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Feb. 3, 2019 - Sargon of Akkad - Carl Benjamin
25:08
The FTC Complaint (#PatreonPurge 9)
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Hello everyone, I'm interviewing Lior from the channel YouTuber Law.
As I understand it, Lior is an attorney and he has filed a complaint over the Patreon debacle with the FTC.
Now, I'm actually not an expert on these things, so I don't know what that means.
So hopefully Lior will be able to explain to us.
How are you doing, Lior?
I'm doing great.
Thank you so much for inviting me.
Oh, it's my pleasure.
Thank you.
Right.
So would you like to tell people about what's going on?
Well, I mean, it all started, obviously, when people heard that you got booted off of Patreon.
Initially, people asked me for an opinion, and I did, first I did a video pretty much kind of repeating stuff I've said in the past that, well, you know, like it or not, it's a free speech right to those to corporation and they're allowed to ban you.
People definitely were not happy with that kind of a response, although that's been the response for like a year and a half on lots of different people, lots of different cases.
So I came back and said, well, let me give you solutions.
And I listed a bunch of solutions.
Again, difficult solutions to come up with, you know, how you could actually fix the situation from a legal perspective.
And I wasn't intending to go beyond that.
So I did two videos on that.
And then, because it happened within a span of less than a handful of days, Subscribestar gets its payment facilities removed.
And to me, that sounded really weird because I've never heard of Subscribestar.
I didn't know anybody who've ever heard of that company.
It was learning afterwards, it was pretty much a brand new company.
It'd been operation for like a year.
Didn't really have a lot of creators on it, a lot of people subscribing to it or donating through it.
It wasn't expressive.
People, when they were looking at what happened to Gab when it came to PayPal, said, you know what, Gab was somewhat expressive because it's been on for a while.
There were lots of people.
You can agree or disagree about whether or not it's extremist or not.
I have no idea because I was on it.
I never thought of it more than a platform, really.
But okay, they've got a story to tell at least.
This company had no real story.
It was just an empty vessel that was the unintended beneficiary of what happened to you.
Because so many people were upset.
Suddenly there was all this attention on a company and it gets its payment facilities pulled by PayPal.
And then a day later, I believe, Stripe.
And I said, well, this makes no sense.
And it seems to me that the only way to explain it is through a form of collusion.
And that's illegal.
So I was thinking about it for a few days.
And I said, you know what?
Nobody's going to do anything about it.
There's no antitrust attorneys who are involved.
YouTube doesn't have that many attorneys on its platform talking about this stuff.
Let me start the process.
I think I can do it by myself.
So I made a video saying I'm going to file a complaint with the Federal Trade Commission claiming, basically asserting that PayPal, Stripe, and Patreon broke the law through an illegal collusion, basically antitrust provision.
And that was the video.
And that's how it started, basically.
That started the entire process.
It's basically besides filing lawsuits in court, which is very difficult because to prove in court collusion and to get past the motion to dismiss where it ends really, really quickly, you have to go through a certain hurdle that we can talk about, but it's very difficult.
So a lot of the cases get dismissed.
But through the FTC, there is a chance because I think I can prove, bypass that hurdle.
I can go to the FTC directly.
I don't need a client.
You're not my client.
I don't know you.
First time we ever spoke, Subscribestar is not my client.
I'm an American.
I'm allowed to file a complaint on my own.
People do it all the time.
Non-for-profits do it all the time on behalf of the public.
It's a public interest complaint.
I can do it.
I can file with them.
They have enormous amount of power.
This is what they do.
It's an agency that is not beholden to the president or to Congress.
It's very independent.
A bunch of attorneys that do this for a living, they actually deal in antitrust and also unfair competition.
I just have to make the case to them.
And I just outlined the kind of stuff that I would have to do to get there.
And that's what I did in my video.
And that's really what I've been working on ever since in the past month.
Right.
Okay.
So how long a process is this?
