 Thomas: Remind us what we're waiting for in all that? What the next of it? Because last I remember, you know, they're fighting over whether this tiny federal penalty is going to of the only thing, or if the California, you know, DFA can come in and actually, you know, penalize them more significantly, although it could still be immaterial, honestly. What are we waiting for in that? Refresh us.

0:51:15 Andrew: Yeah. Yeah, So, two things. In the federal suit, now that DEFA is not allowed to intervene, we still have the potential objections of the union and others with respect to the adequacy of that $10 million settlement. And then the DEFA lawsuit is a lawsuit. The parties have attempted to negotiate a settlement, but clearly hasn't happened. We saw the $100 million settlement with Riot Games, which kind of gives you some hint as to what DEFA is looking for. And so that's just a trial. We're looking for discovery as we move towards a trial on the merits of the respective violation of the California state statutes on equal protection.

0:52:07 Andrew: So that's that's what we're looking for in both of those cases. The federal case, obviously, those objections are going to I think we're going to get that news first. As opposed Right. To, you know, the the dribs and drabs of of producing documents in discovery.

0:52:22 Thomas: All right. And if I had to pin you to a prediction, do you think this deal will go through? All

0:52:27 Andrew: I Here's here's what I will predict. I will predict, uh, going out on a limb here, uh, that in 2022, uh, either the uh DOJ or FTC or both in concert, uh, will file a lawsuit, uh, seeking to block all or part, uh, of this deal. I, I think they're, I think they're paying attention, attention. So let's, let's, let's hope I'm right.

0:52:50 Thomas: Right, and

0:52:52 Clip: And thank you, Let's go!

0:52:54 Thomas: And now it's time to thank our Hall of Famers, our all-time greats, our top patrons on patreon.com/law. Hope you're enjoying all the good stuff, the ad free episodes, each and every episode, the early episodes, uh, again, delayed on the Law'd Awful Movies, apologies. That's scheduling problems. We will get that to you though. We won't miss it. Uh, I can't, well, I'm really excited to do this one. I've been chomping at the bit, but it's, it's a just merely scheduling stuff. We'll be out very soon though. Uh, and I will go first here, thank you too, and sorry, reminder, we're on our third quartile, were

0:53:25 Andrew: Yeah, this is the third quartile.

0:53:28 Thomas: We on quartile or quintile? I've lost I've lost. Uh, okay.

0:53:30 Andrew: It's quartile for January, yeah?

0:53:33 Thomas: Quartile. January, of course. How could I forget?

0:53:36 Andrew: It's quartile January. I mean, everyone knows that.

0:53:39 Thomas: Thank you to Seattle Pete. Oh, my employer evilly added an an MBA clause after years of active employment under threat of job termination. Christopher Brown. By the way, that one is kind of an old one. Let us know what's happened. Did something happen? What's happened with that? Let us now, I want to. There's lot of stories that have started in the Patreon shout outs that I haven't gotten to hear the end of, you know. Thank you to Christopher Brown, Philly Live Show 2022, and the new OA OA Fantasy Football League champion, London Jets. Congratulations. Sorry for the late update.

I've just had my booster in Dusseldorf, Germany. Thanks for the concern and stay healthy. Oh, that was the, uh, I think that was The Australia live show patron that said they couldn't get a shot until October. Remember? I think it was that one. Oh. So that speak of the devil. Thank you for the update. Nice. Lawful copter says hello. And thanks for all the fish. The coin is rigging T3B with a Chinese thermostat controlled by an Italian satellite. Stormy Decisus, Darth Mandy Pants, Judicial Review is the original inhabitant of the constitutional penumbra. How do originalists justify that doctrine?

0:54:13 Andrew: Woo!

0:54:23 Andrew: Yeah, they do not.

0:54:46 Thomas: Yep. Robert M. That's true. Robert M. Lou Thick with two Cs, penumbras. You make the legal reasoning sound, I love it. Bob, Blah Blah's Law Podcast, Ball Arena Live Show, Pauly Hernandez. These these are just simple farmers, people of the land, the common clay of the new West, you know, morons, the impossible hamburglar, the plant-based international man of mystery. You know, if there isn't an impossible hambler burglar, maybe I need to be the impossible hamburger I want to see in the world, you know, start dressing up in that murderous crows. Jason Copas, hey. Arizona, support Aaron Lieberman for governor. And courts lying and the rule of law being fiction is heartbreaking for, for listeners, to, sorry, Andrew. Wow. Well, me too, I don't like it either.

