1 00:00:03,120 --> 00:00:17,960 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:19,880 --> 00:00:23,120 Speaker 2: Hello and welcome to another episode of the Odd Thoughts Podcast. 3 00:00:23,280 --> 00:00:24,640 Speaker 2: I'm Tracy Allaway. 4 00:00:24,360 --> 00:00:25,480 Speaker 3: And I'm Joe Wisenthal. 5 00:00:26,000 --> 00:00:29,440 Speaker 2: Joe, we've done a little bit at this point on antitrust. 6 00:00:29,520 --> 00:00:32,960 Speaker 2: I feel like, kind of interestingly, the first time it 7 00:00:33,080 --> 00:00:38,400 Speaker 2: ever really came up substantively for us was I think 8 00:00:38,440 --> 00:00:41,440 Speaker 2: it was like way back in twenty twenty or maybe 9 00:00:41,440 --> 00:00:44,480 Speaker 2: twenty twenty one, where we were talking about the potential 10 00:00:44,520 --> 00:00:48,000 Speaker 2: for antitrust enforcement to bring down inflation. I don't know 11 00:00:48,040 --> 00:00:49,360 Speaker 2: if you remember that totally. 12 00:00:49,479 --> 00:00:51,200 Speaker 3: No, I do remember it. I think we were talking 13 00:00:51,200 --> 00:00:54,319 Speaker 3: about it actually in the context of shipping at the time. Yeah, 14 00:00:54,360 --> 00:00:56,960 Speaker 3: of course, the major source of inflationary pressure was the 15 00:00:57,000 --> 00:01:00,440 Speaker 3: stress on supply chains. But then that brought away, I 16 00:01:00,480 --> 00:01:03,120 Speaker 3: would say. And then it's since you know people paying 17 00:01:03,120 --> 00:01:05,600 Speaker 3: attention to it more, which is that you know how 18 00:01:05,600 --> 00:01:09,759 Speaker 3: to bottlenecks emerge? How do inflationary bottlenecks merge? One theory 19 00:01:09,920 --> 00:01:14,240 Speaker 3: one source of these inflationary bottlenecks is parts of the 20 00:01:14,440 --> 00:01:16,520 Speaker 3: economy where there's not very good competition. 21 00:01:17,080 --> 00:01:17,399 Speaker 4: Yeah. 22 00:01:17,480 --> 00:01:21,160 Speaker 2: Absolutely. And the other interesting thing that's been happening recently 23 00:01:21,440 --> 00:01:25,440 Speaker 2: is it feels like definitions of anti trust and anti 24 00:01:25,480 --> 00:01:29,600 Speaker 2: competitive practices have been expanding, right. You hear this term 25 00:01:29,720 --> 00:01:33,639 Speaker 2: hipster antitrust all the time, this idea that maybe anti 26 00:01:33,640 --> 00:01:38,480 Speaker 2: competitive behavior doesn't just materialize in things like prices, but 27 00:01:38,640 --> 00:01:40,720 Speaker 2: also in things like labor practices. 28 00:01:40,800 --> 00:01:44,720 Speaker 3: Totally. I think the rise of the huge tech giants 29 00:01:44,840 --> 00:01:48,760 Speaker 3: has contributed to this because you do have this situation 30 00:01:49,160 --> 00:01:52,840 Speaker 3: in which it feels like there are entities. Look, if 31 00:01:52,840 --> 00:01:56,280 Speaker 3: you have like a gigantic steel monopoly or whatever, how 32 00:01:56,360 --> 00:01:59,080 Speaker 3: is that going to manifest itself as being bad for 33 00:01:59,120 --> 00:02:02,640 Speaker 3: the economy, Probably by really high steel prices, right. I 34 00:02:02,680 --> 00:02:06,040 Speaker 3: think in some of these other business models, you sense 35 00:02:06,160 --> 00:02:12,080 Speaker 3: that there is concern about corporate power, corporate concentration, extremely 36 00:02:12,160 --> 00:02:16,600 Speaker 3: powerful companies, but it doesn't necessarily manifest as higher prices. 37 00:02:16,639 --> 00:02:18,440 Speaker 3: In fact, it maybe lower prices, and it may be 38 00:02:18,720 --> 00:02:20,919 Speaker 3: or maybe there's something not priced at all, like right, 39 00:02:21,000 --> 00:02:23,360 Speaker 3: none of us pay Facebook directly or whatever it is 40 00:02:23,360 --> 00:02:25,520 Speaker 3: some of these big social media giants, And so I 41 00:02:25,560 --> 00:02:28,760 Speaker 3: think that has probably contributed to some extent for like, 42 00:02:29,080 --> 00:02:32,880 Speaker 3: how do we address market power through outside the lens 43 00:02:32,880 --> 00:02:34,440 Speaker 3: strictly of consumer prices? 44 00:02:34,680 --> 00:02:37,560 Speaker 2: Absolutely, And the other thing just going back to shipping. 45 00:02:37,760 --> 00:02:40,400 Speaker 2: It feels like anti trust is also potentially getting more 46 00:02:40,560 --> 00:02:44,520 Speaker 2: attention in the context of supply chain resiliency. Right, So, yes, 47 00:02:44,720 --> 00:02:47,480 Speaker 2: you can have high prices because of a monopoly that 48 00:02:47,520 --> 00:02:50,280 Speaker 2: dominates a particular industry, but you could also have a 49 00:02:50,320 --> 00:02:54,240 Speaker 2: situation where if something happens, if there's a choke point 50 00:02:54,400 --> 00:02:57,119 Speaker 2: on that business, as we've seen a number of times 51 00:02:57,480 --> 00:03:00,799 Speaker 2: in recent years, that it creates a vulnerable for the 52 00:03:00,960 --> 00:03:04,320 Speaker 2: entire economy. So all of this got me thinking, you know, 53 00:03:04,480 --> 00:03:09,639 Speaker 2: clearly there is an impact from antitrust on the overall 54 00:03:10,520 --> 00:03:13,800 Speaker 2: shape and functioning of the economy, and you see that 55 00:03:13,919 --> 00:03:16,600 Speaker 2: kind of burst into the policy debate every once in 56 00:03:16,680 --> 00:03:19,600 Speaker 2: a while. But I really wanted to dive into how 57 00:03:19,639 --> 00:03:22,480 Speaker 2: do you start to judge the effects of corporate concentration 58 00:03:23,040 --> 00:03:26,400 Speaker 2: on the overall economy? And I have the perfect guest 59 00:03:26,440 --> 00:03:28,600 Speaker 2: for you, Joe Great, We're going to be speaking to 60 00:03:28,720 --> 00:03:33,080 Speaker 2: someone whose day job is basically exactly this. We're going 61 00:03:33,160 --> 00:03:35,960 Speaker 2: to be speaking with Joanna Marinesque. She is the principal 62 00:03:36,000 --> 00:03:40,000 Speaker 2: economist at the Department of Justice's Antitrust Division, also a 63 00:03:40,040 --> 00:03:43,520 Speaker 2: professor at the University of Pennsylvania. Joanna, thank you so 64 00:03:43,600 --> 00:03:44,960 Speaker 2: much for coming on all thoughts. 65 00:03:45,160 --> 00:03:46,360 Speaker 4: Thank you so much for having me. 66 00:03:46,840 --> 00:03:50,520 Speaker 2: What does a principal economist at the DOJ actually do 67 00:03:50,720 --> 00:03:52,480 Speaker 2: walk us through your sort of day to. 68 00:03:52,520 --> 00:03:55,840 Speaker 4: Day absolutely so you know, in my day job, what 69 00:03:55,960 --> 00:04:00,120 Speaker 4: we do is we investigate different companies for potential violation 70 00:04:00,320 --> 00:04:03,080 Speaker 4: of the anti trust laws and so you know all 71 00:04:03,120 --> 00:04:06,520 Speaker 4: these competition issues that you just talked about. And so 72 00:04:06,760 --> 00:04:09,840 Speaker 4: as an economist, what I do there is I oversee 73 00:04:09,880 --> 00:04:13,360 Speaker 4: the work of my whole team of PhD economists where 74 00:04:13,920 --> 00:04:17,599 Speaker 4: they go and do data analysis in order to uncover 75 00:04:18,200 --> 00:04:21,800 Speaker 4: the effects of anti competitive practices on all sorts of 76 00:04:21,839 --> 00:04:26,440 Speaker 4: outcomes like prices and wages and the quality of products 77 00:04:26,880 --> 00:04:29,200 Speaker 4: and so on and so forth. And we use both 78 00:04:29,320 --> 00:04:33,520 Speaker 4: quantitative analysis as well as interviews and documents that we 79 00:04:33,600 --> 00:04:36,719 Speaker 4: are able to get from the companies like emails, to 80 00:04:36,839 --> 00:04:40,880 Speaker 4: better understand how competition works in that particular case and 81 00:04:41,440 --> 00:04:45,080 Speaker 4: whether there is in fact a sign of anti competitive behavior. 82 00:04:45,279 --> 00:04:48,000 Speaker 3: So we talked about in the intro the sort of 83 00:04:48,040 --> 00:04:51,560 Speaker 3: antitrust thinking, maybe widening the aperture of where you would 84 00:04:51,640 --> 00:04:56,760 Speaker 3: look to find evidence of uncompetitive behavior beyond perhaps just 85 00:04:56,880 --> 00:04:59,760 Speaker 3: consumer prices. What type of data are you looking when 86 00:04:59,760 --> 00:05:01,920 Speaker 3: you talk about your going shifting through all this data 87 00:05:01,960 --> 00:05:04,680 Speaker 3: to look for evident what are the types of data 88 00:05:04,720 --> 00:05:07,000 Speaker 3: that you might look at and what might be I guess, 89 00:05:07,360 --> 00:05:10,800 Speaker 3: the signatures of a company or an industry in which 90 00:05:10,839 --> 00:05:13,240 Speaker 3: anti competitive actions are a problem. 