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Google Users Will Share $630 Million In A Play Store Settlement; CDC: New COVID Subvariant Causing 20 Percent Of U.S. Infections; Blue Origin Launches First Rock Since 2022 Crash; The Fed's Campaign To Slow the Economy May Have Worked; Remembering Supreme Court Justice Sandra Day O'Connor. Aired 3:30-4p ET

Aired December 19, 2023 - 15:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:30:00]

BRIANNA KEILAR, CNN HOST: We have CNN tech reporter Brian Fung on this story. All right, what does this mean for consumers?

BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, well, Brianna and Boris, this is a really important story. Basically, consumers are going to get refunds, as you said, but also Google is going to have to make some changes to its App Store business that could potentially lead to lower prices for consumers when they pay for in-app content or subscriptions and things like that.

But just starting with the refunds, for example, we're talking about, again, $630 million being distributed across 102 million consumers, Android users of Google's Play Store. And, you know, that could mean just a few bucks per person, but Google and the states who are part of the settlement said that, you know, everyone who's involved will get at least a couple of dollars and maybe more depending on how much you bought from the Play Store. So that could mean, you know, whether you spent a lot of money on in-app subscriptions or bought lots of apps, you might get a little bit more than $2.

Now, Google is also going to have to make some changes to its business. And one of the biggest changes is that it's going to have to allow apps and app developers to give you the choice to choose a different billing method. So, until now, you've had to go through Google's own proprietary billing system.

And, of course, Google charges a 30 percent fee for that, right? And so now you're going to be able to choose a third-party payment provider when you buy stuff on apps or buy subscriptions and things like that. And so theoretically, this could mean lower prices for in- app subscriptions, lower prices for in-app content, and that could be a real benefit to consumers. And also, for app developers who have long said that Google has, you know, charged exorbitant fees for in- app content that they then have to pass to consumers. So overall, this could be a huge change to Apple's business, and it could be, you know, really good for consumers.

BORIS SANCHEZ, CNN HOST: Yes, absolutely. Brian Fung, thanks so much.

KEILAR: Now to some of the other headlines that we are watching this hour.

A federal judge has ordered a halt to the removal of a Confederate memorial in Arlington National Cemetery just days before it was set to be fully removed. The temporary stay comes one day after the groups Defend Arlington and Save Southern Heritage Florida filed a lawsuit claiming the removal of the memorial violated the National Environmental Policy Act. A court hearing is set for tomorrow.

And in Kentucky, human remains found at the bottom of a lake 25 years ago have finally been identified as a missing fugitive. Thanks to advances in DNA, investigators now know that Roger Dale Parham was found in a lake back in 1999. At the time of his disappearance, a quarter of a century ago, Parham was on trial for several criminal charges and has been on the FBI most wanted list for years, his case now being investigated as a homicide.

And an atmospheric river. These things, again, unbelievable, could bring heavy rain to California. There is a flood watch that has been issued for over 11 million people across Southern California, including Los Angeles, that begins tonight is going to last through late Thursday. Total rainfall estimates are two to four inches for most of the forecast area, four to eight inches possible across south facing foothills and coastal slopes.

And the CDC is warning of a new COVID-19 variant that is rapidly spreading. We're going to talk about what you need to know about it next.

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[15:38:12]

KEILAR: A new COVID-19 sub variant is currently the fastest growing strain in the country. The CDC estimating that JN1 is causing 20 percent of all new COVID infections.

SANCHEZ: More than doubled in the United States between late November and mid December. Seemingly getting an assist from holiday travel and waning immunity. Now it's becoming the dominant strain in the northeast, accounting for a third of new infections in that part of the country. Let's discuss with CNN's medical correspondent, Meg Tirrell. So, Meg, is JN1 making us sicker?

MEG TIRRELL, CNN MEDICAL CORRESPONDENT: Well, the good news is it doesn't appear to be causing more severe disease than other variants of COVID. But the bad news about it is that it appears to have some kind of advantage over previous variants. And that's how it's really taking over here in the United States and around the world.

If you look at the CDC's estimates of the prevalence of this variant over time, you can see it was just about 4 percent of new cases as of early to mid-November. And that's jumped to more than 20 percent just in the last month. And that's continuing to increase. And the expectation is it'll become dominant both here and worldwide over the coming weeks. And so, you know, the thoughts about this are that it can better evade our existing immunity than previous variants. And that's really how it's getting this advantage -- guys.

KEILAR: So, the vaccine, how does it square off against this?

TIRRELL: So even though it does have these changes in the spike protein that give it that sort of evasion ability around our existing immunity, the vaccines are still expected to provide good protection, particularly against severe disease. So early research into that is pretty reassuring. At the same time, though, we are at a time when hospitalizations are climbing from COVID, and they are getting into the mid-levels and even higher in some areas of the country.

[15:40:04]

The CDC has a map that shows some areas are turning into the yellow and even the orange, which signify higher levels of hospitalizations from COVID. So, they're emphasizing as we're going into the winter season, if you haven't gotten your COVID updated booster, you should.

