Neil I. Patel
Appearances
Decoder with Nilay Patel
The AI election deepfakes have arrived
Welcome back. So we've talked about what the companies that make software and hardware can do about the creation of deepfakes. And it seems like the best answer we have right now is adding watermarks to AI generated content. But the real problems are in distribution. Let's talk about the distribution side, which is, I think, where the real problem lies.
Decoder with Nilay Patel
The AI election deepfakes have arrived
If you make a bunch of deepfakes at your house with Donald Trump and you never share them with anyone, what harm have you caused? You start telling lies about both presidential candidates and you share them widely on social platforms that go viral. Now you have caused a giant external problem. And so it feels like the pressure to regulate this stuff is going to come back. to the platforms.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Now we're headed into the big, noisy homestretch before Election Day, and the use of AI is starting to get really weird and much more troublesome. Elon Musk's X has become the de facto platform for AI-generated misinformation, and Trump's campaign has also started to boost its own AI use.
Decoder with Nilay Patel
The AI election deepfakes have arrived
And again, I think the desire of the platforms to moderate waxes and wanes, and it feels low right now, maybe it'll ramp back up. Where are the platforms right now with the deep fake distribution problem?
Decoder with Nilay Patel
The AI election deepfakes have arrived
The one platform that stands out to me, and you and I have talked about this a lot, is YouTube, which has an enormous dependency on the music industry. The music industry is not happy about AI-generated covers using the voices of its artists. Notably, Fake Drake caused a huge kerfuffle. Universal Music Group went to Google. They announced some rules.
Decoder with Nilay Patel
The AI election deepfakes have arrived
They're going to prevent deepfakes or allow some licensing of the money to flow back to the artists. That is a very private industry. sort of licensing scheme that sits outside of the law, it sits outside of the other platforms. Do you think YouTube is going to lead the way here because it has that pressure or is that just a one-off to the music industry?
Decoder with Nilay Patel
The AI election deepfakes have arrived
I feel like politicians are always asking for donations. Maybe that's just the way to solve the problem. You just pay for the lies as long as politicians are getting paid. From what I gather, particularly Donald Trump, as long as he's getting paid, he might be cool with it.
Decoder with Nilay Patel
The AI election deepfakes have arrived
For the most part, these AI stunts have been mostly for cheap laughs, unless Taylor Swift decides to sue the Trump campaign. But as you'll hear Addy and I talk about in this episode, there are not a lot of easy avenues to regulate this kind of media without running headlong into the First Amendment, especially when dealing with political commentary around public figures.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Outside of YouTube, which does have this big dependency on the labels and licensing and so I think is leading the way on having any particular policy with specificity, do any of the other platforms have ideas here that are more than we have an existing policy and we'll see how it works with the problem?
Decoder with Nilay Patel
The AI election deepfakes have arrived
Is that shipped yet? I feel like we've been talking about C2PA and the content authenticity initiative. We've had Dana Rau, Adobe's general counsel, on the show. He said the deepfake of the pope wearing a puffer jacket was, quote, a catalyzing event for content provenance, which is an amazing quote, and all credit to Dana for it. But there's people wanting to do it.
Decoder with Nilay Patel
The AI election deepfakes have arrived
There's the activity we see, and then there's shipping it. Has that shipped anywhere? Can you go look at it?
Decoder with Nilay Patel
The AI election deepfakes have arrived
Well, unless the labels are in their face, right? Unless you are scrolling on TikTok and you see something and TikTok puts a big label right over the top of it that says, this is AI, which doesn't seem to be happening anywhere. OpenAI did Sora, its video generator. The videos are compelling, although they have some extremely terrifying errors in them.
Decoder with Nilay Patel
The AI election deepfakes have arrived
There's not like a big label on them that says this is AI generated. Like they're going to travel without the context of open AI having produced them to promote their AI tool. And even that seems dangerous to me.
Decoder with Nilay Patel
The AI election deepfakes have arrived
There's a lot going on here and a lot of very difficult problems to solve that haven't really changed since we last talked about it. Okay, AI deepfakes during the 2024 election. Here we go. Addie Robertson, how are you doing? Hi, good. You've been tracking this conversation for a very long time. It does seem like there's more nuance in the disinformation conversation than before.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So we've talked a lot about what the platforms can do, what the AI companies can do as private companies, these initiatives like content authenticity. That's a private framework. The government has some role to play here, right? The big challenges are the First Amendment issues.
Decoder with Nilay Patel
The AI election deepfakes have arrived
exists in the united states and that really directly restricts the government from making speech regulations and then you know we are a patchwork of state and federal laws what is the current state of deep fake law are you allowed to do it are you not allowed to do it how does that work it's mostly a small patchwork of past laws a huge number of laws of varying likely constitutionality that people are debating and not a whole lot at the federal level
Decoder with Nilay Patel
The AI election deepfakes have arrived
Let's start with non-consensual deepfake pornography, which I think everybody agrees is a bad thing that we should find ways to regulate away. A solution to revenge porn broadly on the internet is copyright law, right? You have made these files with your phone or your computer. someone else distributes them, you say, no, those are mine. Copyright law will let me take this down.