91 00:05:14,000 --> 00:05:16,240 Speaker 4: So there are two main types of data that I 92 00:05:16,279 --> 00:05:19,640 Speaker 4: would point to. The first one is on market shares, 93 00:05:19,839 --> 00:05:24,080 Speaker 4: so you look at the share of the companies in 94 00:05:24,120 --> 00:05:26,480 Speaker 4: their market. So this could be a labor market or 95 00:05:26,520 --> 00:05:29,760 Speaker 4: a product market. So you know, if a company has 96 00:05:29,800 --> 00:05:32,280 Speaker 4: a high share and merges with another company that also 97 00:05:32,320 --> 00:05:34,960 Speaker 4: has a high share, then that's likely to raise anti 98 00:05:34,960 --> 00:05:40,360 Speaker 4: competitive concerns in the sense that prices or wages might 99 00:05:40,440 --> 00:05:44,440 Speaker 4: be affected in a bad direction. So that's one way 100 00:05:44,560 --> 00:05:48,000 Speaker 4: that we look at things again, calculating market shares, and 101 00:05:48,080 --> 00:05:52,000 Speaker 4: so that's for one approach to looking at potential for 102 00:05:52,120 --> 00:05:56,160 Speaker 4: anti competitive harm. And we can also talk about dominant firms, 103 00:05:56,160 --> 00:05:59,919 Speaker 4: so firms that have monopoly power. That's also one of 104 00:06:00,120 --> 00:06:03,000 Speaker 4: ways to measure it is through market shares. And then 105 00:06:03,040 --> 00:06:07,160 Speaker 4: the second way is looking at what we called head 106 00:06:07,200 --> 00:06:10,120 Speaker 4: to head competition, So how much do firms directly compete 107 00:06:10,160 --> 00:06:14,040 Speaker 4: with each other? And this would be found in things 108 00:06:14,120 --> 00:06:16,240 Speaker 4: like they are called win loss data. So when you 109 00:06:16,320 --> 00:06:19,880 Speaker 4: look at sales data, you're looking at what company you 110 00:06:20,080 --> 00:06:22,599 Speaker 4: lost your business too. And that would show if you 111 00:06:22,680 --> 00:06:26,080 Speaker 4: often lose business to another company that now you're trying 112 00:06:26,120 --> 00:06:29,240 Speaker 4: to merge with. Well, once you're merging, there's no longer 113 00:06:29,279 --> 00:06:33,000 Speaker 4: going to be that competition, the intense competition between the two. 114 00:06:33,360 --> 00:06:37,000 Speaker 4: And so that's the second like broad category of data. 115 00:06:37,040 --> 00:06:39,719 Speaker 4: And there's similar data for workers. If you constantly lose 116 00:06:39,760 --> 00:06:43,760 Speaker 4: your workers to your competitor and now you're merging, that 117 00:06:43,800 --> 00:06:45,080 Speaker 4: competition is going to be lost. 118 00:06:45,200 --> 00:06:46,320 Speaker 1: Oh that's really interesting. 119 00:06:46,400 --> 00:06:49,640 Speaker 2: So something like that win loss data, how would you 120 00:06:49,720 --> 00:06:51,960 Speaker 2: actually access that? Where does that come from? 121 00:06:52,080 --> 00:06:56,000 Speaker 4: So that comes directly from the company's data. So we 122 00:06:56,480 --> 00:06:58,840 Speaker 4: because you know we're the Department of Justice, if you're 123 00:06:58,880 --> 00:07:02,919 Speaker 4: under investigation with the companies must send us their data, 124 00:07:03,640 --> 00:07:06,240 Speaker 4: not any data, but of course the data that's needed 125 00:07:06,279 --> 00:07:10,200 Speaker 4: for the investigation that concerns the specific concern we have 126 00:07:10,640 --> 00:07:14,600 Speaker 4: with potential adverse effects on competition. So companies send us 127 00:07:15,040 --> 00:07:19,320 Speaker 4: the data, whether it's again on the product for labor markets, 128 00:07:19,360 --> 00:07:22,440 Speaker 4: it would be data from things like an applicant tracking 129 00:07:22,480 --> 00:07:25,640 Speaker 4: system where they see where people are coming from. So 130 00:07:25,680 --> 00:07:28,120 Speaker 4: that can also allow us to know where they're hiring 131 00:07:28,160 --> 00:07:32,840 Speaker 4: employees from and therefore trace back the competition for labor. 132 00:07:33,120 --> 00:07:35,920 Speaker 2: So that sort of data you would get that once 133 00:07:36,080 --> 00:07:39,800 Speaker 2: an investigation had already been started. Talk to us about 134 00:07:40,240 --> 00:07:45,920 Speaker 2: identifying potential investigations and what sort of information and data 135 00:07:46,080 --> 00:07:48,600 Speaker 2: you would be looking at there, or maybe you're looking 136 00:07:48,680 --> 00:07:52,480 Speaker 2: at something like the overall impact on the labor market 137 00:07:52,600 --> 00:07:55,080 Speaker 2: or prices, which we've already discussed. 138 00:07:55,200 --> 00:07:58,600 Speaker 4: Right, So for mergers, that's sort of the bread and butter. 139 00:07:59,120 --> 00:08:03,960 Speaker 4: There is requirement for companies to file so called HSR 140 00:08:04,080 --> 00:08:07,600 Speaker 4: forms for any transaction that's above some threshold, and so 141 00:08:07,720 --> 00:08:11,760 Speaker 4: in those forms they give us some basic information about 142 00:08:11,960 --> 00:08:14,760 Speaker 4: why they're seeking to merge, you know, what markets this 143 00:08:15,160 --> 00:08:17,680 Speaker 4: might affect, and so on and so forth. And actually 144 00:08:17,680 --> 00:08:22,360 Speaker 4: we now have new proposed additional information on labor so 145 00:08:22,400 --> 00:08:25,560 Speaker 4: that it's easier to look at potential labor market effects. 146 00:08:25,720 --> 00:08:28,760 Speaker 4: So based on that, there's an initial screening to see 147 00:08:28,800 --> 00:08:32,160 Speaker 4: if we think that there might be potentially anti competitive 148 00:08:32,160 --> 00:08:35,240 Speaker 4: effects from the merger. Then you know, there's an initial 149 00:08:35,320 --> 00:08:38,480 Speaker 4: investigation phase and basically it goes from step to step 150 00:08:39,120 --> 00:08:41,920 Speaker 4: until we are satisfied that it's likely not going to 151 00:08:42,000 --> 00:08:45,439 Speaker 4: substantially lessen competition or it could end up in a 152 00:08:45,520 --> 00:08:48,920 Speaker 4: lawsuit to try to block the merger if after having 153 00:08:48,960 --> 00:08:51,880 Speaker 4: done a lot of analysis and data and interviews, we 154 00:08:52,000 --> 00:08:56,520 Speaker 4: conclude that there's a substantial risk that the transaction, the merger, 155 00:08:56,559 --> 00:08:58,079 Speaker 4: would lessen competition. 156 00:08:58,840 --> 00:09:02,200 Speaker 3: Not necessarily a specific merger or an example, but just 157 00:09:02,360 --> 00:09:05,480 Speaker 3: what would be a style type of something. You know, 158 00:09:05,559 --> 00:09:09,760 Speaker 3: imagine company widget company A wants to merge with widget 159 00:09:09,800 --> 00:09:14,400 Speaker 3: company B. They fill out this hs R form for you, 160 00:09:14,920 --> 00:09:18,360 Speaker 3: what might be an example of something that shows up 161 00:09:18,880 --> 00:09:21,640 Speaker 3: that crosses some threshold and in fact, is there a 162 00:09:21,679 --> 00:09:24,360 Speaker 3: threshold like is there a level of X or Y 163 00:09:24,520 --> 00:09:26,760 Speaker 3: in which like the red flag goes off, or is 164 00:09:26,800 --> 00:09:30,559 Speaker 3: there some level of subjectivity walk us through like looking 165 00:09:30,559 --> 00:09:33,480 Speaker 3: at that data when the data flashes some alarm to 166 00:09:33,520 --> 00:09:35,520 Speaker 3: take this is not a good deal. 167 00:09:36,000 --> 00:09:39,400 Speaker 4: So the main there are many, of course considerations that'd 168 00:09:39,400 --> 00:09:41,520 Speaker 4: be hard to go through here, but one of the 169 00:09:41,600 --> 00:09:44,960 Speaker 4: main things is the market shares. Okay, so if we 170 00:09:45,120 --> 00:09:49,360 Speaker 4: have some evidence that these companies are competing in some 171 00:09:49,520 --> 00:09:52,640 Speaker 4: market for some widgets, some specific widgets, so that's a 172 00:09:52,640 --> 00:09:55,880 Speaker 4: specific product market, let's say, and if both of those 173 00:09:55,920 --> 00:09:59,760 Speaker 4: companies have a high enough market share, that raises alarm 174 00:09:59,760 --> 00:10:01,960 Speaker 4: and in the merger guidelines. So we have guidelines where 175 00:10:02,000 --> 00:10:04,520 Speaker 4: we tell everybody this is public. You can go see them. 176 00:10:04,559 --> 00:10:06,679 Speaker 4: They are brand new. We just put them out twenty 177 00:10:06,679 --> 00:10:09,520 Speaker 4: twenty three Merger Guidelines. It tells you exactly what that 178 00:10:09,640 --> 00:10:13,679 Speaker 4: threshold is. So what must your share be for us 179 00:10:13,720 --> 00:10:18,040 Speaker 4: to conclude that there is a risk that competition might 180 00:10:18,080 --> 00:10:20,960 Speaker 4: be hurt in this merger. And again, the general principle 181 00:10:21,080 --> 00:10:25,319 Speaker 4: is that the two companies must have a high enough 182 00:10:25,360 --> 00:10:27,520 Speaker 4: share in the market. So basically the market we call 183 00:10:27,559 --> 00:10:30,880 Speaker 4: it concentrated, so there's few companies, each one has a 184 00:10:31,080 --> 00:10:34,920 Speaker 4: large share. And further, we require that after the merger, 185 00:10:35,480 --> 00:10:39,440 Speaker 4: the share of the two companies combined increases enough that 186 00:10:39,520 --> 00:10:44,040 Speaker 4: it threatens competition. So that's really a key screening tool 187 00:10:44,280 --> 00:10:48,000 Speaker 4: that we use, and that's going to play an important role, 188 00:10:48,559 --> 00:10:51,640 Speaker 4: you know, as we go on with the investigation, and 189 00:10:51,800 --> 00:10:54,880 Speaker 4: why are shared is important. They are important as an 190 00:10:54,920 --> 00:10:59,640 Speaker 4: indicator of how anti competitive effects could happen. And this 191 00:10:59,760 --> 00:11:02,840 Speaker 4: could be either through a reduction in what we call 192 00:11:02,880 --> 00:11:07,640 Speaker 4: again competition direct competition for customers or for workers, or 193 00:11:07,960 --> 00:11:11,439 Speaker 4: it could also be through potentially an increased risk of 194 00:11:11,600 --> 00:11:16,640 Speaker 4: collision that whether explicit or implicit. The few actors they 195 00:11:16,679 --> 00:11:19,360 Speaker 4: are in the market, and the easier it is for 196 00:11:19,400 --> 00:11:23,800 Speaker 4: them to agree, let's say to you know, increased prices 197 00:11:23,800 --> 00:11:26,120 Speaker 4: a little bit or let's say keep wages down a 198 00:11:26,160 --> 00:11:27,839 Speaker 4: little bit more, something like that. 199 00:11:43,000 --> 00:11:46,920 Speaker 2: What happens in a non competitive economy? Walk us through 200 00:11:46,920 --> 00:11:50,760 Speaker 2: the sort of side effects of having high corporate concentration. 