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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. Hello and welcome to

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Speaker 1: another episode of the Odd Lots podcast.

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Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 1: We got a special episode for listeners today.

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Speaker 3: We do a very special episode. We had a live

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Speaker 3: event over in Washington, d C. It was a very

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Speaker 3: cool event.

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Speaker 1: Joe, it was really fun. It's been a while, you know,

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Speaker 1: we do live events, we do live recordings from time

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Speaker 1: to time. It's been a while since we like put

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Speaker 1: out a full evening of programming, a full show, if

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Speaker 1: you will.

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Speaker 3: Also our first show in DC.

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Speaker 1: And our first live public show in DC. We've been

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Speaker 1: wanting to do one for a while. We had a

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Speaker 1: bunch of great guests. I actually really like going down

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Speaker 1: to DC.

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Speaker 3: Yeah, and it was a great crowd as well. I

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Speaker 3: think we have the only audience that would devote two

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Speaker 3: and a half hours on a Wednesday night to listening

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Speaker 3: about the Jones Act and anti trust policy.

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Speaker 1: Yes, that's right. It was sort of a late night too.

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Speaker 1: It's sort of awkward timing because it was sort of

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Speaker 1: dinner so people had to skip.

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Speaker 3: But there was popcorn. It included with the tickets.

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Speaker 1: It was popcorn anyway, so we're going to release all

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Speaker 1: of the conversations that we had on that evening as episodes.

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Speaker 1: But to start, we had a conversation about anti trust.

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Speaker 3: We spoke to Andrew Ferguson. He's the new chair of

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Speaker 3: the FTC for the Trump administration. Obviously, there's a lot

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Speaker 3: of curiosity about how much continuity there may or may

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Speaker 3: not be between antitrust under the Biden administration, under Lena Kahn,

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Speaker 3: who we've also spoken to on the podcast, and what

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Speaker 3: this new era might look like. So it was really

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Speaker 3: interesting to sit down with him and get a better

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Speaker 3: sense of it.

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Speaker 1: That's right, and it's got pretty interesting implications really for

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Speaker 1: multiple reasons. I mean, if you recall, one of the

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Speaker 1: themes sort of when the election happened, was a lot

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Speaker 1: of excitement on Wall Street because of a perception that

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Speaker 1: there would be a lot of mergers in deals would

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Speaker 1: get a green light that they would be going forward

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Speaker 1: the new era of deal making activity. Incidentally, the new chair,

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Speaker 1: Andrew Ferguson, kept the merger guidelines that were put in

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Speaker 1: place under his predecessor, but they're clearly going to be differences.

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Speaker 1: There are areas of alignment, There are areas of differences,

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Speaker 1: and so we talked to Andrew about sort of what

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Speaker 1: a conservative or what a maga vision of antitrust might

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Speaker 1: look like.

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Speaker 3: Maga m and A was my suggestion, I think, and

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Speaker 3: he took it. So all right. Here it is our

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Speaker 3: live conversation with the new FTC chief, Andrew Ferguson.

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Speaker 1: Thank you so much for coming. I'm really annoyed actually,

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Speaker 1: because one of your lawyers gave me like the perfect

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Speaker 1: first question for the podcast today. I was like, Oh,

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Speaker 1: this is amazing, and then you sort of walked it back.

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Speaker 1: I don't exactly know what happened, so that dulled it

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Speaker 1: a little bit. But anyway, apparently in court today one

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Speaker 1: of your lawyers said, we need a pull for this

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Speaker 1: case against Amazon because we don't have the resources and

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Speaker 1: we can't pay for transcripts. Like, oh, this is an

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Speaker 1: amazing first question for Andrew, and then he walked away.

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Speaker 1: Is there a constraint though, between this impulse and we'll

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Speaker 1: get into it, you know, in terms of headcount and

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Speaker 1: your desire for what you know looks like going to

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Speaker 1: be a sort of vigorous new antitrust uh enforcement approach.

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Speaker 2: Thank you for having me a lot to unwrapped there. Yeah,

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Speaker 2: first on constraints. No, okay, I've got the people I

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Speaker 2: need to protect Americans from monopolies, to protect them from fraud.

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Speaker 2: And you know, no, I don't think anyone in Washington

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Speaker 2: has taken sort of the threat that big tech poses

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Speaker 2: to American consumers more seriously than I have. When President

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Speaker 2: Trump announced my appointment, this is one of the things

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Speaker 2: he said he really cared about was taking the threats

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Speaker 2: that big tech pose to American consumers very seriously. There,

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Speaker 2: I will throw every re resource the agency has at

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Speaker 2: prosecuting cases against big tech that we've got going. So unequivocally, No,

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Speaker 2: there are no resource constraints on protecting Americans from monopolies

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Speaker 2: and fraud.

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Speaker 1: Can you explain what happened today?

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Speaker 2: I think a lawyer had a bad day in court.

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Speaker 2: He was wrong. He filed a letter almost immediately after

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Speaker 2: saying I was wrong. We don't have resource constraints, and

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Speaker 2: we are ready to prosecute this case on whatever timeline

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Speaker 2: the court wants for us. So we're ready to go.

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Speaker 3: Okay, but presumably there is this broader drive to streamline

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Speaker 3: some agencies yours included at the same time that you

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Speaker 3: have these really lofty targets that you're trying to reach.

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Speaker 3: I just saw the very good Bloomberg story out today

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Speaker 3: about the Microsoft probe. This is a huge company that's

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Speaker 3: going to take a lot of effort, a lot of resources. Again,

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Speaker 3: presumably you're doing this with less resources than you had,

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Speaker 3: say a year ago.

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Speaker 2: At the FTC, I would not presume that. Look, the

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Speaker 2: Americans voted for major reform. President Trump ran on major

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Speaker 2: reform and he's giving it to him. And government should

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Speaker 2: not be bigger than is necessary to deliver the services

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Speaker 2: that Americans need to protect Americans from the problems that

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Speaker 2: Americans have. The FTC we are engaged in the streamlining process.

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Speaker 2: The goal is to maximize Americans' returns on their taxpayer dollars.

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Speaker 2: When they send their money off to Washington, they expect

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Speaker 2: their government to do a lot with that money, and

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Speaker 2: that the government shouldn't be any bigger than is necessary

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Speaker 2: to do those tasks. And so at the FTC, we've

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Speaker 2: got the resources we need to protect Americans from fraudam monopoly.

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Speaker 2: And look, you know, no government official in history has

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Speaker 2: ever said, no, I want fewer resources. Which is why

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Speaker 2: the President's efficiency agenda is so important, because government will

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Speaker 2: always keep sucking up resources. The goal here is to

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Speaker 2: maximize the return on investment for American taxpayers, and that's

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Speaker 2: what we're doing the FTC. Okay, So what.

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Speaker 3: Does Trump actually think about antitrust? Because he has a

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Speaker 3: lot of opinions, Sometimes it's hard to get a handle

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Speaker 3: on what exactly those opinions are. Sometimes he seems to

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Speaker 3: contradict himself. You know, a lot of people think he's

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Speaker 3: pro business, but at the same time he has talked

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Speaker 3: about antitrust and competition and the power of the big

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Speaker 3: tech platforms as you just mentioned. What does he tell

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Speaker 3: you about how he thinks of all of this.

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Speaker 2: I think President Trump is pro innovation, pro growth, and

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Speaker 2: in that sense, he is pro business. But I'm going

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Speaker 2: to push back a little bit on the way you

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Speaker 2: frame the question. I don't think that there's any inconsistency

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Speaker 2: with being pro business and favoring vigorous anti trust enforcement.

