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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: With four days left now in the Biden administration, the

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Speaker 2: transition is in full swing, but they are still working

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Speaker 2: at the FTC. Case in point, filing suit today against

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Speaker 2: one of the largest ag equipment companies in the world,

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Speaker 2: alleging Deer In Company restricted the ability of customers to

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Speaker 2: make repairs. Joining us now for an important conversation on

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Speaker 2: this and a lot more, including her four years at

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Speaker 2: the helm of the agency is FTC Chair Lena Khan.

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Speaker 2: Wonderful to see you in person.

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Speaker 3: Thanks for coming in, Thanks for having me.

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Speaker 2: An important action today that you're rolling out here, and

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Speaker 2: some of your critics are calling this partisan ship in

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Speaker 2: terms of its timing, why is it happening now?

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Speaker 4: Well, Look, the FTC has been focused these last few

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Speaker 4: years in making sure that Americans can enjoy the right

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Speaker 4: to repair. I've met with farmers numerous times over the

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Speaker 4: last few years, and one of the biggest pain points

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Speaker 4: they share is that they're no longer able to easily

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Speaker 4: repair their own equipment or even be able to take

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Speaker 4: their tractors and combines to independent repair shops, and instead

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Speaker 4: they've been steered into Deer's network of authorized dealers, which

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Speaker 4: practically means they're paying more, and especially for farmers that

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Speaker 4: live in rural areas, it means they sometimes have to

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Speaker 4: drive hours to even get to the nearest dealer. Practically,

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Speaker 4: we all know that farming is a very time sensitive business,

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Speaker 4: and so we've even had farmers that have lost their

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Speaker 4: crop faced ruinous delays, and so we think there's real

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Speaker 4: harm here. There's a law violation, and we want to

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Speaker 4: make sure farmers can enjoy the right to repair well.

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Speaker 5: And you and two other commissioners did vote to bring

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Speaker 5: this claim forward. Yet the two Republican commissioners did not,

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Speaker 5: including the man who will be FTC chair, just stays

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Speaker 5: from now, is it your expectation that Andrew Ferguson is

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Speaker 5: actually going to see this through or was it just

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Speaker 5: brought today to make a point knowing that that may

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Speaker 5: not happen under new leadership under the FTC.

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Speaker 4: Well, look, I can't speak to what any new leadership

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Speaker 4: will do, but this did have the support of the

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Speaker 4: majority of the commission. This follows a multi year investigation,

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Speaker 4: and I always think it's important that we act with

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Speaker 4: urgency and swiftly, and if there is real harm, we

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Speaker 4: shouldn't let politics get in the way of delivering real

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Speaker 4: relief to farmers.

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Speaker 2: You've got a lot of things on the works right

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Speaker 2: now that you're going to be leaving behind, including court

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Speaker 2: actions against Facebook, I believe in the spring Amazon next year.

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Speaker 2: Will we expect those to continue?

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Speaker 4: Well, Look, we are set to go to trial against

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Speaker 4: Facebook this spring, set to go to trial against Amazon

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Speaker 4: in fall of twenty twenty six. Those actions are only

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Speaker 4: going to trial because the FTC was victorious along the way,

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Speaker 4: defeating motions to dismiss, and so we are on strong

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Speaker 4: grounds and I fully expect that we'll be able to

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Speaker 4: see these trials go forward. Of course, whenever there's a

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Speaker 4: new administration, defendants may want to see if they can

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Speaker 4: come in and get a cheap settlement, but I hope

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Speaker 4: we wouldn't see that here.

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Speaker 5: Well, and from people we've talked to who've just observed

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Speaker 5: the FTC from the outside, the suggestion has been that

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Speaker 5: your leader ship and Andrew Ferguson's leadership when it comes

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Speaker 5: to big tech specifically, may not be that different. Do

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Speaker 5: you see that as an area in which you've been

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Speaker 5: most aligned in your time serving together on the Commission.

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Speaker 4: Well, look, there's no doubt that there is strong bipartisan

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Speaker 4: concern about the economic power of large technology companies and

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Speaker 4: how that can undermine fair competition, undermine people's free speech rights.

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Speaker 4: And so we'll of course have to see what the

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Speaker 4: next administration does, but it's certainly been an area of

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Speaker 4: strong bipartisan concern during my tenure.

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Speaker 2: Social media has created a whole new realm of possibility here,

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Speaker 2: and we're considering the potential for a sale or a

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Speaker 2: divestment of TikTok right now. Even Elon Musk has been

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Speaker 2: floated as a potential buyer. He's got a pretty large

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Speaker 2: presence on social media. Are you concerned about consolidation as

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Speaker 2: a result of divestment of TikTok if it happens.