201 00:11:51,480 --> 00:11:55,760 Speaker 4: Yeah, so there are many adverse effects, but broadly, some 202 00:11:55,840 --> 00:12:01,640 Speaker 4: of these effects are higher prices, lower wages is less innovation, 203 00:12:02,000 --> 00:12:05,520 Speaker 4: so you know, just broadly, and lower product quality, lower 204 00:12:05,520 --> 00:12:09,120 Speaker 4: wage quality. So, for example, for the labor market, if 205 00:12:09,120 --> 00:12:11,599 Speaker 4: we just take that as an example, because of a 206 00:12:11,679 --> 00:12:14,840 Speaker 4: lack of competition, so if you're an employee and you 207 00:12:14,920 --> 00:12:16,920 Speaker 4: don't have anywhere else to go, that would be a 208 00:12:16,920 --> 00:12:19,400 Speaker 4: good firm that you would like. Similarly, just as well 209 00:12:19,440 --> 00:12:22,280 Speaker 4: as your current employer. That means that the employer can 210 00:12:22,320 --> 00:12:24,160 Speaker 4: pay you less because where are you going to go? 211 00:12:24,679 --> 00:12:27,439 Speaker 4: And so you know, I have a paper, for example, 212 00:12:27,440 --> 00:12:31,200 Speaker 4: and others have written related academic papers, and you can 213 00:12:31,240 --> 00:12:35,079 Speaker 4: show that if we got rid of this lack of competition, 214 00:12:35,240 --> 00:12:39,120 Speaker 4: wages may increase by as much as twenty percent on average. 215 00:12:39,200 --> 00:12:41,080 Speaker 4: You know, in the extreme case that we could, you know, 216 00:12:41,120 --> 00:12:44,320 Speaker 4: without all issues with competition in the labor market. Now, 217 00:12:44,559 --> 00:12:47,440 Speaker 4: if you look at the product market, so you know 218 00:12:47,520 --> 00:12:50,840 Speaker 4: there's a lack of competition in various markets for various widgets. 219 00:12:51,400 --> 00:12:56,160 Speaker 4: Not only that will increase prices, reduce quality, and reduce 220 00:12:56,200 --> 00:13:00,480 Speaker 4: consumer choice, reduce innovation, but interestingly, that will also have 221 00:13:00,559 --> 00:13:04,120 Speaker 4: an adverse effect on workers, which is an indirect effect 222 00:13:04,160 --> 00:13:08,040 Speaker 4: because when you have a monopoly, a monopoly makes less stuff. 223 00:13:08,080 --> 00:13:12,360 Speaker 4: They produce less widgets, fewer widgets, and in order to 224 00:13:12,679 --> 00:13:16,360 Speaker 4: produce fuel widgets, well, that also means fuel widgets means 225 00:13:16,360 --> 00:13:19,120 Speaker 4: you need fewer workers to produce the wigets. So there's 226 00:13:19,200 --> 00:13:22,760 Speaker 4: a less demand for labor, less demand for workers. So 227 00:13:22,800 --> 00:13:26,840 Speaker 4: therefore that reduces employment opportunities. And there's really cool new 228 00:13:26,880 --> 00:13:30,439 Speaker 4: academic work that's still work in progress by Tanya Babina 229 00:13:30,440 --> 00:13:33,959 Speaker 4: and co authors suggesting that when the anti trust authorities 230 00:13:34,040 --> 00:13:36,920 Speaker 4: go in and enforce the anti trust law and stimulate 231 00:13:37,400 --> 00:13:41,000 Speaker 4: competition the product market, you see an increase in employment 232 00:13:41,600 --> 00:13:45,760 Speaker 4: as business flourishes, and they also need more workers to 233 00:13:45,840 --> 00:13:47,680 Speaker 4: produce whatever it is that they're producing. 234 00:13:48,240 --> 00:13:52,160 Speaker 3: One of the arguments that you know, one thing that 235 00:13:52,200 --> 00:13:55,000 Speaker 3: can theoretically happen. I don't know if it happens in practice. 236 00:13:55,080 --> 00:13:58,160 Speaker 3: But one thing that can theoretically happen is that two 237 00:13:58,240 --> 00:14:02,439 Speaker 3: companies can combine and become more efficient, and that means 238 00:14:02,440 --> 00:14:04,480 Speaker 3: that they have economies of scale, and maybe they can 239 00:14:04,559 --> 00:14:09,559 Speaker 3: lower prices. Maybe that scale brings consumer benefits with the 240 00:14:09,600 --> 00:14:13,480 Speaker 3: lower prices, et cetera. From an economist perspective, I'm sure 241 00:14:13,520 --> 00:14:16,440 Speaker 3: there are many instances where companies say that that's what 242 00:14:16,520 --> 00:14:20,120 Speaker 3: will happen, and it seems at least possible. Is it 243 00:14:20,160 --> 00:14:23,480 Speaker 3: possible in your view that concentration can lead to better 244 00:14:23,560 --> 00:14:27,840 Speaker 3: consumer outcomes, either a from a price perspective or from 245 00:14:27,880 --> 00:14:30,200 Speaker 3: a here's a very powerful company that then becomes a 246 00:14:30,240 --> 00:14:33,000 Speaker 3: wage ceter or you just sort of would you be 247 00:14:33,080 --> 00:14:34,880 Speaker 3: per se skeptical of those claims. 248 00:14:35,480 --> 00:14:39,320 Speaker 4: So, you know, in general, as with every claim where 249 00:14:39,520 --> 00:14:42,040 Speaker 4: you know the companies have an interest in making that claim, 250 00:14:42,240 --> 00:14:45,520 Speaker 4: we need to examine it, you know, with fairness and 251 00:14:45,560 --> 00:14:47,720 Speaker 4: with evidence. And you know, if you look at the 252 00:14:47,760 --> 00:14:51,520 Speaker 4: merger Guidelands, there's a whole section on efficiencies, recognizing that 253 00:14:51,520 --> 00:14:55,160 Speaker 4: that's a possibility, but we also ask that those efficiencies, 254 00:14:55,200 --> 00:15:00,400 Speaker 4: if claimed, be well documented, you know, clearly articulated, verified 255 00:15:00,440 --> 00:15:04,080 Speaker 4: by outside experts, so that we can start to potentially 256 00:15:04,120 --> 00:15:07,360 Speaker 4: consider them, and we find that oftentimes that's just not 257 00:15:07,480 --> 00:15:10,360 Speaker 4: the case. And so you know, again it's all a 258 00:15:10,440 --> 00:15:13,400 Speaker 4: fact based investigation and you have to look at it. 259 00:15:13,680 --> 00:15:16,840 Speaker 4: But that's certainly something that we consider in the holistic 260 00:15:16,880 --> 00:15:20,840 Speaker 4: assessment of what's going to happen. Since it's a predictive exercise, 261 00:15:20,880 --> 00:15:23,360 Speaker 4: we have to assess the risk. We take that into 262 00:15:23,360 --> 00:15:24,480 Speaker 4: account as one element. 263 00:15:25,280 --> 00:15:29,240 Speaker 3: Just to press you on this part further, as an 264 00:15:29,240 --> 00:15:31,680 Speaker 3: economist coming to the table and there are other people, 265 00:15:31,760 --> 00:15:34,280 Speaker 3: there are lawyers or others at the table, what are 266 00:15:34,320 --> 00:15:37,840 Speaker 3: some of the tools in your arsenal that you might use, 267 00:15:37,960 --> 00:15:40,280 Speaker 3: or tools in your toolbox per se, that you might 268 00:15:40,520 --> 00:15:44,280 Speaker 3: use to make such a prediction to evaluate claims of 269 00:15:44,400 --> 00:15:46,440 Speaker 3: economies of scale and such things. 270 00:15:47,040 --> 00:15:51,800 Speaker 4: So what we essentially, it's important to note that it's 271 00:15:51,840 --> 00:15:54,880 Speaker 4: not up to us the Department of Justice, to make 272 00:15:54,920 --> 00:15:58,480 Speaker 4: that point. It's rather that the companies must be able 273 00:15:58,560 --> 00:16:02,960 Speaker 4: to prove with some evidence that these efficiencies are likely 274 00:16:03,000 --> 00:16:06,120 Speaker 4: to result and be not only that there are efficiency 275 00:16:06,480 --> 00:16:09,000 Speaker 4: at all, which might well be the case, but that 276 00:16:09,040 --> 00:16:13,280 Speaker 4: they are sufficiently substantial that they will negate the anti 277 00:16:13,280 --> 00:16:16,520 Speaker 4: competitive effects that we fear, and so and of course, 278 00:16:16,600 --> 00:16:20,840 Speaker 4: the specifics against specific But what's really important is not 279 00:16:20,960 --> 00:16:24,320 Speaker 4: just to show that there are some efficiencies, but that 280 00:16:24,440 --> 00:16:29,240 Speaker 4: they are again substantive enough that the initial concern that 281 00:16:29,280 --> 00:16:32,280 Speaker 4: we had for all the adverse anti competitive effects is 282 00:16:32,440 --> 00:16:37,080 Speaker 4: likely not to materialize because you know, those efficiencies make 283 00:16:37,120 --> 00:16:39,840 Speaker 4: the market so much more competitive. But again the burden 284 00:16:39,920 --> 00:16:42,680 Speaker 4: of proof in terms of who must show that that's 285 00:16:42,720 --> 00:16:44,400 Speaker 4: the economists of the other side. 286 00:16:45,960 --> 00:16:49,240 Speaker 2: So one of the more interesting cases that the DOJ 287 00:16:49,560 --> 00:16:52,960 Speaker 2: took on over the past because it was a few 288 00:16:53,040 --> 00:16:58,360 Speaker 2: years since it started, but the Penguins acquisition of Simon 289 00:16:58,400 --> 00:17:02,440 Speaker 2: and Schuster, and part of this is media naval gazing 290 00:17:02,520 --> 00:17:05,680 Speaker 2: because it involves the publishing industry, and if you read 291 00:17:05,760 --> 00:17:08,240 Speaker 2: some of the complaints and the other documents around this, 292 00:17:08,480 --> 00:17:12,639 Speaker 2: there is just oodles and oodles of information on like 293 00:17:12,760 --> 00:17:16,239 Speaker 2: the actual numbers behind publishing and how they come up 294 00:17:16,280 --> 00:17:20,720 Speaker 2: with things like author advances, how much they spend on marketing. 