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Speaker 2: Those two have to go hand in hand. Look, I

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Speaker 2: like most Republicans, and I think like most Americans and

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Speaker 2: pro free markets. Anti trust is how we keep our

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Speaker 2: markets free markets that are infected with monopoly, that are

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Speaker 2: infected with collusion, that are infected with foreclosure. These are

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Speaker 2: not free. They move value from consumers from innovative businesses

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Speaker 2: to giant monopolies, who then are focused mostly on protecting

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Speaker 2: those monopolies rather than innovating, rather than growing, rather than

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Speaker 2: coming up with the next great idea that changes americans lives. So,

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Speaker 2: you know, I think President Trump up his pro American markets.

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Speaker 2: He's pro business, but that is easily reconcilable with favoring

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Speaker 2: vigorous anti trust enforcement. And President Trump, you know, he's

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Speaker 2: been president for four years before this, we sort of

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Speaker 2: have seen what President Trump's anti trust agenda looks like.

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Speaker 2: And he favors vigorous enforcement. He favors following the law,

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Speaker 2: and he favors clarity and certainty for people who have

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Speaker 2: to participate in these markets.

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Speaker 1: Right, no, no, no, no, no, no, a live recording, So

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Speaker 1: hold on, hold, hold on, no, it's a live recording.

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Speaker 1: It's a live recurd.

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Speaker 2: President Trump spent four years as the victim of endless lawfare.

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Speaker 2: He's president of the United States. Yeah, all right, it's

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Speaker 2: DC audience, I get it. He has spent the last

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Speaker 2: several months picking people so in his cabinet or an

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Speaker 2: agencies like mine who are focused on enforcing the laws

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Speaker 2: as they are written and carrying out this agenda.

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Speaker 1: All right, let me ask you, all right, Uh, you

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Speaker 1: mentioned streamlining, uh the FTC. One way that you could

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Speaker 1: imagine streamlining from a government's perspective is that we don't

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Speaker 1: need an FTC. And obviously you have your counterparts at

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Speaker 1: the Department of Justice. You yourself have talked about the

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Speaker 1: sort of philosophy of the sort of disputing the premise

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Speaker 1: of sort of these independent agencies. Why do we need

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Speaker 1: two separate antitrust uh enforcement agencies?

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Speaker 2: So I think we can get to independence in a minute.

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Speaker 2: But I think the FTC sort of adds value to

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Speaker 2: the enforcement regime regime because it combines the consumer protection

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Speaker 2: and the anti trust enforcement program in a single agency,

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Speaker 2: and those two can cross pollinate and they protect consumers

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Speaker 2: more fully than you know, just a singular anti trust

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Speaker 2: enforcement necessarily would.

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Speaker 1: Uh.

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Speaker 2: And the you know, the two missions sort of like

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Speaker 2: learn from each other. The anti trust people when they're

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Speaker 2: doing investigations, they can find problems that violate the consumer

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Speaker 2: protection laws, and then the FTC can continue those investigations

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Speaker 2: with the other side of the house. So I think

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Speaker 2: there's some benefits to that. But you know, there's Also,

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Speaker 2: I think some benefits in certain circumstances to having multi

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Speaker 2: member agencies with people from both parties. I mean, look,

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Speaker 2: if you have an agency that is exceeding the law,

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Speaker 2: abusing the companies that are purports to regulate, it's helpful

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Speaker 2: for markets, for courts, for litigants, for government transparency to

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Speaker 2: have people in the other party pointing this out and

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Speaker 2: saying it in dissents. Like you know, I wrote four

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Speaker 2: hundred plus pages of descents during my time as a

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Speaker 2: Minority commissioner. I think that that adds value. But I

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Speaker 2: think that the FTC's particular value add is you combine

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Speaker 2: the two missions, consumer protection and antitrust in a single house,

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Speaker 2: and they both sort of like help reinforce the other.

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Speaker 3: I know it's early days, but one of the things

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Speaker 3: you've done so far is you said you were going

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Speaker 3: to maintain the merger guidelines from the Biden administration, and

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Speaker 3: some people were really surprised about that. You said that

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Speaker 3: you thought stability is good for enforcement agencies. I think

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Speaker 3: maybe some some people are confused because this doesn't necessarily

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Speaker 3: seem to be an administration that is obsessed with stability

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Speaker 3: or continuity. Walk us through the thinking there. Why did

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Speaker 3: you commit to those particular guidelines, especially given the you know,

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Speaker 3: they got a lot of criticism from multiple sides of

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Speaker 3: the aisle.

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Speaker 2: Yeah. So we've had various iterations of the merger guidelines

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Speaker 2: dating back to the sixties and then when the FTC

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Speaker 2: and DJ started doing it together in the nineteen eighties.

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Speaker 2: You know, we tend to have guidelines for pretty long

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Speaker 2: periods of time. Sometimes there are sort of iterative changes

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Speaker 2: made to those guidelines over the course of time, but

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Speaker 2: a complete rewrite of the guidelines relatively rare, and it happens.

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Speaker 2: You know, we had the guidelines we written in twenty ten.

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Speaker 2: But the general principle has been presidents of one party

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Speaker 2: maintain the guidelines from the previous They may add here

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Speaker 2: and there. They provide commentaries on those guidelines to sort

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Speaker 2: of explain to business how you know that current administration

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Speaker 2: understands the guidelines. But a complete read vamp is rare.

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Speaker 2: And if we get into this process where every single

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Speaker 2: time a new administration comes in they jettison the guidelines,

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Speaker 2: two things happen. First, the agencies spend all their time

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Speaker 2: writing the guidelines. I mean, the previous administration of jettison

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Speaker 2: the twenty ten guidelines and spent like two years having

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Speaker 2: to write this one. They were only effective for barely

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Speaker 2: a year of the last administration. If we get into

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Speaker 2: this process where every four years were yanking and rewriting,

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Speaker 2: it's all the agency you're going to do. Number one.

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Speaker 2: Number two, the guidelines will become basically meaningless if they

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Speaker 2: just are like one party's statement of its view of

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Speaker 2: anti trust policy. Courts won't follow them anymore if they

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Speaker 2: think that they're just openly partisan. Regulated entities won't rely

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Speaker 2: on them to plan. You know, businesses can't just plan

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Speaker 2: into your cycles. They have to plan longer than that.

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Speaker 2: And if the year of the view that every election

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Speaker 2: runs the risk of the guidelines being yanked, the guidelines

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Speaker 2: just become meaningless. And third, you know, there definitely were

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Speaker 2: parts of the guidelines that were you know, departures from

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Speaker 2: the twenty ten guidelines, but they generally are relatively well aligned.

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Speaker 2: They're built on case law, they preserve a lot of

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Speaker 2: the PC from previous guidelines, and I think just throwing

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Speaker 2: them all out all at once means A the agencies

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Speaker 2: are going to devote tremendous resources to rewriting them, and

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Speaker 2: b everyone will remain very uncertain about how the agencies

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Speaker 2: feel about it. And finally, you know, a lot has

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Speaker 2: been written about the sort of effects of the guidelines.

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Speaker 2: They're guidelines at the end of the day. They aren't law.

