🗞️ Biden's Debt Bullies, The Twitter Showdown Heats Up, & Does Apple Have A New Suit?
This Week: Biden's debt relief plan gets pushback, The Twitter showdown is becoming a who's-who of Big Tech, and Apple is staring down the barrel of an antitrust suit. Plus, Tesla sends its own cease-and-desist and a look at equality in law school faculties.
President Biden made good on one of his campaign promises last week by announcing that he would cancel some $10,000 worth of student loan debt per American — and up to $20,000 when including Pell grants. Nearly as soon as the announcement was made, however, Republican politicians and conservative figures began chastising the move. Among them, Georgia Congresswoman Marjorie Taylor Green told Newsmax, "For our government just to say, 'OK, well your debt is completely forgiven'... it's completely unfair," reports CBS News. The White House quickly responded with a tweet stating "Congresswoman Marjorie Taylor Greene had $183,504 in PPP loans forgiven."
Beyond debt forgiveness, the Biden plan will further hold a freeze on student debt repayment (which began at the start of the pandemic) through January.
More than 40 million Americans are estimated to have a combined $1.7 trillion in student loan debt, adds CBS News.
The Brookings Institution notes that four years after graduation, Black Americans hold an average of $53,000 in student loan debt, compared to White Americans holding $28,000.
Former baseball pitcher Curt Schilling was another vocal critic of the debt relief announcement, tweeting "this isn’t loan forgiveness, it’s a generation of lazy unaccountable uneducated children being covered by hard-working debt paying Americans." Many on Twitter were quick to call out Schilling for this comment. Back in 2012, the six-time baseball all-star secured a $75 million loan guarantee from the state of Rhode Island for his video game company 38 Studios. The company failed, and the state taxpayers ate the costs, writes CBS Detroit.
It seems the Republican opposition to Biden's plan may not have a legal counter to his actions — or at least not a clear one, so bloviating on news shows and social media is their best attack. That being said, Biden's team calling out the hypocrisy is a boss move.
🎧 What We’re Listening To
In case you've been living under a rock, Matt and Oren have been killing it on our weekly podcast (the one that follows along with the stories in this newsletter). And, well, we realized we never introduced them.
Meet Oren! Pictured: right. He’s been writing and podcasting with Lawtrades for nearly a year. He’s a writer based out of LA who’s written for the likes of Vanity Fair, Architectural Digest, and Los Angeles Magazine. Plus, he's got enough personality to keep even Matt on his toes.
The brewing courtroom battle between Twitter and Elon Musk is beginning to spill over into the highest ranks of Silicon Valley. As The New York Times reports, some 100 subpoenas have gone out across the Valley to "big-name banks (Goldman Sachs, Morgan Stanley), high-profile investors (Andreessen Horowitz, Sequoia), well-known advisers, prominent companies that employ Twitter’s board members (Salesforce, Mastercard), and members of Mr. Musk’s entourage." Jack Dorsey and Larry Ellison also seem to have been included.
The forthcoming trial will no doubt be a collection of the who's-who in Big Tech
"Every firm in the Valley is salivating like dogs trying to get in on that action," Carol Langford, a professor of legal ethics at the University of San Francisco, told The Times.
Twitter has already hired Wachtell, Lipton, Rosen & Katz; Potter Anderson & Corroon; Ballard Spahr; Kobre & Kim; and Wilson Sonsini Goodrich & Rosati. Meanwhile, Musk has retained: Skadden, Arps, Slate, Meagher & Flom; Quinn Emanuel Urquhart & Sullivan; Chipman Brown Cicero & Cole; and Sheppard Mullin.
Among those subpoenaed for this case is Peiter "Mudge" Zatko, the former security chief for Twitter who exposed significant flaws in the company last week, notes The Verge. One of Zatko's allegations is that Twitter downplayed bot activity on its platform — which is precisely the claim Musk made when he pulled out of the acquisition deal. However, Twitter's current CEO, Parag Agrawal, denies Zatko's claims, calling them a "false narrative."
The sheer dollar amount of legal fees set to be billed over this case is staggering to think about. However, with the addition of Zatko's bombshell claims, the strength of Musk's case may in fact be mounting.
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The Justice Department is mulling over moving forward with an antitrust suit against tech titan Apple by year's end, reports Politico. The suit is likely to focus on its Services business, which, according to Tech Crunch, "includes advertising, cloud services, the App Store, subscription services like Apple TV+ and Apple Music, AppleCare and more." Services are Apple's second-largest revenue stream after the iPhone itself. The DOJ has been investigating Apple since at least 2019.
Apple has been accused by numerous App Store users and competitors of engaging in unfair business practices from the likes of Fortnite, Tile, Match, and more.
According to Politico, DOJ attorneys in San Francisco have been reaching out recently "to companies that partner with Tile," and have hinted that "both Apple’s App Store and mobile phone operating systems at large are under scrutiny."
Bloomberg writes that Apple's Services business is worth some $70 billion — not bad for a company that itself has a market cap of nearly $3 trillion.
With the COVID-related shutdowns in China, Apple has seen its profits from iPhone sales hurt this year. But, as The New York Times reports, the Cupertino-based firm has been shifting its focus toward software as services, which "generated $19.6 billion in the quarter from sales of apps and Apple Music and Apple TV+ subscriptions." That equates to a 12% growth in software and services sales, which is itself the smallest increase since the start of the pandemic.
Apple has likely expected an antitrust suit for some time now, so this news comes as no surprise. For the sake of fair competition, and the overthrow of the mobile ecosystem duopoly Apple shares with Google, let’s hope the DOJ can take on such a massive opponent.
📤 What Else We're Forwarding
Tesla Tussle: After receiving its own warnings from the DMV about its Full Self-Driving (FSD) ads, Tesla is now sending a cease-and-desist letter to its critics. As Teslarati says, the company sent a CD to Dan O'Dowd for tweeting that FSD "will indiscriminately mow down children."
Pink Ghettos: A new study finds that female law deans and faculty may be more numerous than ever before, but their roles tend to be of "lower status" than their male counterparts. As Law.com continues, about 44% of current law school deans are women.
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