295 00:17:20,640 --> 00:17:21,440 Speaker 4: Stuff like that. 296 00:17:21,840 --> 00:17:25,760 Speaker 2: But walk us through the economic lessons of a case 297 00:17:26,119 --> 00:17:29,120 Speaker 2: like that, because there seem to have been some trade 298 00:17:29,119 --> 00:17:30,720 Speaker 2: offs in that particular action. 299 00:17:31,640 --> 00:17:34,080 Speaker 4: So you know, I was really excited to see that case. 300 00:17:34,160 --> 00:17:37,239 Speaker 4: This was ongoing when I arrived in my job at 301 00:17:37,280 --> 00:17:40,280 Speaker 4: the division and just to table sat a little bit. 302 00:17:40,320 --> 00:17:44,199 Speaker 4: That case was a case where Penguin Random House was 303 00:17:44,200 --> 00:17:47,320 Speaker 4: seeking to merge with another big publisher, Simon and Schuster, 304 00:17:47,680 --> 00:17:51,040 Speaker 4: and we always first look at competition in this industry, 305 00:17:51,080 --> 00:17:55,000 Speaker 4: and in this case were interesting competition for authors. So 306 00:17:55,040 --> 00:17:58,119 Speaker 4: you know this big publisher publishing houses, they are trying 307 00:17:58,160 --> 00:18:02,480 Speaker 4: to buy the rights to author's books, and so for 308 00:18:03,080 --> 00:18:07,240 Speaker 4: big name authors, they're on that many publishing houses. In fact, 309 00:18:07,240 --> 00:18:10,399 Speaker 4: there are only five so called big five publishing companies 310 00:18:10,800 --> 00:18:15,560 Speaker 4: that vuy typically for books by famous authors. And so 311 00:18:15,600 --> 00:18:20,359 Speaker 4: we focus specifically on what we called anticipated top selling books, 312 00:18:20,359 --> 00:18:22,600 Speaker 4: which were books that would get an advance of two 313 00:18:22,680 --> 00:18:25,399 Speaker 4: hundred and fifty thousand dollars or more. So we're talking 314 00:18:25,440 --> 00:18:29,600 Speaker 4: here about you know, likely big selling books. And so 315 00:18:29,760 --> 00:18:33,600 Speaker 4: in that market again for those big big books, Penguin 316 00:18:33,640 --> 00:18:36,800 Speaker 4: Random House had the market share there. We got market share, 317 00:18:36,840 --> 00:18:39,919 Speaker 4: remember we talked about that before, of thirty seven percent 318 00:18:39,960 --> 00:18:42,840 Speaker 4: and Simon and Schuster twelve percent, and so you can 319 00:18:42,920 --> 00:18:46,680 Speaker 4: see that together after the merger, if it had happened, 320 00:18:46,680 --> 00:18:50,720 Speaker 4: they would essentially have half of that market. And so 321 00:18:50,840 --> 00:18:55,399 Speaker 4: that's like a really significant change in market shares. That 322 00:18:55,480 --> 00:18:58,760 Speaker 4: would give these publishing houses significant market power. And what's 323 00:18:58,800 --> 00:19:03,600 Speaker 4: the market power here, it's the market power over authors. 324 00:19:03,760 --> 00:19:06,960 Speaker 4: When authors are shopping around the manuscript to find a 325 00:19:07,040 --> 00:19:10,840 Speaker 4: publisher that they like that gives them good conditions. Again, 326 00:19:10,880 --> 00:19:12,600 Speaker 4: that's what they do. They shop around and they make 327 00:19:12,640 --> 00:19:16,920 Speaker 4: competition play who's giving me the best terms? And once 328 00:19:17,040 --> 00:19:20,720 Speaker 4: these publishing houses would have merged, that would remove an 329 00:19:20,760 --> 00:19:24,919 Speaker 4: option for the authors to get a better deal for 330 00:19:25,040 --> 00:19:28,160 Speaker 4: their books. And so therefore we predicted that they would 331 00:19:28,240 --> 00:19:33,320 Speaker 4: get lower advances, and that would therefore damage competition in 332 00:19:33,440 --> 00:19:36,560 Speaker 4: that market for the author's work. And this is the 333 00:19:36,680 --> 00:19:39,000 Speaker 4: judge agreed with us. And so this is the first 334 00:19:39,080 --> 00:19:43,640 Speaker 4: merger that was blocked primarily on a theory of labor 335 00:19:44,200 --> 00:19:50,359 Speaker 4: market power, where those publishing houses would exercise power over 336 00:19:50,520 --> 00:19:54,560 Speaker 4: the labor of the authors in this specific case, is. 337 00:19:54,520 --> 00:19:57,639 Speaker 3: There a you know you mentioned okay, a company with 338 00:19:57,720 --> 00:20:00,399 Speaker 3: thirty seven percent market share want to merge with twelve 339 00:20:00,400 --> 00:20:03,719 Speaker 3: percent market share almost fifty percent? Is there a number 340 00:20:04,119 --> 00:20:07,199 Speaker 3: in which this is too much? Does it vary by industry? Like, 341 00:20:07,280 --> 00:20:11,439 Speaker 3: where is this threshold exist such that you could say, okay, 342 00:20:11,480 --> 00:20:14,240 Speaker 3: this is an okay level of market power or this 343 00:20:14,440 --> 00:20:15,560 Speaker 3: is too much. 344 00:20:15,920 --> 00:20:19,240 Speaker 4: Right, So that's in the merger guidelines. We have a 345 00:20:19,840 --> 00:20:22,359 Speaker 4: famous you know, this is nerdy nerdy, but we have 346 00:20:22,440 --> 00:20:25,720 Speaker 4: an index try The HHI is actually the Herd fineral 347 00:20:25,840 --> 00:20:29,960 Speaker 4: Hershman index that essentially boils down to market shares. So 348 00:20:30,400 --> 00:20:33,880 Speaker 4: if the market shares in the market are generally high enough, 349 00:20:34,000 --> 00:20:36,080 Speaker 4: you're going to have a market that's already we call 350 00:20:36,119 --> 00:20:39,840 Speaker 4: it highly concentrated. And then from there, if the merger 351 00:20:39,920 --> 00:20:43,040 Speaker 4: is going to increase it sufficiently in this concentration, making 352 00:20:43,080 --> 00:20:47,800 Speaker 4: the market even more concentrated with fewer players, then we 353 00:20:48,040 --> 00:20:50,560 Speaker 4: think that it, you know, presumptively, is going to cause 354 00:20:50,560 --> 00:20:54,040 Speaker 4: an anti competitive effect. And this, you know, this is 355 00:20:54,080 --> 00:20:57,120 Speaker 4: this is something that you can calculate, and the thresholds 356 00:20:57,160 --> 00:20:58,719 Speaker 4: are there in the merger guidelines. 357 00:20:58,880 --> 00:21:02,840 Speaker 2: Wait, so, speaking of calculations and nerding out, when it 358 00:21:02,920 --> 00:21:07,240 Speaker 2: comes time to try to predict the effect of this 359 00:21:07,320 --> 00:21:12,280 Speaker 2: type of consolidation on advances for authors and their proposed books, 360 00:21:12,560 --> 00:21:16,480 Speaker 2: presumably you go about actually modeling that in one way 361 00:21:16,600 --> 00:21:19,919 Speaker 2: or another. How do you do something like that for publishing, 362 00:21:19,960 --> 00:21:24,560 Speaker 2: which is kind of a notoriously opaque industry in many ways. 363 00:21:24,320 --> 00:21:27,400 Speaker 4: That's right, So, you know, as I was saying, it's 364 00:21:27,440 --> 00:21:30,760 Speaker 4: always very fact specific, and actually one of the coolest 365 00:21:30,800 --> 00:21:33,199 Speaker 4: things that I've learned by being at the division is 366 00:21:33,320 --> 00:21:36,840 Speaker 4: just the very many different details of each industry that 367 00:21:36,880 --> 00:21:40,119 Speaker 4: you know, as an academic, you don't access this level 368 00:21:40,160 --> 00:21:43,320 Speaker 4: of detail, you know, or manage as a journalist. If 369 00:21:43,359 --> 00:21:46,800 Speaker 4: you could get all the you know, various emails and 370 00:21:46,880 --> 00:21:49,920 Speaker 4: all these documents about what's really going on, it's really juicy. 371 00:21:50,400 --> 00:21:54,760 Speaker 4: So but essentially here in this case, there's a process 372 00:21:54,760 --> 00:21:58,919 Speaker 4: of bargaining and shopping around the manuscripts, and there's various 373 00:21:58,920 --> 00:22:01,960 Speaker 4: ways how this could happen, but typically it's some sort 374 00:22:01,960 --> 00:22:07,119 Speaker 4: of auction like format, and so therefore our expert in 375 00:22:07,160 --> 00:22:11,160 Speaker 4: this case we work with an outside economic expert who 376 00:22:11,240 --> 00:22:14,200 Speaker 4: does some of the analysis, and so he modeled an 377 00:22:14,240 --> 00:22:19,240 Speaker 4: auction style situation where those firms, now instead of each 378 00:22:19,320 --> 00:22:24,199 Speaker 4: bidding independently, would be together and calculated. You know, the 379 00:22:24,280 --> 00:22:28,280 Speaker 4: fact that it would likely result in a significant decrease 380 00:22:28,359 --> 00:22:30,280 Speaker 4: in what the authors were going to be able to 381 00:22:30,320 --> 00:22:32,880 Speaker 4: get for their books. 382 00:22:33,400 --> 00:22:36,200 Speaker 3: You know, one thing in staying with the books example, 383 00:22:36,359 --> 00:22:39,600 Speaker 3: but maybe it's not the best example. Another element of 384 00:22:39,640 --> 00:22:43,640 Speaker 3: these fights is fights over the definition of what constitutes 385 00:22:43,680 --> 00:22:46,480 Speaker 3: a market, and maybe in books, it's kind of clear. 