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Speaker 2: They're supposed to be explanations to the public about how

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Speaker 2: the agencies generally understand the merger program going forward. But

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Speaker 2: the most important feature of anti trust enforcement in the

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Speaker 2: United States isn't the guidelines. It's the commitment of particular

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Speaker 2: anti trust enforcers to following the laws is written, providing

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Speaker 2: certainty and clarity about how they understand the law. And

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Speaker 2: then when you go to court bringing the cases that

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Speaker 2: you think that you can win, and when you can't

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Speaker 2: win the cases, get the hell out of the way

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Speaker 2: and let the mergers close.

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Speaker 1: So one of the things that obviously came up during

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Speaker 1: under the last DEPTC chair this idea of like, okay,

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Speaker 1: there's more than the consumer welfare standard that should be evaluated.

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Speaker 1: One nice thing about conceiving of consumer welfare narrowly in

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Speaker 1: terms of price a well, people like cheap things. But also,

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Speaker 1: you know, it creates a certain law, it eliminates a

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Speaker 1: certain subjectivity. You could plug. Okay, this is what's gonna

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Speaker 1: happen to market share companies. You can plug them into

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Speaker 1: some economist model. I don't know if those models actually

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Speaker 1: work or not, but theoretically spit out some answer where

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Speaker 1: we get lower prices, and then it's like, okay, this

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Speaker 1: is this is good or bad? When you start broadly

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Speaker 1: defining consumer welf welfare, rethinking that like, first of all,

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Speaker 1: what is that term? What do you when you hear

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Speaker 1: the consumer welfare standard? What does that mean to you?

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Speaker 1: Does it mean more than prices for one thing?

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Speaker 2: In order to talk about this, I want to get

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Speaker 2: a little bit into history. Is sure?

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Speaker 3: Do like history?

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Speaker 2: Yeah, so you said.

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Speaker 1: So.

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Speaker 2: Congress passes its first competition law in eighteen ninety, the

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Speaker 2: Sherman Act. I don't know how many of you read

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Speaker 2: the Sherman Act, but the operative provisions of the Sherman

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Speaker 2: Acts Sections one, in sections two, it's like fifty words.

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Speaker 2: Like the most important provisions of American ads trust law

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Speaker 2: are fifty words. Adopted in eighteen ninety, the Congress has

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Speaker 2: not changed effectively since then. Then, in nineteen fourteen, they

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Speaker 2: passed the FTC Act, which both creates my Agency and

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Speaker 2: also creates a new antitrust provision that prohibits unfair methods

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Speaker 2: of competition, and then a couple months later it passes

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Speaker 2: the Clayton Act. And the Clayton Act is really important

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Speaker 2: because that's the law that prohibits mergers that promote tend

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Speaker 2: to create a monopoly or injured competition. So by nineteen fourteen,

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Speaker 2: and then with an important amendment called the Robinson Patman

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Speaker 2: Act in the nineteen thirties, our anti reslaws are basically

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Speaker 2: set like the operative provisions for merger purposes of Section

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Speaker 2: seven of the Clayton Act and sections one and two

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Speaker 2: of the Sherman Act are basically unchanged. They were originally adopted.

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Speaker 2: For decades, courts kind of cast about for a theory

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Speaker 2: about how to apply the anti trust laws. So we

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Speaker 2: know that the anta trust laws are about competition and

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Speaker 2: protecting competition, but that doesn't tell you a whole lot.

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Speaker 2: Does that mean like making sure that there are a

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Speaker 2: particular number of competitors in the marketplace. Does it mean

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Speaker 2: competitors have to do particular things and we don't care

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Speaker 2: how many there are. Does it mean that we care

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Speaker 2: about the economic effects of monopoly. Doesn't mean we care

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Speaker 2: about the political effects of monopoly? And this can matter

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Speaker 2: because you can imagine, you know, the existence of some

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Speaker 2: monopoly somewhere that ends up keeping prices low, or of

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Speaker 2: a duopoly but wield unbelievable economic power. Or you can

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Speaker 2: imagine businesses that aren't true monopolists, but they have tons

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Speaker 2: of economic power, or of political power. I'm sorry. And

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Speaker 2: so courts up through the nineteen fifties and sixties were

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Speaker 2: just sort of casting about, looking for some standard they

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Speaker 2: could articulate about when the anti trust laws are violated.

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Speaker 2: And by the fifties or sixties, it was very difficult

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Speaker 2: for anyone to predict what any given court was going

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Speaker 2: to say about any given transaction or conduct. You had

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Speaker 2: his you know, you could have premised it on what

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Speaker 2: the judges were having for breakfast when they were deciding

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Speaker 2: the cases, and that was as likely a predictor of

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Speaker 2: outcomes as anything else. Then this guy who you you know,

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Speaker 2: a lot of people in this audience, if you know

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Speaker 2: it's as sort of wonky as you say it is,

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Speaker 2: have probably heard of for other reasons. Who's a professor

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Speaker 2: at Yal's name was Robert Bork, and he writes a

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Speaker 2: book called The Anti Trust Paradox and the the you know,

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Speaker 2: the subheading of the book is a policy at war

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Speaker 2: with itself, And the position he articulates is the courts

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Speaker 2: are using anti trust to accomplish all sorts of things

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Speaker 2: that don't have anything to do with economic injuries, politics,

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Speaker 2: labor unions, all sorts of stuff that just don't have

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Speaker 2: anything to do with it. It's basically a choose your own

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Speaker 2: adventure legal regime. It makes no sense, and it's actually

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Speaker 2: injuring economic growth. Growth. The only thing the anti trust

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Speaker 2: laws should care about, Judge Borck said, are the welfare

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Speaker 2: is the welfare of consumers. So he articulates this few

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Speaker 2: in the seventies, and by nineteen seventy five, in this

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Speaker 2: famous case called Writer, the Supreme Court is citing Judge

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Speaker 2: Bork and saying the antitrust laws are a prescription for

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Speaker 2: consumer welfare. Okay, when Judge Bork writes about consumer welfare,

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Speaker 2: he says, look, low prices, that's important for consumer welfare.

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Speaker 2: High output, that's important. Other things are important too, like

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Speaker 2: the promotion of future competition, the protection of innovation, product quality.

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Speaker 2: All sorts of things sort of fit within consumer welfare.

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Speaker 2: But what we care about are economic injuries inflicted on

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Speaker 2: participants in marketplaces, not about stuff that isn't related to

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Speaker 2: sort of economic welfare of market participants. At the same

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Speaker 2: time this is happening, something else is happening in our system.

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Speaker 2: We have this sort of like economic libertarianism on the

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Speaker 2: right that sort of attaches itself to the consumer welfare standard,

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Speaker 2: and it has certain supposition like ideological suppositions about markets.

