WEBVTT - `Hipsters' Aim to Turn Back Antitrust Policy 100 Years (Audio)

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcasts. They've been branded

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<v Speaker 1>as hipsters by their critics, but it has nothing to

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<v Speaker 1>do with what they wear or the music they listen to.

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<v Speaker 1>It has to do with their views on antitrust. They're

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<v Speaker 1>a small group of policy wonks critical of the increasing

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<v Speaker 1>consolidation of corporation. You can probably name many of those

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<v Speaker 1>corporate giants. They not only want a toughen antitrust enforcement,

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<v Speaker 1>but also to return antitrust policy to its early twentieth

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<v Speaker 1>century roots. Bloomberg News legal reporter David McLaughlin has written

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<v Speaker 1>about their mission in this week's Bloomberg Business Week, and

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<v Speaker 1>he joins us now, David, tell us about these competition

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<v Speaker 1>policy wonks as you describe them in your story. Yeah, So,

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<v Speaker 1>there are a group of folks here in Washington, mostly UM,

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<v Speaker 1>that have been speaking out a lot about UM big

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<v Speaker 1>companies UM, warning about the threat from UH monopolies, especially

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<v Speaker 1>in in in technology and UM they were basically spun

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<v Speaker 1>out of a think tank uh here in in DC

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<v Speaker 1>called New America, and they they formed this uh new

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<v Speaker 1>organization called Open Markets and they've been gaining a lot

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<v Speaker 1>of attention because UM, you know, there's been a long

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<v Speaker 1>debate in the world of any trust about UM how

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<v Speaker 1>tough to be on mergers and in big companies for

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<v Speaker 1>many years and and and the pendulum is sort of

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<v Speaker 1>swung back and forth on that during different administrations. But

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<v Speaker 1>you know, essentially, the the basic playbook for how to

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<v Speaker 1>evaluate mergers and monopolies has always been the same. And

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<v Speaker 1>these guys are saying that whole playbook just needs to

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<v Speaker 1>be thrown out. So tell us about the old playbook,

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<v Speaker 1>which is based on the notion of consumer welfare. Right.

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<v Speaker 1>So that was a notion that UM came to be

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<v Speaker 1>really in the early nineteen eighties. UM. It was Uh.

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<v Speaker 1>It was brought up by Robert Bourke UM in a

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<v Speaker 1>in a book he called in a book he wrote

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<v Speaker 1>called the antitrust paradox. UM. Essentially, the ideas that when

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<v Speaker 1>we think about whether a merger should be should be

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<v Speaker 1>blocked or should be allowed, and when we think about

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<v Speaker 1>dominant companies in their in their market power. That the

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<v Speaker 1>question is are you know, is the deal or is

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<v Speaker 1>the company harming consumers? And and and for the most

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<v Speaker 1>part that has meant has meant price. So in anti

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<v Speaker 1>trust enforcers um investigate a merger, they're primarily focused on

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<v Speaker 1>on price and will the combined company gain the power

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<v Speaker 1>from from combining to be able to raise prices on

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<v Speaker 1>you know, their their customers, um and UM. That's been

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<v Speaker 1>basically the framework and so UM the but there's been

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<v Speaker 1>these these swings. So like you know, typically, like you know,

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<v Speaker 1>in the Embroment administration, they were seen as somewhat more

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<v Speaker 1>aggressive on merger enforcements. During the Bush administration the sort

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<v Speaker 1>of conventional thinking as they were slightly more hands off.

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<v Speaker 1>But but the kind of the way to evaluate the

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<v Speaker 1>deals is thinking about consumer welfare. That's always been sort

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<v Speaker 1>of the the agreed upon framework. So what is the

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<v Speaker 1>main criticism of the theories of these competition policy walks.

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<v Speaker 1>What's the opposition saying about them? Yeah, so they say

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<v Speaker 1>that that this this whole notion is sort of um,

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<v Speaker 1>you know, corrupted. UM the uh, the the reason for

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<v Speaker 1>the reason why any trust laws were um brought into

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<v Speaker 1>place A hundred years ago. UM. This was the time

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<v Speaker 1>of you know, standard oil, et cetera, in the in

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<v Speaker 1>the in the the trusts, so a hundred years ago UM.