386 00:22:47,040 --> 00:22:50,560 Speaker 3: We're talking about books and there's five big publishers, and so, okay, 387 00:22:50,800 --> 00:22:55,199 Speaker 3: there's an advance and everything. But one could theoretically make 388 00:22:55,240 --> 00:22:58,280 Speaker 3: the argument that the market is more than just five 389 00:22:58,280 --> 00:23:01,320 Speaker 3: book publishers. And we live in an age of social 390 00:23:01,359 --> 00:23:04,720 Speaker 3: media and writers maybe not doing a book, maybe doing 391 00:23:04,800 --> 00:23:08,480 Speaker 3: a deal with Netflix and turning it into a documentary 392 00:23:08,920 --> 00:23:12,840 Speaker 3: or other vehicles that are not precisely booked, but that 393 00:23:12,960 --> 00:23:16,600 Speaker 3: may be a vehicle for an author or researcher or 394 00:23:16,720 --> 00:23:19,880 Speaker 3: writer to get there out. Where does the fight over 395 00:23:19,960 --> 00:23:23,680 Speaker 3: what constitutes the market itself occur or when does that occur? 396 00:23:24,240 --> 00:23:27,439 Speaker 4: Well, you're really pointing the you know, putting your finger here. 397 00:23:27,480 --> 00:23:30,440 Speaker 4: You're putting your finger on a fundamental question in those 398 00:23:30,720 --> 00:23:34,679 Speaker 4: anti trust cases, which is what's the market. And importantly 399 00:23:34,720 --> 00:23:37,480 Speaker 4: it's it's not like there is the market, it's we 400 00:23:37,560 --> 00:23:41,439 Speaker 4: have to show a relevant market based on how competition works. 401 00:23:41,480 --> 00:23:45,919 Speaker 4: And so here we define the market as this anticipated 402 00:23:46,800 --> 00:23:49,320 Speaker 4: stop selling books two hundred and fifty k or more. 403 00:23:49,359 --> 00:23:52,280 Speaker 4: But again you could say, well, they could self published 404 00:23:52,280 --> 00:23:56,119 Speaker 4: on published on Amazon, right, and so that's where the 405 00:23:56,200 --> 00:23:59,320 Speaker 4: critical question becomes, Yes, but is this other way of 406 00:23:59,359 --> 00:24:03,080 Speaker 4: publishing a reasonable substitute from the point of view of 407 00:24:03,119 --> 00:24:07,199 Speaker 4: those authors. That's really a critical question that we go 408 00:24:07,280 --> 00:24:10,760 Speaker 4: about asking and for that we use a tool, again 409 00:24:10,880 --> 00:24:14,359 Speaker 4: very nerd. It's called the hypothetical monopsonist test. And so 410 00:24:14,400 --> 00:24:19,440 Speaker 4: what this asks is whether a hypothetical publishing house that 411 00:24:19,560 --> 00:24:21,800 Speaker 4: would become a monopsist, meaning that they would be the 412 00:24:21,800 --> 00:24:25,280 Speaker 4: only publishing house, not five Big five, the only one, 413 00:24:25,680 --> 00:24:30,040 Speaker 4: would they be able to impose a small but significant 414 00:24:30,080 --> 00:24:34,360 Speaker 4: reduction in the advances that are paid to these authors. 415 00:24:34,720 --> 00:24:37,600 Speaker 4: And if we find that that would likely happen, that 416 00:24:37,760 --> 00:24:40,320 Speaker 4: means that the market is well defined. And basically what 417 00:24:40,359 --> 00:24:43,800 Speaker 4: that boils down to is authors just don't have other 418 00:24:44,440 --> 00:24:49,000 Speaker 4: viable options, other equivalent options outside of this market. 419 00:24:50,160 --> 00:24:54,120 Speaker 2: So you mentioned looking at various industries, and I can 420 00:24:54,160 --> 00:24:57,480 Speaker 2: only imagine how interesting that must be with the amount 421 00:24:57,520 --> 00:25:01,080 Speaker 2: of data, first person data that you that you get 422 00:25:01,119 --> 00:25:04,199 Speaker 2: to see. But one thing I was wondering is, you know, 423 00:25:04,240 --> 00:25:06,720 Speaker 2: you jump from sort of industry to industry. So I 424 00:25:06,760 --> 00:25:09,639 Speaker 2: think in recent times you've looked at publishing, which we 425 00:25:09,800 --> 00:25:14,040 Speaker 2: just discussed, You've looked at nursing, You've looked at things 426 00:25:14,080 --> 00:25:18,879 Speaker 2: like poultry processing, and also video games, can you maybe 427 00:25:19,240 --> 00:25:22,760 Speaker 2: single out one of those that was most interesting to 428 00:25:22,800 --> 00:25:26,440 Speaker 2: you or one where you've learned something new about how 429 00:25:26,480 --> 00:25:28,040 Speaker 2: that particular industry worked. 430 00:25:28,840 --> 00:25:32,160 Speaker 4: For sure, I think one of the coolest cases I've 431 00:25:32,240 --> 00:25:35,000 Speaker 4: gotten to work on. And my kids got super excited 432 00:25:35,040 --> 00:25:37,200 Speaker 4: about this because they played a lot of video games. 433 00:25:37,240 --> 00:25:41,919 Speaker 4: Concerned video game tournament, the Overwatch League, So this is 434 00:25:42,080 --> 00:25:45,840 Speaker 4: organized by Activision Blizzard, so that was like a really 435 00:25:46,119 --> 00:25:50,359 Speaker 4: cool case. And what happened there is that it's really interesting. 436 00:25:50,400 --> 00:25:53,919 Speaker 4: So they have professional video game players who get paid 437 00:25:54,520 --> 00:25:57,960 Speaker 4: to play video games. I'm sure that's the dream for 438 00:25:58,440 --> 00:26:01,480 Speaker 4: some people. And and so what was happening there is 439 00:26:01,520 --> 00:26:04,960 Speaker 4: that they had a soft cap on workers' salaries. So 440 00:26:05,200 --> 00:26:08,159 Speaker 4: it was the case that each team could not pay 441 00:26:08,720 --> 00:26:12,280 Speaker 4: more than a certain amount or else the additional pay 442 00:26:12,359 --> 00:26:15,440 Speaker 4: above that amount would get taxed away. And so that 443 00:26:15,960 --> 00:26:18,760 Speaker 4: meant that the teams had a strong incentive to keep 444 00:26:18,800 --> 00:26:21,959 Speaker 4: the tool pay to the whole team, you know, not 445 00:26:22,000 --> 00:26:25,040 Speaker 4: go above the threshold. And so what we said therefore 446 00:26:25,240 --> 00:26:28,840 Speaker 4: is that this is reducing competition for workers. Here. The 447 00:26:28,920 --> 00:26:32,280 Speaker 4: workers are video game players, professionals, they won't be able 448 00:26:32,320 --> 00:26:34,760 Speaker 4: to get paid as much as they would get paid 449 00:26:34,800 --> 00:26:39,240 Speaker 4: without this restriction right, because again the teams are strongly 450 00:26:39,280 --> 00:26:43,800 Speaker 4: disincentivized from increasing the wages above this cap. And what's 451 00:26:43,840 --> 00:26:47,600 Speaker 4: really interesting is that there are similar rules in other 452 00:26:47,680 --> 00:26:50,840 Speaker 4: leagues like the NBA and the NFL, but those rules 453 00:26:51,280 --> 00:26:56,440 Speaker 4: are collectively bargained and whereas in video games there's no unionization, 454 00:26:56,960 --> 00:27:00,879 Speaker 4: and so these rules were imposed without the workers, in 455 00:27:00,920 --> 00:27:03,480 Speaker 4: this case, the professional video game players being able to 456 00:27:04,000 --> 00:27:06,440 Speaker 4: have a say in the rules. And so to me, 457 00:27:06,720 --> 00:27:09,560 Speaker 4: that case is really interesting not only for the video 458 00:27:09,600 --> 00:27:13,679 Speaker 4: game context, but also for the interesting consideration of what 459 00:27:13,800 --> 00:27:17,320 Speaker 4: happens with collective bargaining or here the absence thereof and 460 00:27:17,400 --> 00:27:21,040 Speaker 4: therefore our prediction that those rules you know, are imposed 461 00:27:21,080 --> 00:27:24,440 Speaker 4: on workers without their consent and are going to significantly 462 00:27:24,760 --> 00:27:25,680 Speaker 4: diminish their pay. 463 00:27:26,560 --> 00:27:30,280 Speaker 3: Major League Baseball actually has an official legal exemption the 464 00:27:30,359 --> 00:27:31,120 Speaker 3: anti trust law. 465 00:27:31,680 --> 00:27:35,520 Speaker 4: Yes, and that's really important because historically one of the 466 00:27:35,520 --> 00:27:37,560 Speaker 4: ways that the anti trust laws could be used is 467 00:27:37,560 --> 00:27:41,120 Speaker 4: to bust the unions because the you know, the workers 468 00:27:41,200 --> 00:27:44,160 Speaker 4: agree with each other. Normally they should compete, but they agree. 469 00:27:44,440 --> 00:27:47,240 Speaker 4: And so it was decided from a policy perspective that 470 00:27:47,280 --> 00:27:51,480 Speaker 4: there would be an exemption for union bargain bargaining that 471 00:27:51,640 --> 00:27:55,119 Speaker 4: you know, the the unions cannot be sued by the 472 00:27:55,160 --> 00:27:58,480 Speaker 4: Anti Trust Division for doing collective bargaining, and so that's 473 00:27:58,480 --> 00:28:01,760 Speaker 4: why it's different. If there is a union is one thing. 474 00:28:01,800 --> 00:28:04,119 Speaker 4: If there is no union, it's a different thing. And 475 00:28:04,200 --> 00:28:07,639 Speaker 4: so in this case of the Overwatch League, you know, 476 00:28:07,760 --> 00:28:10,359 Speaker 4: the company agreed not to do this again, you know, 477 00:28:10,440 --> 00:28:13,399 Speaker 4: to limit the workers' pay because again there was no 478 00:28:13,480 --> 00:28:16,919 Speaker 4: agreement with the worker through bargaining, but instead it was 479 00:28:17,000 --> 00:28:20,440 Speaker 4: just imposed on workers against their will and would likely 480 00:28:20,520 --> 00:28:23,399 Speaker 4: reduce wages that the workers are being paid. 481 00:28:23,560 --> 00:28:26,280 Speaker 2: This might be a very theoretical question, but we've obviously 482 00:28:26,320 --> 00:28:31,800 Speaker 2: been talking about the impact of concentration on prices and labor. 