Because I get the, I mean, I'm personally still involved in a lawsuit with another YouTuber because it's just dragging on, even though I think it's going quite well in my favor, but I just waiting.
So what kind of timeframe does this take?
Okay, so the first time frame is how long it will take for me to actually file the complaint.
And when I initially thought about it doing it on my own, I thought that this will be, could take me a year because I can only maybe devote a day, a week, because it's going to be very costly for me to do it on my own.
So that's what I anticipated.
But almost immediately there was so much positive response from people online and so many people asking, can I volunteer?
Attorneys, law students, people in IT, people, various part of tech engineers, because there's a lot of different components involved here.
Business analysts, then it's just right now the past month, I've been working largely on outlining the complaint, on building a team and interviewing a lot of people and trying to work with them to slot them into different position.
I think we have as of today like 80 volunteers.
You know, 30 or 40 have already been put in specific groups and I'm working on specific tasks.
So I anticipate they will move a lot faster than I thought originally.
Hopefully within anywhere from 122 days to six months, you'll be able to get the process finished.
Now, that does not end the process.
It's like what it will take to file a lawsuit versus how long it will take to actually resolve it.
That truthfully can take up to two years through the Federal Trade Commission because if they accept it, then they do all the investigation.
They on their own, they can write subpoenas.
They can demand documents.
They don't have to go to court.
So it's a very powerful agency.
So it takes them for a while to collect the information, analyze it, get into negotiations with the other side.
So the process can be, I'm hoping that the process to get it accepted and started is fairly short, no more than six months.
Maybe I can do it even faster if I can manage the organization better.
But how long the FTC takes to go through, that can take upwards of two years.
Right, I find that really interesting.
Just the fact that the FTC, if they take this on, can do this.
Because I mean, I considered my deplatforming from Patreon to be illegitimate and unjust.
But I mean, at the end of the day, it's a market and there are alternatives.
And I was happy to use the alternatives.
And PayPal stepping in and Stripe stepping in and shutting down the competition was incredibly suspect to me.
So, I mean, do you think that the FTC will view it in the same way?
Or do you think they'll take a different tank?
No, I think that's exactly it.
I think that if all I ever spoke about is everybody that got deplatformed, I don't think it would have gone anywhere.
The very fact that you have a market-dominating company, right?
Because PayPal dominates the online payment processing.
In the United States, like 75%.
And once you start adding some of the other things that it owns, like Venmo, it starts creeping up.
You add to it Stripe.
Together, they are pretty much the online payment processing.
So losing them is effectively killing off a company.
Over time, obviously, subscribestar found something else.
But the dominant power of those two companies have an incredibly anti-competitive impact.
And that's what the FTC is concerned with.
Ultimately, it's charged with making sure that the market is competitive.
It doesn't guarantee results, but it wants to make sure that competitors have a chance to compete in the market effectively.
Yeah, because it is monopolistic, isn't it?
The way that just essentially owns, I mean, it's what Patreon themselves refer to as like the integrated global payment network.
And that seems to be the main concern that they have.
And it seems that these companies have their own particular interests of what they consider right and wrong and who can and can't use these things.
But I still have accounts with these companies.
You know, these aren't shut down for me.
So the fact that they would go after Subscribestar after people move to them seems unbelievably suspect.
But right, okay, so like, can you take me through the sort of steps of your own involvement as you anticipate it going into it?
Because I don't really know anything about this.
So it's all quite opaque to me.
Okay, so I mean, the step right now, I've already drafted how the complaint, I anticipate the complaint to look like, which is not going to be any different than a complaint you've seen in court that identifies, starts with a summary, but then identifies the parties, the jurisdiction, then get into fact, you know, what happened, where I describe essentially, I have to describe you, your background, you getting banned, the same thing about PayPal, Patreon, Stripe, just describing what happened.
So it's more of a statement of fact, then get into the legal arguments.
And I basically drafted right now focusing on two particular legal claims.