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Speaker 2: Markets always correct themselves as one of the suppositions. Professor

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Speaker 2: at NYU, Daniel Francis Bright Young anti trust scholars written

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Speaker 2: a lot about this, highly recommend him that government intervention

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Speaker 2: is almost always worse than anything happening in markets, even monopolies,

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Speaker 2: and so we should always preference against government intervention, even

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Speaker 2: if it's to correct market failures and monopolies. And a

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Speaker 2: strong deference to c suite decision making on the view

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Speaker 2: that they understand what should work best in a marketplace,

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Speaker 2: and government ought to be hands off and deferential to

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Speaker 2: c suite decision making. These two things right alongside each other,

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Speaker 2: and so by the nineteen nineties, consumer welfare has basically

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Speaker 2: been reduced to two questions. Is the transaction or conducted

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Speaker 2: issue likely to increase price in the shorter intermediate term

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Speaker 2: or reduce outcome in the shorter intermediate term. But that

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Speaker 2: isn't really what consumer welfare is about. Consumers can suffer

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Speaker 2: all sorts of injuries that aren't just about short term

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Speaker 2: prices or short term output. A loss of innovation is

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Speaker 2: a huge injury to consumers. A loss of product quality

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Speaker 2: huge injury consumers. But a lot of courts that started

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Speaker 2: to shift away and focus on the extremely qualitative question

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Speaker 2: about price and output, which also led to a deference

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Speaker 2: to econometrics and to economists and anti trust cases. Sorry

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Speaker 2: you make quantitative quantitative? Sorry, thank you, thank you. That's

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Speaker 2: right quantitative, which also ends up making anti trust cases

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Speaker 2: very expensive because everyone has to hire an army of

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Speaker 2: economists to talk about the case, makes it very difficult

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Speaker 2: for judges to decide these cases because the way these

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Speaker 2: often go is each side has their own army of economists,

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Speaker 2: identically trained, identical schools, fancy credentials on both sides, making

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Speaker 2: exactly opposite arguments about the same number, often predictive arguments,

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Speaker 2: and a judge untrained in any of this. I mean,

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Speaker 2: you know, I don't know how much how many lawyers

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Speaker 2: are on the room, but the average federal district judge

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Speaker 2: in the United States was like a local prosecutor or

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Speaker 2: a local defense attorney or a member of the local

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Speaker 2: bar has probably never dealt with anti trust in his

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Speaker 2: or her life before that case. And now you've got

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Speaker 2: MIT and Stanford trained economists having a really vicious dispute

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Speaker 2: about identical facts, and the judge is supposed to decid

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Speaker 2: The judge kind of goes, I don't know, it seems

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Speaker 2: like a wash, but it makes these cases long and expensive,

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Speaker 2: and so that is. You know, in my view, the

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Speaker 2: consumer welfare standard encompasses injuries to participant economic injuries to

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Speaker 2: participants in marketplaces. It includes consumers, obviously, it also includes laborers.

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Speaker 2: The Supreme Court has understood the antitrust laws to protect

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Speaker 2: laborers as sellers of labor to the same extent it

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Speaker 2: protects purchasers of goods. You know, the sort of fixation

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Speaker 2: on short and intermediate term price and output effects isn't

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Speaker 2: actually what consumer welfare was ever understood to me. And

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Speaker 2: it was supposed to encompass a broader range of injuries

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Speaker 2: to marketplace participants, but it got shrunk largely because of

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Speaker 2: ideological views about markets.

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Speaker 3: Thank you for that history. That was useful, And Joe

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Speaker 3: and I keep joking that we need to we need

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Speaker 3: to add a bort clocks into our monopolies question library.

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Speaker 2: But I guess, well, actually I didn't really answer your

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Speaker 2: question because the question is what I felt like.

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Speaker 3: Yeah, I was building up to ask politely, but yeah,

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Speaker 3: go on.

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Speaker 2: So then we get to President Trump's first administration, and

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Speaker 2: I'll just give a little background on myself. I was

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Speaker 2: a private practicing lawyer. I clerked off law school and

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Speaker 2: was a private practicing lawyer here at DC firms doing

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Speaker 2: anti trust work. And my parents back in rural Virginia

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Speaker 2: used to joke that I was a pro trust lawyer

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Speaker 2: because I represented the businesses who were resisting anti trust suits.

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Speaker 2: And then I went and clerked on the Supreme Court

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Speaker 2: for Justice Thomas during the twenty sixteen election, and I

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Speaker 2: would bike into work from Old Town and listen to

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Speaker 2: the news or podcast on the way in, and was

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Speaker 2: doing this as sort of a like lawyer who had

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Speaker 2: thought a lot about anti trust as a practitioner, but

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Speaker 2: very little about anti trust as a policy. You know,

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Speaker 2: when you're a practicing lawyer, you think about doctrines. How

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Speaker 2: can I help my client with these doctrines, you don't

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Speaker 2: go one step up and sort of think about the policy.

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Speaker 2: And if I'm driving into work, I'm listening to President

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Speaker 2: Trump calling for more vigorous anti trust enforcement, you know,

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Speaker 2: pretty vocifically on the campaign trail, and I'm writing in

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Speaker 2: I'm going, what's happening? Like A We're talking about anti

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Speaker 2: trust in a presidential campaign? This is very strange. And

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Speaker 2: two a Republican calling for more vigorous anti trust enforcement.

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Speaker 2: And so when President Trump takes office, he's not calling

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Speaker 2: for a revolution in the consumer welfare standard like some

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Speaker 2: of his successors did. He wasn't saying, you know, get

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Speaker 2: rid of the consumer welfare standard. But he hires anti

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Speaker 2: trust enforcers who take seriously the idea that consumer welfare

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Speaker 2: isn't just about price and output and what a bunch

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Speaker 2: of economists say. It's about consumers participation in marketplaces and

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Speaker 2: protecting them from short term and long term injuries and

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Speaker 2: laborers as marketplace participants. And so, you know, a lot

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Speaker 2: of folks have talked, not incorrectly about the Biden administration

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Speaker 2: bringing lots of lawsuits against big tech. A lot of

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Speaker 2: people have talked about the Google search suit, which is

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Speaker 2: in the remedy phase right now, where the United States

436
00:22:56,080 --> 00:22:58,119
Speaker 2: is asking to split Chrome off for the rest of Google.

437
00:22:58,320 --> 00:23:01,120
Speaker 2: President Trump brought that case. President Trump brought that case

438
00:23:01,119 --> 00:23:03,600
Speaker 2: in twenty twenty, and it was litigated during the Biden administration.

439
00:23:03,680 --> 00:23:07,359
Speaker 2: But President Trump brought that case. The biggest attempted block

440
00:23:07,400 --> 00:23:10,240
Speaker 2: of a vertical merger in American history up to that

441
00:23:10,280 --> 00:23:12,560
Speaker 2: point was brought by President Trump and the AT and

442
00:23:12,600 --> 00:23:15,400
Speaker 2: T Time Warner case, and the Meta case that's going

443
00:23:15,440 --> 00:23:18,639
Speaker 2: to trial in my agency in just a month that

444
00:23:18,760 --> 00:23:23,000
Speaker 2: says that Meta's acquisition of Instagram and WhatsApp violated the

445
00:23:23,040 --> 00:23:26,040
Speaker 2: anti trust laws was brought by President Trump's administration. So

446
00:23:26,480 --> 00:23:30,119
Speaker 2: sort of the reconsideration of consumer welfare to encompass a

447
00:23:30,160 --> 00:23:34,040
Speaker 2: broader range of consumer injuries than just price and output

448
00:23:34,280 --> 00:23:37,639
Speaker 2: starts with President Trump. Now President Biden comes in and

449
00:23:37,680 --> 00:23:42,879
Speaker 2: picks my successor, who is an extremely talented anti trust thinker,

450
00:23:43,240 --> 00:23:46,199
Speaker 2: but was of the view that the consumer welfare standard

451
00:23:46,200 --> 00:23:48,920
Speaker 2: ought to be discarded entirely and ought to be replaced

452
00:23:48,960 --> 00:23:51,640
Speaker 2: with a far more open ended understanding of the anti

453
00:23:51,640 --> 00:23:55,919
Speaker 2: trust laws that protect which she calls the competitive process,

454
00:23:56,280 --> 00:24:00,840
Speaker 2: but is more than just economic injuries to laborers and consumer. It's,

455
00:24:01,160 --> 00:24:04,800
Speaker 2: you know, the political effects of consolidation, all sorts of

456
00:24:04,840 --> 00:24:10,359
Speaker 2: downstream non economic effects, and that consolidation itself is the enemy,

457
00:24:10,800 --> 00:24:14,600
Speaker 2: even irrespective of the relationship of that consolidation to sort

458
00:24:14,600 --> 00:24:19,800
Speaker 2: of economic injuries on market participants. And that was basically

459
00:24:19,800 --> 00:24:23,280
Speaker 2: a proposed revolution. A lot of people call this neo Brandisianism.

