How Apple lost control of the App Store

26:09Right. Instead of 30, they picked 27%. And every developer that's in this record as well says, well, Stripe is going to cost us more than 3%. Yep. So this is just not worth it to us. And Josh says, well, that's just not right. Like, you just picked a number because it sounded good. And you know that developers aren't going to leave. Like, here's all this evidence of these executives talking about how developers won't leave. The only person, by the way, who comes off looking good in this entire sequence of events, Phil Schiller. Phil Schiller. Yeah. Kudos to Phil, who was the one saying we should not take commissions and fees.

26:40You know, Phil ran the App Store for years. I think he's still, you know, he has like some emeritus role at Apple now. I think he still plays a very active role in the App Store. He's the one who talks to developers. Like, he is the face of that organization to developers. You know, he used to work with Steve Jobs very closely. I think he was there in like the power book years when Apple was not a behemoth. I think he knows what it's like to be the underdog and need those developers to do what you want them to do instead of punishing them to do what you want them to do, which is what you can do when you're very powerful.

27:14And at every turn, he's like, well, what if we do the right thing? And Luca Mastri, Apple's CFO, is like, what if we just charge them all the money we can? And Tim Cook is picking the finance team. literally the words cook chose poorly are in this decision and i look we have a lot of people listen to us we're this isn't we're not interpreting the decision this is the judge saying it as clearly as she can this is over i have made these findings a fact this is what happened and this is what apple has to do now no more excuses actually at the very end i think the last line of the ruling is there will not be another bite at the apple which you can just see her just hit and return at the end of that one and be like bang take it out of the typewriter but yeah there's something there where look I mean these are big businesses they have to print a bunch of money Apple stock price affects things like firefighter pensions in this country like these are massive load-bearing pillars of the American economy they have a lot of people that they are beholden to But you can just see that they picked the finances over the product over and over again.

28:28And if they had just figured out a way to make in-app purchases worth more to developers than leaving the ecosystem, developers, I think, would have picked in-app purchases every single time. It's just easier. And they didn't. Instead, they punished the ability to compete. Right. I mean, that's what we've been hearing from developers for years, right? And that's what Apple knew when it went from 30 % to 27%, right? Is even if it was a reasonable financial gain for those developers, which it wasn't because of like payment processing fees, the convenience kills it, right? Like the most people I have talked to over the years have always said, I'm happy to play by the platform rules as a tiebreaker just because it's simpler.

29:12It makes building my app simpler. It's easier for users who have to click fewer buttons to subscribe. Like it when it works financially, it is the better option. And so if Apple had just found a way to make itself a tiebreaker, it would have won. And instead, it way overshot. And so Judge Gonzalez Rogers just basically blew the whole thing up. Yeah. So just to sum up her ruling, it's just literally she says to summarize, the court found that Apple's 30 percent commission allowed it to reap super competitive operating margins was not tied to the value of its intellectual property and was less anti-competitive.

29:42Apple's response was to charge a 27 % commission, again tied to nothing, on off-app purchases where it had previously charged nothing, and extend the commission for a period of seven days after the consumer had left the app. So if you left the app in a link and then bought something on that website seven days later, you still owed Apple money, which is nuts. Apple's goal was to maintain its anti-competitive revenue stream. The court prohibited Apple from denying developers the ability to communicate with and direct consumers to other purchasing mechanisms. Apple's response was to impose new barriers and new requirements to increase friction and increase breakage rates with full-page scare screens, static URLs, and generic statements.

30:19The goal was to dissuade customer usage of alternative purchasing opportunities and maintain its anti-competitive revenue stream. In the end, Apple sought to maintain a revenue stream worth billions in direct defiance of the court's injunction. This is bad. That's just bad. And again, this is not – Apple says it will appeal. but this is not going to be the same kind of appeal like but in the meantime also the other thing is and and this is the flip side of what happened before is apple did nothing for a long time because it didn't have to now it has to do something like the thing that is going to change quickly is that developers are going to start updating their apps with loud aggressive ways for you to pay for the app outside of the app store because they can now like even even under the provisions before there were all kinds of wacky things right you could you could have one link it wasn't allowed to be in the normal in-app purchase flow it had to be somewhere else in the app which was like it was all design it was just shenanigans all the way down and now by the rules of this ruling i can open up my app and the very first thing it shows me is a link to go subscribe somewhere on the web it can't i can't pay in a button in the app is the one difference right Like it's still, it can send me to a website that takes Apple Pay, but it can't take Apple Pay right there.

31:40We're going to find out. We are going to find out. Because this is what I was saying about being right four years ago. Four years ago, the injunction was Apple can't prohibit developers from using buttons and external links. The difference between a button and an external link exists only in our shared metaphysical reality. Sure. Right. We all just decide that as a family, what the difference between those two things are. And like in this ruling, there are literal pictures of buttons and links that the court thinks are competitive and aren't competitive. And Apple every time chooses the least competitive one.

32:16It defines button all the way down to a piece of plain text with a little, you know, that little box with the arrow. That's a button? indicates you're about to go. They're like, that's a button. You can have that button. And the court's like, that's not a button. And Apple's like, isn't it though? And that's where we're at. And so my headline four years ago is the future of the app store depends on the difference between a button and a link. Like Apple pushed back on that hard. They're like, we, everyone knows. And then for four years, it spent time trying to convince the court that these shitty links were actually buttons.

32:50This is a real thing that happened in our nation's court system. And the judge eventually got tired of this and said not. And now she said, look, we're not arguing about buttons and links anymore. Here's what I'm saying. To make up for all of your bad behavior, you are no longer allowed to impose any commission or any fee on purchases that consumers make outside an app. And that means you have no reason to audit, monitor, track, or require developers to report any purchases or any activities that consumers make outside the app. So Apple had this ability before, but they acted badly. So the court says, nope, that's gone.

33:22I'm just taking it off the table. They're no longer, Apple is no longer allowed to restrict or condition developer style, language, formatting, quantity, flow, or placement of links for purchases outside an app. So anything, any quality of a link is now off the table. Those two things right there are the whole ballgame. It's the game. That's the App Store. That is Apple going from what it wanted to the 180 degree, not what it wanted. Like this is the worst case Apple scenario. Apple also prohibited from prohibiting or limiting the use of buttons or other calls to action or otherwise conditioning the content style language formatting flow or placement of these devices for purchases outside an app.

33:57So you can style the buttons any way you want now. So now the difference between a button and link doesn't matter. You can style them both any way you want. She had a different bullet for links and buttons. She knows what she's doing. George has figured this out. When I say this as a verged story. They are not allowed to exclude categories and developers and apps from obtaining the link provisions, which they were going to do, right? They were going to say games in particular had to keep paying the money. All those Candy Crush whales are about to get a 30 % discount. They are not allowed to interfere with the consumer's choice to proceed in or out of an app by anything other than a neutral message apprising users that are going to a third party site.

34:35So no more scary language. And they're not allowed to restrict a developer's use of dynamic links that bring customers to a specific product page in a logged in state rather than just requiring static links that make customers have to log in again. Again, this is very Vergy, right? Apple was saying you can only have static links, so you couldn't carry login tokens through the links. So you would land on Netflix.com, but it wouldn't know that you were logged into the Netflix app. You have to log in again to get your discount. Apple knows this is friction. So the judge says, no, I'm all the way to mandating the use of dynamically generated links in apps so developers can pass login states.

35:17This is the ballgame. To your point, David, this is the whole game. It's the whole thing. Apple lost its revenue stream in the App Store. In-app purchase revenue is going to go down. If they'd played ball, they could have maintained a healthy chunk of it. One thing that I don't know if anybody has looked at in like 15 years or however long the App Store has existed, what does it actually look like for Apple to compete with web purchases? What does it do? What changes now? If they have to contend with this. I mean, I can think of a million things. just off the top of my head. If you buy everything in the App Store or the Apple system, you have a catalog in one place of everything that you bought.