Decoder with Nilay Patel
The AI election deepfakes have arrived
When you have deep fakes, there is no original. It's not a copy of something that you've made or that you own. You have to come up with some other way to do it, right? You have to come up with some other mechanism, whether that's just a law that says this is not right, or it's some other idea like the right to your likeness. Where have most of the existing laws landed there?
Decoder with Nilay Patel
The AI election deepfakes have arrived
There are a bunch of state laws around non-consensual AI-generated pornography. What states are those, and is there any federal law on the horizon?
Decoder with Nilay Patel
The AI election deepfakes have arrived
It's not just Russia made people elect Trump, which is I think where we were in 2016. Can you just give a background? What's the shape of how people are thinking of disinformation right now?
Decoder with Nilay Patel
The AI election deepfakes have arrived
The idea that someone should be in absolute control of a photograph of themselves has only gained prominence over time. Emily Ratajkowski wrote that great essay for The Cut several years ago, where she said, a street photographer took a photo of me, and I put it on my Instagram, and I'm suing him to say that I can take his photo because it's a photo of me.
Decoder with Nilay Patel
The AI election deepfakes have arrived
And that is a very complicated argument in that case. But the idea that you should be in total control of any photo of you, I think a lot of people just instinctively believe that. And I think likeness law is what makes that have legal force. But you're saying, oh, there's some stuff here you wouldn't want to pull under that umbrella.
Decoder with Nilay Patel
The AI election deepfakes have arrived
We have to take another quick break. We'll be right back.
Decoder with Nilay Patel
The AI election deepfakes have arrived
We're back talking with Verge Policy Editor Addy Robertson about why it's really hard to limit either the creation or sharing of deepfakes. So that's the philosophical policy debate. You want to restrict this because in many cases it can be used to do very bad things.
Decoder with Nilay Patel
The AI election deepfakes have arrived
There's some things that we absolutely want to forbid, but if we let that get too wide, we're going to start running into people's everyday speech. We're going to start running into absolutely constitutionally protected speech, like documentaries, like news reporting. That's pretty blurry. And I think the audience here, you should sit with that because that is pretty blurry.
Decoder with Nilay Patel
The AI election deepfakes have arrived
On the flip side, there are two bills in Congress right now that purport to restrict on this stuff. There's something called the No Fakes Act, which is Chris Coons, Marsha Blackburn, Amy Klobuchar, Tom Tillis.
Decoder with Nilay Patel
The AI election deepfakes have arrived
And then after the Taylor Swift situation on X, there's something called the Defiance Act, which stands for the Disrupt Explicit Forged Images and Non-Consensual Edits Act, which is quite a lot of words. Do they go towards solving the problem? Do you see differences there? Do you see them as being an effective approach?
Decoder with Nilay Patel
The AI election deepfakes have arrived
That is the likeness law approach to it, which has big problems of its own. Another approach we've heard about on Decoder is rooted in defamation law. So Barack Obama was on Decoder. He said there are different rules for public figures than 13-year-old girls. We're going to treat them differently. We should have different rules for what you can do with a public figure than teenagers.
Decoder with Nilay Patel
The AI election deepfakes have arrived
We should have different rules for what is clearly political commentary and satire versus cyberbullying. And then Senator Brian Schatz was recently on and he said something similar. Is defamation where this goes? Where it's, hey, you made a deep fake of me. Maybe it's my likeness. But you're actually defaming my character. And you did it on purpose.
Decoder with Nilay Patel
The AI election deepfakes have arrived
And that rises to the level of you knowingly telling a lie about me. And defamation law is what's going to punish you for this instead of some law about my likeness.
Decoder with Nilay Patel
The AI election deepfakes have arrived
One thing we constantly say here at The Verge is that copyright law is the only real law on the internet because it's the only speech regulation that everyone just kind of accepts. Defamation law is not a speech regulation that everyone just accepts. It has boundaries. The cases go back and forth. The idea that there should be a federal right to likeness doesn't even exist yet.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So that feels like it will be very controversial if it happens as a speech regulation. But at the heart of that is the First Amendment, right? People have such a strong belief in the First Amendment that saying the government should make a speech regulation, even if something is really bad, is an extraordinarily complicated and high barrier to cross. Do you see that changing in the context of AI?
Decoder with Nilay Patel
The AI election deepfakes have arrived
We spent a lot of time talking about the visual side of it. We're going to make deep fake images. Those images have real world harms, especially to young people, especially young women in an election cycle, making it seem like Trump or Biden fell down the stairs could be very damaging. There's also the voice side of it, right? Where having Joe Biden do AI generated robocalls is a real problem. Uh,
Decoder with Nilay Patel
The AI election deepfakes have arrived
or convincing people on TikTok that Trump said something he didn't say is a real problem. Do any of these laws address that aspect of it?