460
00:24:23,760 --> 00:24:27,080
Speaker 2: Brandeis was a very famous Supreme Court justice who articulated

461
00:24:27,119 --> 00:24:30,800
Speaker 2: a sort of anti consolidation view of the anti trust

462
00:24:30,840 --> 00:24:33,679
Speaker 2: laws in the first half of the twentieth century, and

463
00:24:33,720 --> 00:24:37,240
Speaker 2: they proposed sort of ripping the anti trust laws out

464
00:24:37,280 --> 00:24:40,280
Speaker 2: of the consumer welfare standard and opening up a much

465
00:24:40,359 --> 00:24:43,520
Speaker 2: broader range of interests. I think sort of two things

466
00:24:43,560 --> 00:24:45,560
Speaker 2: to think about there. The first is this is basically

467
00:24:45,720 --> 00:24:49,960
Speaker 2: go back to the fifties and sixties before Bork's book.

468
00:24:50,320 --> 00:24:52,920
Speaker 2: The rationale was that price and out part are too

469
00:24:53,240 --> 00:24:56,399
Speaker 2: narrow a consideration on which to base an anti trust regime.

470
00:24:57,080 --> 00:24:59,080
Speaker 2: And the answer to that is it's true. But Bor

471
00:24:59,160 --> 00:25:01,760
Speaker 2: didn't actually say just limited to price and output. He

472
00:25:01,840 --> 00:25:06,080
Speaker 2: understood consumer welfare standard to encompass consumers in all of

473
00:25:06,119 --> 00:25:09,840
Speaker 2: their aspects of participating in markets, including how things will happen. Further,

474
00:25:09,880 --> 00:25:14,520
Speaker 2: in the future with innovation and product quality. And you know,

475
00:25:14,840 --> 00:25:18,440
Speaker 2: I think if you measure the previous anti trust regime

476
00:25:19,000 --> 00:25:22,879
Speaker 2: by whether it achieved its neo Brandisian revolution, the answer

477
00:25:22,920 --> 00:25:25,159
Speaker 2: is it definitely did not. Every court in the country

478
00:25:25,200 --> 00:25:27,159
Speaker 2: still applies the consumer welfare standard.

479
00:25:27,359 --> 00:25:31,040
Speaker 3: I prefer hipster anti trust to neo Brandisian. But I mean,

480
00:25:31,119 --> 00:25:33,520
Speaker 3: what what should we call your brand of anti trust?

481
00:25:33,560 --> 00:25:36,560
Speaker 3: Give us like a catchy name like hipster anti trust,

482
00:25:36,640 --> 00:25:40,239
Speaker 3: like anti woke anti trust, like maga m and a like,

483
00:25:40,440 --> 00:25:41,199
Speaker 3: give us something.

484
00:25:41,440 --> 00:25:44,240
Speaker 2: Yeah, you can call it maga anti trust if you want.

485
00:25:44,280 --> 00:25:46,720
Speaker 2: I think there are two things I would say. The

486
00:25:46,720 --> 00:25:49,600
Speaker 2: first is it's conservative anti trust in the sense that

487
00:25:50,160 --> 00:25:53,840
Speaker 2: you know, we aren't behold into sort of libertarian ideology

488
00:25:53,840 --> 00:25:57,040
Speaker 2: about markets. We take markets actually as they actually are.

489
00:25:57,359 --> 00:25:59,959
Speaker 2: We take consumers as they actually are, how they actually

490
00:26:00,040 --> 00:26:03,480
Speaker 2: participate in markets. We take laborers as they actually are,

491
00:26:03,520 --> 00:26:07,159
Speaker 2: and we take very seriously that you know, consumers and

492
00:26:07,240 --> 00:26:10,320
Speaker 2: laborers suffer in markets short of things that just affect

493
00:26:10,400 --> 00:26:13,320
Speaker 2: short term price and output. And that the loss of

494
00:26:13,320 --> 00:26:16,240
Speaker 2: innovation even if you can't measure it the way, or

495
00:26:16,280 --> 00:26:19,280
Speaker 2: the loss of choice or product quality, even if you

496
00:26:19,320 --> 00:26:21,840
Speaker 2: can't measure it the way that an economist would measure

497
00:26:22,119 --> 00:26:25,800
Speaker 2: price and output still matter to consumers and still matter

498
00:26:25,840 --> 00:26:28,760
Speaker 2: to antitrust. And I think the second is, you know,

499
00:26:29,600 --> 00:26:31,879
Speaker 2: I really do see my view as just like a

500
00:26:32,240 --> 00:26:35,080
Speaker 2: cop on the beat, you know. I think the other

501
00:26:35,160 --> 00:26:38,280
Speaker 2: thing that was unusual about the previous administration was that

502
00:26:38,280 --> 00:26:42,240
Speaker 2: it had a really hardcore focus on x ANTI regulation.

503
00:26:42,720 --> 00:26:45,920
Speaker 2: You know, the FTC under my predecessor passed a record

504
00:26:45,960 --> 00:26:48,560
Speaker 2: shattering number of x anti rules for an agency that

505
00:26:48,600 --> 00:26:52,399
Speaker 2: doesn't pass very many x anty rules, including competition rules,

506
00:26:52,400 --> 00:26:55,120
Speaker 2: which it had not done in a long time, arguably

507
00:26:55,160 --> 00:26:58,080
Speaker 2: had in my view, had never lawfully done. And you know,

508
00:26:58,160 --> 00:27:00,920
Speaker 2: the only one that we passed has been vacated by

509
00:27:00,960 --> 00:27:04,040
Speaker 2: the courts. But you know, it was not just a

510
00:27:04,119 --> 00:27:06,560
Speaker 2: sort of neo Brandisian revolution. It was an emphasis on

511
00:27:06,720 --> 00:27:09,120
Speaker 2: x ANTI regulation. And my view is, as a cop

512
00:27:09,160 --> 00:27:12,440
Speaker 2: on the beat, if we really vigorously enforce the anti

513
00:27:12,440 --> 00:27:15,800
Speaker 2: trust laws, we avoid the need for regulation, because regulation

514
00:27:15,920 --> 00:27:18,119
Speaker 2: is what you have to do when monopolies have totally

515
00:27:18,160 --> 00:27:20,960
Speaker 2: consumed a market. I mean, all of us live in

516
00:27:21,000 --> 00:27:24,320
Speaker 2: some form of a utility monopoly. Grew up in Virginia.