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<v Speaker 1>And so they say that basically this, you know, pursuing

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<v Speaker 1>this framework has got us not has basically harm consumers

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<v Speaker 1>because it's led to these gigantic companies UM like technology

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<v Speaker 1>like in technology or very consolidated UM airline industry, UH,

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<v Speaker 1>A very consolidated banking industry. So you can look at

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<v Speaker 1>a number of different industries that UM that have consolidated

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<v Speaker 1>over the years, UH, and they say this has UM.

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<v Speaker 1>This may be in some cases led to lower prices

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<v Speaker 1>for consumers, but there have been other harms that the

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<v Speaker 1>framework or the consumer welfare standard has has sore, have missed,

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<v Speaker 1>and that those are harms that have affected UM workers

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<v Speaker 1>and other elements of supply chains in different industries. So, David,

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<v Speaker 1>are we seeing some shift in antitrust enforcement policies? For

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<v Speaker 1>example with the Justice Department going to court to stop

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<v Speaker 1>the merger of A T and T and Time Warner,

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<v Speaker 1>where they're not just looking at vertical versus horizontal. UM.

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<v Speaker 1>You know that that deal in particular was definitely a

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<v Speaker 1>shift UM. I don't think though, that it was because

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<v Speaker 1>of this hipster any trust movement, although they certainly supported

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<v Speaker 1>the challenge UM that that was certainly a shift in

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<v Speaker 1>that um because it was not a horizontal deal as

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<v Speaker 1>a vertical deal. Vertical deals had tended to be tended

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<v Speaker 1>to be approved with with conditions on how companies operated,

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<v Speaker 1>and that surprised a lot that the A T and

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<v Speaker 1>T lawsuit surprised a lot of people because, uh, um,

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<v Speaker 1>the government is going to court to block it and

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<v Speaker 1>basically saying there are no behavioral or conduct conditions that

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<v Speaker 1>that can fix um, that can fix the deal. So,

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<v Speaker 1>you know, I think it's still kind of early in

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<v Speaker 1>this administration to know whether their approach is going to

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<v Speaker 1>be significantly different UM or whether the you know, the

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<v Speaker 1>A T and T cases is sort of a one off,

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<v Speaker 1>but it has certainly that that case certainly has a

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<v Speaker 1>lot of people asking that question. Let's turn for a

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<v Speaker 1>few moments to Broadcom, which is one of the world's

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<v Speaker 1>largest chip makers through a string of acquisitions over the

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<v Speaker 1>past few years. It said it's under investigation by US

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<v Speaker 1>anti trust officials for potentially anti competitive conduct. Can you

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<v Speaker 1>explain what's happening with Broadcom. So the Broadcom Broadcom said

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<v Speaker 1>yesterday they put out a statement saying that the UM

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<v Speaker 1>at the Federal Trade Commission UM, which is the other

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<v Speaker 1>anti trust enforcement agency in the US, is investigating anti

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<v Speaker 1>competiti of conduct by the company. It didn't elaborate on

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<v Speaker 1>exactly what conduct that is, although it said that it's

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<v Speaker 1>not UM it's not related to their wireless business. This

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<v Speaker 1>is about I think UM. If it's not their wireless,

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<v Speaker 1>would be a sort of network UM network business UM.

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<v Speaker 1>So we don't know exactly what the FTC is concerned

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<v Speaker 1>about UM. I think the news of that investigation spooked

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<v Speaker 1>the market briefly because Broadcom is in the process of

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<v Speaker 1>trying to buy its rival, rival shipmaker call Calm, So

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<v Speaker 1>I think some investors were concerned that, well, if the

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<v Speaker 1>FDC is worried about broad coons con Broadcom's conduct, then

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<v Speaker 1>that might affect the merger review UM with the Call

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<v Speaker 1>Calm merger of view. So we'll have to see, we will,

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<v Speaker 1>and I'm sure there's a lot more antitrust at coming up.