Decoder with Nilay Patel
The AI election deepfakes have arrived
What about a fake Joe Biden, Joe Rogan podcast on TikTok?
Decoder with Nilay Patel
The AI election deepfakes have arrived
All right. So we've arrived at what I would describe as existential crisis. Many, many problems. One set of things that should clearly be illegal, which deepfake nonconsensual pornography seems like it should clearly be legal. Everything else seems kind of up for grabs. How should people be thinking about these challenges as they go into this election year?
Decoder with Nilay Patel
The AI election deepfakes have arrived
Thanks again to Verge Policy Editor Addie Robertson for joining us on Decoder. These issues are so challenging and she always helps me understand them so much more clearly. If you have thoughts about this episode or what you'd like to hear more of, you can email us at decoder at theverge.com. We really do read every email and we talk about them quite a bit.
Decoder with Nilay Patel
The AI election deepfakes have arrived
You can also hit me up directly on threads on that reckless 1280. We also have a TikTok. It's a lot of fun. Check it out. It's at DecoderPod. If you like Decoder, please share it with your friends. Subscribe wherever you get your podcasts. If you really love the show, hit us with that five-star review. Decoder is a production of Verge and part of the Vox Media Podcast Network.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Today's episode was produced by Kate Cox and Nick Statt. It was edited by Callie Wright. The Decoder music is by Breakmaster Cylinder. We'll see you next time.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So the platforms are getting tired of this is worth talking about for one second longer. There was a huge rush of how do we make ultra sophisticated content moderation systems? And I think the pinnacle of that rush was Facebook setting up its oversight board, which is effectively a Supreme court of content moderation decisions. And that was seen as, okay, Facebook is as big as a state.
Decoder with Nilay Patel
The AI election deepfakes have arrived
It has the revenue of a state. It's a government now. It's going to have some government-like functions to regulate speech on its platforms. That didn't pan out, right? The oversight board exists. It moves very slowly. It's, I think, hard for the average Facebook user or average Instagram user to think there's a moderating force involved. on content moderation on this platform.
Decoder with Nilay Patel
The AI election deepfakes have arrived
It's the same as it ever was for the user perspective, as far as I can tell.
Decoder with Nilay Patel
The AI election deepfakes have arrived
I wanted to bring that up specifically because that was the pinnacle, I think, of the big thinks about content moderation. Since that time, the companies have all done lots of layoffs. We've seen trust and safety diminished across the board. I think most famously with Twitter, now X, Elon Musk basically decimated the trust and safety team on that platform.
Decoder with Nilay Patel
The AI election deepfakes have arrived
It appears Lindy Iaccarino is trying to bring some of them back. But the idea that content moderation is the thing these platforms have to do is no longer in vogue, I think, the way it was when the Oversight Board was created.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So yeah, let's go through the new players and how they might turbocharge the disinformation conversation now. And then let's talk about what might be done about it. I do just wanna emphasize for the audience, it doesn't seem like the desire to regulate information on social networks is nearly as high as it has been in the past.
Decoder with Nilay Patel
The AI election deepfakes have arrived
And I think that is an important thing to start with because the technical challenges are so hard that wanting to solve them is actually an important component of the puzzle. But let's talk about the actual technical challenges and the players behind them. OpenAI, that's a new company. There are a lot of other new companies in various stages of controversy.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So Midjourney exists, that is an image generator. Stability AI exists, another image generator. They're getting sued by Getty for using the Getty library, allegedly, to train images that look like Getty photos. in this context, very important. MidiJourney is getting sued as well. OpenAI is getting sued for training on the New York Times database.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Just a few days ago, OpenAI announced Sora, its text-to-video generator, which frankly makes terrifying videos. All those videos look terrifying. But you can see how... A enterprising scammer could immediately use that to make something that looks like compelling video, something that didn't happen. All of these companies talk about AI alignment, making sure AI doesn't go off the rails.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Where's the AI industry broadly on we shouldn't do political deepfakes? Do they have a unified point of view or are they all in different spots? How's that working out?
Decoder with Nilay Patel
The AI election deepfakes have arrived
One challenge here in America is the existence of the First Amendment. The Biden administration recently did an executive order saying, don't do bad stuff. And these companies all agreed, OK, we won't do bad stuff. But the United States government is pretty restricted in saying you can't make deep fakes of other people because the First Amendment exists and it can't control that speech directly.
Decoder with Nilay Patel
The AI election deepfakes have arrived
Are the companies rising to that challenge and saying we will self-regulate because the government can't directly regulate us?
