Weekend Law: Google, Wartime Act & Chicago Bracing

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1:27All figures per serving of Hero Bread see nutrition facts on Hero.co. This is Bloomberg Law with June Grosso from Bloomberg Radio. In the biggest tech antitrust case in three decades, Google avoided a breakup. A D.C. federal judge ruled against the government's most severe proposals for remedies, like a forced sale of its Chrome browser. Judge Amit Mehta had already found in August of last year that Google illegally dominated the search market by paying more than$25 billion to Apple and other companies to make its search engine the default on smartphones and web browsers. This ruling was all about the fix.

2:16And Google will have to make some concessions, including sharing online search data with rivals and ending exclusive contracts for distribution. My guest is antitrust expert Harry First, a professor at NYU Law School. Harry, on the Department of Justice website, it says, Department of Justice wins significant remedies against Google. But this falls far short of the severe remedies that the government wanted. How much of a setback is it for the government in its attempt to curb the power of the biggest tech companies? Well, you know, people often talk about things as being a win-win, and that that's a good thing.

3:00So I think that the judge's decision is a win-win, but not a good thing. I view it as win in sort of eight-point type on the government side and win in sort of 16-point type on Google's side. So here's what I mean. It's not a significant victory for the Justice Department. They did win some things, and maybe that will help bring some competition into search. But I think Google won a lot by not losing very much. They get to keep Chrome. A lot of the remedies that the department asked for and got even were cut down, circumscribed, diminished. And, you know, whether what the judge did will end up changing the search business, I doubt, but who knows.

3:53But we've now passed the point where the question will be, will we get competition? And the question will just be, is Google complying with the decree? Of course, all of that comes after a round of appeals. So there's much more to this. But in terms of, you know, the overall feeling, I think it's, you know, from a public point of view, a disappointment. So the big headline was always, will Google be forced to sell Chrome? So Google doesn't have to do that. Why did Judge Mehta decide not to make Google divest Chrome? So this is a point that pervades Judge Mehta's decision, rightly in a legal sense, but I think not so correct from a policy point of view and really where the law ought to be.

4:43So this is in many ways a very conservative opinion. It's the judge expressing what judges often express is that, you know, they understand the limits of who they are, what the institution can do, and what they want to do on an ongoing basis. So they're conservative about this. And here the government plaintiffs are asking them to do some pretty strong restructuring of one of the superstar firms in the United States. So you got to be a little modest. Now, the judge backs up his modesty with a lot of quotations from the Court of Appeals and recently from the Supreme Court in a different antitrust case, opinion written by Justice Gorsuch, which counsels, let's be careful a little bit.

5:35So the ask that Crone be divested, structural relief is something that the D.C. Circuit itself, remember Judge Mehta is a district court judge overseen by a court of appeals from the D.C. Circuit. So he is required to follow the law from that circuit. The law from that circuit on remedies is actually pretty conservative and cautious. And that stems from actually the Microsoft case, which is much the template for the complaint that the government filed and for the government's theories. So, you know, they said, well, when it comes to structural relief, restructuring, reorganizing a company, you really need some strong proof before you do that.

6:20You need to watch out. And so he took those admonitions to heart and just didn't find enough to overcome that sort of a presumption that, you know, you don't do this unless you really have to do it for effective relief. And this then goes to the second part. Maybe the government didn't make an effective enough case for divesting Chrome and maybe made it seem too easy. So stuck with all of that, he backed away from it. How much did AI play into Judge Mehta's decision? So I think his decision is all about AI, frankly. And I think that he's betting, and many in the industry are just simply betting that AI is going to replace search as we know it with something else that's not search as we know it, or maybe as you and I know it, but just simply getting information.