35:57You have a catalog of every subscription that you have. You can cancel those subscriptions. You can manage your purchases. Maybe you can transfer purchases to someone else because there's a shared, centrally maintained database of who owns what. You don't need a blockchain for that if you just trust Tim Cook to run that database. There's a million things you can do if you are the central transaction provider that Apple has not had to do or not even been pushed to do because you can't buy anything anywhere else. And so the only thing you can offer outside is it's a little bit cheaper, then you're terrified of that.

36:29But if you say to customers, protect your purchase by buying it with Apple, it will cost a dollar more, but here's all these services you get for that dollar. Like maybe that'll work. It's also easier. You don't have to do anything else. You're just like push this button. But they haven't had to have these ideas. Right. I mean, the other thing I think is going to be interesting here is we're going to see a lot of different ideas about how to solve some of this friction. I mean, it's not it's not not ironic that the simplest way to pay for things on the Web is Apple Pay. And in many ways, what is going to happen here is people are going to punt from a thing that gives Apple a huge commission to a thing that gives Apple a small commission.

37:10And that's fine. But we're also seeing pretty quickly any company that collects payments is going to try to find a very quick way to collect payments on the web for your app subscription. Like this is going to become a really interesting competitive business. Like Stripe is out here already promoting stuff that it's doing. Patreon has big ideas about what it's going to do. The quick internet transaction market has never had to be interesting in this space because there hasn't been a reason to do it. And so not only is Apple going to have to figure out how to compete, all these other companies are going to have a chance to figure out how to compete.

37:45And I think that to me is where a lot of this stuff gets super interesting. It's like Netflix is just going to want me to input my credit card number, right? But in a fair fight against in-app purchases where they are now at the same price, because they can be, because Netflix doesn't have to pay 30%, there's actually fascinating competition to see who can give me the most to be the one where I put in my credit card details. The thing that gets me at that, which I was not expecting this outcome, I knew there would be a fight about buttons and links. I just want to point this out. Yeah, we're all very proud of you, Eli.

38:20I'm very proud. If you're not proud of yourself, if you don't love yourself, you know, no one else can. Can love you back. Is that true? Let's go down that rabbit hole for a while. Should we talk about this for a minute? Is that just a Coldplay lyric? I'm not 100 % sure. All right. It's a weird time in America. I'm coursing with emotions. This outcome from our standpoint as consumers is the best outcome. Because instead of we will force the app store to compete head up against an entire other app store with different rules. and weirdo experiences and, you know, all this other stuff you're worried about.

38:58It's actually just everything's going to get cheaper in the same app store that you love today. That, Apple could have solved this so long ago. Like, it's nuts that we're talking about, like, alt store in Europe and how Epic might do Epic Games Store and we're having these pitched antitrust battles and you got to get all the way to, like, can you construct a legal argument using the existing consumer welfare standard to prove that Apple has a monopoly on its own platform. And at the end of the day, they just screwed it up and they got to the result that I think most developers wanted, which is we're still going to rely on the App Store for discovery, for distribution.

39:35And now we can just collect more margin from the things people buy in our apps with alternative payments. Or there's another version of the upside here, which is now all of a sudden there's a stuff that if you're a developer, you can put into the App Store as in-app purchases if this forces Apple to be more competitive on that front too, right? Like step one is everybody just goes and buys stuff elsewhere. But like the best case scenario is there is a step two where Apple is forced by that to be more competitive and play ball with in-app purchases so that you can start to do things like buy Kindle books in the app store again.

40:11And we've talked a lot over the years on this show about all the kinds of things that you can't do in the app store because it's not a 30 % margin business. and things like books and audiobooks are like right there on that. And so we've made the experience awful. And so if this works and becomes actually competitive, it actually turns back towards making the App Store version of everything better. I'm not counting on that because Apple will appeal to death before it allows that to happen. But like the tie here should be good for both sides. And ultimately for however you want to use the app, it should be better when these fees start to fall.

40:49point i'm glad that you have a good and kind heart because you went to people will buy art and culture more easily and i went to oh fuck the nfts are coming what can't you buy me what can't you buy in an app right now what you know what definitely isn't a 30 business or nft there's 30 of nothing is what so we'll see what happens there's that but i we i do think we're going to see a new kind of competition here yeah it's good and the the joy in the developer community yes is unreal i mean it truly is like we've just gotten an outpouring and jake i think you've seen more of these than i have even over the last several hours as this has been happening of just the grand enthusiasm from people who are like oh my god finally the day has come we can play in the app store again yeah developers are usually pretty wary about uh criticizing apple and here everybody's just like got it let's go we're ready we've been waiting for this like we we have the product ready we're submitting it like people are ready to go there was one uh ryan jones who's the developer of an app called flady that i really like it's uh i always follow flady because they're always at the forefront of like interesting apple features like whenever apple releases anything flighty is there cool great job flighty uh and uh ryan jones who runs the app tweeted so what's going to happen starting tomorrow apps in the u.s will have save 20 with apple pay type buttons right next to normal buttons or better yet only have the link out button on the paywall.

42:16Apple specifically cannot limit anything about the buttons. That's something I had not even thought of, that people might just bypass the idea of in-app purchases entirely. And when you hit the subscribe button, it might just take you to the web, which is a thing everyone is familiar with. And suddenly, so like not only do I have to compete with in-app purchases, I might be able to do away with them entirely. Yeah. And then you're still completing it in the Apple ecosystem with Apple Pay for a much lower fee. Right. The thing that I think is going to be really fascinating is if developers do this quickly enough and everything gets cheaper or more competitive or more vibrant, there's all this excitement in the developer community and then Apple appeals and starts fighting to put the genie back in the bottle, it still might not matter if they win.

43:01Because you can't be like, well, we won this court case, so everybody stop it. Go make your app worse. Yeah. Like we will have run the A-B test. They like that 30%. Look, Todd Hazleton this morning woke up and was like, I got to write this down. Like the amount of pressure on Apple is out of control right now. So we'll link that piece too. It's really good. But he just listed them. He's like, okay, tariffs. Tariffs are going to increase the costs of every product. And Apple has to figure out how to work that into its margin. The Google search remedies case, which we'll talk about in a second here, might just take $20 billion off of Apple's bottom line.

43:38And that's pure margin. Google just pays Apple$20 billion to be the default. Yeah. They might just go away. That's the, that's one of the very real results of the case that is ongoing. And then the entire part of the business that's growing is services every quarter. Now it's services. It's growing. It's not Apple TVs and Mac books. It's not the iPhone. It's not the iPad. It's services. What services? They don't want to say it. They want you to think of severance. It's not severance. it's candy crush whales. Apple's entire business has been taking 30 % of candy crush whales, and that's been growing for years.

44:16And so you're going to take that too now. So you're going to lose the$20 billion from Google. You're going to lose the candy crush whale money. You're going to increase the margin pressure because of tariffs. Wow, that whole business has changed. By the end of this year, all of the fundamentals of Apple's business will be flipped. and then what's the next turn that everyone's talking about whether you believe in or not it's ai well they had to delay their ai project like this company is suddenly like real shaky and that's not to say the iphone's bad the thing that they do is really good it is still like the centerpiece of the modern tech economy but you're just like wow all the pieces of this puzzle just got real frayed around the edges.

45:00Like, what's going to happen? How do they recover from this? And I'm hopeful there's smart, creative, really interesting people who work at Apple that they are finally forced to be creative and invent the next turn as opposed to figuring out more and more ways to extract dollars from the iPhone. Yeah, I mean, it is funny to watch this sort of rhyme with the Google trial in that if you sort of boil it all the way down, And like Apple found its version of Google search in the 30 % commission, which is just essentially a perpetual money machine, right? It is if you want to exist in the world, you have to give us money.

45:41That's that's what Google did with the Internet. And that's what Apple did with mobile. Right. And it boy, did it work gangbusters. But eventually, if you get someone who is willing to peel that apart, it becomes really hard to put back together. And like Google is furiously fighting to not have happened to it. Essentially what just happened to Apple, which is a judge says, absolutely not. You just can't do this thing anymore. I am curious if Apple, you know, still tries to pull something here. You know, the judge put some pretty strict limits on things, but Apple explored some other options, right?