0:55:19 Andrew: Oh, Yeah,

0:55:33 Thomas: Do I get a sorry? Your turn.

0:55:33 Andrew: And, On that note, uh, thank you to Ian Hamilton. To crimer, no, criming. Stop calling him Uncle Frank. Nate Drex has to call him dad, man. It's hard not to sing this. Thanks to bad boys, bad boys, what you gonna do, what you're gonna do when Merrick Garland comes for you. Uh, to definitely not an MSNBC spy, right, yeah, of course not, to my fully stocked basement bar. Is your, your fully stocked basement bar for a Philly Live Show Platinum event. You pick what's on tap. Civilpoliticsradio.com. Fridays at 7 p.m. Eastern on Valley Free Radio. John Bilderbeck, Jeff Gelbeck, Jennifer Kratch. Aaron has to read this weekly, but Thomas only bimonthly. Explain this deontologically.

0:56:13 Thomas: Yeah.

0:56:17 Andrew: Stop aloada slander. Another Minneapolis waiting for our live show in Minneapolis. Medicon 7. My friend's cousin mixed Coke with Cop Rocks and he died. Still funny every time. Stephen Balticate Sandoval. This isn't the third quartile. It's the sixth octile. We should go to octiles. That would be great. Philip Kizer. Andrea the Arbitrary and Capricious. Pain Strumpet. Gare Sergeth. And changed all my passwords to Kenny so I could have Kenny Loggins. That is an A plus dad 80s joke. I love it. Thank you so much.

0:56:53 Thomas: And I haven't heard it before. I, you know, that's, that makes a good dad pun. If, if you haven't hurt it before, it's new to you. Uh, thanks top patrons.

0:56:55 Andrew: Yeah. Yeah. Thank you.

0:57:03 Clip: Sometimes you eat the bar, and sometimes the bar will eat you.

0:57:09 Thomas: Now it's time for T3BE or T3E2 ethics exam. Answer time. Is the test as straightforward as I think, or am I not ethical this week? Let's find out.

0:57:21 Andrew: All right. So yeah, this is a prosecutorial ethics question. It says state prosecutor was assigned to a murder case in which the defendant confessed to committing that crime. In the course of receiving that confession, the defendant also confessed to a whole bunch of other crimes, including the murder of a young woman in another jurisdiction. So then the prosecutor investigates that confession, it's stated in the questioning that it was credible, discovered that another individual had been convicted of the murder to which, you know, he now has credible evidence that someone else has confessed to, and that other person was sent to prison on the defendant's confession for which there, there was corroboration. The prosecutor knew that it was reasonably likely that the individual convicted of murdering the young woman was innocent, but he didn't tell anybody about it. Was that proper? And you went with, as you said, the straightforward answer, no, because the prosecutor failed to promptly disclose the information regarding the defendant's confession to a court or the chief prosecutor in the other jurisdiction. And Thomas, you are, are two for two on ethics, my friend.

0:58:05 Thomas: Hmm.

0:58:29 Thomas: All right. I was a little worried just because I feel like this happens every single day in our country and it doesn't matter. Doesn't it? I've heard a lot of stories of like, oh yeah, someone else confessed that murder. No, it didn't matter, nothing happened.

0:58:44 Andrew: Well, so, question bifurcates out the ethics responsibility on the prosecutor and the standards for habeas relief on somebody who's been wrongfully in prison. And, right, because of Antonin Scalia, uh, the, you now have a Supreme Court decision that says being actually innocent is not enough, uh, standing alone.

0:59:05 Thomas: What a guy, guy.

0:59:06 Andrew: Yeah. To Uh, to grant, uh, habeas corpus relief and and secure someone's relief from prison. Um, but it, it can circumstance where you have more than just actual innocence. Um, I I we

0:59:06 Thomas: What a jurist. What is more than actual innocence, like, also I gave to charity, I am, I'm a stand-up guy too, another

0:59:23 Andrew: Yeah I I will uh we I will, I will cover this, we'll do a deep dive on it, uh, but but, um, it is Rule 3.8 of the Model Rules of Professional Conduct governs the special responsibilities of a prosecutor, and this, this hypothetical was testing subsections G and H. So let me read you the relevant rules. Rule 3.8G says, when a prosecutor knows of new, credible, and material evidence creating a reasonable likelihood that a convicted defendant did not commit an offense of which the defendant was convicted, the prosecutor shall, one, promptly disclose that evidence to an appropriate court or authority, and two, if the conviction was obtained in the prosecutor's jurisdiction, promptly disclose that evidence to the defendant unless a court authorizes delay, and undertake further investigation or make reasonable efforts to cause an investigation to determine whether the defendant was convicted of an offense that the defendant did not commit.

