In this episode, Rep. Matt Gaetz (R-GA) and Elizabeth Warren (D-MA) go head-to-head in a debate about the dangers of big tech companies and their control over our digital world.
00:03:21.000It's a chapter title in my book, Firebrand, and it's true.
00:03:24.000Just listen to what our bipartisan investigation uncovered regarding how Apple serves as an anti-competitive gatekeeper for those who want to innovate and enter the marketplace.
00:03:36.000The App Store is a feature of the iPhone, much like the camera is and the chip is.
00:03:43.000My point is, and I'm sorry to interrupt, but I want to get to the point.
00:03:47.000The point is that Apple is the sole decision maker as to whether an app is made available to app users through the Apple Store.
00:04:00.000In 2010, Apple introduced an online bookstore called the iBook Store where it offered e-books.
00:04:08.000And the only major publisher that didn't agree to join iBook Store was Random House.
00:04:14.000Random House wanted to offer its own e-books through its own apps and submitted their apps to be added to the App Store.
00:04:22.000Amidst continued negotiations between Apple and Random House, senior VP Eddie Q said, and I'm quoting him, he quote, I'm quoting him when he said it prevented an app from Random House from going live in the App Store.
00:04:37.000Q himself cited this app rejection as a factor in finally getting Random House to give in and join iBook Store.
00:05:16.000Apple kicks one out and said that one that was helping parents but keeps the one owned by a powerful government.
00:05:26.000If that is correct, Mr. Cook, that apps that supposedly did the same thing, why would you keep the one owned by a powerful government?
00:05:40.000I'd like to look into this and get back with your office.
00:05:45.000It sounds like you applied different rules to the same apps.
00:05:49.000Apple has sole control over who they allow to market their apps in their App Store, enabling them to eliminate opportunity for anti-competitive reasons or really for no reason at all.
00:06:01.000But it's not the quality of apps that they seek to ensure.
00:06:09.000Those that pose a viable threat or really any threat to Apple developed software, well, they seem to suddenly be taken out of the market for the children, of course.
00:06:20.000We were concerned, Congresswoman, about the privacy and security of kids.
00:06:25.000The technology that was being used at that time was called MDM.
00:06:30.000And it had the ability to sort of take over the kids' screen and a third party could see it.
00:06:38.000And so we were worried about their safety.
00:06:40.000The same technologies that were unacceptable for outside competition were just as swiftly snatched up by Apple and rebranded as their own as soon as they were taken off the Apple Store.
00:06:52.000Sure is a win for companies like Apple.
00:06:54.000No longer do they need to come up with ideas of their own.
00:06:58.000They just have to wait for the competition to plant the newest seed in the ever-growing apple tree so that they can pluck and harvest.
00:07:07.000When you see evidence of this anti-competitive behavior, you have to wonder,
00:07:11.000why isn't the Department of Justice taking stronger action against Apple or really anyone else cheating the economy to kill innovation and competition?
00:07:21.000The truth is that at the Department of Justice, the intensity of antitrust litigation is all about the jobs these DOJ officials want when they leave government service.
00:07:35.000DOJ doesn't want to do nothing about big tech.
00:07:38.000After all, if you want to sell the antidote, first you have to sell the virus.
00:07:43.000But they don't want to do anything to actually hurt big tech in any real way.
00:07:48.000Those are their future employers, after all.
00:07:50.000There is a revolving door between the DOJ and big tech as I laid bare here during debate in the House Judiciary Committee.
00:07:59.000There is a final piece of evidence here, Mr. Chairman, and I did not expect to obtain this when we had our transcribed interview of the former U.S. Attorney for the Southern District of New York, Mr. Berman.
00:08:10.000But in the inquiry of Mr. Berman, the majority asked a number of questions about why Attorney General Barr was asking him to leave the Southern District of New York and take over as head of the Civil Division.
00:08:22.000And Mr. Berman explicitly says that the reason that the Attorney General is trying to coax him into the acceptance of that assignment is that it would be, and I'm quoting direct from the transcript here, a good resume builder.
00:08:34.000Mr. Berman testifies, he said that I should want to create a book of business once I return to the private sector, which that role would help to achieve.
00:08:43.000How improper for Attorney General Barr to be attempting to lure the U.S. Attorney for the Southern District of New York to the Civil Division of the Department of Justice for the explicit purpose of building a business and then engaging in the revolving door back to the private sector to be able to leverage those contacts.
00:09:00.700To be honest, it's going to be very difficult for Congress to pass these breakup big tech bills.
00:09:14.720They eked out of committee with Republicans and Democrats on both sides.
00:09:19.640It's complex and messy to say the least.
00:09:22.220And as you can see from the Barr-Berman fiasco, the DOJ is in on the big tech employment grift.