7:17And that Google search, that product, no matter what he does in this opinion, is going to be eclipsed by some AI product. And I think that he views generative AI as coming to the rescue of competition. Some say it's already eroding Google's dominance in search. The data seem to show, he mentions this in his opinion, that searches on Safari have decreased. People seem to be going directly to, you know, chat GPT or perplexity or some of these other AI assistant things and just getting information that way. This is the destructive force of innovation, as the economist Joseph Schumpeter talked about many years ago.

8:07So maybe he's right. And, you know, that may mean that sort of didn't matter what he did so long as AI lives. But of course, the worry is that we'll just replicate the current structure. The tech platform superstar firms will just control AI and we won't have moved to new competition, but we'll have a different product. He's ordering Google to share data with rivals to open up competition in online search. Google has to share some of the data with competitors, but not some of its most important data, would you say? Well, here again, it's hard to say exactly what are important data. You could say all of the data are important, the more the more.

8:53But, you know, this particularly involves the search index, which is something that Google has done really well. And the government in some ways didn't ask for as much as it could, which would have been a license to the index itself. What they wanted is some help with the data so competitors could build an index. And even with that, the judge cut down the kinds of data that will be required to be disclosed. and to me, even more importantly, the timing of the disclosure. So for some of these data, it's a one-time snapshot, which strikes me as, you know, the judge calls it a kickstart for competition.

9:35Yeah, like a kick in the rear, I don't know. You know, a one-time thing for some very important parts of some basic information to help them put together a better index of the web. There's an awful lot of information out there, and indexing it is critical for an effective search engine. And, you know, when it comes to sort of this user-side data, the click and query, you know, what we do when we get free search is create data that's worth a heck of a lot of money, for which we don't get paid, we being you and me and all the other users. But these data, here again, the judge cuts down the request, gives some amount of the request, and then sort of puts on some limits yet to be decided about how often this will be disclosed, more than once now.

10:30It's not just a snapshot, but the cap yet to be determined by this technical committee that the decree is going to set up. So I don't know. It's hard for me to say exactly, you know, will this enable competitors to really get an effective competing search engine or will it not quite be enough? And in some ways, this goes to what I've always viewed as the underlying problem with these decrees is a judge trying to say what competitors need to succeed instead of a judge saying, don't ask me, just come back. You know, Google, just come back and let me know whether there's competition or not. And if there isn't, we're going to have to do something more about it.

11:13You know, for judges or even the Justice Department, which apparently at least is still made up of some lawyers, you know, trying to design these remedies is tough. And you can feel it with what the judge has written in this opinion. It's hard. And trying to figure out what the effect is going to be, I mean, he said at the beginning, you know, I don't have a crystal ball. Other judges have used that worry as well when being asked to predict effects in future markets. Google has previously said it's going to appeal. Do you think Judge Mehta's decision is conservative enough to survive, at least at the D.C.

11:52appellate court stage? So he did a lot to try to survive review by the Court of Appeals. I mean, he relied quite heavily on key decisions, particularly the Microsoft Remedy decisions. And he also, oh, by the way, bolstered one of the potential weaknesses in the liability decision while he was at it. So I think it's not perfectly bulletproof, the aspect of letting AI companies share in some of these data. If I were Google, I would be hitting on that, whether that was not warranted, given as he started out by saying, there was nothing at the trial about AI. And there are ways of casting what he did as maybe not within the bounds of what the goal was in the trial.

12:42So there's some potential issue there. And, you know, I mean, it could be more conservative, I guess. He could have just given Google what Google wanted. But it's a carefully drawn opinion. And, you know, time after time, he sort of knocks the government plaintiffs back a bit by saying, you know, you've overreached, you're asking for too much, you know, we need to be modest, etc., etc. And later this month, Google is scheduled to go on trial to determine remedies in another case where a judge has found the company holds illegal monopolies in online advertising tech. So more to come. Thanks so much, Harry.

13:20That's Professor Harry First of NYU Law School. Coming up next, Trump can't use a wartime act to deport alleged gang members. I'm June Grosso, and you're listening to Bloomberg. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock.