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Speaker 4: Well, look, as you know, there is a TikTok specific

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Speaker 4: build that we just heard an argument at the court around,

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Speaker 4: so you.

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Speaker 3: Know, this is a very live issue.

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Speaker 4: Of course, we have seen these antitrust lawsuits filed in

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Speaker 4: part because we've seen a lot of illegal monopolization in

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Speaker 4: these markets, and so of course we wouldn't just want

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Speaker 4: to forget or ignore all the lessons of those harms

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Speaker 4: and repeat those mistakes.

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Speaker 3: But we'll have to see what happens.

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Speaker 5: Well, and considering that you really had your claim to

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Speaker 5: flame flame fame as an academic looking at Amazon specifically

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Speaker 5: from an academic landscape, when you look at large tech

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Speaker 5: companies like this, can you see a world in which

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Speaker 5: it wouldn't be anti competitive for a big tech company

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Speaker 5: to absorb a company that has one hundred and seventy

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Speaker 5: million users in the US and a valuation our analyst

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Speaker 5: suggests could be north of forty billion dollars without it

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Speaker 5: raising antitrust concerns.

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Speaker 4: Well, look, all of these questions and investigations are highly

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Speaker 4: fact specifics. You'd want to look at all sides, but

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Speaker 4: at a high level, if you have a firm that

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Speaker 4: is dominant in one market that's going out and b

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Speaker 4: buying a rival or another company in that same market

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Speaker 4: by ordinary standards, that often raises at least initial concerns.

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Speaker 2: You've talked about how extreme a concentration of economic power

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Speaker 2: can have great political influence. You could correct me if

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Speaker 2: I'm not getting the words perfectly right there. You've talked

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Speaker 2: about this as potentially the beginning of another Gilded Age.

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Speaker 2: Elon Musk is reportedly taking an office in the White

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Speaker 2: House complex in the old executive office building, even as

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Speaker 2: one of the most prolific government contractors out there. Is

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Speaker 2: this the kind of example you're talking about, and should

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Speaker 2: that be in the purfew with the FTC?

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Speaker 4: Well, look, the FTC's mandate is squarely looking at commerce

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Speaker 4: in our economic realm, and so we're very focused on

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Speaker 4: the specific facts. Do we see monopolization, do we see

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Speaker 4: mergers that are illegal, rather than waiting into kind of

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Speaker 4: big picture political questions. But it's certainly true that for

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Speaker 4: the lawmakers who passed the antitrust laws over one hundred

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Speaker 4: years ago, one of the animating concerns was the way

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Speaker 4: in which concentrated economic power can be translated into political power.

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Speaker 2: We're not seeing it now.

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Speaker 4: Well, look, certainly we've seen, you know, time and time again,

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Speaker 4: including you know, over the last few years, efforts by

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Speaker 4: dominant companies to use political sway.

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Speaker 5: Well, when we consider companies and their behavior and what

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Speaker 5: they might be gearing up to do in the coming years,

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Speaker 5: we have bank earnings today, including some big investment banks

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Speaker 5: like Goldman Sachs talking about what they see is going.

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Speaker 3: To be a better deal environment.

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Speaker 5: It actually echoed what the CFO of Goldman, Dennis Coleman

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Speaker 5: had to say last month about the new direction the

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Speaker 5: FTC specifically could be taking in this upcoming administration.

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Speaker 1: Let's listen with Fergen's nominee. There could be a new

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Speaker 1: direction at the FTC. Obviously as a as a sitting

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Speaker 1: commissioner dissented with the current leadership on a number of cases,

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Speaker 1: and so we could see a more favorable environment heading

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Speaker 1: into twenty twenty five that could act spur more by

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Speaker 1: way of CEO confidence and in turn unlocking more investment,

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Speaker 1: more activity, and provide a more favorable strategic backdrop.

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Speaker 5: People are kind of expecting chair con it seems what

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Speaker 5: could be a tidal wave of m and A. Do

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Speaker 5: you think it's actually that simple.

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Speaker 4: Well, look, we certainly heard over the last few years

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Speaker 4: directly from deal makers, directly from anti trust lawyers who

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Speaker 4: acknowledge that several years ago they wouldn't even think about

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Speaker 4: anti trust risk when initially putting together some of these deals,

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Speaker 4: but under the Biden administration they had to think very

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Speaker 4: early about whether a certain merger would pose legal risk.

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Speaker 4: And as a law enforcer, of course, that type of

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Speaker 4: deterrence is good for the public. It leads to more

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Speaker 4: efficient outcomes and so I would hope that we wouldn't

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Speaker 4: see a backsliding, a return to an environment where flagrantly

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Speaker 4: illegal deals are being proposed and deal makers are thinking, well,

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Speaker 4: maybe we can get this one through even though it

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Speaker 4: violates the law. So we'll have to wait and see.