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<v Speaker 1>Thanks so much. That's Bloomberg News legal reporter David mclauch Bucklin,

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<v Speaker 1>and you can read his article in the latest Bloomberg

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<v Speaker 1>Business Week. It's entitled Hipsters Versus Chicago, The Fight to

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<v Speaker 1>rewrite the Antitrust Playbook. Claims of executive privilege during Steve

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<v Speaker 1>Bannon's testimony at the House Intelligence Panel have thrown a

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<v Speaker 1>glaring spotlight on the potential conflicts of interest of White

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<v Speaker 1>House counsel Don McGan McGann has not only been interviewed

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<v Speaker 1>by investigators for the Special Counsel in the Russia probe,

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<v Speaker 1>Bannon's lawyer is also his lawyer, and McGann's office was

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<v Speaker 1>involved in instructing ban and on which questions from the

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<v Speaker 1>House panel he should answer he shouldn't answer, according to

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<v Speaker 1>a person familiar with the matter. Walter Shab, former director

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<v Speaker 1>of the Department of Government Ethics, spoke about McGann's position

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<v Speaker 1>with CNN earlier this month. He can try to hide

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<v Speaker 1>behind the I was only following orders. But that didn't

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<v Speaker 1>work at Nuremberg and it's not going to work here

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<v Speaker 1>because as an attorney, the president is not his client.

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<v Speaker 1>The Office of the President is is his client, and

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<v Speaker 1>he's ultimately answerable to the American people. Joining me is

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<v Speaker 1>Tom Schoenberg, Bloomberg News Financial Crime reporter Tom describe what

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<v Speaker 1>happened when these areas of concern to the White House

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<v Speaker 1>came up during Bannon's testimony. Sure, so, over the course

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<v Speaker 1>of about uh you know, about nine hours or so

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<v Speaker 1>that Steve Bannon was on the on Capitol Hill. Um,

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<v Speaker 1>a question would be asked, they would pause while his attorney,

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<v Speaker 1>Bill Burke would uh place a phone call to the

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<v Speaker 1>White House to get an answer as to whether or

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<v Speaker 1>not he can answer the question. And this went on,

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<v Speaker 1>and uh, you know they uh he refused then to

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<v Speaker 1>answer a number of questions about his time both in

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<v Speaker 1>the White House and even uh during the transition. Uh,

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<v Speaker 1>you know, the given the advice from the White House

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<v Speaker 1>being that they may want to assert executive privilege. So

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<v Speaker 1>McGann is supposed to defend the office of the president,

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<v Speaker 1>not the president himself. But he's also a witness to

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<v Speaker 1>controversial events under investigation by Muller and Congress and reportedly

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<v Speaker 1>took part in some of them. So he could be

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<v Speaker 1>a witness or possibly a defendant. What kind of potential

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<v Speaker 1>conflicts do you see there? Well, here, you know, at

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<v Speaker 1>the moment, it's it's kind of this, uh, this appearance

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<v Speaker 1>of possible conflict as far as we know Don McGann

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<v Speaker 1>hasn't recused himself from decisions on whether to assert executive privilege,

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<v Speaker 1>uh in questioning over the Russia the Russia matter, and um,

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<v Speaker 1>you know he's been someone who also has had this

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<v Speaker 1>front row seat. So uh, you know, it's it's sort

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<v Speaker 1>of looks a little strange when you potentially have kind

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<v Speaker 1>of one witness calling another witness, you know, for advice

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<v Speaker 1>on how to answer questions. And with lawyers, it is

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<v Speaker 1>the appearance of improprietor a that is also supposed to

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<v Speaker 1>be avoided. What is the line? Do we know what

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<v Speaker 1>the line is between defending the office and defending the

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<v Speaker 1>man in the office. Right, Well, well, defending the office,

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<v Speaker 1>I mean asserting executive privilege, um is kind of one

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<v Speaker 1>of your one of your jobs assessing whether that needs

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<v Speaker 1>to happen, because again, as White House counsel, you do