13:55You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. They're back live across North America.

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15:35This is Bloomberg Law with June Grosso from Bloomberg Radio. Venezuela's been a very bad actor. They've been, as you know, they've been sending millions of people into our country, many of them Tren de Aragua, some of the worst gangs, some of the worst people anywhere in the world. President Trump used an 18th century wartime law to try to quickly deport alleged members of a violent Venezuelan gang in March, arguing that the Tren de Aragua gang had been sent to the U.S. by Venezuela's president to destabilize the country. For the first time, a federal appeals court weighed in this week, blocking the administration from using the Alien Enemies Act of 1798 to deport the men.

16:24The Fifth Circuit found that, quote, A country's encouraging its residents and citizens to enter this country illegally is not the modern-day equivalent of sending an armed, organized force to occupy, to disrupt, or to otherwise harm the United States. Borders are Tom Holman had admitted that the wartime law was being used for swift deportations that avoided due process. I'm not arguing right here that nobody should get due process. I'm just saying there's a different process under Alien Enemies Act, less of a process you need to see through Title 8. D.C. appellate judge Patricia Millett criticized the government for not giving the Venezuelans any opportunity to challenge their removals.

17:08There were plane loads of people. There were no procedures in place to notify people. Nazis got better treatment under the Alien Enemy Act than has happened here. The two-to-one decision from the New Orleans court will most likely end up back at the Supreme Court. My guest is immigration law expert Leon Fresco, a partner at Holland & Knight. Leon, this case has been going on almost six months and has been up to the Supreme Court twice already. Catch us up. This is a case involving President Trump's proclamation in March of 2025 that the Venezuelan gang Tren de Aragua was a dangerous invading force into the United States such that its members should be deported under the Alien Enemies Act, which permits deportation without due process.

17:57Essentially, the government can just apprehend anyone it says is in the Alien Enemies Act group, which in this case is Tren de Aragua, and deport them. and people were being deported to El Salvador to the Cicott prison. Now, there was two iterations of this case. The first one started in D.C. where Judge Bosberg had said that the government couldn't do this, and there was the debate about the flights and the debate about whether there should be contempt. But nevertheless, the Supreme Court comes in and says, no, no, no, all of that was wrong. None of that should have been filed in D.C. These kinds of cases should be filed as habeas cases.

18:33Now, mind you, there was a decision a couple of years ago where Justice Alito had said no more habeas for immigration. But nevertheless, I think that these facts on the ground concerned the Supreme Court so much, they said, well, you got to be able to file something. So fine, we're back to habeas again. So you've got to file them as habeas cases. And the habeas cases have to be in the locations where people were being detained. Well, where were people being detained? They were being detained all over Texas. So there were district court decisions all over Texas. But now, finally, the main case reaches the Fifth Circuit and the Fifth Circuit grants the preliminary injunction preventing the removal of the petitioners who were the Venezuelan nationals that the Trump administration wanted to deport under the Alien Enemies Act.

19:21Federal judges in Colorado, New York and Texas have ruled that Trump improperly invoked that act. How did the Fifth Circuit come to that same conclusion? The Fifth Circuit in a two-to-one decision said that at the end of the day, the Alien Enemies Act doesn't justify their removal because there isn't a declared war and that the actions of this Trenda Aragua gang do not constitute an invasion or a predatory incursion by a foreign nation or a government, which requires, in their view, military-like actions directed by a foreign power. They're saying this is more of sort of a gang or criminal type of thing, but it isn't actually a military incursion.

20:05They don't even get into anything about whether these individuals specifically are members of Trente de Aragua or anything like that. They just say that this invocation of the Alien Enemies Act is unlawful, and so it cannot be used to create deportation without due process. Now, they did say if the Trump administration wants to deport these people, they can deport them under any other grounds that's permissible. The boarder czar Tom Holman and others in the administration kept saying that the Venezuelans were terrorists. Was that part of their legal argument? Well, first of all, you're correct that there's a very concerted effort, even in this bombing that occurred this week with the Venezuelan drug lords on the boat, that everybody's calling them in the administration terrorists to try to link that with some sort of military-like action directed by a foreign power to get it as close as possible to the Alien Enemies Act.