0:59:30 Thomas: Time another show. Yeah I

1:00:25 Andrew: So, you know, you looked at, I think, part of where the attractive distractor on C, uh, was, was coming from, um, excuse me, on B, uh, was uh, no, yeah,

1:00:34 Thomas: Don't think there are any attractive distractors. I try, a big D is maybe the second best for no reason, I donno

1:00:37 Andrew: No, that Yeah. Um, and so, uh, it, you have an even higher obligation if it's in your jurisdiction, right? If that, if that case, uh, is one of your cases, you, you have to not just tell the court, you've got to to tell the defendant and you have to undertake reasonable efforts to cause an investigation to determine if that person was wrongfully convicted. H says, when a prosecutor knows of clear and convincing evidence establishing that a defendant in the prosecutor's jurisdiction was convicted of an offense that the defendant did not commit, the prosecutor shall seek to remedy the conviction. So again, another affirmative duty, but that's only for cases in your jurisdiction, for out of your jurisdiction, uh, if you have a, if you know of credible and material evidence creating a reasonable likelihood that a defendant did not commit an

1:00:41 Thomas: Uh. It's

1:01:35 Andrew: Offense of which they were convicted, you shall promptly disclose that to the appropriate court, you cannot just sit on it, which is what the prosecutor does here. So you are 100% correct.

1:01:45 Thomas: Just so easy to be ethical, everybody. This is a morality play.

1:01:47 Andrew: Yeah. It's Not hard.

1:01:48 Thomas: Now, well, How many of these are we going to do before that point is made, okay?

1:01:49 Andrew: Hard. I think we're gonna do, I have, uh, I have 15 ethics questions here, uh, but I say if, if you rattle off a streak, uh, let's say we want to do a mercy rule with, yeah.

1:02:00 Thomas: Oh, I see, yeah. I like this pipe Yeah, if I'm beating ethics by enough, I'll allow ethics to forfeit. Is that what you're saying? Okay.

1:02:12 Andrew: There we go That's Exactly right, so, uh, I

1:02:15 Thomas: We'll play it by ear, we'll see, yeah.

1:02:15 Andrew: Think you You, there should be some tough questions, but, but, you know, if there aren't, if there aren' t, that will also make our point, right?

1:02:20 Thomas: Yeah, yeah, that it's, you know, no, that'll, that, attention, Rudy Giuliani and, uh, Sidney Powell. Oh, Dersh. It's not hard. It's non-ethical to be ethical. Okay. Well, uh... I win again. Let's see, again, which of our listeners is supremely ethical, makes all the right choices in life. Who's our big winner this time? And this week's winner of T3BE is at @Craig K Bryant, who says prosecutors are interesting among lawyers in that they have ethical obligations human beings would recognize, not that they always live up to them, but the obligation here is to report exculpatory evidence because of course it is. A great answer, Craig, you nailed it, it was the obvious answer, it's also the ethical answer, and we're all happy, everybody's in agreement here.

1:02:29 Andrew: Yeah, Sidney Powell, yeah.

1:03:17 Thomas: Prosecutors should probably report to somebody if you have exculpatory evidence in another case. So congratulations at Craig K. Bryant. Enjoy your never ending fame and fortune. And because it's me here, I actually do guarantee the fame and fortune. I'm not very legally responsible about that. So you guaranteed infinite fame and Fortune guaranteed. And that's our show. Thanks so much for listening, everybody. And we'll see you next time for a rapid response Friday

1:03:44 Clip: I move for a bad court thingy. You mean a mistrial? Yeah, that's why you're the judge and I'm the law talking guy.

1:04:18 Clip: www.openargs.com. Be sure to join the Facebook group at facebook.com slash groups slash Yodel Mountain and follow us on Twitter at OpenArgs. This podcast is a production of Opening Arguments Media LLC, all rights reserved. It is produced with the assistance of transcriptionist Heather Leverage, production assistant Ashley Smith, and additional contributions from Morgan Stringer and Debra Smith. Special thanks to Teresa Gomez, who runs our live shows and heads up the OA Wiki, follow at OA Wiki on Twitter. Additional thanks to the moderators of the Opening Arguments Facebook community, Emily Waters, Alicia Cook, Eric Brewer, Natalie Newell, Brian Ziegenhagen, and Teresa. And finally, thanks to Thomas Smith, who edits the show and created the fabulous theme music, which was used with permission.