Decoder with Nilay Patel
The AI election deepfakes have arrived
Hello and welcome to Decoder. I'm Neil Apatow, Editor-in-Chief of The Verge, and Decoder is my show about big ideas and other problems. We're on a short summer break right now. We'll be back after Labor Day with new interview and explainer episodes, and pretty excited about what's on the schedule.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So you've got a handful of companies with varying sets of restrictions, a broad general industry consensus. We shouldn't do deep fakes. And then you have reality, which is that there are deep fakes of celebrities all the time. There are deep fakes of teenage girls in high schools that are getting circulated on private message boards. It is happening. What can be done to stop it?
Decoder with Nilay Patel
The AI election deepfakes have arrived
Let's start with the second one, which I think has the more obvious answer. Saying no deepfakes are allowed whatsoever seems like it comes with a host of unintended consequences about speech and also seems like impossible to actually accomplish. because of the existence of open source tools. Like I think, how would you actually enforce a total ban on deepfakes?
Decoder with Nilay Patel
The AI election deepfakes have arrived
And the answer is that Intel and Apple and Qualcomm and Nvidia and AMD and every other chip maker have to prevent it somehow at the hardware level, which seems impossible. The only example I can think of where we have allowed that to happen is that Adobe Photoshop won't allow you to scan and print a dollar bill
Decoder with Nilay Patel
The AI election deepfakes have arrived
which makes sense, like it broadly makes sense that Adobe made that deal with the government. But it's also like, well, that's about as far as you should let that go, right? Like there's a point where you wanna make a parody image of a Biden or a Trump, and you don't want Photoshop saying, hey, are you manipulating a real person's face? Like you're saying, that seems way too far.
Decoder with Nilay Patel
The AI election deepfakes have arrived
In the meantime, we thought we'd reshare an explainer that's taken on a whole new relevance these last couple weeks. It's about deepfakes and misinformation. In February, I talked with Verge Policy Editor Addie Robertson about how the generative AI boom might start fueling a wave of election-related misinformation, especially AI-generated deepfakes and manipulated media.
Decoder with Nilay Patel
The AI election deepfakes have arrived
So a total ban seems implausible. There are other things you could do at the creation step. OpenAI bans certain prompts that violates their terms of service. Getty won't let you talk about celebrities at all. If you type a celebrity's name or basically any proper noun into the Getty image generator, it just tells you to go away.
Decoder with Nilay Patel
The AI election deepfakes have arrived
There's a lot of conversation about watermarking this stuff and making sure that real images have a watermark that say they're real images and AI images have a watermark that say they're AI images. Do any of those seem promising?
Decoder with Nilay Patel
The AI election deepfakes have arrived
The part where you restrict the prompts. OpenAI restricts the prompts, Getty restricts the prompts. It's pretty easy to get around that, right? The Taylor Swift deep fakes that were floating around on Twitter, they were made in a Microsoft tool and Microsoft just had to get rid of the prompts. Is that just a forever cat and mouse game on the restrict the prompts idea?
Decoder with Nilay Patel
The AI election deepfakes have arrived
That's the creation side. We need to take a quick break. When we come back, we'll get into the harder problem, distribution.
Decoder with Nilay Patel
The AI election deepfakes have arrived
At the time, the biggest news in AI fakes was a robocall with an AI version of Joe Biden's voice. It's been about six months, and while there hasn't been quite an apocalyptic AI free-for-all out there, the election itself took some pretty unexpected turns.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
And there's added complexity here because of the intricate relationship between Google's ad products and its search engine, which afforded Google the scale and resources and quite honestly cash flow to grow far faster than its competition. especially through aggressive acquisitions.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Acquisitions have definitely been a major theme here. Google started out as just a search engine 25-ish years ago, but it quickly acquired its way into being a major advertising player. Has that come up?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
A lot of people think letting Google acquire DoubleClick just wasn't a great idea, especially now that Google has allegedly used it in a monopolist kind of fashion. Did it get looked at at the time?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Right after Lauren talked to us for this episode, another major witness took the stand. Neil Mohan is now the CEO of YouTube. He's actually been on Decoder before, but he joined Google as part of the DoubleClick acquisition way back in 2008. The DOJ's lawyers brought Mohan in to grill him about something called parking.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Basically, the government's claim is that Google uses its immense market power and resources to buy up any company that looks like it could become a competitor in the ad tech space, and then basically sets it aside. Instead of using the company, the tech, or the people, Google allegedly just parks it out of the way somewhere so it can't cause any trouble.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
See, while Google figured out how to put ads on the search results page all by itself, it had to acquire its expertise in many of the other forms of online advertising like display and video ads by buying competitors.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
So DoubleClick and a ton of other small companies are part of Google now. They scrambled the eggs, you can't unscramble them. What is the DOJ's argument about what Google's doing with all of that power?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
You spent a lot of time in your reporting during the first week of the trial talking about something called UPR. Can you expand on that? What does that mean? Why does it matter?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
It then spent many years integrating and combining those companies and their products into a wildly complicated system known as an ad tech stack, basically an all-in-one shop for businesses and websites of all sizes to buy and sell ads, creating, arguably, the world's most sophisticated digital ad network.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Why did Google have those rules? Were they designed to keep customers from going to competing ad exchanges?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
To hear the rest of the industry tell it, Google maintained the dominance of that network pretty ruthlessly. Most people just see the cuddly side of Google, not the side that makes money. And that side is just as cutthroat and competitive as any big business.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
We have to take another quick break.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Verge senior policy reporter Lauren Feiner has been at the courthouse in Alexandria, Virginia, basically every day this month to hear testimony from news publishers, advertising experts, and Google executives that make sense of what's going on. And ultimately, to see whether a federal judge hands Google another antitrust defeat.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Welcome back. Verge senior policy reporter Lauren Feiner is here explaining what's going on with Google's big ad tech antitrust case. The case is still happening. It's about to wrap up its second week of government witnesses, and then Google will be able to present its side of things for a few weeks. It's definitely too early to say how this case might play out.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