46:14They were like, hey, we could charge people based on how many downloads their apps get. That's one of the things that they pulled in Europe. But they're not allowed to do it anymore. They can't condition links on that. They could just charge people. That would totally upend the App Store model. Yeah, I think if you're Apple, that's pretty dangerous. You're probably fearing this ruling, which is the goal, right? Like Judge Gonzalez Rogers here is very much attempting to strike the fear of God into this company. Like, if you cross me again, I will ruin you is pretty much the message of this thing.

46:49It reads a little like that. Yeah. I mean, it is going to be really interesting to see because I'm confident there have been meetings all day in Cupertino about maybe not how to ignore this, but how to get around it. Like, how do we keep getting our services revenue without this? And some of those meetings are about products and some of those will not be about products. But this ruling intentionally and in as many words opened the floodgates for developers. And it's basically like they get to do this now and you can't stop them or it's illegal. It also opened the floodgates for regulators. So I was talking to some antitrust people yesterday after the ruling hit and a little bit of insight.

47:36Maybe you can share that. But the overwhelming feeling was like finally someone has called Apple out on their hubris. Apple, their rep around the world when it comes to this stuff is how dare you? no, we'll fight you till you die. Arrogance and hubris, just absolutely. Like the comparison was made specifically to Google and they're like, Google's pretty arrogant and non-compliant as well, but at least they pretend that they're nice, which tracks, like totally tracks. Like Google's like, we make YouTube. Just a bunch of goofballs over here. Apple's like, we make the iPhone and none of you will ever have taste.

48:15Like we have taste. So please shut up. and like it just bit them in the ass here like they didn't have to get to this position and now they're totally constrained well and to that point one of the things apple has said over and over throughout this whole process is and every big tech company does this is they they yell and scream about security and privacy right that if you do this if you allow developers to put links in their apps it will devastate privacy on the internet people will be opened up to fraud everything will be horrible and uh all over this ruling from judge gonzalez rogers it just says that is a lie and that's not what you think that is not how you feel and i can prove it right and that is like the the stuff in this documents was you had a meeting about money and then you told a story about privacy and those two things have nothing to do with each other and i am tired of hearing the privacy story because it's about money and that is like we've all kind of known that but it's it's different to say it when you have the meeting minutes in front of you.

49:14And it's like, oh, you know what never came up in this meeting about whether it should be 27 % or 30 %? User privacy. Turns out you don't actually care except as a justification to the public who you hope don't really understand what's going on. The thing that I heard specifically yesterday when I was talking to some folks was if the DOJ is smart, they will take this ruling and amend the complaint against Apple for antitrust to include a bunch of what you're saying. Right. You can take your complaint and amend it. The complaint is basically the offense monopoly and Apple uses it to legally command all kinds of other industries.

49:50And there's a laundry list of ways to do that. Well, if you're smart, now you have a bunch of evidence that says, oh, they super do that. And you're going to amend your complaint. And all of their defense, again, which is about privacy and security and taking the best care of users, may not actually be what you're worried about. Yep. So these things begin to stack up. Like the regulators around the world are looking at this decision and they're looking at this judge saying, you know, actually, I can just body up and punch Tinkook in the nose. And they're emboldened. Like the joke I was making last night was like there are bells ringing in Paris.

50:21Like there's a bunch of happy, gray-suited European lawyers being like, finally, look. It's happened. Like someone has finally like punt, like landed a punch and it's because of Apple's attitude. And that is such an own goal. Like they did not have to get here. That said, we have a statement from Apple that says they disagree with the judge's ruling. They're going to appeal it. There's, there's an amount of, even all the statements we're getting, the indie app developers, I think are very excited. The big companies like Spotify and match groups that have been fighting this the loudest, a little more measured, right?

50:56Like they're all, The proof is going to be in the pudding, right? It's going to be the app updates. I sincerely believe the next 14 days of app updates from all of these companies is going to be fascinating. Here's the one that's going to be the most fascinating. Tim Sweeney says Epic will put Fortnite back in iOS. How? No. I was talking to Jay Peters about this earlier. Like this, this suggests that Epic has been updating the Fortnite iOS app for years waiting for this day. I'm serious. Like that is what has been going on is Epic has been waiting to win so that it can, it can victoriously and ceremoniously reappear in the app store triumphant over Apple's monopoly.

51:38And it's going to work. And I like, I guarantee you every big app developer. How will it work? So the mechanics of this case, Epic broke Apple's rules by shipping a secret update to iOS Fortnite that allowed people to purchase stuff in Fortnite without in-app purchases. Apple kicked them out of the store, said you broke our rules. Epic said, aha, it was a troll. And they filed a lawsuit. They've gotten here where Apple's noncompliance with the injunction has gotten Apple in a bunch of trouble. But Epic lost on did you willfully break the iOS developer agreement? There's nothing in this ruling says Apple has to give Epic its developer account back.

52:19So how are they going to put it back? That's a good point. So I think they do have Fortnite ready because they brought it to the EU a couple months back. Oh, yeah, that's right. Yeah, yeah, yeah. Because they launched that big game store. They had another battle with Apple over a developer account in the European Union, which Apple briefly banned. So it remains unclear to me if they have a developer account in the US or if Apple is required to, by any means, let them have Fortnite on the store. I feel like Apple's allowed to just be like, sorry, guys, we're pretty pissed about this. I will say Tim Sweeney put out what he calls a peace proposal, which is super not a peace proposal.

53:02No, it's just a knife. He says, Epic puts forth a peace proposal. If Apple extends the court's friction-free, Apple tax-free framework worldwide, we will return Fortnite to the Apple store worldwide and drop current and future litigation. It's like, yeah, if you give in completely everywhere forever, we'll give you a video game.

53:23Cool, buddy. It sounds, David, like Tim is going to come on to one of our shows soon, right? I think so. I hope so. We've asked for him. So I want to ask him very specifically how he thinks he's going to get Fortnite back in the store. All right. We should take a break. There's yet more litigation to discuss here on our tech podcast about cell phones and party speakers. We'll be right back. Amazon has everything for everyone on your list. Like your teenage son, who won't give up the peach fuzz currently posing as a mustache on his upper lip. Get him an electric razor. Amazon has early holiday deals on gifts everyone wants.

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56:00All right, we're back. Now on to active litigation. Here on the America's favorite tech litigation podcast. We opened with party speakers to draw you in. yeah if people would launch more gadgets we would talk like it's it's about to be developer conference and gadget season again and i'm very much looking wait can i sidetrack you because david there was something you wanted to talk about up front that we skipped over oh you're right so we could do a little intermission here let's let's do a brief gadget cleanser yeah uh because i i need to know nila you in particular but both of you we got to talk about the slate truck for like five minutes because we talked about the slate truck with tim stevens on tuesday show he wrote a great story for us he's written a couple of great stories for us about the slate truck i would say without giving too much away traffic to our website suggests that this is the most interesting thing that anyone has done in a very long time it's neck and neck between slate truck and calling jeff bezos a coward that's our audience that's about right yeah so let's what do you think you weren't here for our talk with tim on on tuesday what do you make of the slate truck i listened to it actually uh the other day um i loved him tim and i used to work together and gadget uh he it's so much fun when he writes for us and does stuff for us um i i'm like take my money it's i don't need a pickup truck anymore i used to need a pickup truck when i lived in the woods on an unpaved road and had to take my own trash to the dump once a week with the baby in the house which meant the trash could not stay in the house for more than two days if you understand what I'm, do you understand what the baby was doing?

57:39Babies like trash. Babies make the worst trash in human history. Yeah, that's real. It's not great. So yeah, we, you know, there was a time when I like loaded the bed of a pickup truck like several times a week in a pandemic and drove away and that was great. And then I moved to Westchester. Pickup truck was incompatible with this area. Sold the pickup truck. And then I saw the slate truck and I was like, what if? what if I found a reason to take my own trash to the jumping. But it's not a very pickup-y pickup truck. Like, I have never once in my life been like, you know what I need is a pickup truck.