00:09:29.000So outgunned, outfunded, small companies are having to go at it alone in the courtroom.
00:09:37.480They're suing for their lives, for injunctions to just open slivers of the marketplace for competition.
00:10:16.620Epic Games just got a federal judge to say that Apple must allow game developers to push purchasers to payment processors outside the Apple system.
00:10:41.920It isn't just Apple who tries to scrub out its competition.
00:10:46.640We have large conglomerates like Facebook who are more than willing to throw their elbows in the face of any competitor that comes their way.
00:10:56.200You can see me here questioning Facebook's very own Mark Zuckerberg defending the acquisition of anyone that might pose a threat to their market dominance.
00:11:06.120Mr. Zuckerberg, what is a digital land grab?
00:11:08.660Congressman, I'm not sure what you're referring to.
00:11:14.380Well, in the emails that your company produced to the committee, there's one from David Wehner in 2014 where he's describing under the mergers and acquisitions advice within the company that you need to engage in a land grab.
00:11:31.560And he says, I hate the word land grab, but I think that's the best convincing argument and we should own that.
00:11:37.660And it goes on to describe a strategy wherein Facebook would spend 5 to 10 percent of its market cap each year to shore up its market position.
00:11:47.320Yes, Congressman, thanks for the opportunity to address this and frankly, to correct the record, because I believe that what he was referring to was a question that was incoming from investors about whether we would continue to acquire different companies.
00:12:06.440I don't think that that was that wasn't referring to an internal strategy was referring to an external question that we were facing about about how we would how investors should expect us to act going forward.
00:12:18.820And I think he was discussing the fact that as mobile phones were growing in popularity, there were a lot of new ways that people could connect and communicate that were part of this overall broader space and market around human connection and helping people stay connected and share their experiences.
00:12:37.420Okay, well, Mr. Zuckerberg, it seems to be both internal and external, because then in an email from you in 2012, we see a similar sentiment expressed.
00:12:47.540You write, we can likely always just buy any competitive startups.
00:12:52.280So is your desire to limit competition by purchasing your competitors consistent with the message to your investors that the way you'll run your company is through digital land grabs?
00:13:08.380Congressman, I'm not sure I agree with the characterization of how we communicated with investors.
00:13:13.640But your words, but I think the broader point is that there were a lot of new ways that that people can connect that were created by smartphones.
00:13:23.240This is about your merger and acquisition strategy.
00:13:25.400You went on to say one thing about startups is you can often acquire them.
00:13:28.960So, I mean, I'm not interested in how people connect.
00:13:30.880I'm interested in how you how you acquire businesses to limit competition.
00:13:34.560Gentleman, as time has expired, but the witness may answer the question.
00:13:39.180Congressman, in order to serve people better and help people connect in all the ways they want,
00:13:43.640we innovated and built a lot of new use cases internally and we acquired others.
00:13:49.360And that, I think, has been a very successful strategy at serving people well.
00:13:56.760And a lot of the companies that we've been able to acquire have done have gone on to reach and help connect many more people than they would have been able to on their own.
00:14:19.460We saw one of your profit and loss statements, and it appears that in one month alone, Amazon was willing to bleed over $200 million in diaper profit losses.
00:14:31.960Mr. Bezos, how much money was Amazon ultimately willing to lose on this campaign to undermine diapers.com?
00:14:57.220American innovators should not be shut out of a marketplace just because there's a bigger company willing to snuff them out for the monopoly with anti-competitive practices.
00:15:07.600This is why I support the antitrust legislation that is currently being put forth in Congress.
00:15:13.780Specifically, bills like the American Innovation and Choice Online Act would prevent companies like Apple and Amazon from giving preference to their own products and stifling those who would compete for the digital space.
00:15:27.720It is bills like this that will put American innovators first, allowing them the opportunity to prosper and grow American technology.
00:15:36.380I urge others to support these bills, as does our friend Tucker Carlson.
00:15:41.280Well, the House Judiciary Committee just passed six bipartisan antitrust bills today that could finally, in the end, lead to breaking up the big tech companies and saving the nation.
00:15:51.800One bill, it's called the American Choice Innovation Online Act, prohibits big tech companies from giving preference to their own products on their platforms.
00:15:58.980That's a typical piece of antitrust legislation.
00:16:02.100It also prevents them from discriminating against their competitors.
00:16:04.840Another bill is called Ending Platform Monopolies Act, and that bill could force tech companies to break up in the end and sell their assets.
00:16:14.180That bill passed by a single vote, in part thanks to two Republicans, Matt Gaetz and Ken Buck.
00:16:21.280Republicans have talked about big tech censorship for years.
00:32:51.620Who could forget George H.W. Bush's socks?