One is being, both of them antitrust.
One being collusion, basically an act by PayPal and Patreon together toward killing off a competitor of Patreon, effectively.
The other one is basically abuse of monopoly power, what PayPal is permitted to do given its control of the market, which is separate from what Patreon did to you.
So those two claims, there's potentially a third one, but it's somewhat of a different one.
So it's a question of what I do it.
So I drafted that.
And then I showed conclusion and what I'm asking the FTC to do and resolve it that way.
So basically, since that point, so many people have been basically have been asking to join in this.
So divided it up into like five units because it's not just about me submitting.
Because yes, I can do a phenomenal job on the complaints.
It's a work of art, if you can call it that.
Doesn't mean anything whether or not the FTC will accept it because there's a million things they can look at.
For them to choose one thing or another, it has to rise to a certain level of importance for them.
Right.
So, well, the president cannot tell them what to do.
He can ask them to do that.
That will be obviously a lot of pressure.
Congress cannot tell them what to do.
They can ask them.
They may take on a case because Congress wants it.
But a lot of this stuff, they simply take it on their own.
The majority of the cases are taken on their own.
They choose it.
And it's usually about how important it is.
You know, there's a groundswell of complaint that gets against somebody, somebody, let's say a YouTuber who is cheating people out of their money, that becomes a big issue enough of public interest, they take it on.
So the likelihood of it being accepted, and a lot of it depends on how successful I am and now part of a group, really, how the group is in raising how much social media attention there is on it, whether or not we can get some of the not-for-profit organization that usually are players in this market, like the Electronic Frontier Foundation, various not-for-profits that are involved in privacy and basically internet access,
that can we get them to either join in the complaint or maybe write Anarchist, which is basically friend of the court that can write their own shortened version telling the FTC why it should take.
So to be successful requires a lot more than just a lawyer writing a complaint, requires somewhat of a PR campaign to raise the importance and also explain to the FTC, like, well, this might be describing a small little triangle.
You know, should you care about, you know, Carl, Patreon, and subscribe Star Wall?
No, because there is a lot more behind it.
So you need to look into it because there's been lots of deplatforming of individuals and been other platforms that against that essentially that have been attacked by having their facilities removed, domain names, servers, or payment facilities.
So it's a small case, but it's really important because we see a lot of parallel actions relative to it.
And that's why.
So I'm confident if we can do a good job at it, it will be accepted.
But it's a big process.
So is there something that people in the general public can do, like emailing the FTC or something and registering their voicing their complaint there or something like that?
Oh, so there's a lot of things that people can do.
And that's part of what as a group, as a volunteer, we need to set up for people.
So when it actually gets filed, yes, the idea will be that every individual affected or everybody with an opinion would then be in a position to write as well by simply sending something to an email address at the FTC in support of the complaint.
So that's something we would go to them once we are ready to file.
Exactly.
And to do that, we need to build some of the tools and some of the stuff so that people can easily have the information in front of them to submit to it.
So that's part of it.
A lot of it right now is making connections because we need to make connections with these not-for-profits.
So they know what we're talking about.
So maybe they'll feel comfortable joining and supporting this process.
So a big part of it is us talking and talking to other people.
So it raises the profile of this so that because that just helps later on.
Anytime, like everything on social media, people care about it today, do they care about it tomorrow?
So if we're able to keep it in the news, it has a greater chance of doing.
And they'll be also trying to build the tools, allowing people to submit those complaints also to their local representative, their senators, because again, any sort of request by Congress can also have a massive impact.
So those are tools and capabilities we're building.
Same time, people are obviously volunteering.
So that's a big help.
Obviously, a lot of people working on a project and providing their expertise.
And frankly, financial support, that's a big stuff because that determines how much time I can devote to it ultimately.
Yeah.
I mean, money makes the world go around.
It's just the way things are.
So I can't remember the lady's name, but the head of Patreon's trust and safety team worked for PayPal for eight years.