483 00:28:32,359 --> 00:28:35,880 Speaker 2: Are there other effects where you could see a sort 484 00:28:35,920 --> 00:28:40,760 Speaker 2: of anti trust argument playing out, like other consequences on 485 00:28:40,800 --> 00:28:44,160 Speaker 2: the economy that might be worth looking at for sure. 486 00:28:44,240 --> 00:28:47,680 Speaker 4: I think, you know, another aspect that we haven't touched 487 00:28:47,760 --> 00:28:51,120 Speaker 4: upon as much but is innovation. And you know, innovation 488 00:28:51,360 --> 00:28:54,120 Speaker 4: is really important and one of the you know, in 489 00:28:54,200 --> 00:28:57,720 Speaker 4: order to create new jobs and new businesses. So you know, 490 00:28:57,760 --> 00:29:01,880 Speaker 4: we really need innovation to grow, and that innovation can 491 00:29:01,920 --> 00:29:07,479 Speaker 4: be really thwarted by anti competitive behavior by you know, big, 492 00:29:07,920 --> 00:29:12,360 Speaker 4: big actors who monopolize markets. And so you know, for example, 493 00:29:12,440 --> 00:29:16,880 Speaker 4: we have filed a lawsuit against Apple as an example, 494 00:29:17,320 --> 00:29:20,160 Speaker 4: and you know, one of the arguments there is that 495 00:29:20,480 --> 00:29:26,600 Speaker 4: Apple is preventing its users from switching to alternative smartphones 496 00:29:27,040 --> 00:29:30,320 Speaker 4: and one of the ill effects of that is a 497 00:29:30,360 --> 00:29:34,960 Speaker 4: reduction in innovation. So essentially, the big picture vision here 498 00:29:35,600 --> 00:29:38,320 Speaker 4: I just want to make clear is that the anti 499 00:29:38,320 --> 00:29:42,680 Speaker 4: competitive behavior decreases innovation. We're not saying that the company 500 00:29:42,720 --> 00:29:45,160 Speaker 4: isn't innovating at all. It's more like if there was 501 00:29:45,200 --> 00:29:47,840 Speaker 4: more competition, they'd be innovating more. So what does this 502 00:29:47,960 --> 00:29:51,280 Speaker 4: mean intuitively, is if you're able to hold your audience 503 00:29:51,360 --> 00:29:53,960 Speaker 4: captive as a company, you know, you're it's very hard 504 00:29:54,000 --> 00:29:56,560 Speaker 4: for the customer to move away from your product. You 505 00:29:56,720 --> 00:29:59,800 Speaker 4: just don't have the same incentive to make your product 506 00:29:59,840 --> 00:30:02,560 Speaker 4: re good for the customer in order to keep them. 507 00:30:02,560 --> 00:30:05,480 Speaker 4: Whereas if there's a lot of competition, well there's always 508 00:30:05,520 --> 00:30:08,040 Speaker 4: a risk of losing the customer, And now you're really 509 00:30:08,040 --> 00:30:11,760 Speaker 4: incentivized to work hard to innovate so that the customer 510 00:30:11,840 --> 00:30:14,480 Speaker 4: wants to stay with you rather than switching to somebody else. 511 00:30:30,120 --> 00:30:34,760 Speaker 2: Since you mentioned tech and Apple and innovation, there's a 512 00:30:34,800 --> 00:30:38,400 Speaker 2: line of thinking in economics, which is that maybe the 513 00:30:38,520 --> 00:30:43,080 Speaker 2: way we do official economic statistics at the moment isn't 514 00:30:43,120 --> 00:30:47,120 Speaker 2: necessarily the best at capturing the new economy, for lack 515 00:30:47,160 --> 00:30:51,280 Speaker 2: of a better word, like maybe productivity. It's harder to 516 00:30:51,320 --> 00:30:55,160 Speaker 2: measure productivity improvements in something like a video game or 517 00:30:55,200 --> 00:30:58,000 Speaker 2: a phone, or I don't know, a refrigerator that now 518 00:30:58,080 --> 00:31:02,200 Speaker 2: comes with a bluetooth speaker or whatever. I'm curious if 519 00:31:02,240 --> 00:31:06,400 Speaker 2: the same dynamic kind of exists in anti trust laws 520 00:31:06,600 --> 00:31:10,280 Speaker 2: and enforcement. Does it feel to you like the current 521 00:31:10,360 --> 00:31:14,719 Speaker 2: tools at your disposal are adequate to capture maybe some 522 00:31:14,760 --> 00:31:18,160 Speaker 2: of the new anti trust challenges being thrown up by 523 00:31:18,480 --> 00:31:19,720 Speaker 2: a more modern economy. 524 00:31:20,320 --> 00:31:23,280 Speaker 4: Right, So, I think, you know, that's precisely why we 525 00:31:23,480 --> 00:31:26,040 Speaker 4: created the or you know, we worked together with the 526 00:31:26,200 --> 00:31:30,320 Speaker 4: FTC to put out the twenty twenty three merger guidelines. 527 00:31:30,440 --> 00:31:33,800 Speaker 4: You know, we have taken to heart all of those 528 00:31:33,840 --> 00:31:37,959 Speaker 4: new technological developments and you know, new ways of looking 529 00:31:38,040 --> 00:31:41,800 Speaker 4: at old problems, and so, for example, you know, I 530 00:31:41,960 --> 00:31:46,240 Speaker 4: mentioned innovation as being one important consideration, and in the 531 00:31:46,360 --> 00:31:50,200 Speaker 4: merger guidelines, for example, we pay special attention to let's say, 532 00:31:50,240 --> 00:31:54,240 Speaker 4: acquisition of nascent competitors where a dominant player might be 533 00:31:54,320 --> 00:31:57,680 Speaker 4: buying a smaller company that is very promising and might 534 00:31:57,760 --> 00:31:59,920 Speaker 4: come to eat their lunch, and so it really pay 535 00:32:00,080 --> 00:32:03,640 Speaker 4: attention to that. And also with respect to labor, it's 536 00:32:03,680 --> 00:32:06,480 Speaker 4: not all about wages, but we're also looking at things 537 00:32:06,520 --> 00:32:09,720 Speaker 4: like working conditions. You know, how flexible the work is, 538 00:32:10,200 --> 00:32:14,800 Speaker 4: maybe special hybrid arrangements, right, talking about technology that workers 539 00:32:14,880 --> 00:32:18,200 Speaker 4: might really enjoy. If there's less competition for workers, there's 540 00:32:18,320 --> 00:32:21,520 Speaker 4: less incentive for firms to come up with creative ideas 541 00:32:21,520 --> 00:32:25,120 Speaker 4: of organizing work in ways that you know will make 542 00:32:25,240 --> 00:32:28,520 Speaker 4: people happy and productive at work. So I think, you know, 543 00:32:28,560 --> 00:32:32,720 Speaker 4: the new merger guidelines have really learned from recent developments 544 00:32:32,720 --> 00:32:35,640 Speaker 4: in technology and you know, in the economics literature to 545 00:32:35,880 --> 00:32:41,480 Speaker 4: look at a broader area of potential effects from anti 546 00:32:41,480 --> 00:32:44,400 Speaker 4: competitive behavior that isn't just limited to prices, which is 547 00:32:44,480 --> 00:32:46,840 Speaker 4: usually the bread and but of course we look at prices, 548 00:32:47,120 --> 00:32:50,360 Speaker 4: but there's all these other aspects like you know, as 549 00:32:50,400 --> 00:32:53,840 Speaker 4: I said, wages, but also innovation and the quality of jobs. 550 00:32:54,240 --> 00:32:56,960 Speaker 3: When it comes to innovation, and you brought up the 551 00:32:57,000 --> 00:32:59,360 Speaker 3: Apple case, so on the one hand, you could say 552 00:32:59,400 --> 00:33:03,920 Speaker 3: it's anti competitive from an innovation standpoint because the frictions 553 00:33:03,960 --> 00:33:06,640 Speaker 3: that they make make it hard for a user or 554 00:33:06,680 --> 00:33:09,720 Speaker 3: a consumer to move from one type of smartphone to another. 555 00:33:10,160 --> 00:33:13,880 Speaker 3: On the other hand, one could argue that actually it's 556 00:33:13,880 --> 00:33:16,719 Speaker 3: good for innovation because if you pool a ton of 557 00:33:16,800 --> 00:33:20,080 Speaker 3: users onto a single platform, then someone can build a 558 00:33:20,120 --> 00:33:24,920 Speaker 3: product and have this huge, a wide swath of people 559 00:33:24,960 --> 00:33:27,920 Speaker 3: that they can target, and that opens up anything. You 560 00:33:28,000 --> 00:33:31,680 Speaker 3: mentioned big companies buying up small companies. Maybe that is 561 00:33:31,760 --> 00:33:34,120 Speaker 3: anti competitive in one sense. But on the other hand, 562 00:33:34,320 --> 00:33:37,600 Speaker 3: if small companies view an exit to a large company 563 00:33:37,720 --> 00:33:40,640 Speaker 3: as a likely outcome and the alternative of an IPO, 564 00:33:41,120 --> 00:33:45,000 Speaker 3: then maybe that funds the investment in more companies in 565 00:33:45,040 --> 00:33:47,000 Speaker 3: the first place. So I guess what I'm asking is, 566 00:33:47,080 --> 00:33:49,560 Speaker 3: how do you actually measure or is there a way 567 00:33:49,600 --> 00:33:52,920 Speaker 3: to measure innovation or what are the tools you use 568 00:33:53,240 --> 00:33:56,719 Speaker 3: to actually measure the effect of some corporate behavior of 569 00:33:56,760 --> 00:34:00,160 Speaker 3: some deal on the amount of innovation, which seems like 570 00:34:00,240 --> 00:34:02,000 Speaker 3: kind of a hard thing to strictly quantified. 571 00:34:02,480 --> 00:34:06,480 Speaker 4: It's very hard to quantify directly, and so that's why 572 00:34:06,520 --> 00:34:11,520 Speaker 4: we are relying on again industry specific documents. So, I mean, 573 00:34:11,520 --> 00:34:13,440 Speaker 4: what you have to realize is, like we're talking here 574 00:34:13,440 --> 00:34:16,920 Speaker 4: in the abstract, but in the concrete case, we have 575 00:34:17,120 --> 00:34:20,319 Speaker 4: like like information. 