58:11And I have still been on the Slate Auto website a half dozen times this week being like, I could buy this car. They did the one extremely smart thing about the Slate Auto website. Even if you're not a pickup truck person or a car person, the configurator is so much fun. Because the thing is so modular by design. They're like, I don't know. Today I want a yellow SUV. Tomorrow, a red pickup truck with a Bluetooth speaker. And they usually screw with it. I think their ability to capture the trends in cars right now with what people are doing with cars and not what, like, Ford thinks people are doing with cars is super interesting.

58:50So every, you know, car culture is dominated by people wrapping their cars. Like, all over the place, people buy, like, car people buy, you know, when you're, like, trying to buy a car, like, a used car if you're a car person, there's a party that's like, I want to make sure I get the color I want. But there's another part that is like, I know exactly what set of specs and option packages I was looking for. And the color is almost immaterial because I'm absolutely going to wrap this car when I get it. That's just a thing that happens in this world. Lots of people wrap new cars. So for Slate to say, you know what?

59:22We can just do away with a paint shop or metal body panels and assume that our customers are going to wrap the car to their specifications. There's something about that that I think is incredibly smart. Right? They're not at the what does the big company think the market wants. They're at the what is the community doing and how do we deliver to the community the product that might work. And I don't know if any of that's going to work. Right? Like it's new. I don't know if the car is any good. No one's ever driven in one. I think listening to Tim, it sounds like Slate hasn't spent a lot of time driving.

59:57It does sound like it. They've sat in it a lot. That we know for sure. but has it gone anywhere? There's something about that which I love, which is like they're at the fringe of car culture in a very specific way that I think is super cool. Yeah, that's fair. Jake, you're famously a truck guy. Everyone who knows you knows you love a cable knit sweater and a pickup truck. What do you think of this thing? I'm neither a car guy nor a truck guy, but this is the coolest truck I've ever seen. That's how I feel. This is the thing. It's like every single time I am in a car, I have a problem with something.

1:00:29The speaker system is terrible. The infotainment system is terrible. I love that they're just like, listen, you were going to be mad about it anyway. Whatever. Bring your own speaker. I don't care. You were going to put your phone up anyway. Like, just do it. It's like such a delightful approach. It feels very friendly and welcoming. And like, I kind of love that, even though it's actually like deeply for tinkerers. The big question to me, and again, not a car guy, people love really large vehicles. And they started with a truck and a small truck. Like when I see old trucks in the wild, the wild being the streets, I'm like, oh my God, they're so cute.

1:01:12Like this adorable little truck that was actually just a full-size truck from 10 years ago. So I'm really curious how that taps into the market they're going for. But it's a really cool idea. Yeah, Neelai, is there a turn towards, obviously like everywhere else it's you know the 90s and early 2000s again are we going to do that with cars are we going to go back to like you know the the cars our parents had back in the day is that is that coming because that's kind of what the slate truck is aesthetically so one i want people to go on technologically and technologically uh they're all gonna have cigarette lighters in them again it's gonna be great um i've been around with a boom box on my passenger seat for a long time like that's that's a real thing go on tiktok and just search for the ford ranger song no further commentary.

1:01:59It's just an ecosystem of content that you can be a part of. It's very good. When I say my TikTok feed is trucks jumping over stuff, I'm offering you a door. That's very good. You know, the market's distorted. The trucks are big and they cost$100 ,000 because trucks are excluded from some fuel economy standards and people buy them and then you make them bigger and then dentists can write them off on their taxes in specific ways. and then you make them cost so much money because that's just pure margin for the automaker. Like there's like a nonsensicality to that part of the market. Because when you show people a picture of like the Rivian R3X, everyone's like, that's what I want.

1:02:40I want a weird little 80s hatchback that goes 300 miles on a charge. Like, give me that. You show people a Ford Maverick, which is still huge compared to the Slate truck. And they're like, that's, I want that. Give me that. so there's a distortion in the market that i think everyone thinks is real but it's like it really is like a the part of tax is like sexual and so now it's like you can write off the full value of a giant vehicle all at once if you run a small business and you claim that yes you know your dry cleaners need the truck of this size and so people do it and like there's just a distortion in the market um and i i think this is the antidote to that in a real way but i know why car makers have been making their cars bigger i will the other thing i'm curious if the audience feels this way um i think all cars are ugly right now like they are so ugly i agree with that yeah very very few cars are just straightforwardly beautiful and this trend back to sort of classic designs like very handsome profiles i just can't come fast enough oh i totally agree we we've been lost in this like cars should look like the future thing for a while now And like there's a there's a Hyundai and Genesis dealership just down the street from me.

1:03:52And so like every day, some new stupid spaceship looking thing comes driving by my front door. And I'm like, what what have we done here? Like people love the Ionics. It's all fine. And every single one has like more weird angles. And it's like, why? These aren't cars anymore. What are we doing here? Yeah. My favorite weirdness in the current car design market is everyone has decided the headlights should be vertical. but we should still pretend to have very tiny small horizontal headlights like eyebrows and i'm like this looks horrible like if any of you looked at the cars i just don't know what's going on um so it's nice to see some classic profiles come back i think um the car's not going to ship for another year two years it's vapor tilt ships man like yep but you know who doesn't love drinking out of vaporware car.

1:04:43It's like America's favorite pastime. That's what we do here. And it's past, it's a render. So at least, at least we're past that point. It's not just a drawing of a car. It is a car. And that's, that's something. Yeah. Jake, thank you for that. I feel much better. Let's go back to the courthouse because there's so, there's so, so much. All right. All right, David, let's start with Google because it's simpler. The meta case is so complicated. It's going to take us a minute. David, you were at the Google trial in the courthouse this week with Sundar Pachai in the stand. And from what I gather, he was just there to say, please, please don't make me sell crime.

1:05:17Kind of. I actually expected him to be a tiny bit more of that than he was. And so I've been in the courthouse three out of the eight days now. And I think I've missed a couple of interesting people, but I've seen a bunch of the most interesting moments of the remedies trial so far. And the thing that has become abundantly clear is that Google is petrified of the part of the DOJ's remedies that suggests that what Google actually needs to do is take its search index, its ranking information, which is just like how it ranks all the stuff when it puts it on the page, and the query streams that it gets, which is all the stuff that people are actually searching for, and essentially give that to anyone who wants it at what the DOJ calls a marginal cost.

1:06:00Nobody knows what marginal cost is or who's going to decide. That is one of the things Google is concerned about. But of all the things the DOJ wants, that is the one that Google is terrified of. And so Sundar, when he was on the stand, spent a long time talking about how scary that is. And you could tell the line he had rehearsed either in his head or with a bunch of people who work for him at Google. I suspect both. Yeah. You think he just workshopped it in the mirror that morning at the hotel? He's just in the car on his way going, reverse engineer, reverse engineer. But his whole thing was essentially that if Google has made itself into what it is, because it has essentially out invested and out spent all of its rivals for 25 years.

1:06:47And it's true, right? Like, no, nobody has tried harder at search for longer than Google. Certainly true. and the thing he kept saying is if you do this if you take away all of the stuff that we have done and you give it to everybody else who asks for it i don't know how as google we can continue to justify investing in search the way that we have and what he said is if if you give people all this data they can reverse engineer google if you have all the information you have the order in which we rank that information and you have all the stuff that people are searching for that's the whole thing.

1:07:21That's it. You can get from there to every single thing about how Google works, is Google's argument. They don't have to give you the algorithm, but if you have the inputs and the outputs, you can figure out the algorithm. And he over and over was like, if you let people reverse engineer Google, why would I keep building Google? And it is like, just forcefully saying that over and over. And he has really interesting thoughts about Chrome because he started Chrome. Chrome was how Sundar sort of made his rise inside of Google in the first place. But the thing for him is he's like, you cannot make us give this away because it will crush Google search.