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<v Speaker 1>not necessarily want Congress, um and others to be able

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<v Speaker 1>to kind of pull in and get into the sort

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<v Speaker 1>of business and decision making of the White House. It's

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<v Speaker 1>one of the protections for the you know, for the

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<v Speaker 1>White House to be able to do its job. It

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<v Speaker 1>gets a little tricky in situations where you have investigations

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<v Speaker 1>that reach into the White House and reach into that

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<v Speaker 1>sort of role of the White House counsel where the

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<v Speaker 1>person's a potential witness, and this has come up, Uh,

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<v Speaker 1>you know, questions about that role has come up in

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<v Speaker 1>past administrations Nixon, Clinton, Uh, and those investigations, court rulings

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<v Speaker 1>that kind of came out of their kind of really

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<v Speaker 1>sort of limited, Uh, the protections of that sort of

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<v Speaker 1>that White House Council really asserted that they're there not

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<v Speaker 1>to protect the person in the office, but the office

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<v Speaker 1>of the presidency itself. Mcgan's lawyer not only represents Bannon,

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<v Speaker 1>but also Ryan's previous and there's nothing ethically wrong with

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<v Speaker 1>that at this point. But you spoke to Nicholas Allardin

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<v Speaker 1>of brook And Law School. Tell us what he said

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<v Speaker 1>about the difficulty of representing three people in the same matter. Sure, Um,

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<v Speaker 1>you know again you have three you have three sort

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<v Speaker 1>of key players here in this in this investigation, and um,

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<v Speaker 1>to just try and get your arms around what each

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<v Speaker 1>each one of those knows and their various sort of

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<v Speaker 1>rights and uh, you know, how they're gonna, how they're

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<v Speaker 1>answering questions or where they are and you know where

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<v Speaker 1>they kind of fit into the probe is a is

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<v Speaker 1>a pretty big job. You know. Bill Burke, the lawyer

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<v Speaker 1>for all three UM, He's a prominent defense lawyer in Washington.

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<v Speaker 1>He's handled uh, you know, big political cases in the past.

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<v Speaker 1>He represented UM Virginia Governor Bob McDonald's wife in a

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<v Speaker 1>corruption case there a few years ago. So he's a

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<v Speaker 1>very experienced individual and he knows how to do big

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<v Speaker 1>Also in corporate cases, where it's it's not that unusual

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<v Speaker 1>for a lawyer to handle uh, you know, represent kind

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<v Speaker 1>of multiple employees and a probe. I think the difference is, uh,

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<v Speaker 1>you know, it's it would be unusual for a single

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<v Speaker 1>lawyer to handle representation for a CEO CFO and the

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<v Speaker 1>CEO definitely now. And it comes up in criminal cases

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<v Speaker 1>where sometimes a lawyer at the beginning will represent two defendants,

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<v Speaker 1>but then if their interests diverge at all, the judge

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<v Speaker 1>will tell them that, you know, you need to get

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<v Speaker 1>a separate lawyer to protect your own interests. This hasn't

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<v Speaker 1>reached that point, but if it does, I take it

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<v Speaker 1>that Mueller will be there to say something, because he's

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<v Speaker 1>already challenged some of the lawyers who have uh to

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<v Speaker 1>interest tell me about that. Yeah, he Uh. So with

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<v Speaker 1>regards to the uh, the the cases, the case brought

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<v Speaker 1>against Paul Manafort and UH and Rick Gates. Um in

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<v Speaker 1>that matter, there was you know, a lawyer that Rick

0:14:16.480 --> 0:14:19.840
<v Speaker 1>Gates had had hired who uh, a New York lawyer

0:14:20.280 --> 0:14:23.920
<v Speaker 1>happened to also be involved in a current case that

0:14:24.720 --> 0:14:28.600
<v Speaker 1>Mueller's team felt, uh Gates could possibly be a witness

0:14:28.600 --> 0:14:30.360
<v Speaker 1>in that matter. So you had the lawyer kind of