576 00:34:19,960 --> 00:34:21,840 Speaker 3: So what are the things that come up in the 577 00:34:21,920 --> 00:34:24,000 Speaker 3: course of a case that you're like, Okay, this is 578 00:34:24,480 --> 00:34:27,319 Speaker 3: useful data or this is signal that can tell us 579 00:34:27,360 --> 00:34:31,400 Speaker 3: something about the net effect on innovation. That's something in 580 00:34:31,400 --> 00:34:32,279 Speaker 3: the tech space would have. 581 00:34:32,719 --> 00:34:35,759 Speaker 4: So like, for example, if we are looking at the 582 00:34:35,840 --> 00:34:39,279 Speaker 4: concrete case and we are looking at let's say a 583 00:34:39,280 --> 00:34:44,279 Speaker 4: dominant company and its practices, we often see evidence on 584 00:34:44,360 --> 00:34:47,960 Speaker 4: smaller competitors that let's say there might be an anecdote 585 00:34:48,120 --> 00:34:50,480 Speaker 4: where you know, we know that they brought a new 586 00:34:50,520 --> 00:34:54,480 Speaker 4: product and the product in question was very popular, but 587 00:34:54,719 --> 00:34:59,000 Speaker 4: let's say you know, the dominant firm made sure that 588 00:34:59,120 --> 00:35:02,920 Speaker 4: the product cannot take off by imposing all sorts of restrictions. 589 00:35:02,920 --> 00:35:05,040 Speaker 4: Because you know, there's all sorts of ways. It's very 590 00:35:05,120 --> 00:35:07,839 Speaker 4: industry specific, but there are ways, and that's what we're 591 00:35:07,840 --> 00:35:10,960 Speaker 4: going after. It's so called exclusionary practices. There are ways 592 00:35:11,239 --> 00:35:15,080 Speaker 4: for the dominant companies to make sure that that new, upstart, 593 00:35:15,160 --> 00:35:18,719 Speaker 4: cool product, you know, finds it hard to find a 594 00:35:18,840 --> 00:35:22,000 Speaker 4: market and so and so that's what we really want 595 00:35:22,040 --> 00:35:25,880 Speaker 4: to have our eyes wide open toward, is to be 596 00:35:26,040 --> 00:35:29,839 Speaker 4: able to detect those kinds of behaviors and you know, 597 00:35:29,880 --> 00:35:33,520 Speaker 4: if possible, curb it right. And again, extreme behavior would 598 00:35:33,520 --> 00:35:35,520 Speaker 4: be to literally buy up that company that has the 599 00:35:35,600 --> 00:35:38,960 Speaker 4: cool new product, you know, and maybe potentially do a 600 00:35:39,040 --> 00:35:42,040 Speaker 4: killer acquisition, you know, just kill that product so that 601 00:35:42,080 --> 00:35:44,360 Speaker 4: it never it never comes to comes to market. So 602 00:35:44,400 --> 00:35:47,600 Speaker 4: there's all sorts of things that companies can do, and 603 00:35:47,640 --> 00:35:51,400 Speaker 4: we have to be very vigilant about all these strategies. 604 00:35:51,440 --> 00:35:54,240 Speaker 4: And companies often say, oh, but we are so great, 605 00:35:54,280 --> 00:35:57,600 Speaker 4: we so innovative, and that's really missing the point because 606 00:35:57,680 --> 00:36:01,000 Speaker 4: nobody said they're not innovative the big player. It's more 607 00:36:01,040 --> 00:36:05,400 Speaker 4: about how much innovation is lost through their anti compantive behavior. 608 00:36:05,440 --> 00:36:07,600 Speaker 4: The point is we could have even better stuff, yea, 609 00:36:07,760 --> 00:36:11,560 Speaker 4: even better working conditions, even more innovation if there was 610 00:36:11,600 --> 00:36:12,280 Speaker 4: more competition. 611 00:36:12,800 --> 00:36:15,040 Speaker 3: So I just have one more question, and I've asked 612 00:36:15,040 --> 00:36:18,560 Speaker 3: this before on conversation about anti trust, but I'm curious 613 00:36:18,600 --> 00:36:21,800 Speaker 3: to get your perspective within the context of you know, 614 00:36:22,040 --> 00:36:27,600 Speaker 3: we're this administration is undertaking a number of policy measures. 615 00:36:27,800 --> 00:36:30,440 Speaker 3: People call it industrial policy, for example, and in some 616 00:36:30,560 --> 00:36:34,640 Speaker 3: case it involves just giving one money, one company money, 617 00:36:34,760 --> 00:36:38,560 Speaker 3: or a few companies money. And in theory that you know, 618 00:36:38,600 --> 00:36:41,000 Speaker 3: that's a major advantage to them, let's say a competitor 619 00:36:41,239 --> 00:36:43,840 Speaker 3: might not have. And so we're sort of at a 620 00:36:43,920 --> 00:36:46,040 Speaker 3: time in which you know, we are sort of to 621 00:36:46,080 --> 00:36:50,360 Speaker 3: some extent picking winners or picking candidates who could be 622 00:36:50,400 --> 00:36:53,160 Speaker 3: winners depending on how they execute. Can you talk a 623 00:36:53,200 --> 00:36:56,560 Speaker 3: little bit, maybe philosophically or from your perspective, how you 624 00:36:56,640 --> 00:37:01,000 Speaker 3: see anti trust enforcement fitting in with the sort of broader, 625 00:37:01,640 --> 00:37:05,799 Speaker 3: broader policy landscape in which the administration is not just 626 00:37:05,840 --> 00:37:09,000 Speaker 3: sort of letting the invisible hand to determine who's going 627 00:37:09,080 --> 00:37:10,759 Speaker 3: to win and who's going to build on, but it's 628 00:37:10,840 --> 00:37:14,600 Speaker 3: actually shaping and guiding corporate behavior in multiple industries. 629 00:37:16,239 --> 00:37:18,680 Speaker 4: HM. So I think what I can best say about 630 00:37:18,719 --> 00:37:22,960 Speaker 4: this is that we work, you know, to foster competition 631 00:37:23,320 --> 00:37:27,080 Speaker 4: given other you know, existing rules and constraints. So we 632 00:37:27,400 --> 00:37:30,600 Speaker 4: take the other stuff as given, and you know, if 633 00:37:30,600 --> 00:37:32,960 Speaker 4: there's rules out there, there's rules we don't. You know, 634 00:37:33,000 --> 00:37:36,480 Speaker 4: we're not here to change legislation or anything like that, 635 00:37:36,520 --> 00:37:39,960 Speaker 4: and we're looking at, hey, is there a competition problem 636 00:37:40,360 --> 00:37:44,120 Speaker 4: within the existing rules, and we're going after that. So 637 00:37:44,160 --> 00:37:47,359 Speaker 4: I think it's like just you know, each tool in 638 00:37:47,400 --> 00:37:51,360 Speaker 4: its own sort of domain of application. There's many policy 639 00:37:51,400 --> 00:37:53,400 Speaker 4: goals and you know, I don't want to comment about 640 00:37:53,480 --> 00:37:58,600 Speaker 4: other policies outside us. What we do is given again, 641 00:37:58,680 --> 00:38:01,319 Speaker 4: what every other I know. Actually a good example of 642 00:38:01,360 --> 00:38:05,000 Speaker 4: this in labor again is the union topic. Right, So 643 00:38:05,520 --> 00:38:09,080 Speaker 4: unions got an exception. We take that as a given. 644 00:38:09,160 --> 00:38:11,360 Speaker 4: So we're not going to go after unions. You know, 645 00:38:11,440 --> 00:38:15,000 Speaker 4: they they by legislation, and that's really important in democracy. 646 00:38:15,480 --> 00:38:19,040 Speaker 4: If the legislature decided to make the law a certain way, 647 00:38:19,800 --> 00:38:22,000 Speaker 4: that's how it is, and we respect that. And then 648 00:38:22,000 --> 00:38:25,960 Speaker 4: we're asking, given that, you know, what other competition is there, 649 00:38:26,000 --> 00:38:31,279 Speaker 4: and how might workers and consumers gain if we intervene 650 00:38:31,360 --> 00:38:34,000 Speaker 4: in order to foster more competition. That would lead to 651 00:38:34,040 --> 00:38:37,960 Speaker 4: again lower prices, more innovation, higher wages, better quality jobs. 652 00:38:38,600 --> 00:38:41,160 Speaker 2: So just on this note, Joe kind of reminded me. 653 00:38:41,239 --> 00:38:44,000 Speaker 2: But going back to the supply chain issue and the 654 00:38:44,080 --> 00:38:46,520 Speaker 2: experience of the pandemic, I mean, I think there is 655 00:38:46,560 --> 00:38:51,640 Speaker 2: a realization that concentration can have negative consequences in terms 656 00:38:51,680 --> 00:38:55,279 Speaker 2: of overall resiliency of the system. So if you have 657 00:38:55,360 --> 00:38:59,520 Speaker 2: one supplier of something that is strategically important and then 658 00:38:59,600 --> 00:39:02,440 Speaker 2: there I don't know, a COVID outbreak in their factory 659 00:39:02,520 --> 00:39:04,799 Speaker 2: or something like that, then you could have the entire 660 00:39:04,880 --> 00:39:08,400 Speaker 2: supply of that good curtailed basically. And the other thing 661 00:39:08,440 --> 00:39:11,400 Speaker 2: that seems to have happened recently is there's more recognition 662 00:39:11,600 --> 00:39:15,440 Speaker 2: of the cascade effects in the economy. So economists like 663 00:39:15,520 --> 00:39:19,200 Speaker 2: Isabella Weber have been working on this idea of systemically 664 00:39:19,239 --> 00:39:23,560 Speaker 2: important sources of inflation or where you could get higher 665 00:39:23,560 --> 00:39:26,840 Speaker 2: prices in one particular good that's a building block of 666 00:39:26,880 --> 00:39:29,040 Speaker 2: a number of other things, and then that sort of 667 00:39:29,160 --> 00:39:33,000 Speaker 2: flows through the entire economy. So I'm curious as someone 668 00:39:33,040 --> 00:39:36,120 Speaker 2: who does this at the DOJ. This is your job, 669 00:39:36,160 --> 00:39:41,279 Speaker 2: your day to day, is supply chain resiliency or kind 670 00:39:41,320 --> 00:39:43,840 Speaker 2: of on your radar at all? Is that something that 671 00:39:43,840 --> 00:39:45,359 Speaker 2: you would be looking at as well. 672 00:39:46,280 --> 00:39:49,359 Speaker 4: I mean, I think one way that this intersects with 673 00:39:49,400 --> 00:39:54,400 Speaker 4: our bread and butter concerns is through entry. So you know, 674 00:39:54,440 --> 00:39:58,200 Speaker 4: we're always looking at in order to predict whether, let's 675 00:39:58,239 --> 00:40:02,880 Speaker 4: say a merger is going to significantly affect competition in 676 00:40:02,880 --> 00:40:06,239 Speaker 4: a negative way. So these two companies are merging, and 677 00:40:06,400 --> 00:40:09,120 Speaker 4: is that going to increase prices, that going to reduce wages? 