1:07:58And then the DOJ is sitting there being like, yeah, that's the goal. That's what we're here for. And so it's fascinating. Like for so much of this trial in the liabilities phase and in the remedies phase, these two sides have been talking completely past each other. Google is like, we're very good. And the DOJ is like, everything you've done is illegal. And they just have not been speaking to each other. And it was soon or was the first time that it was like, oh, we're actually all talking about the same thing now. And what Google is saying is you think that what you have to do is solve some of the problems that you've created.

1:08:31And what I'm saying it will happen is it will kill Google. And it was just it was just fascinating. And like Judge Metta, who is overseeing all of this, has asked a lot of questions about how big a deal this kind of thing would be. In the opening arguments, he asked a lot of questions about what's a behavioral remedy and what's a structural remedy. And does this change within Google search constitute a behavioral remedy, which is easier to ask for and get or a structural remedy, which is essentially breaking up Google? And Sundar Pichai's argument is this is breaking up Google. Like, he could not have been more apocalyptic about what happens if this happens.

1:09:10And it was fascinating. You know, it's interesting. There's some wonkiness about behavioral remedies and structural remedies. The behavioral remedy is we're going to change the way you act and the government will watch out. Right. Be cool. Be cool or show up. Right. We're watching you. And there's a big argument. You can actually listen to Rebecca Slaughter, FCC commissioner on Decoder earlier this week. Her argument is behavioral remedies are more intrusive. It's the government over your shoulder saying what you can and can't do. And the structural remedy where you break it up is actually the more democratic, small d, democratic solution.

1:09:51Because you're just like, well, you're broken up now. Everyone try your best. The government out. And there's some real back and forth there. Do you want a Google that has this administration sitting over its shoulder? Being like, are you behaving yourself? If you don't, if you love this administration, do you want to Google that has President AOC sitting over their shoulder saying, are you doing what I want? Like, there's a lot to contend with there in the behavioral remedy. Whereas the shock remedy might be the end of Google if you listen to Sundar Pichai. It's hard to evaluate which one's like a better idea.

1:10:25Right. I mean, it is sort of funny. I went into this thinking and I have talked to a bunch of people who confirmed that they were also thinking this people sort of in and around the trial that the the idea that Google should have to divest Chrome was the big swing. Nobody thought they would get right that this was this was the thing you performatively give up in order to get the other stuff and that it would wind down to just just don't you can't pay Apple 20 billion dollars a year that that was going to be where this landed. the DOJ has argued far more forcefully for the idea that solving search in this way is what has to happen and Google has come to believe pretty clearly that it's a real threat and that it would be much scarier like you get the distinct sense that Google would much rather sell Chrome than give up this search data well you know there's like a natural experiment for Google because they're just the default on iPhone that's like it's not iOS Chrome that's making them the money right now right it's chrome search it's it's google searches in safari right what they would lose if they lost chrome right if somebody else is operating chrome i guess the threat is that they have their own search engine or ai service to replace it but if they can still offer a cut of search traffic and just say like hey if you want to still just gonna be more google search yeah yeah you're gonna be paying a lot yeah to be clear google would very much like to hold on to chrome And Sundar talked a lot about that.

1:11:51And it's his baby. It is his baby. But also he talks a lot about the Chromium project, which he is correct in saying Chromium is the most important thing in web browsing right now. And it's a technically open source thing that Google fundamentally controls and runs and operates. He said 94 % of the code commits to Chromium over the last year have been from Google employees. It spends huge amounts of money on Chromium. Microsoft's browser is based on Chromium. Like Brave is Chromium. Almost all of the browsers people use are Chromium or Chrome. And that matters, right? Like that's a huge deal. And the idea of some other company, like I asked a person around this trial, like, is the idea of OpenAI administering Chromium terrifying to you?

1:12:40And they just laughed at me. and and chromebooks change chrome os changes like it is a huge change for google in a really meaningful way and all of a sudden the the default android browser becomes not yours which is meaningful too but but again like that is all immaterial to google if it can't win at search anymore like chrome only matters because search matters and if you kill search who cares i find this Chrome argument so disingenuous? Can I just say that? Like, I agree. Everything is, Electron is Chrome. Half of the desktop apps I'm running right now are Chromium. Yeah, that's true. Like, Notion Calendar is a Chromium app.

1:13:19Like, it's running, it's just an Electron thing, right? Like, whatever. All of those companies have an enormous incentive to make sure their apps still work and that Chromium is good. Google has an enormous incentive to make sure the Android browser is good, which means it will continue developing chromium upon which it is based so this idea that if they don't have chrome dust like chrome on windows anymore that they won't just immediately fork chromium they can't that's not allowed they're not allowed by the rules of the the remedies that the doj has proposed google would not be allowed to do that it could land elsewhere but the idea right they can negotiate their way out of that say we need to make our first party browser on Android.

1:14:03Right. A question we've gotten a bunch from folks actually is like, couldn't Google just make another browser? And there's a ton of wiggle room in it, but like letter of the law? No, it couldn't. It would not be allowed to. It just feels like that's the give and take here, right? Like, a bunch of people are still very motivated to keep Chromium going. A lot of people don't spend the money because Google will. Right. That's the interesting counterfactual. Right. But if that development moves elsewhere, it's not like all those people have suddenly lost their incentive. Like, Electron as an open source platform unto itself relies on chromium you can just see how that development ecosystem will like help it won't be as big won't be as rich right you won't get as many like you know old time classic google neckbeards like doing chromium under the good of their heart that like against no revenue which is a thing that a company at google scale can do and a company with google's culture can do like uh you know i've interviewed sooner before i'm like is ai killing the web for like an hour and he's like i love the web and it's like you believe him Because he made Chrome.

1:15:03He cares whether or not he's actually killing the web. And that was the heart of that conversation last year. I don't know what's going to happen here. It just feels very much like Google making a search a little bit more interoperable against the worry that someone will reverse engineer all of search and then make it so that Google is worth nothing to consumers is just like fake worry. There's still Google. people still say they're going to Google it. Yeah. Like you could make Bing an exact copy of Google today and people wouldn't use Bing. Bing has made Bing an exact copy of Google today and people won't use Bing.

1:15:47There's something about this that just seems, we'll see what happens. But it feels like they're making all of this, you know, it's like the smartest people in the world are saying we can't solve this problem. It just never rings sincere to me. Yeah, no, I think that's fair. And the other thing I should say about Chromium is I've talked to a lot of people who make browsers who would love for Google to be less intense about running Chromium. Everybody I talk to who doesn't work at Google and works with Chromium is like, God, it's so annoying that Google runs Chromium because what they want goes and everything they do is to benefit Google in some way.

1:16:22And wouldn't it be great if we had a neutral thing that just wanted browsers to be great? The problem is that's very expensive and no one has ever done it before. But to your point, no one has ever done that before because Google always has. So like, is there a way in the wings for this to work? It's certainly possible. The DOJ certainly believes there is. Are there scaled open source projects that run the entire world that don't have a Google involved? Yes. Linux exists. Now, does Linux have its own deeply fucked governance problems? It absolutely does. but like it exists somewhere soon our prejah just heard you comparing google to the linux foundation and started sobbing uncontrollably i'm just the whole world is like man i hope the one guy shows up to commit code to linux for free and like it works like thus far it has worked all right that's a google case where david i think you're gonna be in that courtroom a bunch uh just down the hall upstairs around uh down the hall it's it's all it's all pure chaos uh My favorite thing is, this is a little inside baseball for everybody.

1:17:28So the way this works is these courtrooms. We should say it's the meta case that's just down the hall. Oh, yeah, the meta case is just down the hall. And what I should say is the courtrooms typically don't allow any electronics at all, right? Like you can't even type on your laptop while you're in there. You can't have phones, no, nothing. So what a lot of media members do who want to like take notes and write stories, there are media rooms for each one of them. And sometimes it's another courtroom and they just get like a video feed of the trial and they watch it there. they move the media rooms around every day.