But looking forward, if Google should end up losing this case, what kind of outcomes do you think we might see?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Meanwhile, we're still waiting on the remedies portion of the search case to play out. There's been some reporting that the DOJ is considering requesting a full breakup of Google, but it doesn't have to officially submit its suggested penalties to the court until the end of the year. So that's going to take a while.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Is there any chance the outcomes in that case could affect the ruling in the ad tech case?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
So I asked Lauren to join the show this week to help me break it all down and get her take on which direction she thinks this case is headed next. Before we get into it, though, I want to take a moment to zoom out to the big picture. There's a lot of vocabulary here, and don't worry, I'm not going to explain all the fine details of how internet advertising works.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
There's a lot going on in the antitrust world right now. The amount of enforcement has just ballooned these last few years. Since the 80s until pretty recently, companies have been allowed to get bigger and more powerful. But regulators around the world, including Lena Kahn at the FTC and Jonathan Cantor at the DOJ, have been aggressively pushing back.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
We've had Cantor on the show a couple times this year, most recently right after Google lost the search antitrust case. What's interesting about the Google cases is that they're not just the first ones to get across the finish line. They're some of the first to really even get past the starting line. For more than five years, we've heard federal regulators are looking at Amazon, Meta, and Apple.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
And while some suits have been filed, no other cases have been heard in court. Is there a reason that the Google cases have gotten the farthest the fastest?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
But there's a few key ideas we should go over just so we're up to speed on the terminology that's getting thrown around in this courtroom. At the heart of the trial here is the market for what we call web display advertising. At a high level, display advertising is the cornerstone of the digital ad market and the oldest form of advertising we have on the internet.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
In your reporting, have you gotten any sense of what the remedies in this case might look like if Google loses?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
The Justice Department isn't the only entity that's mad at Google, right? After the search trial ended, we saw some companies immediately pipe up and take advantage of the situation, either in press releases or kind of kicking Google while it was down, or actual lawsuits like one we saw from Yelp. Obviously, the search business is more visible from the outside than the ad business.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
But have you seen any companies or organizations or witnesses that might target Google with their own lawsuits about ad stuff if Google loses this case too?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
All right, we'll have to have you back on the show when the dust starts to settle. Lauren, thank you so much for joining us on Decoder.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
I'd like to thank Lauren for taking the time to join the show and honestly for sitting in a courtroom listening to ad tech testimony for several weeks. I'd also like to thank you for listening to Decoder. I hope you enjoyed it. If you'd like to let us know what you thought about the show or really anything else you'd like us to cover, drop us a line. You can email us at decoderattheverge.com.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
We really do read all the emails. You can also hit me up directly on threads on MattReckless1280. And we have a TikTok. Check it out. It's at DecoderPod. It's a lot of fun for as long as it lasts. And I have to tell you, the TikTok ban lawsuit is just kicking off now. So we'll cover that soon as well.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of The Verge and part of the Vox Community Podcast Network. Our producers are Kate Cox and Nick Statt. Our editor is Kylie Wright. Our supervising producer is Liam James. The Decoder music is by Breakmaster Cylinder. We'll see you next time.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
It started back in the early 90s with the banner ad, and it's expanded from there to include a variety of different ad formats. When you're reading a website, the ads you see most often are display ads, and the market leader there is Google. And while Google now has a lot of different kinds of ads, from search ads to video ads on YouTube, this case doesn't concern those.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
It's focused on the display ads, how they get there, and how much they cost. Behind every display ad is a supplier, the news publisher, the website owner, whoever owns the boxes on the web pages that are being filled with ads. On the other side, there's a customer, usually a company trying to sell a product or service, someone who wants to fill those boxes.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
In the middle sit the ad exchanges, which facilitate the buying and selling of ads at massive scale. Companies like Google with its Google Ads and AdSense platforms and competitors like Pubmatic. But over time, Google has come to own virtually every piece of the ad tech stack, not just the exchanges. but also the tech used on both sides of the ad transaction.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
As online advertising became more sophisticated over time, companies like Google began to experiment with technology that would automate those transactions at ever greater scale and speed through automated bidding. Think of it like countless split-second auctions that are happening across the entire internet all day, every day, often for just pennies per click. The money is in the scale.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Google recorded $238 billion in ad revenue last year, primarily from the ad products that power its search engine and the huge swaths of the web that use its related display and video ad products.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
You're going to hear Lauren talk about all of these terms, and in particular, you'll hear her talk about a company called DoubleClick, which Google purchased in 2007, and how it eventually formed the backbone of an exchange called AdX.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Virtually all of these platforms and services have since been combined and rebranded into more generic-sounding Google products, but the technology at the heart is what regulators argue allowed Google to consolidate power in unprecedented fashion. Okay, Google's big antitrust fight over ads. Here we go. Lauren Feiner, welcome to Decoder.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Let's start at a very basic level. What is this case? Who's suing Google? What's it about? Where's it being heard?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Presumably Google disagrees with all this. What's their response?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Google already lost a big federal antitrust case once this year in search. What makes this case different from that one?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Are these cases related at all? Do they stem from the same investigation or is it just two totally different things?