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Speaker 4: We have had several merger lawsuits filed with unanimous support

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Speaker 4: at the Commission, and so we'll have to wait.

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Speaker 3: And see what happens.

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Speaker 2: Well, it may not be flagrantly illegal, but we keep

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Speaker 2: hearing about the pipeline, the backlog, animal spirits. How do

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Speaker 2: you envision the next one hundred days looking.

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Speaker 3: In that realm?

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Speaker 4: Well, look, we'll have to see, you know, what actually

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Speaker 4: ends up being proposed. One interesting fact that we've seen

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Speaker 4: in some of the data is instances in which firms,

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Speaker 4: especially large technology firms, have known that they can't just

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Speaker 4: go out.

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Speaker 3: And buy their rivals.

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Speaker 4: We've actually seen them have to invest, invest more in

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Speaker 4: innovation and actually try to organically expand and improve their

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Speaker 4: business rather than just go.

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Speaker 3: Out and snuff competition.

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Speaker 4: So I think we want to see markets where firms

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Speaker 4: are fairly competing and being incentivized to really compete on

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Speaker 4: the merits rather than just buy out their rivals.

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Speaker 5: And if we were to look at this kind of

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Speaker 5: on an industry by industry basis. Obviously we've talked about

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Speaker 5: agriculture already in this conversation about technology, But is there

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Speaker 5: an industry in which you see the potential for potentially

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Speaker 5: aggressive consolidation that you maybe not during your tenure had

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Speaker 5: a chance to address that gives you concern going forward?

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Speaker 4: Well, look when we put out a request for comment

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Speaker 4: from the public about our new merger guidelines and ask

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Speaker 4: people where have there been waves of consolidation that you're

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Speaker 4: worried about.

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Speaker 3: We've really heard it across the board.

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Speaker 4: I mean, healthcare came up over and over again, including

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Speaker 4: from healthcare workers, including from patients and patient advocates. We've

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Speaker 4: heard a lot of concern about consolidation in media. We've

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Speaker 4: personally had to file several lawsuits against big hospital mergers

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Speaker 4: that we know result in higher costs and worse quality.

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Speaker 4: So you know, my approach was to focus on the

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Speaker 4: markets that can have a huge impact on people's day

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Speaker 4: to day lives, and healthcare really sort to the top

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Speaker 4: of the list.

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Speaker 3: While I was at the home.

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Speaker 4: The FTC took a particularly assertive approach to farmer mergers,

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Speaker 4: making sure that we were not just looking strictly at

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Speaker 4: what is the overlap today, but understanding more from a

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Speaker 4: business perspective, could this deal undermine even potential competition and

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Speaker 4: make things worse for Americans over.

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Speaker 3: The long term.

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Speaker 2: We talk about technology as this big, squishy thing, but

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Speaker 2: specifically when it comes to AI, we're seeing technology advance

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Speaker 2: so quickly that we're having trouble keeping up with it.

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Speaker 2: If you were staying in this job, or to the

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Speaker 2: extent that you'll be in this space in your next role,

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Speaker 2: how concerned are you about the way AI is actually

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Speaker 2: changing the rules?

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Speaker 4: Well, the FTC has been very focused on understanding across

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Speaker 4: the stack, where are areas where there may be bottlenecks

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Speaker 4: or choke points that some of the incumbents might be

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Speaker 4: able to exploit in ways that undermine competition. And so

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Speaker 4: we've been going later by hi layer, looking at the chips,

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Speaker 4: looking at the cloud, looking at some of the models.

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Speaker 4: We have an active inquiry examining the active investments and

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Speaker 4: partnerships between some of the hyperscalers, big cloud computing providers

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Speaker 4: and some of the newer AI firms to try to

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Speaker 4: understand is this undermining competition. I think historically we've seen

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Speaker 4: that these moments of technological inflection points are ones where

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Speaker 4: enforcers have to be extraordinarily vigilant because there's huge opportunity

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Speaker 4: here for real competition, real innovation, real growth.

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Speaker 3: But those are also.

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Speaker 4: The moments where the incumbent monopolists can panic because they

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Speaker 4: can imagine themselves becoming overtaken or disintermediated. And so those

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Speaker 4: are just some of the concerns we have to keep

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Speaker 4: in mind.

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Speaker 5: All Right, we'll leave it on that note. Chair con

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Speaker 5: thank you so much for joining us here on Balance

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Speaker 5: of Power. That is the outgoing chair of the FTC

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Speaker 5: Lenacon