1:17:57So every morning you show up at the courthouse and it's just pure chaos of a bunch of reporters trying to figure out which room to go to. And every morning there's somebody who thinks they're in the Google trial, but is actually in a meta trial and vice versa. And the other day when I was there for Sundar, they started the morning with a completely unrelated criminal trial, just like it was just another trial that Judge Mehta is overseeing. And so for five minutes, he just had like a procedural conversation with a lawyer about when they were going to talk to this guy about his And people are like pouring into the media room as this is on the screens being like, who's in the jumpsuit?

1:18:31This is a guy in like an orange prison jumpsuit. And everybody's trying to figure out which Google executive this is. Yes. It's fantastic. It wasn't Andy Rubin. It was not, in fact. But the meta trial, there are like three. There are a lot of things going on in this meta trial. But we should note Lauren Feiner is in that. Do you and Lauren see each other in the courthouse? We do. We pass each other in the hallways a couple of times a day. That's hilarious. And Lauren has become like sort of the house mom of the courtroom. Every time I look around, she's like directing somebody where to go and telling them where the cafeteria is.

1:19:02And she's like, no, the mediums are over there. Lauren lives in the district court of D.C. And someday she will leave and she'll be on the Verge cast and it will be very exciting. But there are kind of three threads that I want to talk about from the meta trial this week. And the first is TikTok, which has come up an awful lot in the course of the meta trial. Because the like big open question for all of this, and we've talked about this, is like, what is a social network, right? And that, what was it? What was it? One day where TikTok was gone has turned into this incredibly interesting data point of who competes with who based on what happened when TikTok was gone.

1:19:40and uh tiktok's head of operations was on the stand this week talking about what reels is versus what tiktok is and how people use reels and how people use tiktok and uh how instagram has adapted reels and its own app to match tiktok but this question of like what is tiktok and how have all the other apps particularly within meta responded to it has become like one of the most important parts of this whole trial. And it's deeply bizarre because TikTok is supposed to be gone. So is it good for meta or bad for meta when people flock to its apps in place of TikTok, right? That shows that they are the sun around which everything else orbits.

1:20:25On the other hand, it shows that people are other places. It's really true. And also a lot of different a lot of different witnesses on the stand this week have been forced to acknowledge that there is nothing remotely unique about Instagram at all. I mean, over and over and over. They're like, oh yeah, Instagram's just a copy. Three other apps smashed together. Yeah, exactly. Which I've enjoyed very much. Like there was a line from, I believe his name is Aaron Pressman, or Aaron Presser, excuse me, at TikTok, who called TikTok reels and shorts virtually and deliberately indistinguishable in function and user experience, quoting something that the company had written in March.

1:21:06It's fabulous. I just love it. It's very good. But this TikTok thing, I think to your point, Jake, is like Meta is trying to prove that it has millions of competitors, right? And that TikTok competes with Instagram and Instagram competes with Facebook. And actually this is like a huge teaming ecosystem of places people hang out and spend their time. the the case against it is that facebook is a is a personal social network and that that's that's what it does and that that's where it has a monopoly and thus all the stuff that it has done is monopolistic and the the tiktok thing i think on balance probably helps meta because what they're saying is they've had executives from Tumblr and Pinterest and Strava come up on the stand and say, we're not a social network.

1:22:03We are about interests, right? Like even Twitter folks said this, like we're a place to go for things that you're interested in, which is not the same as a place to go to find people that you're friends with. But Meta gets up and is like, well, when TikTok dies, everybody comes to our app. And then when TikTok comes back, everybody leaves and goes back to TikTok. So what are we going to do? I do think it's really interesting. Like it feels to me and tell me if I'm wrong, but it feels to me like a lot of this case is premised around this idea of the personal social network, you connecting with your friends and your family, which is this very old school, old school, you know, 10, 15 years ago, I guess, vision of social media.

1:22:40And I feel like if Facebook vanished today, I don't know that there would be a one-to-one replacement, Right. That is just not how people are thinking about social media anymore, as I think, which may be. Where are my angriest neighbors to try to send their friends to jail? There is another app for that. That is true. Yeah. But like maybe that hasn't popped up because Facebook has this monopoly and they're being anti-competitive. But maybe it hasn't popped up because people just want different types of experiences on social media. And I feel like that's what we're seeing with all of these other companies that they're calling up.

1:23:13But this was Mark's insight. I mean, this is the heart of the case is Mark Zuckerberg woke up and said every so often there's a new thing that people want to do on their phones that gives rise to another social network. There's another kind of sharing dynamic. And so Facebook was whatever it was, not or not for colleges. And then he identified photo sharing on Instagram and said, I got to buy that one. And then he identified and there's all these emails where he lays out his thinking. And then he identified group messaging and messaging as, I got to buy WhatsApp. And so the point here is the anti-competitive move was to stifle the thing that could have taken Facebook's market share.

1:23:56And whether or not they could have bought a TikTok, it's like you're just getting into this place where they became so big that TikTok was too big to buy and also owned by the Chinese government or controlled by the Chinese government. It's the weirdest one. Because they did try to buy Snap, right? And Evan said no. I have this quote here from Rebecca Slaughter. She's a commissioner at the FTC. She was a Democratic commissioner at the FTC. She was appointed by Trump in the first term, legally fired by Trump in this term. But she is one of the commissioners at the FTC who voted this case out of the commission and said we should go to trial on it.

1:24:35And so I asked her about this market definition thing. I was like, this is done, right? Like Meta's narrative about this is like putting us in personal social networking is whatever. And she said, look, all antitrust cases are at market definition to a degree. It's very tortured things. It makes people hate lawyers. The concept of antitrust law is very simple. The administration of it gets very complicated. Market definition is always hard. Everyone has a different view about the right way to define a market. It all gets ligated. And then she went on to tell me. What this case is really about is whether Meta bought competitors to eliminate the risk of competition.

1:25:07That is the argument at the end of the day. Did it not want to compete on the merits, but instead take out potential competition through acquisition in order to build and maintain a monopoly in a way that's illegal? It's not more complicated than that. So I think Meta is putting a lot of stock into the existence of MeWe. It's like, here's this dumb thing we can say to make everyone think everything else is dumb. And then you have the actual Federal Trade Commission saying, no, this case is you saw Instagram as a rising threat and you bought it to kill it. And they've shown that now, I think, pretty conclusively.

1:25:38And here are all of these other threats. If you could have bought TikTok, when TikTok went down, people came to your apps. They're obviously competitors. If you could have, you would have. I don't know how this is going to go. I really don't. This case is real weird. It's like this old lawyer cliche I keep saying. If you don't have the law, you argue the facts. If you don't have the facts, you argue the law. And if you don't have either, you pound the table. This is like old law professors say this. They think they're very clever. but that's what that's what's happening here like Meta is trying to argue the esoteric law of market definition and the government is like but you bought Instagram right and that I mean we talked about this last week but that was the thing that was so damaging about the Kevin Systrom bit of it and to that point actually I think the most interesting piece of all that this week has been about WhatsApp which has come up more this week than in sort of previous parts of the testimony and it has become very clear that Facebook was petrified about what messaging apps might do to Facebook in particular.

1:26:38And it was really worried that Google was going to buy WhatsApp and turn it into a cross-platform social network, which is very funny because at the same time Lauren is hearing this, I was sitting in the courtroom listening to Sundar talk about how bad Google Plus was and get burned by the plaintiffs for how bad Google Buzz was. And they literally use that as an example of how Google is not able to take care of its users' privacy. That's how bad Google bust was. And so Google, this company that can't make a social network to save its life, Facebook is terrified, is going to spend a bunch of money on WhatsApp, make it cross-platform, and take over the world with it.