KEILAR: So go ahead, get the updated COVID booster, get the flu vaccine while you're at it, because obviously this is a really tough season for respiratory diseases.

TIRRELL: It is.

KEILAR: All right, Meg, thank you so much.

The second time apparently the charm for Jeff Bezos' Blue Origin Space Tourism Company, which catapults customers with deep pockets to the edge of space and back.

SANCHEZ: It did successfully launch its new Shepard rocket this morning, a day after its first attempt yesterday, had to be scrubbed over a ground systems problem. This marks the rocket's return to space after a fiery crash last year. And like that launch, this latest mission also unmanned, carrying only science experiments on board.

CNN's Tom Foreman is here with more details. Tom, how big a deal was today's test mission for Jeff Bezos?

TOM FOREMAN, CNN CORRESPONDENT: Well, it's a very big deal because it's been more than a year since the last time, they tried this.

You have to prove not just to yourselves, but to the aerospace community and everyone out there, that you're still in the game, you're still doing well. For them to take off didn't last very long. It's only seven minutes up there, and it's like most of their flights, a little quick parabola up and back down.

But it proved they could do a big improvement, and this could restart their space tourism program. That's what they're really aiming for here.

KEILAR: Yes, that's right. The coolest parabola that you can spend a lot of money for, right?

FOREMAN: A lot of money, yes. KEILAR: So, what happens next with the tourism space flights?

FOREMAN: Well, now that they've done this -- and one of the things they've tried to emphasize before is they've had six successful flights with people on board. They tried to point out that even when it failed last year in that launch, that the capsule got back to Earth safely, didn't have people on board.

But Jeff Bezos has really talked up the idea that if you do this, you're not so much feeling like you're taking your life in your hands because they have basically an exit strategy for all of this. But we don't know. We do know they want to get back to taking people up. They said that today after this test. We don't have a timeline yet on when that would happen.

SANCHEZ: Tom, we know Bezos is working on a different program. It's called the New Glenn. Tell us about that.

FOREMAN: Yes, this is done through the United Launch Alliance, which is a combination of Lockheed and Boeing all working together here. This is different. This isn't about space tourism. This is about a big, powerful rocket that would compete in that arena of taking heavier things into space.

Remember, space is all about making things light. One of the big quests right now is to be able to take heavier things up there for moon bases, for an attempt at Mars. So, when they put the New Glenn rocket up next year, they'll have a couple of different launches that are scheduled for that to prove its capability, to show what it can do out there. That's a bigger step, and that's more of the serious side of space aside from the tourism. So, a big day for Blue Origin.

SANCHEZ: If he's looking for more names to send up there just for publicity's sake, I mean, the three of us could go.

KEILAR: You guys can go. That's cool. Hey, someone's got to stay home and cover it.

FOREMAN: You think we could stand seven minutes in a small space together? I don't know. It's a long time.

KEILAR: I think we could do it.

FOREMAN: We should.

KEILAR: I think you guys could do it. And I will be here cheering you on.

SANCHEZ: We should be on there together.

KEILAR: My claustrophobia is clicking.

FOREMAN: I think I get to drive. I get to drive.

KEILAR: Thanks, Tom.

SANCHEZ: Tom Foreman, thank you so much.

When we come back on NEW CENTRAL, economists predicted the U.S. would be in a recession, but that hasn't materialized. Why it's now extremely unlikely that the country's economy is going to go in reverse?

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[15:48:08]

SANCHEZ: The U.S. may have pulled off the impossible. A soft landing, avoiding what for a while looked inevitable to a lot of experts. A recession. The Fed spent the last 20 months doing everything in its power to slow the economy, to fight inflation, without costing too many Americans their jobs.

KEILAR: This time last year, top economists were predicting a recession, and now that is increasingly unlikely. So how is all of this accomplished? We have CNN business correspondent, Vanessa Yurkevich, and chief economist at Moody's Analytics, Mark Zandi, with us. Vanessa, I do want to begin with you. Just explain to us why a recession has not happened.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, so even the Federal Reserve Chair, Jerome Powell, says the economy is doing a lot better than even he expected. And while we don't see a recession this year, we certainly can't rule it out for the future. But let me give you the cliff notes on why we haven't seen a recession.

As you mentioned, the Federal Reserve has raised interest rates by 11 times over the past two years or so. And what that has done is cooled down inflation. You can see it right there. The interest rate hikes that we've seen, there's been obviously a pause in the last few months. But the big question was whether or not that was going to throw the economy into a recession. But we have not seen that.

And it was also a big concern about what it would do to unemployment. But over the last year, we have seen 2.6 million jobs added. The unemployment rate is below 4 percent. It's been below 4 percent for two years now.

And also at the same time, you saw wages rising and consumers spending. And many consumers ended up sitting on the sidelines when it came to big purchases, though, like housing.