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Hello and welcome to Decoder. I'm Neil I. Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today, we're talking about the big Google antitrust trial that's currently taking place in a federal courthouse. No, not the one you're thinking of. It's the second Google antitrust case in just as many months.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
The search case was heard in a federal court in Washington, D.C. Is this one in the same court with the same judge? And how long is this thing going to take? Because the other case was filed during the Trump administration, which means it took four years for it to trial, and it's still not over.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Speaking of length, we have to take a quick break. We'll be right back.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
The company lost a landmark case in August in which a court ruled that it had an illegal monopoly in search. This time around, the Department of Justice is claiming that Google has another illegal monopoly in the online advertising market. Unlike the search case, the ads case is both extremely complicated and somewhat harder to see.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
We all use search all day, and we're surrounded by online ads all day. But while it's easy to talk about search, no one really wants to think about how the ads get there or how much they really cost.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
Welcome back. I'm talking to Verge senior policy reporter Lauren Feiner about Google's current antitrust case, separate and apart from the one it already lost about search last month. The Justice Department gets to bring all of its witnesses in first to this trial. It's been doing that last week and this week. Lauren, you've been in court virtually every day watching that unfold.
Decoder with Nilay Patel
Why Google is back in court for another monopoly showdown
What kind of witnesses is the Department of Justice bringing in?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
We have to take a quick break. We'll be right back.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
But it sold that stake in 2008, while also spinning off its own semiconductor business into what is now the very successful NXP. Basically, while every other company has been trying to get bigger, Royal Philips has been paring itself down to a tight focus on healthcare.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Roy and I talked about that and why that market is worth the focus and whether European companies have a different attitude towards size than American firms. And of course, we talked about AI. Philips makes complex diagnostic tools like those MRI machines and ultrasound systems. And there's a lot of interest in adding AI to these tools to help find medical issues earlier than ever.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Welcome back. I'm talking to Royal Philips CEO Roy Jacobs. We love to joke that Decoder is a show about org charts. So what does it actually look like to take a big conglomerate structure and try to stream it all for the modern age? You're halfway into a pretty ambitious three year restructuring project that you announced. As part of that, you have done or you have planned 10,000 layoffs.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's a lot of restructuring. What is the end goal? What structure do you want Royal Philips to be in?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
But I wanted to know how that actually works, and what it takes to not only develop these tools, but also to put them in place with doctors and hospitals around the world. Roy and I also talked about a serious, ongoing controversy at Philips that he had a part in.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
In 2021, after years of consumer complaints, Philips was made to recall millions of its breathing machines, including home-use CPAP machines and hospital ventilators. because the foam used in them was deteriorating and being breathed in by users, causing serious health issues. These ventilators were eventually tied to more than 500 deaths.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
You're describing going from what sounds like a very complicated matrix model to a pretty classic divisional model. You're going to have P&Ls, you're going to have segments, you're going to let people run. There might be some overlapping functions and sales or marketing or whatever inside those divisions. That's a big change.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
It's also, I just would come back around to, I talked to a lot of Silicon Valley CEOs on the show, and they're all in functional structures. Everything rolls up to them and they operate Apple, famously the most functionally organized company in the world. What are the benefits to you of being in that divisional structure? That is the big change.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
I'm not sure it's the same kind of structure that everyone else is in, but it seems like it's working for you.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Roy's predecessor stepped down in 2022 amid the scandal, that's when Roy became the CEO, and he immediately started a massive restructuring plan to rescue a company in crisis. including several waves of planned layoffs. But although Roy wasn't in the top job, he was with Phillips throughout the entire decade the faulty machines were being sold.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Even at Philips for a long time, you obviously worked inside of that complicated matrix structure. Was it just like a huge relief when you got to say, look, we just need to be divisions?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
These are all big decisions. This is the other big decoder question. How do you make decisions? What's your framework?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's reporting and court filings showing that Roy himself was involved in the decision to keep selling the defective machines, even though Phillips had received at least 3,700 consumer complaints during the 11-year period leading up to the recall. That's a pretty big decision with literal life or death consequences, and you'll hear us talk about it in detail.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Let's put this into practice. Philips is currently in litigation over 15 million defective sleep apnea machines and ventilators. The FDA says that led to over 500 deaths. You're under a consent decree in the United States. You have to stop selling those products. You have to give up some of your revenue on the products you are allowed to keep selling.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's compliance for five years with inspectors and regulators. There's evidence presented in court as part of this litigation that says even as questions arose about these products, you said Philips could keep selling them. How did you make that decision?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
