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Speaker 1: Right now, though we are monitoring our DC bureau as

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Speaker 1: our Peggy columns get ready gets ready to sit down

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Speaker 1: with the head of the FTC.

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Speaker 2: Lead a Coon. Let's take it to DC.

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Speaker 1: FTC Chair, thank you so much for your time today

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Speaker 1: and for joining us.

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Speaker 2: Thanks for having me.

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Speaker 1: And it's actually fun fact for all of you. It's

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Speaker 1: the one hundred and ninth birthday of the FTC today,

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Speaker 1: So happy birthday.

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Speaker 2: Yes, joyous occasion.

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Speaker 1: So Chair con let's start with the news, because there's

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Speaker 1: a lot of it out there today. Just hours ago,

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Speaker 1: the FTC dropped a case against one of the world's

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Speaker 1: biggest companies, Amazon, and in the case, you allege that

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Speaker 1: the company is monopolizing the online marketplace in a way

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Speaker 1: that's harmful for consumers and for sellers on the platform.

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Speaker 1: But Amazon's already come out and said it's going to

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Speaker 1: fight you in terms of challenging the case, and that

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Speaker 1: the case is a radical departure for the FTC from

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Speaker 1: its core mission of protecting consumers. What is your strongest

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Speaker 1: argument in the case.

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Speaker 2: So, if this is a case about a set of

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Speaker 2: unlawful tactics that Amazon has used to maintain its monopolies,

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Speaker 2: we note in the complaint both a set of anti

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Speaker 2: discounting tactics that Amazon uses to punish any seller or

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Speaker 2: retailer that dares to discount, and ultimately these sets of

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Speaker 2: tactics deter sellers and retailers from lowering prices and closes

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Speaker 2: off an entire dimension of price competition. The other set

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Speaker 2: of tactics we note is a coercive scheme that Amazon

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Speaker 2: uses to effectively require sellers use its fulfillment service, and

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Speaker 2: this in turn ends up stunting the development of independent

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Speaker 2: fulfillment providers and ultimately also deprives actual and potential rivals

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Speaker 2: of scale. And that's really the core theme here. These

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Speaker 2: are a set of tactics, but ultimately Amazon has pursued

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Speaker 2: them to deprive actual and potential competitors of the ability

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Speaker 2: to gain scale and momentum needed to effectively compete online.

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Speaker 2: And having achieved and protected its monopoly power, our complaint

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Speaker 2: details how Amazon is now exploiting that monopoly power in

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Speaker 2: ways that harm customers, both the sellers the tens of

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Speaker 2: millions of American families that use Amazon to do their shopping,

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Speaker 2: but also the sorry both the shoppers but also the sellers,

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Speaker 2: the hundreds of thousands and tens of thousands of sellers

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Speaker 2: that use Amazon to access those shoppers, and it's done

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Speaker 2: that through actively raising prices. Amazon takes close to one

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Speaker 2: out of every two dollars from sellers that they use

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Speaker 2: its platform. It's also degraded its service by adding a

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Speaker 2: whole set of pay to play ads that make it

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Speaker 2: more difficult for consumers to find what they're looking for

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Speaker 2: and steers them to higher price products. So really encourage

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Speaker 2: everybody to read the complaint. It details all of this

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Speaker 2: conduct in great detail, and we're really looking forward to

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Speaker 2: moving forward with it.

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Speaker 1: So one of the things in the complaint is this

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Speaker 1: phrase structural relief that you're seeking structural relief in this case,

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Speaker 1: which implies a breakup. What would that look like?

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Speaker 2: So at this stage the complaint is really focused on

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Speaker 2: the issue of liability. We lay out a scheme that

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Speaker 2: we believe violates the US antitrust laws. What we note

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Speaker 2: in the complaint is that these different aspects of Amazon's

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Speaker 2: scheme have an aggregated effect, so the harm is accumulating,

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Speaker 2: there are feedback loops between the harms, and so the

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Speaker 2: net exclusionary effect of Amazon's conduct is quite significant. Ultimately,

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Speaker 2: we'll want to make sure that any remedy is halting

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Speaker 2: the illegal conduct, preventing a recurrence, and ensuring that Amazon

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Speaker 2: is not able to profit and benefit from its illegal behavior.