517
00:27:24,640 --> 00:27:28,160
Speaker 2: We have a giant electric utility monopoly, it is heavily, heavily,

518
00:27:28,200 --> 00:27:31,920
Speaker 2: heavily regulated directly by the state legislature. But if you

519
00:27:32,960 --> 00:27:35,520
Speaker 2: vigorously enforce your and you know, utility monopolies, they're a

520
00:27:35,560 --> 00:27:37,760
Speaker 2: little different because of the sort of space constraints on

521
00:27:37,800 --> 00:27:39,840
Speaker 2: wires and cables and things like that. But if you

522
00:27:39,920 --> 00:27:43,320
Speaker 2: take the anti trust laws very seriously and you really

523
00:27:43,440 --> 00:27:46,359
Speaker 2: vigorously enforce them, and you don't pull your punches because

524
00:27:46,359 --> 00:27:50,960
Speaker 2: of ideological suppositions about markets, you can avoid the need

525
00:27:51,000 --> 00:27:55,600
Speaker 2: for ex anti regulation because vigorous market competition ensures monopolies

526
00:27:55,640 --> 00:27:59,600
Speaker 2: do not rise. Anti trust enforcement ensures vigorous market competition.

527
00:28:00,040 --> 00:28:02,720
Speaker 2: If you have market competition, you don't need heavy regulation

528
00:28:02,800 --> 00:28:04,679
Speaker 2: because you don't have giant monopoly problems.

529
00:28:04,720 --> 00:28:09,480
Speaker 1: So I take I understand this point that you don't

530
00:28:09,480 --> 00:28:12,919
Speaker 1: need as much regulation if you take antitrust uh seriously.

531
00:28:13,480 --> 00:28:17,600
Speaker 1: There does seem to, however, be maybe you dispute this

532
00:28:17,600 --> 00:28:23,240
Speaker 1: this tendency towards centralization in the modern internet economy, and

533
00:28:23,520 --> 00:28:27,600
Speaker 1: you know, like it's very helpful that everyone you know

534
00:28:27,920 --> 00:28:29,639
Speaker 1: more or less goes to one place to share a

535
00:28:29,640 --> 00:28:33,840
Speaker 1: photo something like Instagram, or one place to review books,

536
00:28:33,840 --> 00:28:37,920
Speaker 1: et cetera. Like this is just one place to trol

537
00:28:38,240 --> 00:28:42,280
Speaker 1: on Twitter like I do. How do you like? Actually

538
00:28:42,320 --> 00:28:44,960
Speaker 1: that's a joke. I never troll. Sorry I slipped. I

539
00:28:45,000 --> 00:28:50,080
Speaker 1: slipped there, Tracy, I slip for a second. I do

540
00:28:50,160 --> 00:28:51,200
Speaker 1: not troll on Twitter?

541
00:28:51,520 --> 00:28:52,400
Speaker 2: But how do you like?

542
00:28:53,360 --> 00:28:56,440
Speaker 1: I guess what I'm trying to understand is many people

543
00:28:56,520 --> 00:28:59,680
Speaker 1: on both the right and the left feel this in

544
00:28:59,720 --> 00:29:02,520
Speaker 1: two of sense that there's a tremendous amount of power

545
00:29:02,920 --> 00:29:08,400
Speaker 1: being accrued in these gigantic tech platforms. And to your point,

546
00:29:08,440 --> 00:29:12,440
Speaker 1: like antitrust and the FTC seats specifically, how do you

547
00:29:12,480 --> 00:29:16,440
Speaker 1: measure when something is uncompetitive in a deal? Because again,

548
00:29:16,800 --> 00:29:19,120
Speaker 1: the nice thing about prices, et cetera is like you

549
00:29:19,160 --> 00:29:21,640
Speaker 1: can measure it, So like, what does it actually look

550
00:29:21,760 --> 00:29:24,760
Speaker 1: like to have a sort of more competitive internet?

551
00:29:24,960 --> 00:29:28,600
Speaker 2: Yeah, And the additional layer of complication for a lot

552
00:29:28,600 --> 00:29:30,880
Speaker 2: of the Internet platforms that we all use is that

553
00:29:30,920 --> 00:29:34,360
Speaker 2: we use them without exchanging money for them, Right, It's like,

554
00:29:34,400 --> 00:29:38,440
Speaker 2: you know, Facebook X, not premium Google Search. You know,

555
00:29:38,480 --> 00:29:40,680
Speaker 2: we don't. We don't hand over money in exchange for

556
00:29:40,760 --> 00:29:43,520
Speaker 2: using those services. That doesn't mean that there aren't ways

557
00:29:43,640 --> 00:29:46,720
Speaker 2: to measure a loss of competition. So like, you know,

558
00:29:46,760 --> 00:29:50,120
Speaker 2: I'll just use an example, the position that the commission

559
00:29:50,160 --> 00:29:53,280
Speaker 2: is articulated in meta, which is, you know, purely, purely public.

560
00:29:53,640 --> 00:29:55,080
Speaker 2: But one of the ways you can measure a loss

561
00:29:55,120 --> 00:29:58,959
Speaker 2: of competition is if product quality is degraded without a

562
00:29:59,000 --> 00:30:03,680
Speaker 2: meaningful competitive impact to the company that's degrading product quality. So,

563
00:30:03,720 --> 00:30:06,440
Speaker 2: for example, the FTC has alleged, and you know, we've

564
00:30:06,440 --> 00:30:08,760
Speaker 2: got a trial coming up on this, but the FTC

565
00:30:08,840 --> 00:30:12,000
Speaker 2: has alleged in meta, for example, that Facebook was able

566
00:30:12,040 --> 00:30:15,680
Speaker 2: to massively increase the ad load on Facebook without losing

567
00:30:15,720 --> 00:30:18,520
Speaker 2: any consumers, which meant that they were able to degrade

568
00:30:18,520 --> 00:30:21,880
Speaker 2: the quality of their product, and consumers didn't have anywhere

569
00:30:21,880 --> 00:30:24,480
Speaker 2: else to go, and so they just sort of stayed.

570
00:30:25,240 --> 00:30:27,520
Speaker 2: And that you know, the anti trust laws and a

571
00:30:27,600 --> 00:30:30,240
Speaker 2: sort of fully formed understanding.

572
00:30:29,840 --> 00:30:32,720
Speaker 1: I guess the question, I guess, And that makes a

573
00:30:32,760 --> 00:30:35,640
Speaker 1: lot of sense to me. On the other hand, how

574
00:30:35,720 --> 00:30:40,920
Speaker 1: much is that about some prior failure of antitrust versus

575
00:30:41,440 --> 00:30:44,560
Speaker 1: this tendency on the Internet for everyone to be while

576
00:30:44,840 --> 00:30:49,720
Speaker 1: their friends are and the sort of naturalization network effects exactly.

577
00:30:49,960 --> 00:30:52,400
Speaker 2: Yeah, so you know, network effects are sort of a

578
00:30:52,480 --> 00:30:55,160
Speaker 2: natural part of the Internet environment. Yeah, and the anti

579
00:30:55,200 --> 00:30:59,280
Speaker 2: trust laws do not actually forbid monopoly itself. They don't

580
00:30:59,440 --> 00:31:00,840
Speaker 2: the courts of go and out of their way over

581
00:31:00,880 --> 00:31:03,560
Speaker 2: and over for decades to say, the acquisition of a

582
00:31:03,880 --> 00:31:08,000
Speaker 2: monopoly naturally and lawfully does not violate the anti trust laws.

583
00:31:08,120 --> 00:31:10,479
Speaker 2: You know, if someone is just really good at something

584
00:31:10,520 --> 00:31:12,880
Speaker 2: and way better than everyone else, they sort of will

585
00:31:12,960 --> 00:31:15,959
Speaker 2: naturally develop monopoly in that because people will prefer that

586
00:31:16,000 --> 00:31:20,080
Speaker 2: product or service. What you can't do is maintain your

587
00:31:20,080 --> 00:31:23,720
Speaker 2: monopoly from things unrelated to your skill or the quality

588
00:31:23,720 --> 00:31:26,959
Speaker 2: of your product, or sort of dumb luck. And you know,

589
00:31:27,360 --> 00:31:30,840
Speaker 2: in terms of like you know, failures of previous antitrust regimes.