0:14:30.360 --> 0:14:33.000
<v Speaker 1>representing a defendant in the case in New York as

0:14:33.040 --> 0:14:37.640
<v Speaker 1>well as Rick Gates who could potentially be a witness

0:14:37.640 --> 0:14:40.360
<v Speaker 1>in that case. And so the judge in the in

0:14:40.440 --> 0:14:45.400
<v Speaker 1>the Manafort Gates matter here in Washington, UH, she kind

0:14:45.400 --> 0:14:48.200
<v Speaker 1>of you know, had the party sort of explained to

0:14:48.240 --> 0:14:50.680
<v Speaker 1>her the situation, and at the end of the day,

0:14:50.760 --> 0:14:53.560
<v Speaker 1>you know, Gates was allowed to kind of keep his lawyer,

0:14:53.560 --> 0:14:56.920
<v Speaker 1>I think once all sort of the you know, everything

0:14:56.960 --> 0:14:58.640
<v Speaker 1>was kind of explained in terms of what he would

0:14:58.640 --> 0:15:01.280
<v Speaker 1>be giving up, you know, the the potential for harm there.

0:15:02.320 --> 0:15:05.000
<v Speaker 1>Something that has has come up in the news is

0:15:05.040 --> 0:15:09.960
<v Speaker 1>that though Bannon asserted, well, he kind assert executive PRIs

0:15:09.960 --> 0:15:12.960
<v Speaker 1>but though he refused to answer some questions based on

0:15:13.040 --> 0:15:16.920
<v Speaker 1>the president's claim of executive privilege when he goes to

0:15:17.040 --> 0:15:22.280
<v Speaker 1>talk to Mueller's investigators whenever that time is set up. Um,

0:15:22.680 --> 0:15:25.880
<v Speaker 1>people familiar say that he is not going to assert

0:15:26.000 --> 0:15:29.360
<v Speaker 1>executive privilege at that point. So does that put his

0:15:29.440 --> 0:15:34.120
<v Speaker 1>lawyer in a strange position? Yeah, it's uh, you know,

0:15:35.000 --> 0:15:39.560
<v Speaker 1>in these big investigations like this, He's Washington investigations. Um,

0:15:39.560 --> 0:15:43.040
<v Speaker 1>obviously the Hill, the Hill's probe isn't a criminal probe, right,

0:15:43.080 --> 0:15:45.840
<v Speaker 1>so you want to make sure that you're going to

0:15:45.920 --> 0:15:48.240
<v Speaker 1>be as open as possible when you do talk to

0:15:48.360 --> 0:15:52.040
<v Speaker 1>the sort of criminal investigators. And so you know, if

0:15:52.080 --> 0:15:55.600
<v Speaker 1>they were to assert executive privilege, and then we may

0:15:55.640 --> 0:15:58.280
<v Speaker 1>be in a situation like we have in past investigations

0:15:58.600 --> 0:16:01.360
<v Speaker 1>where uh M, there's team could challenge it next thing

0:16:01.400 --> 0:16:03.920
<v Speaker 1>and nowhere, and you know, we're creating some new uh

0:16:04.200 --> 0:16:07.160
<v Speaker 1>some new precedent um the type of which we haven't

0:16:07.160 --> 0:16:10.560
<v Speaker 1>seen in some years. Could it get any more complicated?

0:16:10.600 --> 0:16:14.720
<v Speaker 1>That's a rhetorical question. It will. Thanks for being here.

0:16:15.160 --> 0:16:19.480
<v Speaker 1>That's Tom Schoenberg, Bloomberg News Financial crime Reporter. Thanks for

0:16:19.560 --> 0:16:22.800
<v Speaker 1>listening to the Bloomberg Law Podcast. You can subscribe and

0:16:22.880 --> 0:16:26.120
<v Speaker 1>listen to the show on Apple Podcasts. SoundCloud and on

0:16:26.200 --> 0:16:30.920
<v Speaker 1>bloomberg dot com slash Podcast. I'm June Brosso. This is

0:16:30.960 --> 0:16:31.560
<v Speaker 1>Bloomberg