Is that something that's going to sort of count against them, do you think, in this?
It will be in the statement of facts.
In and of itself, it's not sufficient because there have been other cases where that happened.
And the argument is, well, in tech, everybody circulates among different companies.
That is not enough to show the court would look to see, do you have any proof that they're, let's say, regular calls or regular meetings, they're having lunches, stuff like that.
And the difficulty with that is that you often don't know until you start in a court will be discovery.
In this case, it will be, you know, once the FTC subpoenas the information.
So unless you have a whistleblower, you don't know what happens on the inside.
So it's a statement of fact that would tend to support the idea that the FTC should get into it and actually seek the information, but it's not in and of itself sufficient.
Right.
Okay.
So what do you think will happen if everything goes exactly according to plan?
What do you think the end result will be?
Well, for me, success is not the end result.
I believe right now the success, I mean, I think there's enough evidence to support the idea that the FTC should investigate.
And for them, investigation, again, subpoenaing all the internal confidential information, take a look, look for collusion and improper monopoly behavior.
For me, that would be successful.
If it comes back out and says, look, we looked through everything and we found no instance of collusion, fine.
I will say that's fine.
But given this particular action, which I think PayPal made a mistake by acting so quickly against Subscribestar, but given this scenario, I think that there's enough evidence.
So for me, success is them saying, we've started the investigation.
They're sending subpoenas.
So that's all I'm asking for.
I'm not telling them how to conclude because that's be, you know, a lot of people see parallel actions and say, well, there has to be collusion.
All these companies, it can't be that Apple bans Gab and then PayPal and then, you know, I don't know, GoDaddy and everything.
There has to be collusion.
Well, it might be, or it might be just companies looking to one another and copying one another, not really colluding, but copying them.
So I don't have to jump to a conclusion except to say that given the standards of what's in the law, what the courts have said about antitrust, what's required, there is now enough evidence for that investigation to start.
Well, that's really interesting because Jack Conte did say in his interview with Dave Rubin that the heads of the tech giants in Silicon Valley are all very friendly with one another.
And they do spend a lot of time talking and having lunches and whatnot, which, I mean, that's surely not going to help his case, is it?
No, that's nice evidence to be able to put into the complaint saying that there's an acknowledgement that they seek advice from one another and they seem to be following.
It's almost mentorship sometime from one another.
And I can see if my mind was more conspiracy-minded, I can see somebody, a company like Patreon, which is a relatively small company relative to the other big guys, listening and following the advice or the requirements by PayPal or potentially from Visa MasterCards or whoever is actually defining those, what's permitted and what's not.
Yeah, yeah, yeah, I think so.
So, I mean, what are the possible outcomes of this?
Like, so, you know, assuming they take on the case and they investigate, and let's say they find, you know, a meeting between someone from PayPal and Jack Conte or something like that.
And, you know, there is some kind of evidence comes out.
What potential ramifications could this have Patreon and PayPal?
Well, the number one reformification is just millions of dollars of fines.
So this is not a lawsuit where I'm gaining anything.
It's all money that collected by the government, right?
But the number one is usually injunction.
You are forbidden from doing something.
Usually the fines are usually enormous.
I've had clients, entire business been killed off by the FTC because those fines are massive, depending on the scope of the wrongdoing that they find.
If this is one instance, is this part of a larger set of actions that they've conspired against?
So it's usually defined, obviously, at extreme situation if it's purely based on improper behavior by a monopoly, in this case, PayPal.
There could be a breakup or a separation of different facilities, you know, whether or not, you know, your ability to directly deal with people may be separate from your ability to sell your facility to third parties, so to websites, you might have to make distinctions on that.
So, but that's unlikely.
The United States does not like to break up companies.
So that does not normally happen.
It usually is injunctions with supervision.
So if they feel that it was too egregious, happened with Amazon, with Microsoft years ago, they'll put somebody in your office that has to sit on meetings.