1:27:15Because to your point, they perceived messaging apps as the future of how people interact with their friends and family, which, check, correct, they won. That was it. That was exactly correct. The group chat has taken over the Facebook feed in a real way. And they were worried about iMessage and all of this stuff, right? They looked at all the messaging apps out there and said, okay, we are the place people hang out with their friends right now. That is going to move to messaging apps. It's more private. It's easier to administer. There's just a lot of reasons for it. And they went and got WhatsApp, A, because they understood that that was going to work, B, because they understood that Facebook's own stuff, including Messenger, was not going to be that.

1:27:57There's been some really interesting testimony from folks at Facebook who were just like, Messenger just wasn't that thing. It was popular, but it just, it wasn't it. It wasn't going to win. And then they were worried about what iMessage might be. Like there were questions inside of Facebook about whether Apple was going to turn on ads and more social features inside of iMessage. And Apple's just like, we're not going to do that. That's a stupid idea. We would never do that. But that's been the other thread of this is is the same thing mark zuckerberg saw on instagram which is photo sharing is is the way people are going to share going forward and he was right about that uh he was also right about messaging apps and so now the question is did uh did facebook sort of neuter whatsapp by buying it or did it help it ascend to new heights which is the exact same question on Instagram.

1:28:49Yeah. I don't know, man. My, did you look at all these cases? The end, like Apple's just first quarter of the year is like, well, Apple's going to be a whole different company. Google's going to come out of these cases. But we haven't even talked about ad tech remedies. Like that hasn't even started. You think Google will be a different company if you pull apart search? Wait until you gut the money. Google's going to end the year in a totally different place. Meta might end the year in a totally different place. Like we're in for restructuring of the internet. It's coming. Good. Something's going to happen.

1:29:21If you know what it is, by all means, tell me. I think it's party speakers.

1:29:27But something's up. You can feel it in the air. It should be exciting. It's weird. So much other stuff is so foreboding that I think this feels foreboding, but I think it's actually exciting. There's space. These companies, under all this pressure, is going to create space. Yeah. Other people are going to build stuff. You look at what happened at the Microsoft case, and it's like, because of the Microsoft case, we got Google. That's just a thing that happened, right? And we're now doing that at greater scale with a bunch of different companies all at once. And we're doing it at a very weird economic moment.

1:30:01So I think this is ordinarily a time that you would see venture capitalists just falling all over themselves to invest in everything everywhere because suddenly it feels like there might be space in tons of these markets for the first time. That's not happening because they're all in group chats being weirdos with each other. They've got dumber ideas. One of the antithesis regulars I talked to yesterday said VCs have hated Apple for so long. It is only a matter of time before the money starts flowing. I believe it. I mean, there's so much there. So we'll see. We'll see. I'm just saying it's all this stuff is happening and you can argue about the individual twists and turns, but this is the stuff that creates space for new companies.

1:30:42And honestly, it's a little exciting. All right. We got to take a break. We're going to run through this later on. It's going to happen. We'll be right back. Every great company story is defined by moments when the founders make bold decisions. These are high stakes moments that risk the business, but can lead to greatness. I'm Rolof Boota, managing partner of Sequoia Capital and the host of Crucible Moments. We're returning for a brand new season. Join us as leaders from Stripe, Zipline, Palo Alto Networks, Klarna, Supercell and more. Share what it's actually like to navigate the make or break decisions.

1:31:22Crucible Moments is back on October 23rd. Until then, Catch up on seasons one and two wherever you find your podcasts.

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1:32:33All right, we're back. I think we got it. This one's got to be short, David, this time. Yeah, I have things to do. For once, I can't just podcast with you clowns forever. We got party speakers to find. Exactly. Can someone invent a metal detector for party speakers? Think about it. My Navy ship is leaving soon, so I have to finish this podcast. Please, please, more enlisted service members. Send us photos. Neil, is it time? It's the lightning round, but is it once again that time for America? It's time. Okay. It is time for America's favorite non-food podcast within a podcast. That I feel I can say comfortably.

1:33:09Award winning. Future award. Award inventing. Proposed award winning podcast within a podcast. Brendan Carr is a dummy. All right. So another quiet week for Brendan. He did congratulate himself a lot. We just did 100 days of the Trump administration. Brandon put out a tweet with just a list of things that he says he's accomplished. Brandon believes that he's strengthened national security and advanced public safety. He believes he's protected consumers and expanded America's space economy. Brandon, all by himself. Is that Brandon's job? He's unleashed high-speed infrastructure. He's restored our leadership in wireless, which, as you know, is under constant existential threat.

1:33:51If you don't upgrade the 5G network, something China. Yep. It's just there. It's just in the background all the time. And, you know, he says he has restored free speech. So it's a long list. We'll link it. It's a tweet. Under restoring free speech, he claims that he has joined DOJ Assistant Attorney General Slater and FCC Chairman Ferguson to launch a campaign to smash the censorship cartel and restore free speech rights. which means sending threatening letters from the government about other people's speech and just upside down world all over the place with brendan so brendan's very proud of it's very trumpian everything he says is a thing that you didn't do yeah and a lot of it's just stuff the fcc does like he's like we did a spectrum off and it's like yeah it was tuesday at the fcc great what i want to call it this week is we there's a bunch of other hundred days coverage of brendan that we should call out uh we did big piece carl bode who we love working with just ran down all the stuff Brandon has done.

1:34:49It's basically familiar, I think, to Vergecast listeners, particularly listeners of America's Favorite Podcast from the podcast Brandon Carl's dummy. That piece is great. Carl is a ferocious writer. He has been the model for how I think about writing for consumer advocacy and consumer rights for a long time. He just did a great job. So go read that piece. I also want to call out, other people have started taking note of Brandon in real meaningful ways. so FIRE which is a free speech advocacy organization not without its own controversies it has a strong point of view on what case it takes and doesn't take people a lot of feelings about it you might almost call it the more conservative free speech advocacy organization I wouldn't go that far but some people do they have a long piece about how Brendan sucks like just straightforwardly FIRE published a piece called Brendan Carr's Bizarro World FCC they have a cartoon of him with a backwards FCC logo dressed up like like bizarro superman and the caption on the cartoon brendan is saying the fcc should operate as the nation's speech police we're just gonna link it a little on the nose but you know it's a little on the nose yeah but it's not just us screaming it right it is some of our nation's preeminent free speech organizations some which like i'm pointing this out just to point it out are not always aligned with what people think my politics are although i think my politics are basically like free markets are good and don't be racist which aren't exactly communist but whatever whatever you think my politics are um they don't always align with some of these groups so racism is bad they call me uncle woke you just said like eight things that people are going to make us put on t-shirts now i just want you to know that including they call me uncle woke that's that's that's just everyone who's listening please know i will make that t-shirt like what what it's so i get these notes like i did the piece about calling jeff bezos a coward i got some of the most bananas emails of all time, just like calling me like literally like, you are a communist.

1:36:45And I was like, the only political opinions I've really expressed consistently are like, free markets are good. Competition makes better products. Like, what do you want from me? Exactly. And the answer is state regulated speech. Clearly. The LA Times is a good piece about Brendan running down all the things he's done. So the coverage is out there. It's not just us. It's not just me. Uncle Woke. But as always, I want to end Brandon Carr's a dummy by saying, Brandon, I know you listen. I know you love attention. You do. You live for it. Come on the show, man. If you can defend any of this crap, you should do it.

1:37:23You should make the argument. You should say the words out loud to me and then win. Don't you want to win, Brandon? Don't you want to collect this trophy from me? I'll make you a trophy if you win that debate. And you can have it. You can tweet about it. You can show it to your buddy Elon. the offers in front of you i just i don't think you can do it so as always brendan i think you're a dummy but you are welcome on decoder you're welcome on the verge cast you're welcome to one of those you know those things that you on youtube now are like 20 kids wave flags of people sitting in the center we'll do that let's go i don't think you will because i think you're a dummy and i think you know that you can't win as always this has been brendan carr is a dummy america's favorite podcast within podcast.