21:02But what this court is saying is that's not really what these people are. These people are not being instructed by the Venezuelan government to come to the United States and commit war acts against the United States. These are just individual criminals trying to profit off of drug and gang activities. They're not soldiers or quasi-soldiers acting on behalf of the Venezuelan government. This is a Fifth Circuit decision, the most conservative appellate court in the country. a George W. Bush appointee and a Biden appointee in the majority, and in dissent, a Trump appointee. What did the dissent argue?

21:40Well, the dissenting judge, who used to be the Solicitor General of the state of Texas, a very well-known, strong conservative judge, Judge Oldham, he basically argued that the Alien Enemies Act is something that is so broad in terms of the congressional authority that the courts really don't have a role in reviewing a presidential determination under the Alien Enemies Act. Basically, what he was saying is that the courts should not second guess when the president says there's a war, because this can lead to very dangerous circumstances in that, you know, you have the president who has all of this sort of expertise in the sense that they have the Defense Department and the CIA and the Department of Homeland Security and the NSA, to do all of this work and consultation.

22:31And if they make a determination that there is a dangerous environment akin to the environment that's required under the Alien Enemies Act, for the courts who are just judges sitting there in, you know, Louisiana or Texas or wherever they're sitting, that don't have all of this access, to be able to come in and say, well, well, we don't actually think this rises to the kind of war-level threat that is required under the Alien Enemies Act. He's saying that it's incredibly dangerous because what is the limiting principle there? Now the judges can decide what is a war, what isn't a war, and that's not what Congress had intended here.

23:12The problem with that is, at the end of the day, if you really have no limiting principle on the Alien Enemies Act at all, including whether it can be invoked and who it can be invoked against, then at that point, I mean, there really would be no way for either you or I or any of your listeners to go into court if we were mistakenly apprehended by ICE. ICE could say, you know, Leon or June, you're members of this Trenda Aragua gang and we're sending you to El Salvador. And you could say, yeah, but I've never visited Venezuela and I don't even know any Venezuelans and I'm not a member of a gang.

23:47I host the Bloomberg show. And it won't matter because there's no court to bring it to. And so I don't think anyone will be fully comfortable with that kind of decision. And I don't think the Supreme Court was comfortable with that, which is why they didn't issue that decision. And moving forward, I don't think they're going to get there in terms of to just not have any due process determination as to these decisions. Yeah, a Colorado judge called that argument nonsense. It's a difficult argument to make. I mean, look, it all depends where you're approaching this from. If you're approaching this from a belief system that everybody in the world acts in good faith, then you could conceivably understand.

24:33You'd say, well, why would a president ever want to do something like this, put someone in a detention if it wasn't absolutely necessary. But if you were to approach it from the perspective that sometimes people don't act in good faith or sometimes people make a mistake, then maybe you do need some due process in that system, because otherwise what is checking those kinds of abuses from occurring? The ruling could be appealed to the full Fifth Circuit or could be appealed directly to the Supreme Court. Is there any reason to bother going for an en banc hearing at the Fifth Circuit when the case is just going to end up at the Supreme Court anyway?

25:12You know, right now, the government doesn't have the strongest hand. And maybe, you know, the government wins in the Fifth Circuit fully. And so then it would be the onus then on the foreign nationals to actually then appeal to the Supreme Court. So from that perspective, they may want to strengthen their hand. But honestly, if the Trump administration is trying to really say, hey, these are the most dangerous people in the world, and we need to get them out as soon as possible, asking for en banc review of the Fifth Circuit doesn't seem to make a lot of sense, because why are you delaying getting to the ultimate outcome here?