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Speaker 2: So right now we're squarely focused on the question of liability,

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Speaker 2: but when we get to the issue of remedy, those

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Speaker 2: are going to be the principles we'll be focused on.

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Speaker 1: So, just staying on the issue of remedy for a

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Speaker 1: minute there, what do you think the company should be

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Speaker 1: doing differently?

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Speaker 2: So the complaint lays out a set of tactics that

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Speaker 2: we believe are illegal and that are illegally elevating and

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Speaker 2: inflating prices for the American people. So at the very least,

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Speaker 2: any relief would require that the company halt those tactics.

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Speaker 2: But as I noted, effective relief also needs to be

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Speaker 2: restoring competition to this market, which we'll be asking the

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Speaker 2: judge to do as well.

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Speaker 1: And when you think about the prospect for winning the case,

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Speaker 1: how would things change for consumers and sellers if you do,

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Speaker 1: in fact win.

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Speaker 2: So this case is ultimately about competition and competition that

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Speaker 2: has been foregone because of Amazon's unlawful tactics. As the

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Speaker 2: complaint lays out as a result of that, people are

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Speaker 2: paying higher prices right Consumers are paying more than they

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Speaker 2: otherwise would. Small businesses are having to pay a fifty

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Speaker 2: percent Amazon tax right now, and so ultimately the complaint

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Speaker 2: is seeking to restore the law promise of competition. Greater

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Speaker 2: competition will mean lower prices, better quality, better selection, and

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Speaker 2: greater innovation. And that's ultimately what this case is about.

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Speaker 1: So Amazon will say that it's providing a platform that

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Speaker 1: has a mix of products on it, but also when

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Speaker 1: it comes to merchants on its platform, it's offering more

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Speaker 1: and more services to them, shipping, delivery, advertising. In terms

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Speaker 1: of why they're like the charges that they have, how

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Speaker 1: do you respond to that?

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Speaker 2: So the complaint really goes in some detail about the

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Speaker 2: different ways that this tax effectively has been increasing steadily

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Speaker 2: and the way that that can be evidence of direct

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Speaker 2: evidence of monopoly power. Interestingly, at various points, Amazon did

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Speaker 2: experiment with giving sellers more leeway to use seller fulfilled prime,

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Speaker 2: but once Amazon recognized that would threaten its monopoly power,

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Speaker 2: it twitched that off. Even those sellers were effectively meeting

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Speaker 2: the same standards that FBA does, So you know, the

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Speaker 2: complaint really goes through all of this in great detail

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Speaker 2: and lays out why we believe these are unlawful tactics

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Speaker 2: that are hurting the American people.

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Speaker 1: And you mentioned just a bit ago paid advertising that

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Speaker 1: Amazon's doing more of this, and that comes up in

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Speaker 1: the complaint as well. What concerns you there?

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Speaker 2: So, look, ads can be useful, ads can be relevant.

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Speaker 2: What the complaint surfaces is that Amazon has used ads

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Speaker 2: in ways that actually degrade the experience for shoppers, that

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Speaker 2: make it more difficult for shoppers to find relevant search results,

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Speaker 2: and that actually steers shoppers to higher price products. So

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Speaker 2: that's actually a degradation of service that we claim is

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Speaker 2: also direct evidence of Amazon's monopoly power. You know, in

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Speaker 2: a competitive world, if you have a company that's both

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Speaker 2: hiking prices and worsening services for customers, that's the type

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Speaker 2: of situation that should create an opening for rivals to

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Speaker 2: come in to attract business, to grow. But it's really

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Speaker 2: Amazon's exclusionary scheme that is keeping that from happening, and

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Speaker 2: what's in enabling Amazon to effectively be exploiting its monopoly

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Speaker 2: power with impunity.