They put essentially a watchdog on you, depending on if they feel that it's too egregious your behavior.
And then a lot of money.
Really?
That's very interesting.
Right, Kevin.
So I'll obviously leave a link to your channel in the description of this video so people can come and keep a tab on what's happening.
And I will obviously follow this myself.
But if people want to get directly involved, I mean, I assume that donating money to help you do this is a given.
But assuming, like, there's...
You froze.
Sorry, have I frozen, have I?
Again, yeah, it's okay.
I think you're good now.
Right, okay, great.
I'll start that bit again instead of that.
So I'll leave a link to your channel in the description, obviously, so people can keep a tab on what's happening and follow the case as it matures.
And obviously, if people want to help you directly, then a donation is very useful, obviously.
But is there any, I mean, what can people do if they want to become more involved and actually join one of your teams and help you out?
What sort of facilities and skills do you need?
So right now, the easiest way to help in any which way just to go to the website at youtuberlaw.com.
It'll give basic directions of the kind of facilities.
Normally, I mean, just join Subscribestar, made sense.
So people want to go to Subscribestar, but you can also do it directly through YouTuber Law and a number of different ways if they want to financially support.
They also found a link to the Discord server.
There's a couple of Discord server, which is serving as the front end to a lot of people joining.
And basically, they also, so people start basically joining like a public forum.
At that point, I actually interview each and every single individual.
It can take me sometimes days on end when I'm speaking to people, but I speak to each person individually, see what they want to add, how they can fit into it.
And then they get slotted into different groups.
And then I'm working on kind of tasks and outlines for each one of these groups, depending on what's needed to support the final complaint.
Great.
So what kind of skills are you looking for, particularly?
You can always use more attorneys and more law students.
That's for the legal group.
There's also a business analysis group.
As you can imagine, we're talking here about market power and the impact that actions have on the competitiveness of the market itself.
So we have essentially a business analysis group that are working through data.
What is PayPal?
How do they control the market?
What's the impact of their actions?
They're sensitive to price changes.
It gets very, very detailed.
And we have some really good data analysts there.
But it's about searching for information and going through them.
There's a lot of information to really go through to really analyze that.
So people that are interested in business analysis.
And then there is kind of the tech.
So whether or not we need for web designers to people in security and running servers.
We're building some tools as well to enable people to help out the general public to submit information to FTC or to Congress.
So it's kind of a varied.
I mean, we really literally are getting people from, I don't have any real skill, at which point we're getting them slotted into kind of content and social media and stuff like that so they can help at least in the promotion of it versus people that have specific skill that want to work on it.
So I guess finally, do you have a name for this project?
Because it sounds like it sounds really necessary.
And it sounds like something that I, I mean, I completely support what I've heard so far.
And it sounds like it's going to go on for quite some time.
So, I mean, I figure you need a catchy name for this so people can use a hashtag and you know, like help raise awareness, get this sort of stuff trending.
I'm completely with you, and I have no clue whatsoever.
So we so people submitted a lot of ideas.
I'm not that crazy about any of them.
None are really catchy.
So I need a hashtag.
So I'm thinking maybe of doing like a video asking people to submit and maybe do a competition to see what kind of a hashtag would win out.
But I really don't know.
So far, all the hashtags that have been suggested are very clinical, really boring to talk about.
So that's something that definitely needs some assistance on.
So I figured I'll throw it out there.
I'll see who comes up with it.
Okay.
Well, for anyone watching, well, do check out Leo's channel.
I'll leave a link in the description.
And if you're interested in helping, obviously go and sign up to his Discord and help out.
And if you're just watching casually, do us a favor and help us figure out a hashtag, some kind of name for the project, because I'm terrible with naming.
But Leo, thank you very much for joining me.
I really appreciate it.
And I'm sorry it took so long for us to have this conversation.
Oh, no, my pleasure.
Thank you so much.
I appreciate it.
All right.
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