590
00:31:31,080 --> 00:31:33,280
Speaker 2: Let me just touch on that a minute. Sure, let's

591
00:31:33,320 --> 00:31:36,320
Speaker 2: just take Google Search for example. A lot of the

592
00:31:36,360 --> 00:31:40,520
Speaker 2: Google Search case is a very traditional Section two case.

593
00:31:41,000 --> 00:31:45,600
Speaker 2: It's tying, it's ordinary monopolization conduct. It doesn't propose breaking

594
00:31:45,720 --> 00:31:47,600
Speaker 2: sort of our standards. It is a very normal thing.

595
00:31:47,760 --> 00:31:50,120
Speaker 2: And this case, the idea for this case is sort

596
00:31:50,120 --> 00:31:53,000
Speaker 2: of sat around for a long time. But there are

597
00:31:53,000 --> 00:31:56,440
Speaker 2: political decisions made by antitrust inform for serves in previous

598
00:31:56,440 --> 00:32:00,000
Speaker 2: administrations not to do it. But those are political decision,

599
00:32:00,400 --> 00:32:03,680
Speaker 2: those are political economy decisions driven either by some combination

600
00:32:03,760 --> 00:32:09,280
Speaker 2: of ideology or a prudential you know, preference against government intervention,

601
00:32:09,360 --> 00:32:10,960
Speaker 2: even if you think you can win the case, because

602
00:32:11,040 --> 00:32:12,600
Speaker 2: you know, you don't want to be the guy that

603
00:32:12,720 --> 00:32:15,480
Speaker 2: kills the goose laying the golden egg. But you know,

604
00:32:15,560 --> 00:32:17,360
Speaker 2: I think we need to be realistic about it. There

605
00:32:17,960 --> 00:32:21,400
Speaker 2: there were moments during the creation of the Internet and

606
00:32:21,480 --> 00:32:23,600
Speaker 2: during the sort of rise of these platforms where they

607
00:32:23,920 --> 00:32:28,200
Speaker 2: made decisions that even under ordinary anti trust theories would

608
00:32:28,240 --> 00:32:30,280
Speaker 2: have said, hey, this is potentially a problem. I mean,

609
00:32:30,320 --> 00:32:33,640
Speaker 2: for example, the FTC's theory and meta was that the

610
00:32:33,680 --> 00:32:37,360
Speaker 2: acquisition of Instagram was an anti trust violation, but the FTC,

611
00:32:37,880 --> 00:32:41,000
Speaker 2: you know, did not block the merger. My own view is,

612
00:32:41,200 --> 00:32:44,960
Speaker 2: I don't think that we should say if a monopoly

613
00:32:45,040 --> 00:32:48,400
Speaker 2: arose in any market, in any market, Internet platforms or

614
00:32:48,480 --> 00:32:50,600
Speaker 2: any of the other goods and services we use every day,

615
00:32:50,920 --> 00:32:56,720
Speaker 2: we shouldn't. Let you know, enforcement declinations in the past

616
00:32:57,400 --> 00:32:59,280
Speaker 2: that led to the creation of monopoly be a reason

617
00:32:59,400 --> 00:33:03,280
Speaker 2: not to conf front the monopoly today, because that's basically

618
00:33:03,320 --> 00:33:05,440
Speaker 2: just the sunk cost fallacies like oh, well, we already

619
00:33:05,440 --> 00:33:07,040
Speaker 2: did this once, Like you know, if they have the

620
00:33:07,040 --> 00:33:08,960
Speaker 2: monopoly now, it is what it is. My view is, no,

621
00:33:09,640 --> 00:33:12,520
Speaker 2: if we have monopolies and they're being maintained illegally, no

622
00:33:12,560 --> 00:33:14,520
Speaker 2: matter how they were formed, no matter who was asleep

623
00:33:14,560 --> 00:33:17,760
Speaker 2: at the wheel when their formation came about. My job

624
00:33:17,840 --> 00:33:20,160
Speaker 2: is an interest enforcers to do something about that if

625
00:33:20,200 --> 00:33:21,960
Speaker 2: I think I can win in court, and if I

626
00:33:22,000 --> 00:33:23,560
Speaker 2: don't think I can win in court, I need to

627
00:33:23,600 --> 00:33:38,080
Speaker 2: leave them alone.

628
00:33:39,920 --> 00:33:43,200
Speaker 3: Okay, So, since we're on the topic of the Internet

629
00:33:43,480 --> 00:33:45,800
Speaker 3: big tech platforms, one of the things you've talked about

630
00:33:45,880 --> 00:33:49,800
Speaker 3: is potentially going after censorship on these platforms. Can you

631
00:33:49,840 --> 00:33:52,520
Speaker 3: connect that to You just gave us a great history

632
00:33:52,760 --> 00:33:55,600
Speaker 3: of the consumer welfare standard and how it's changed through time.

633
00:33:55,920 --> 00:33:58,560
Speaker 3: Connect that to the consumer welfare standard, whether it's you know,

634
00:33:58,800 --> 00:34:01,680
Speaker 3: a bork esque definition or something more broad.

635
00:34:01,920 --> 00:34:04,800
Speaker 2: Sure, can I resist your premise lightly? Of course, I

636
00:34:04,800 --> 00:34:07,959
Speaker 2: don't want to go after censorship. Okay. The government is

637
00:34:08,000 --> 00:34:11,080
Speaker 2: not supposed to go after censorship qua censorship because we're

638
00:34:11,120 --> 00:34:14,400
Speaker 2: not the speech police. I do care about market power,

639
00:34:14,840 --> 00:34:18,440
Speaker 2: and if market power enables a business to mistreat its

640
00:34:18,560 --> 00:34:21,719
Speaker 2: consumers or to degrade the quality of its product by,

641
00:34:21,760 --> 00:34:24,880
Speaker 2: for example, throwing people off of their platform and suffering

642
00:34:24,920 --> 00:34:29,520
Speaker 2: no competitive consequences whatsoever, that antitrust cares about not the

643
00:34:29,520 --> 00:34:32,640
Speaker 2: censorship itself, the market power that makes it possible to

644
00:34:32,760 --> 00:34:36,640
Speaker 2: mistreat consumers without suffering competitive consequences. I just give you

645
00:34:36,640 --> 00:34:40,560
Speaker 2: some background this twenty twenty. I am Mitch McConnell's lawyer.

646
00:34:40,760 --> 00:34:44,480
Speaker 2: I'm sitting in my Senate office. The George Floyd protests

647
00:34:44,560 --> 00:34:46,880
Speaker 2: are sort of at their peak, and I start getting

648
00:34:46,880 --> 00:34:51,040
Speaker 2: calls from the gcs of Giant Fortune one hundred businesses

649
00:34:51,360 --> 00:34:54,000
Speaker 2: and business groups, and I pick up the phone and

650
00:34:54,000 --> 00:34:56,960
Speaker 2: they say, hey, cops are really racist. We the business

651
00:34:56,960 --> 00:34:59,520
Speaker 2: community want you to pass a bunch of police reform bills.