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Speaker 1: What do you say to critics who say, by doing

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Speaker 1: these types of cases, these big swings that you're actually

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Speaker 1: getting the way of business and the free markets.

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Speaker 2: So this case is entirely pro business. It is you know,

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Speaker 2: tens of thousands of businesses that are dependent on Amazon

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Speaker 2: to reach shoppers, that increasingly are paying one out of

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Speaker 2: every two dollars, as well as being subjected to all

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Speaker 2: sorts of you know, arbitrary tactics. So we believe that

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Speaker 2: this lawsuit, if we're successful, will actually entirely restore the

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Speaker 2: promise of free competition. Our free enterprise system is one

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Speaker 2: where companies should be competing on the merits and not

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Speaker 2: be able to protect their monopoly power through illegal tactics.

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Speaker 1: If you are successful, Just going back to that question

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Speaker 1: about structural relief, could you see a world where Amazon is,

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Speaker 1: you know, not one big company, but has you know,

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Speaker 1: different parts of it and in terms of breaking it

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Speaker 1: up and having different parts of the business soul entities.

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Speaker 2: So look, we'll want to get to the question of

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Speaker 2: remedy when we get there, but ultimately the key is

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Speaker 2: going to be making sure we understand what's required in

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Speaker 2: digital markets to fully compete and what the aggregated harm

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Speaker 2: has been in these markets through Amazon's unlawful conduct and

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Speaker 2: how do we make sure that competition is fully being restored.

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Speaker 1: So a lot of people will point to this paper

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Speaker 1: that you wrote in twenty seventeen about Amazon, and they

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Speaker 1: point to that as rooted in your approach to antitrust

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Speaker 1: and what you've brought to the job. Do you feel

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Speaker 1: like today by dropping this case, you actually have come

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Speaker 1: full circle from that paper in twenty seventeen.

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Speaker 2: Look, in this job, I'm a law enforcer. It took

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Speaker 2: an oath to really enforce the laws, and this case

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Speaker 2: is the results of really meticulous, careful work by our

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Speaker 2: staff over many years. We really followed the evidence where

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Speaker 2: it took us and is the complaint details. We believe

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Speaker 2: there are facts that show Amazon is violating the antitrust laws,

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Speaker 2: and that's what the case is really about.

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Speaker 1: So this is actually not the first case that you

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Speaker 1: brought against Amazon. I believe it's the fourth, and one

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Speaker 1: of the others was more focused on Prime services, and

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Speaker 1: earlier this month you actually added three executives to that complaint.

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Speaker 1: In terms of the charges are alleging that the company

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Speaker 1: has duped consumers in terms of signing up for Prime services,

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Speaker 1: but also made it really hard to cancel. What was

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Speaker 1: what a message were you trying to get across by

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Speaker 1: adding those three Amazon executives to the case.

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Speaker 2: Look, these are decisions that we always make on a

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Speaker 2: case by case basis. There's a legal standard you have

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Speaker 2: to meet in order to show that individuals you know,

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Speaker 2: had the direct ability and authority to participate or direct

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Speaker 2: the conduct. And so you know, the the amended complaint

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Speaker 2: really lays out why we believe that's the case. We

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Speaker 2: want to make sure that we apply the law in

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Speaker 2: an even handed fashion and are not just going after

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Speaker 2: fraudsters and you know, fly by night scammers while ignoring

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Speaker 2: unlawful conduct by larger entities. And so we want to

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Speaker 2: make sure that we're even handed and applying the law

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Speaker 2: without fear of favor before.

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Speaker 1: We move on from Amazon. Because you've been very busy

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Speaker 1: at the FTC. So there's other things we want to

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Speaker 1: get to. But what's the most important thing you want

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Speaker 1: consumers to take away from how you're approaching Amazon because

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Speaker 1: it's so much of a part of different people's daily lives.