00:32:54.820We make fast calls on people's fashion all the time, whether we realize it or not.
00:32:59.720In an article published in the March 2020 issue of Nature Human Behavior,
00:33:03.760authors O, Shafir, and Todorov of New York University and Princeton conclude that a clothing's quality defines how others perceive competence.
00:33:15.280After all, for many, why do good when you can look good?
00:33:19.820Image as a metric of competence is a rising trend.
00:33:23.740The generation that did it all for the gram is very visual.
00:33:27.080They didn't sit up at night talking on the landline for hours like Gen X or on AIM Instant Messenger with four friends at once chatting like me and all the fellow Xennials out there.
00:33:39.240Conservative media went nuts when AOC wore a Tax the Rich dress to the Met Gala.
00:34:47.780Van Drew was elected a Democrat, switched to become a Republican, and won re-election anyway.
00:34:54.160That is a boss Nucky Thompson move if there ever was one, and the wardrobe is there to drive home the point.
00:35:00.800But if there is a political figure I want to commend for using fashion to make a point that should be front of mind to American consumers, it's Jill Biden.
00:35:11.820Jill Biden is the first First Lady to have the courage and resolve and power to outfit repeat.
00:35:21.400While she changed up her mask and accessories to freshen the look, Jill Biden wore this classy and stylish Narcisco Rodriguez piece to the Tokyo Olympics and in Florida with well-known American tyrant Dr. Anthony Fauci.
00:35:37.160This wasn't the first lady economizing choices to accommodate a carry-on.
00:36:12.620And I know that some of you must be wearing things once and throwing them away, because I have worn this Dewey Destin's tank top over 700 times.
00:36:21.960We haven't made the clothes we actually wear in our country for a long time.
00:36:26.180The prices lower, the quality lower, and when we're done wearing trendy, cheap, crappy stuff, we pollute the third world with it while patting ourselves on the back for donating to charity and destroying domestic industry.
00:36:43.600America is the largest importer of garments in the world.
00:36:46.620Nearly 40% of apparel products that are sold here are imported from China.
00:36:54.840This is the research that startled me most.
00:36:58.400Discarded textile products are the second largest industrial polluter on planet Earth, behind only oil, according to Forbes.
00:37:08.380Aside from the buy-once, wear-once, throw-away culture of detached consumerism, many people have falsely woven this lifestyle into a charitable cause.
00:37:18.580You can indulge your vanity while virtue signaling.
00:37:28.280And our crap tends to end up in Africa, not to clothe the naked, but to clog the rivers, smother the beaches, and billow over the landfills.
00:37:39.040If you donate your clothes to people in need, they aren't going to build a statue to you unless it is made out of unwanted, discarded clothes.
00:37:48.400Over 15 million articles of clothing arrive in Ghana every week.
00:37:52.680Probably about half of it bought at H&M.
00:37:55.460This is an indictment of globalism and its dysfunctionality.
00:38:00.020This crap comes from China and ends up in Africa.
00:38:03.660We wear it, I guess, once or twice in between.
00:38:09.820That is the manufacturing force behind the poorly made Chinese garments that last two or three washes before disintegrating against your office chair.
00:38:19.560China makes more than seven times as many textiles as the second largest producer, which is India.
00:38:26.120Is there something wrong with a society that destroys our businesses in the name of tolerance but won't tolerate an outfit repeat?
00:38:34.920America, at her golden age, had people wearing their Sunday best every Sunday.
00:38:40.820People had two pair of shoes, one for the work week and one for church.
00:38:44.860Now people are keen on hoarding shoes, clothes, accessories.
00:38:50.480America once manufactured well-made lasting fabrics and garments that can still be found as relics in respectable vintage establishments across the country.
00:38:59.940So let's bring classic back, not just as a look, but as a way to think about how we appoint ourselves.
00:39:08.860I know it's the 21st century and Instagram's outfit of the day hashtag obsession is all the rage.
00:39:16.840But fast fashion is ruining our planet with rampant pollution.
00:39:22.000Are cheap, crappy, trendy clothes a good trade for soulless mercantilism?
00:39:27.060I know it's hard to resist buying that skimpy summer dress for $7.99 that you'll wear once before realizing it makes you look like a rectangle.
00:41:47.200The research for this episode has inspired me to be better.
00:41:51.420Now, legislatively, we could look at alternatives to the international free trade system that doesn't seem to be free at all or fair.
00:41:58.740For example, we've made progress in the National Defense Authorization Act that's being considered and hopefully will be sent to President Biden.
00:42:07.400Namely, the Berry and Kissel amendments require certain goods to be purchased right here from American entities manufacturing them.
00:42:17.500And we agree with those Buy American provisions.