[15:50:00]

But just in the last week or so, when the Fed announced it was pausing rates, we've seen mortgage rates come down below 7 percent for the first time since August. And we have seen really good news in the last two days from homebuilders. We've seen more people building homes. And we've seen homebuilder sentiment on the rise for the first time since August. You can see there just in November alone, housing starts, which means new home constructions, up 14.8 percent. And then inflation, the thing that's been plaguing so many Americans

for so long. Inflation has been cooling, not exactly where we need it to be, but at 3.1 percent, and what producers have been paying, 0.9 percent. Those are relatively good numbers, not where we need to be. But listen, there's a lot of paint strokes that paint this picture about the economy.

The good news is that everyone seems to agree that we are moving in the right direction. It's sort of the holiday gift that people weren't expecting but are getting this year. And a lot of Americans can feel really encouraged. But the fight continues, guys. It's not over yet.

SANCHEZ: Yes. Mark, are you surprised the U.S. was able to avoid a recession or has been able to avoid one so far?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, it was going to be tricky. I didn't think the economy a year ago, if we had forced this conversation, we probably did. I would have said no recession, but it's going to be pretty darn close. And we need a little bit of luck and some reasonably deft policymaking by the Fed to get through without a recession. And we got a little bit of luck, and we got some reasonably good policymaking and navigated through without an economic downturn.

But there's a bunch of reasons why I think the economy kind of hung tough here. I think at the very tippy top is the fact that consumers, you, and I as spenders, kept on spending. And as long as that's the case, the American economy will continue to move forward.

And that goes to lots of jobs. That goes to low unemployment, below 4 percent unemployment for over two years. That goes to the fact that people were able to, particularly high-income households, middle- income households, were able to save a lot of money during the pandemic because they weren't out shopping and spending. And they could use that to kind of tide themselves over in the period of high inflation.

Stock markets at a record high. Housing values at a record high. A lot of good things came together to keep consumers in the game. And again, as long as consumers do their part, the American economy will continue to move forward.

And just one final point, the American economy is not only key to you and I, but it's also key to the rest of the world. The U.S. economy, U.S. consumers driving the economic train all over the planet.

KEILAR: And you see, Mark, some of this sentiment, right? I mean, we look at these numbers. They're undeniably good. And yet some of this day-to-day spending power has diminished for people. And they really feel it. So, you know, what are you seeing there as we understand that a lot of Americans are not looking at these numbers and celebrating and saying, yes, I feel great, because they don't.

ZANDI: Yes, they don't. You can see it in the surveys. You can see it in the poll numbers. You know, people are really down on the economy. And I think, Brianna, and again, I think there's a bunch of reasons here. But at the top of the list of the reasons for the poor sentiment is that people really got nailed by the high inflation, you know. And that goes back to the pandemic, which disrupted supply chains and labor markets, and the Russian war in Ukraine, which caused oil prices, food prices to go skyward.

And that really undermined purchasing power of American households and consumers, particularly low-income, low- and middle-income households. And here's the thing that really, I think, is why people are so upset, is that most Americans -- I'm old enough to have experienced the high inflation of the 70s and 80s. I remember that. But most Americans aren't. They've never experienced anything like it.

And the other interesting thing about inflation, you know, the rising prices, is somehow it feels unfair. It's unjust. I mean, how could it be the case that I'm paying so much more for the same thing that I bought a month ago or a year ago, that someone's got to be ripping me off? And so that makes people really upset, and I think that's, you know, what we're seeing in the sentiment polls.

One final point. If I'm right, if my diagnosis is correct, that means, you know, as we move forward here with inflation back down and incomes rising, you know, the economy is doing well, that people will feel increasingly better. Not next month, next quarter, but by this time next year, if we're having this conversation, I suspect people will be feeling -- not only will the economy be OK and good, but people will recognize that and feel it.

KEILAR: Yes, let's hope. Mark Zandi, thank you so much for being with us.

ZANDI: Thank you.

KEILAR: And we'll be right back.

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[15:59:18]

SANCHEZ: Today, the nation is remembering the late Supreme Court Justice Sandra Day O'Connor, the first woman to serve on America's highest court. Today, her family, friends and the nation's top leaders gathered at the Washington National Cathedral to honor the trailblazing justice at her funeral service. Remember, she passed away earlier this month at the age of 93.

President Biden was on hand delivering one of the eulogies.

(BEGIN VIDEOTAPE)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Gracious and wise, civil, and principled, Sandra Day O'Connor, the daughter of the American West, was a pioneer in her own right, breaking down the barriers in legal and political worlds and the nation's consciousness.

[16:00:00]

To her, the Supreme Court was bedrock, the bedrock of America. It was a vital, a vital line of defense for the values and the vision of our republic, devoted not to pursuit of power, for power's sake, but to make real the promise of America.

(END VIDEOTAPE)

KEILAR: Justice O'Connor served on the Supreme Court for more than two decades and was at the center of some of the most consequential decisions impacting the lives of all Americans.

SANCHEZ: Thanks so much for joining us. "THE LEAD" with Jake Tapper starts right now.