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Speaker 2: So, look, this case is about the competition that has

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Speaker 2: been lost because of Amazon's monopolization and their unlawful tactics.

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Speaker 2: And consumers should be entitled to lower prices, to more competition,

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Speaker 2: to more innovation. Similarly, sellers should be entitled to greater competition.

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Speaker 2: And this alternative universe of greater competition, greater innovation, lower prices,

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Speaker 2: better quality has been lost because of these taxs, and

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Speaker 2: that's what we're really trying to get justice for.

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Speaker 1: So one of the other things we write a lot

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Speaker 1: about in addition to big tech at Bloomberg is private equity.

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Speaker 1: And the Amazon case that came out today is a

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Speaker 1: landmark case, but you actually have a case that came

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Speaker 1: out earlier this month that involves the private equity industry,

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Speaker 1: which is the first of its kind as well. And

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Speaker 1: in that case, you're really looking at the practice of

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Speaker 1: roll ups in the private equity industry, where they're buying

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Speaker 1: multiple companies in the same industry. What concerns you there.

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Speaker 2: So this was a losses that the FTC filed last

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Speaker 2: week against USAP and Welsh Carson, the private equity firm,

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Speaker 2: And as the complaint lays out, you know, there was

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Speaker 2: this scheme here to roll up the market. There was

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Speaker 2: a concerted scheme to do serial acquisitions by a whole

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Speaker 2: set of anesthesiology practices and then after buying them, raising

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Speaker 2: the price, raising the price for Texas patients, for businesses,

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Speaker 2: and so those are the practices that were going after.

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Speaker 2: Historically there's been less attention paid to stealth consolidation through

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Speaker 2: theial acquisitions or acquisitions, each one of which may not

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Speaker 2: trigger concern but where in the aggregate you have a

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Speaker 2: roll up, and so we thought it was incredibly important

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Speaker 2: to be scrutinizing these practices. And as the complaint lays out,

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Speaker 2: you know this ended up monopolizing all sorts of markets

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Speaker 2: in Texas, ultimately raising prices. We also in the complaint

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Speaker 2: detail certain price setting agreements as well as market allocation

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Speaker 2: schemes that we think also unlawfully resulted in Texas businesses

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Speaker 2: and patients paying more than they otherwise would have.

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Speaker 1: So you also indicate that this is an area that

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Speaker 1: you're looking at and will continue to look at. And

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Speaker 1: actually one law firm out there said, you know, it's

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Speaker 1: required reading for investors in private equity firms that are

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Speaker 1: doing the practice of buying multiple companies in the same industry.

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Speaker 1: So if you're in the private equity industry, where can

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Speaker 1: they expect you to look at next?

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Speaker 2: So look we follow where the facts take us. This

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Speaker 2: investigation in case was in the context of anesthesiology, but

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Speaker 2: to no a secret. There's been a lot of reporting

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Speaker 2: about other areas where we may have seen these types

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Speaker 2: of roll ups, and so we want to make sure

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Speaker 2: you know we're scrutinizing where there may be the most harm.

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Speaker 1: So in the past these type of acquisitions have gone through,

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Speaker 1: how hard is it going to be for you to

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Speaker 1: convince people to change course? And maybe, you know, look

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Speaker 1: at blocking some of these type of acquisitions in the future.