It was not a comfortable topic, and Roy and I went back and forth on the nuances of how he made the choices he did, as well as whether the resulting scrutiny by the FDA and DOJ has changed how he makes decisions. This was a fascinating and at times tense conversation, and I'm glad we had the opportunity to talk about this part of Phillips' history in depth.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
So here, the decision was to keep selling the machines. Was that the right decision?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
I just want to stick on this for one second. I hear what you're saying, but... You don't sell safe machines and then end up with one of the most intense FDA consent decrees in recent years that has overlapping audit periods and five-year design reviews. There's a lot there that suggests the FDA doesn't agree with you. And you've agreed to this, right? You've agreed to compliance and monitoring.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
You've agreed to taking the profits from the machines you are selling and turning them over to the United States government for the period until you're in compliance. What is that disconnect? I think I'm missing something.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
All right, Royal Phillips CEO Roy Jacobs, here we go. Roy Jacobs, you are the CEO of Royal Philips. Welcome to Decoder. Great to be here. Thank you for having me. Yeah, I'm very excited to talk to you. You have made a lot of very complicated, very high-stakes decisions as you've begun the process of changing Philips over the past few years. I want to ask about a lot of them.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Have you changed your decision-making framework at all, having gone through this experience?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Let's start at the very start, though. Philips is a very old company. It's had multiple identities. It has had multiple lines of business. It's spun out some very famous businesses. You're trying to change it, refocus it. What would you say Philips is today?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
We have to take another short break. We'll be right back.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Welcome back. I'm talking with Roy Jacobs, CEO of Royal Phillips, about the direction he's trying to take the company following a massive recall and settlement related to breathing machines. Let me bring this all the way down to the ground. You are describing, and we've talked about, a restructure of the company into divisions so you can be closer to your customers.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
You can better understand who you're selling to, what they need, what their processes are. In this case, very specifically, what you had was thousands of complaints over a decade from consumers saying there's sticky stuff in their breathing machines. And that wasn't acted on until quite some time later. Will your new structure make you more responsive to consumers who are filing complaints?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
This is a hard and challenging problem with something as mechanical as a respirator or a sleep apnea machine where you can see the problem. You might even be able to hear the problem, right? We've talked a lot about what you're doing next, and a lot of it is software. It's connected services in the home. It's synthesizing a bunch of data to help make diagnoses faster. It's the use of AI.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
It is vastly harder for anyone to see the problems in software. How are you thinking about that risk and measuring that risk?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
One of the pieces of the puzzle there is the actual core AI technology you're using. Maybe for complaint management, do you have an LLM AI that's doing whatever it's doing there to manage text? Maybe that's what you're using for informatics for nurses. In imaging, which is where a lot of the promise of AI in healthcare lies, you might be using a different model.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Are you partnering with outside companies to build those models? Are you training your own foundation models? How does that work for you? We're doing both.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's a handful of radiologists in my family. Their view is over time, AI will just take their jobs away, right? In particularly, the imaging use case is so powerful. Obviously, it doesn't get sleepy. It doesn't make as many mistakes that over time that that will become automated. I don't know if they're right or wrong. That's what they tell me at parties. What's your view?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
That is the opportunity you've identified. There is a lot of opportunity there. There's a lot of reason to innovate there. One of the things that strikes me about Philips in particular is that it used to be a giant conglomerate, like a 1980s-style conglomerate that was innovating across multiple lines of business. You've been there a long time. You've watched the company kind of restructure.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Is the technology good enough to achieve a complete reinvention of that field over some period of time?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
The radiologists I know would not... would blame that entirely on the presence of private equity in their industry. But that is a different podcast. We'll come to that at a different time. Let me ask you this question.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Right now, if you use a standard MRI machine and you have some images taken and somebody reads them, gives you a diagnosis, something happens and they were wrong, you would sue the doctor, right? That's very clear. You're not going to sue the tool that they used.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Once the tool starts making decisions or assisting in making decisions even, there's a chance that the liability lies with Philips because Philips has started to make medical decisions because of the data it has. Have you assessed that risk? Because it seems like a growing piece of the puzzle. More and more of these systems are automated. We need to reallocate the liability.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Probably Decoder listeners most famously associate Philips with the Hue light bulbs. That was the lighting division that got spun out into a company called Signify. You were there when that happened. Walk me through some of this process of taking the big conglomerate and turning it into lots of little pieces. Because here in the United States, mostly what we see is conglomerates getting bigger.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