1:38:02TikTok Trends with Brendan Carr is very clearly a podcast we need to launch. So, Brendan, Brendan, get at us. What's it called? Polobium? Jubilee? Oh, by the way, if there's any young reporters out there who want to profile Jubilee, email us. I'm fascinated by this entire situation. Whatever is going on there is some of the weirdest new media that has ever existed. And I don't understand how any of it works. I would like to know more. Do you want to write a feature? Send us a pitch. Love this. Jake, I have a favor to ask. I put a story that Alex Heath wrote about WorldCoin in our rundown, and I didn't read it because I refused to learn anything about WorldCoin.

1:38:48So can you explain it while I don't pay attention? David, I was worried. For folks who are watching at home, David just drops a gigantic document with a bunch of stories that we may or may not discuss. I try my best to prep for all of them. WorldCoin is so inexplicable. I spoke repeatedly with Alex Heath about this story. I've read this story. I edited this story. I still cannot truly explain what WorldCoin is, why it exists, or what it's doing. The main news, this is the eyeball scanning startup Sam Altman's eyeball scanning startup. It's an orb. They have an orb, scans your eyes, puts you on the blockchain, and that validates your ID.

1:39:37Here's the most important thing. You can now verify yourself on Tinder by getting your eyeballs scanned by Sam Altman. Yep. And when you're swiping through Tinder, that's either going to be a clear way to know that somebody is or is not a match for you. So I think that's a big upgrade. The actual news is they're bringing it to the U.S. for the first time. It's legal in most states, not all of them, but they're bringing it to the U.S. You can now get your eyeballs scanned. You can now get on the blockchain. You can now get some of the world coin. I think the idea is that this is somehow going to help authenticate humans as being humans in a world of AI nonsense happening on the Internet.

1:40:23I'm not quite sure where the crypto coin comes in. That still feels a little like fuzzy magic. It'll be worth value somehow. But yeah, the main thing is they have brought it to the US now. They're opening some stores. You'll be able to go to Razor stores. And while you're shopping for gaming accessories, you can get your eyeballs scanned and get on the blockchain. I would say everything about this feels like Mad Libs. i i still like i'm not sure how this all came together i'm not sure how they decided to partner with tinder well because they they need auth providers or they need to prove that being an provider is useful to someone so you're you're you know like you're worried about getting catfished on tinder and you're like you know what uh that's an eyeball scan that's a real person these eyeballs match yeah yeah that's like a it's like they look they did this announcement in san francisco alex heath went lots of people went yeah sam on was there people want to be there the real quotes about all of this came at a previous event that they had last october because like any startup they need scale like they need people to scan their eyeballs to make everything work and so they're announcing the u.s which will get them scale but i just want to read this quote from last year to provide access to every human we need more orbs lots more orbs probably on the order of a thousand times more orbs than we have today.

1:41:52Not more orbs, but more orbs in more places. Then they are launching a service called Orb on Demand that will let people order orbs much like a pizza you would have delivered to your apartment. So you can push a button and someone with an orb will come to your apartment and scan your eyes.

1:42:16it's so silly I love it I love it this has all completely vindicated my total uninterest in knowing anything about this story I love it look the world soon our social networks will be full of weird AI avatars all trying to bone you and marry Kevin Roos and you are going to have to push the orb button and have an orb show up at your house and verify that it's actually you who is deeply in love with Kevin and not some rogue AI. And it is me, Kevin, if you're listening. Get at me. I'm right here. I've been right here all along, Kevin. It's very good. It's very good. All right, should we do like one or two more?

1:42:54Yeah, let's do one or two more. We need like a palate cleanser. I would say we need more orbs. A thousand times more orbs is a good palate cleanser. Let's do the Trump thing really fast just so you can take another. I said palate cleanser, man. Wait, okay. Can I talk about some more AI nonsense? Yes. There's this, so Meta launched a Meta AI app and it has a social feed of things. People are just sharing their AI prompts. So you can have a conversation with Meta's AI and they don't just post the transcript. You'll be talking to it. You can hear somebody say like, hey, what kind of crackers should I eat today?

1:43:28And then the AI just is like, oh, maybe you could try a whole grain. And they're like, I don't think so. It is, I think the idea is to give people an idea of what they're supposed to do with AI. I have to tell you, this is the single strongest argument against AI that I have seen yet. If you scroll through this feed, it is just like total nonsense nonstop. It is incredible. I can't look away. It's awful. I mean, that's what they want, right? Is I want to see what, how somebody has jailbroken meta AI. You know, Mark Zuckerberg gave an interview to Ben Thompson. I think he came out today as we were recording.

1:44:04And he says explicitly the thing we were talking about a couple weeks ago. He says the future of – Ben asked Mark, like, what do you want to do with AI? And Mark is like, yeah, I want to do better ad targeting, obviously. You know, we want to help people make more content. You know, feeds full of AI content, all this stuff. And he says this thing in the middle where he's like, eventually we're going to make the ads for advertisers. And you're just going to connect to your bank account and tell us what business outcomes you want. And then we'll just, like, deliver you results. Like, we'll just have sold your products for you, which means they're going to, like, make videos of your products with AI, write the copy with AI, generate infinite amounts of creative with AI.

1:44:44Like, you're just going to, it's like literally a black box. Like, you give them some money, they make an advertising campaign, and then some of your products get sold. And that's literally his vision for the future of AI. It's so funny to put that next to the thing that meta executives have been saying for a while, which is that like a lot of people go to these services and appreciate the ads as content. And it's like there just is this belief that actually what people really want is AI made stuff like that. That is like a cultural value at meta that AI stuff is good and people will like it. And I see no evidence of that fact in the actual real world.

1:45:23Yeah. You tell us what your objective is. You connect to your bank account. You don't need any creative. You don't need any targeting demographics. You don't need any measurement, except you're able to read the results that we spit out. And it's like, you know, you guys have a lot of like ad fraud scandals. Like you're kind of famous for inflating the metrics. Yeah, give us a lot of money and trust us. We're Facebook. What could possibly go wrong? I wrote a story about this. I emailed some media people, some ad agency people. I'm just going to read this quote. This is a return. I said, can you respond to this?

1:45:53One person said, I've reacted pretty viscerally to this. I need a moment to say something smart, which is incredible. And another person did not take the time. And they just said, quote, read the results that we spit out is gold. The full cycle towards their customers from moderate condescension to active antagonism to we'll fucking kill you. Perfect. Perfect. So I suspect there's a war coming between meta and the industry. They're not happy with it. All right, a palate cleanser. Just to end it on like the nerdiest note I can end it on in a happy note. LG has spent 20 years trying to make OLED panels with blue phosphorescent backlights.

1:46:34It says it's ready to manufacture tandem panels that use both fluorescence and phosphorescence. This will bring power consumption down by 15%. There's nothing that makes me happier. None of what you just said sounds like words to me. We're happy about this. This is good. everything about the future is predicted first by what happens in display technology. It's absolutely true. Right? You can't get curved phones or folding phones without curved or bendy OLED panels. You couldn't make smartphones without thin LCDs with low power draw. You couldn't make laptops with CRTs, although some people did try.

1:47:11You see what I'm saying? You can look ahead to what the display industry is doing. You can predict the future. yeah i'm just saying 20 years in the making slightly thinner brighter better oleds are coming and something will happen that is exciting i mean i've been doing a lot of research on the sony watchman from the 80s recently for a project that will become very clear to everyone later this year uh and the the like enthusiasm for a slightly different take on a crt unbelievable yeah people were freaking out they were like they made the crt this big and said it this big. It's going to change everything.

1:47:47It didn't. I'm just saying, people react mostly to what things look like and the way you change things, how things look like, you change the display technology. So if you pay attention to that, you will know what things are going to look like and then you know the future. And you don't need an orb to do it. We need more orbs. A thousand times more orbs. That's it. That's the Virtuos. Rock and roll.

1:48:13and that's it for the verge cast this week and hey we'd love to hear from you give us a call at 866 verge 11 the verge cast is a production of the verge and the vox media podcast network our show is produced by will poor eric gomez and brandon keifer and that's it we'll see you next week.

1:48:59Liberty, Liberty, Liberty, Liberty.