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Speaker 2: So the FTC recently, alongside the Justice Department, rolled out

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Speaker 2: proposed merger guidelines that lay out the kind of analytical

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Speaker 2: tools and frameworks that we'll be using to assess whether

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Speaker 2: mergers or acquisitions violate the US anti trust laws. In

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Speaker 2: those guidelines, we note that serial acquisitions can also violate

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Speaker 2: the anti trust laws, and when enforcers are looking at

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Speaker 2: a particular transaction, we may look at that transaction not

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Speaker 2: just in a silo, but as a part of an

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Speaker 2: overall pattern of acquisitions. We also recently propose an update

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Speaker 2: to the HSR form. This is the set of information

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Speaker 2: that companies provide to us if they're proposing a deal

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Speaker 2: that triggers notification. As part of that additional information, we

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Speaker 2: would also be seeking a list of prior acquisitions that

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Speaker 2: companies made in a particular market, and so we're hoping

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Speaker 2: that that could also give us more visibility on the

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Speaker 2: front end to be blocking any type of unlawful roll

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Speaker 2: up scheme and preventing front harm on the front end

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Speaker 2: rather than years later.

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Speaker 1: So, as I said, FTC has been very busy of late.

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Speaker 1: One of the cases where you actually had a loss

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Speaker 1: and courts pushed back was the Microsoft activision case against

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Speaker 1: that deal. What is one of the lessons that you

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Speaker 1: learned from that experience.

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Speaker 2: So, look, I'm not going to be able to talk

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Speaker 2: about that matter because it's still in pending litigation. But

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Speaker 2: anytime we suffer a set back in the courts, we

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Speaker 2: always look at that very closely, as you know, and

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Speaker 2: appeal is pending and so we're hopeful about next steps.

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Speaker 1: Another area of renewed focus for you is the issue

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Speaker 1: of labor. So we're seeing strikes across the country right now,

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Speaker 1: from Hollywood to Detroit, and your agency announced collaboration or

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Speaker 1: further collaboration with the Department of Labor recently to look

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Speaker 1: at labor market and antitrust issues there, Can you tell

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Speaker 1: us a little about what you're looking at there and

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Speaker 1: what concerns you.

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Speaker 2: So overall, we want to make sure that we're enforcing

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Speaker 2: the antitrust laws to protect everybody. That means protecting consumers,

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Speaker 2: but it also means protecting workers. There's been a whole

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Speaker 2: set of empirical work over the last decades showing that

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Speaker 2: markets can be highly concentrated in ways that harm not

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Speaker 2: just sellers, but concentrated in ways that harm labor, harm workers,

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Speaker 2: and the monopsony power may be more prevalent than we

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Speaker 2: had previously realized, So that's something that we've been scrutinizing.

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Speaker 2: More generally. The FTC in January proposed a rule that

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Speaker 2: would eliminate non compete clauses and employment contracts. We've also

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Speaker 2: pursued enforcement actions that resulted in non competes being dropped

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Speaker 2: for thousands of workers. So this is wanting to make

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Speaker 2: sure we're protecting workers from anti competitive conduct and unlawful

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Speaker 2: abuses of monopoly power is a focus for us across

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Speaker 2: the board. We've entered into MOUs with the Labor Department

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Speaker 2: as well as the NLRB to make sure that we're

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Speaker 2: able to share information as appropriate and eliminate blind spots

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Speaker 2: and make sure we're not just working in silos and

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Speaker 2: able to pursue areas where we may have shared goals.

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Speaker 1: And what conserned you most in terms of labor with

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Speaker 1: some of these trends that we're seeing, especially since the

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Speaker 1: pandemic in terms of wages, and where the FTC may

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Speaker 1: be able to help there well.

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Speaker 2: Overall, we want to make sure that we're understanding what

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Speaker 2: monopos any power looks like, and so in our draft

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Speaker 2: merger guidelines, we for the first time lay out how

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Speaker 2: we're going to be assessing whether a merger may undermine

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Speaker 2: competition for labor and for workers. You know, switching jobs

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Speaker 2: is different from buying a toaster, right. There are search frictions,

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Speaker 2: there are other dynamics that are unique to labor markets.