We've only got a few minutes left, and I want to come back to something you said at the very beginning of the conversation, which is part of the journey for Philips is now going home with the customer, being with the patient, providing more care in all the places. I see the big tech companies trying to do it. I'm wearing an Apple Watch. This thing desperately wants to be a healthcare device.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Right. I mean, they've got some FDA clearances for some of their functions or some things they want to do they can't figure out, like glucose monitoring. Samsung has fake metrics in its smartwatch that they won't even tell us what they mean. This is the frontier, right? Wellness in this country in particular feels like a frontier. It's somewhat unregulated.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
It is mostly full of quackery, from what I can tell. But there's a lot of data you can collect and synthesize into some advice, into some outcome. You can sell subscriptions to mattresses that keep you cool at night. There's just a whole universe of stuff that isn't very well proven. Philips has the brand, right? You're in the hospital and now you might go home with a customer.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's all kinds of things you might do. Where's the line for you?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
But do you think that data is good enough? Because this is the, this is the, I think the challenge, right? Yeah. That there's a lot of consumer level data being collected and it might not be good enough to lead to clinical outcomes.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Walk me through going through that process in reverse.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
That's the regulated side, right? You have the four streams, and there's one very important piece of that puzzle. On the consumer side, it's just the Wild West. How do you see that playing out? How do you get people to understand what's important and what's not?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Well, Roy, this has been an incredible conversation. I could keep going for hours, especially about AI and consumer, but I think we're going to have to have you back to finish that up. Thank you so much for being on Decoder.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
I'd like to thank Roy Jacobs for taking time to join me on Decoder, and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode or really anything else, drop us a line. You can email us at decoderattheverge.com. We really do read all the emails. You can also hit me up directly on threads. I'm at Reckless1280. We also have a TikTok.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
For as long as there's a TikTok, you can check it out. It's at DecoderPod. It's a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of The Verge and part of the Box Media Podcast Network. Our producers are Kate Cox and Nick Statt. Our editor is Callie Wright. Our supervising producer is Liam James.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
The Decoder music is by Breakmaster Cylinder. We'll see you next time.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
I have a lot of questions about that because so many tech companies see that as an opportunity, see it as a market. There's a lot of general, I would say, consumer confusion about what some of these numbers mean. And then there's the ongoing support. So I have a lot of questions about that. But I just want to stay on the structure for one more turn.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
A lot of what I hear about when I talk to executives at companies that are going through M&A or trying to buy something is that in the market today, what you need is scale. Scale to go buy computing capacity from a cloud provider. Scale to go buy chip manufacturing capacity from one of the fabs. Scale to go into market internationally because you can only hire so many software developers.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Scale, scale, scale. And you're describing focus, which is often the opposite of scale. We're going to take these companies, we're going to pull them apart, and we're going to have overlapping functions, like all the way overlapping functions, different companies. Where does that push come from?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Where does the tipping point come from where you say, instead of what we need is scale and efficiency, we actually need focus, even if that comes with having literally the overlapping capabilities of two different companies?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Hello and welcome to Decoder. I'm Neil I. Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Roy Jacobs, the CEO of Royal Philips, which makes medical devices ranging from MRI machines to ventilators. Philips has a long history. Their company began in the late 19th century as a light bulb manufacturer.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
You're describing a pretty significant set of changes in how you think about Focus, how you operate the company. As you've mentioned, Philips is a very old company. The logo for Philips is still on other parts of the company. They've been spun off. The light bulbs still have the logo on them.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
How do you convince other people, consumers, healthcare professionals, patients, that the Philips you're describing today is actually Philips without all of the history and all the interconnected signifiers, that logo being everywhere?
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
And over the past century and change, it's grown and shrunk in various ways. That famous light bulb business? Yeah, it was spun out into a separate company called Signify in 2018, which now makes and sells Philips-branded light bulbs like the popular Hue line.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
There's an incredible history of this sort of thing at Philips, which has had a hand in basically every part of the electronics business you can think of. This is the company that invented the cassette tape. It helped to invent the CD with Sony. It's made everything from radios to generators to electric shavers. It was even a founding investor in TSMC, which now dominates chip manufacturing.
Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
A very dumb question. When you approve the purchase order for light bulbs across all of your facilities, do you only buy Philips light bulbs from Signify? Of course, we have the preferential purchase order for Signify.