678 00:40:09,680 --> 00:40:12,839 Speaker 4: One key question is once they merge, let's say they're 679 00:40:12,840 --> 00:40:16,560 Speaker 4: trying to do something bad like increased prices. Are they 680 00:40:16,600 --> 00:40:18,839 Speaker 4: going to be able to do so? And one way 681 00:40:18,960 --> 00:40:22,080 Speaker 4: that they would be limited in that is by entry 682 00:40:22,200 --> 00:40:26,480 Speaker 4: from other companies. If we strongly believe that, you know, 683 00:40:26,560 --> 00:40:29,640 Speaker 4: this is a market that's very dynamic and there's a 684 00:40:29,680 --> 00:40:32,400 Speaker 4: lot of entry, or on the opposite, it's a market 685 00:40:32,440 --> 00:40:35,040 Speaker 4: that's not all dynamic. There hasn't been a new company 686 00:40:35,040 --> 00:40:38,720 Speaker 4: that entered for the past twenty years. That factors into 687 00:40:38,840 --> 00:40:42,680 Speaker 4: our reasoning. And I think this entry is related to 688 00:40:42,719 --> 00:40:46,080 Speaker 4: some extent to this concern about resiliency, because you would 689 00:40:46,080 --> 00:40:50,160 Speaker 4: think that an industry where it's very easy to enter, 690 00:40:50,480 --> 00:40:54,760 Speaker 4: you know, it's very flexible, you would have also less 691 00:40:54,880 --> 00:40:58,239 Speaker 4: of that other concern around resiliency versus and this is 692 00:40:58,560 --> 00:41:01,520 Speaker 4: resiliency to monopoly, but it could potentially be residency to 693 00:41:01,680 --> 00:41:05,440 Speaker 4: other things. So again, I think that entry consideration is 694 00:41:05,800 --> 00:41:08,879 Speaker 4: really important to look at the specifics of the industry 695 00:41:09,200 --> 00:41:12,000 Speaker 4: in terms of economies of scale or other barriers to 696 00:41:12,200 --> 00:41:15,239 Speaker 4: entry that could occur, be there or not be there, 697 00:41:15,520 --> 00:41:18,240 Speaker 4: And again it really depends on the specifics of the industry. 698 00:41:18,520 --> 00:41:21,640 Speaker 2: All right, Johanna Marinescue from the DOJ, thank you so 699 00:41:21,719 --> 00:41:24,520 Speaker 2: much for coming on our thoughts. That was absolutely fascinating. 700 00:41:25,120 --> 00:41:25,879 Speaker 4: Thank you so much. 701 00:41:26,120 --> 00:41:27,040 Speaker 3: Yeah, thank you so much. 702 00:41:27,080 --> 00:41:41,319 Speaker 4: That was great, Joe. 703 00:41:41,360 --> 00:41:43,680 Speaker 2: I'm so glad we did that episode because I remember, 704 00:41:43,840 --> 00:41:46,520 Speaker 2: I think maybe both with Lena Khan from the FTC 705 00:41:46,600 --> 00:41:49,160 Speaker 2: and then Jonathan Kanter from The DOJ, both of which 706 00:41:49,200 --> 00:41:51,960 Speaker 2: we have had on the podcast. At this point, I 707 00:41:51,960 --> 00:41:55,120 Speaker 2: think we were asking them questions about their research process 708 00:41:55,280 --> 00:41:59,799 Speaker 2: and identifying, you know, potential targets for lawsuits and things 709 00:41:59,880 --> 00:42:03,279 Speaker 2: like that. It was really interesting to hear the economists 710 00:42:03,440 --> 00:42:05,920 Speaker 2: perspective on this totally. 711 00:42:05,960 --> 00:42:08,680 Speaker 3: I like hearing about like all the different tools and 712 00:42:08,800 --> 00:42:11,279 Speaker 3: forms and stuff like that, right, because one of the 713 00:42:11,280 --> 00:42:13,919 Speaker 3: things that came up in some of our previous conversations 714 00:42:14,000 --> 00:42:16,239 Speaker 3: is like, well some of it's like anecdotal, right, or 715 00:42:16,280 --> 00:42:18,359 Speaker 3: some of it you hear things and you say, oh, 716 00:42:18,400 --> 00:42:20,080 Speaker 3: you read something in the paper and you're like, hmm, 717 00:42:20,400 --> 00:42:23,360 Speaker 3: something seems kind of weird here, or people are complaining. 718 00:42:23,640 --> 00:42:26,960 Speaker 3: But then hearing about like specific tools, the type of 719 00:42:27,160 --> 00:42:30,400 Speaker 3: data that gets collected. What was it the wind loss data? 720 00:42:30,719 --> 00:42:33,440 Speaker 2: Yeah, and also that one form I can't remember. 721 00:42:34,280 --> 00:42:37,719 Speaker 3: Yeah, I have it up on my computer right now, 722 00:42:37,760 --> 00:42:41,600 Speaker 3: the HSR, the pre merger notification form that you have 723 00:42:41,680 --> 00:42:44,000 Speaker 3: to fill out and that the onus is on the 724 00:42:44,040 --> 00:42:48,120 Speaker 3: companies to sort of demonstrate preemptively that the merger is 725 00:42:48,200 --> 00:42:52,240 Speaker 3: not going to worsen the competitive situation. I like hearing 726 00:42:52,440 --> 00:42:55,000 Speaker 3: as you say about like all these different now, all 727 00:42:55,040 --> 00:42:57,760 Speaker 3: of these different tactics and techniques and tools to actually 728 00:42:57,800 --> 00:42:59,080 Speaker 3: how these things get evaluated. 729 00:42:59,239 --> 00:43:01,839 Speaker 2: Yeah, and Yoanna is right that I would love to 730 00:43:01,920 --> 00:43:04,239 Speaker 2: as a journalist, I would love to see that kind of. 731 00:43:04,239 --> 00:43:05,800 Speaker 3: I wish, you know what, I wish we could subpoena 732 00:43:05,840 --> 00:43:08,319 Speaker 3: up here. I think journalist should have subpoena power over 733 00:43:08,400 --> 00:43:10,399 Speaker 3: our corporate data. I think that would only be fair. 734 00:43:10,520 --> 00:43:13,160 Speaker 2: I guess we do have freedom of information requests, but 735 00:43:13,239 --> 00:43:15,839 Speaker 2: it's not quite the same companies. The other thing I 736 00:43:15,920 --> 00:43:18,480 Speaker 2: was thinking about, you know, I know you keep asking 737 00:43:18,520 --> 00:43:23,480 Speaker 2: this question to various antitrust people about, you know, the 738 00:43:23,480 --> 00:43:28,320 Speaker 2: the active industrial policy of the Biden administration versus questions 739 00:43:28,360 --> 00:43:31,680 Speaker 2: over competition and things like that, and I think, you know, 740 00:43:31,719 --> 00:43:34,640 Speaker 2: there is a tension there that I think is probably 741 00:43:34,760 --> 00:43:36,200 Speaker 2: as yet unresolved. 742 00:43:36,560 --> 00:43:36,759 Speaker 1: Yeah. 743 00:43:36,800 --> 00:43:37,480 Speaker 4: I think so too. 744 00:43:37,640 --> 00:43:40,799 Speaker 3: I mean it's interesting or maybe you know, one way 745 00:43:40,840 --> 00:43:43,480 Speaker 3: to view it, like there is this tension. The other 746 00:43:43,680 --> 00:43:46,759 Speaker 3: argument I think one could make is the fact that 747 00:43:46,800 --> 00:43:50,320 Speaker 3: the US is to some extent, picking winners even further 748 00:43:50,680 --> 00:43:55,200 Speaker 3: emphasizes the need to enforce anti trust and to so 749 00:43:55,440 --> 00:43:58,200 Speaker 3: that you know, because once you've been selected as a winner, 750 00:43:58,239 --> 00:44:01,640 Speaker 3: a candidate winner, so they're actually still competing rather than 751 00:44:02,120 --> 00:44:06,720 Speaker 3: basically rent seeking. So maybe they go hand in glove 752 00:44:06,920 --> 00:44:08,040 Speaker 3: more than I appreciate. 753 00:44:08,280 --> 00:44:09,560 Speaker 2: Absolutely. Shall we leave it there. 754 00:44:09,640 --> 00:44:10,319 Speaker 3: Let's leave it there. 755 00:44:10,480 --> 00:44:13,520 Speaker 2: This has been another episode of the Oudlots podcast. I'm 756 00:44:13,560 --> 00:44:16,200 Speaker 2: Tracy Alloway. You can follow me at Tracy. 757 00:44:15,840 --> 00:44:18,200 Speaker 3: Alloway and I'm Joe Wisenthal. You can follow me at 758 00:44:18,239 --> 00:44:22,200 Speaker 3: the Stalwart. Follow our guest Joanna Maronescu. She's at m Joanna. 759 00:44:22,600 --> 00:44:25,880 Speaker 3: Follow our producers Kerman Rodriguez at Kerman Erman, dash Ol 760 00:44:25,880 --> 00:44:29,160 Speaker 3: Bennett a Dashbot, and Kelbrooks at Kelbrooks. Thank you to 761 00:44:29,160 --> 00:44:32,040 Speaker 3: our producer Moses ONEm. For more odd Logs content, go 762 00:44:32,080 --> 00:44:34,200 Speaker 3: to Bloomberg dot com slash odd Lots, where you have 763 00:44:34,280 --> 00:44:37,600 Speaker 3: transcripts of blog and weekly newsletter comes out every Friday, 764 00:44:37,920 --> 00:44:40,000 Speaker 3: and you can chat about all of these topics twenty 765 00:44:40,000 --> 00:44:44,640 Speaker 3: four to seven in our discord discord do gg slash odlines. 766 00:44:44,239 --> 00:44:46,560 Speaker 2: And if you enjoy odd Lots, if you like it 767 00:44:46,600 --> 00:44:49,239 Speaker 2: when we do these anti trust episodes. Then please leave 768 00:44:49,320 --> 00:44:53,400 Speaker 2: us a positive review on your favorite podcast platform. And remember, 769 00:44:53,480 --> 00:44:55,960 Speaker 2: if you are a Bloomberg subscriber, you can listen to 770 00:44:56,120 --> 00:44:59,200 Speaker 2: all of our episodes absolutely ad free. All you need 771 00:44:59,280 --> 00:45:02,839 Speaker 2: to do is can next your Bloomberg account with Apple Podcasts. 772 00:45:03,160 --> 00:45:06,680 Speaker 2: To do that, find the Bloomberg channel on Apple Podcasts 773 00:45:06,719 --> 00:45:09,280 Speaker 2: and follow the instructions there. Thanks for listening.