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Speaker 2: There are certain metrics that we want to be looking

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Speaker 2: at in terms of impact on wages, but also impact

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Speaker 2: on benefits. We've heard from people that you know, after

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Speaker 2: certain mergers, the ways that the ways that the experience

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Speaker 2: can be degraded for workers is not just through their

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Speaker 2: pay being dock or frozen, but through people having less

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Speaker 2: control over their schedules. Right, There are all sorts of

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Speaker 2: ways in which the particular particularities of how monopsony power

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Speaker 2: manifests is going to look different than how we analyze

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Speaker 2: markets and harm to consumers. And so we're doing a

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Speaker 2: lot of conversations and making sure we're hearing from workers

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Speaker 2: to make sure our analysis is really robust in that area.

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Speaker 1: Another area that we write about a lot of Ploomberg

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Speaker 1: is AI. How are you thinking about AI in terms

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Speaker 1: of antitrust and the mission of the FTC in terms

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Speaker 1: of making sure that you protect consumers?

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Speaker 2: So this is top of mind for us across our work.

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Speaker 2: We've noted on the consumer protection side how this is

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Speaker 2: already providing a lot of concern in the ways that

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Speaker 2: AI can be used to turbocharge fraud and scams, in

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Speaker 2: that these tools can really allow fraudsters to disseminate of,

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Speaker 2: you know, fraud and scams much more cheaply, much more quickly,

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Speaker 2: and on a much wider scale. We've all already heard

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Speaker 2: about the way that voice cloning can be used to

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Speaker 2: scam people out of thousands of dollars, and so this

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Speaker 2: is an area that we're keeping a very close eye on.

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Speaker 2: We're generally on the competition side. You know, we want

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Speaker 2: to be mindful of the ways in which these moments

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Speaker 2: of technological innovation can provide enormous opportunity for competition for

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Speaker 2: new entry. These can also be moments where incumbents are threatened,

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Speaker 2: and so you need to be very vigilant about unlawful

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Speaker 2: efforts to maintain your monopoly and thwart new entrants and innovation.

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Speaker 2: So those are just some of the dynamics that we're

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Speaker 2: looking at quite closely. Overall.

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Speaker 1: When you look ahead to the next year, we're going

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Speaker 1: into twenty twenty four, there's a presidential election. Things could change.

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Speaker 1: So when you think ahead to potentially you know, the

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Speaker 1: last year of the Biden administration or maybe not, but

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Speaker 1: either way, what are your top priorities for twenty twenty four.

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Speaker 2: So look, we have a very full agenda underway. We

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Speaker 2: have a whole set of rules, both on the anti

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Speaker 2: trust side but also on the consumer protection side that

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Speaker 2: we want to see through. We're hoping to be able

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Speaker 2: to finalize our merger guidelines and then continue the lawsuits

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Speaker 2: we already have underway and be able to move forward

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Speaker 2: with ones that are currently being investigated in house.

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Speaker 1: So I want to make sure to leave time for questions.

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Speaker 1: But one criticism that people have of your approach to

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Speaker 1: the chair position at the FTC is that you've been

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Speaker 1: taking some of these big swings, like we've talked about

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Speaker 1: about Amazon, and even reports are out there that some

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Speaker 1: hedge funds are betting against you that you'll be able

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Speaker 1: to be successful in some of these big swings because

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Speaker 1: maybe they're unrealistic. What do you say to people who

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Speaker 1: doubt your approach on this front.

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Speaker 2: So, look, we've been enormously successful on the merger front.

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Speaker 2: We've had around twenty abandonments where parties have walked away

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Speaker 2: after the FTC has filed a lawsuit. We're generally, you know,

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Speaker 2: the way I think about efficacy as deterrence, and we

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Speaker 2: hear a lot from people about how we're having a

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Speaker 2: deterrent effect right and in a situation in which you're

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Speaker 2: seeing fewer illegal deals make it out of the boardroom,

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Speaker 2: is really proof of concept in terms of how you

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Speaker 2: want to be an effective enforcer. So on the deterrence front,

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Speaker 2: we're quite pleased. We have some litigations that are still

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Speaker 2: under way and we're excited to see those through