652
00:35:00,160 --> 00:35:04,600
Speaker 2: And you know, I was a sort of like conservative

653
00:35:04,800 --> 00:35:08,640
Speaker 2: that had relatively strong deference for markets and for market

654
00:35:08,640 --> 00:35:11,040
Speaker 2: actors and people making decisions in those markets. And I

655
00:35:11,080 --> 00:35:13,440
Speaker 2: was shocked by this. And my response was, why are

656
00:35:13,480 --> 00:35:15,800
Speaker 2: you calling me about this. You're supposed to make widgets

657
00:35:15,880 --> 00:35:20,239
Speaker 2: at low prices for Americans. Why are you calling me

658
00:35:20,280 --> 00:35:22,560
Speaker 2: about police reform? What the hell does this have to

659
00:35:22,600 --> 00:35:25,279
Speaker 2: do with you? Leave the political debates to Americans and

660
00:35:25,320 --> 00:35:28,600
Speaker 2: to voters. Stop calling me about this. If anything, don't

661
00:35:28,600 --> 00:35:32,400
Speaker 2: you want more police to protect your businesses? And they're like, no,

662
00:35:32,680 --> 00:35:35,120
Speaker 2: this is it's really important to us, Like we want

663
00:35:35,120 --> 00:35:38,600
Speaker 2: this done. And I remember sitting in my office and going,

664
00:35:39,239 --> 00:35:41,920
Speaker 2: it's weird that these big businesses with all this economic

665
00:35:42,000 --> 00:35:44,960
Speaker 2: power are leveraging that economic power to accomplish social and

666
00:35:45,000 --> 00:35:48,880
Speaker 2: political objectives. And then in twenty twenty we have this

667
00:35:48,960 --> 00:35:53,160
Speaker 2: censorship crisis. People want to question the efficacy of masks,

668
00:35:53,960 --> 00:35:55,600
Speaker 2: You're not going to be on a platform. You want

669
00:35:55,640 --> 00:35:57,440
Speaker 2: to question the safety of vaccines, you're not going to

670
00:35:57,440 --> 00:36:00,439
Speaker 2: be on the platform. You want to question whether it's

671
00:36:00,520 --> 00:36:02,440
Speaker 2: like fair to change voting laws in the middle of

672
00:36:02,440 --> 00:36:04,120
Speaker 2: the election, you're not going to be on the platform.

673
00:36:04,200 --> 00:36:06,200
Speaker 2: You want to question whether there's something at Hunter Biden's

674
00:36:06,239 --> 00:36:07,759
Speaker 2: laptop that we should know about, you're not going to

675
00:36:07,800 --> 00:36:09,000
Speaker 2: be on the platform, and we're not going to let

676
00:36:09,000 --> 00:36:12,479
Speaker 2: you publish it. But it wasn't just censorship. Like any

677
00:36:12,640 --> 00:36:16,280
Speaker 2: consumer in twenty twenty, you couldn't watch TV, you couldn't

678
00:36:16,280 --> 00:36:18,760
Speaker 2: go online, you couldn't shop in a store without having

679
00:36:19,160 --> 00:36:23,040
Speaker 2: nakedly political messages, almost exclusively the platform of one party

680
00:36:23,320 --> 00:36:26,600
Speaker 2: being thrown in your face. And as a consumer, I said,

681
00:36:26,719 --> 00:36:29,320
Speaker 2: how can it be that there are all these businesses

682
00:36:29,360 --> 00:36:32,960
Speaker 2: who are willing to alienate huge swaths of their consumer

683
00:36:33,000 --> 00:36:35,439
Speaker 2: base with these messages that they throw on our face

684
00:36:35,440 --> 00:36:40,840
Speaker 2: and suffer no economic or competitive consequences at all. And

685
00:36:40,920 --> 00:36:43,880
Speaker 2: I started to understand sort of the critique of the

686
00:36:44,000 --> 00:36:48,040
Speaker 2: very narrow understanding the consumer welfare standard and the libertarianism

687
00:36:48,080 --> 00:36:51,600
Speaker 2: that had sort of clommed onto it, which is, large

688
00:36:51,600 --> 00:36:55,280
Speaker 2: businesses with market power will sometimes leverage that market power

689
00:36:55,320 --> 00:36:59,040
Speaker 2: to injure consumers, and sometimes do it in politically motivated ways,

690
00:36:59,200 --> 00:37:01,920
Speaker 2: and we should really care about the market power that

691
00:37:02,120 --> 00:37:05,399
Speaker 2: makes that sort of mistreatment possible. But that's the thing

692
00:37:05,440 --> 00:37:07,319
Speaker 2: I care about, is the market power that makes the

693
00:37:07,320 --> 00:37:10,000
Speaker 2: treatment possible. I don't want to police people's speech, but

694
00:37:10,040 --> 00:37:12,640
Speaker 2: I do want a police market power. But do Okay, I.

695
00:37:12,600 --> 00:37:14,600
Speaker 3: Guess my question is do people have a right to

696
00:37:14,680 --> 00:37:18,520
Speaker 3: be platformed? And then secondly, I mean, I would really

697
00:37:18,600 --> 00:37:21,840
Speaker 3: like an Ermes Burken bag. Ormas will not sell it

698
00:37:21,880 --> 00:37:24,280
Speaker 3: to me because I do not buy thousands and thousands

699
00:37:24,280 --> 00:37:27,000
Speaker 3: of dollars worth of luxury goods every year. They have

700
00:37:27,120 --> 00:37:29,319
Speaker 3: the option whether or not to sell me, and they

701
00:37:29,320 --> 00:37:32,160
Speaker 3: are famously very exclusive in their decisions to do that.

702
00:37:33,239 --> 00:37:33,520
Speaker 1: Yeah.

703
00:37:33,560 --> 00:37:36,000
Speaker 2: So I don't think that anyone has a right to

704
00:37:36,040 --> 00:37:38,640
Speaker 2: be on any particular platform, but you do have a

705
00:37:38,719 --> 00:37:41,960
Speaker 2: right to participate in a market that isn't infected by monopoly,

706
00:37:42,239 --> 00:37:44,000
Speaker 2: and you do have a right not to have the

707
00:37:44,120 --> 00:37:47,960
Speaker 2: quality of the product that you want, including speech on platforms,

708
00:37:48,000 --> 00:37:51,480
Speaker 2: be degraded by someone who will suffer no competitive consequences

709
00:37:51,640 --> 00:37:54,279
Speaker 2: from doing that. For the same reason ermez does not

710
00:37:54,440 --> 00:37:57,280
Speaker 2: have to lower its prices to sell you a burken bag.

711
00:37:57,960 --> 00:38:00,080
Speaker 3: I think they should, but yeah, okay.

712
00:38:00,480 --> 00:38:02,960
Speaker 2: But what they don't have the right to do is

713
00:38:03,040 --> 00:38:05,680
Speaker 2: engage in conduct that maintains a monopoly where they can

714
00:38:05,760 --> 00:38:08,440
Speaker 2: charge you higher prices than they could otherwise charge you

715
00:38:08,480 --> 00:38:11,200
Speaker 2: in a competitive marketplace. Yeah, of course we're gonna have

716
00:38:11,320 --> 00:38:14,560
Speaker 2: luxury goods, but we don't want a market, and we

717
00:38:14,600 --> 00:38:16,760
Speaker 2: shouldn't have a market. And it isn't a free market

718
00:38:16,800 --> 00:38:18,680
Speaker 2: for anyone who cares about free markets like I do.

719
00:38:19,080 --> 00:38:21,800
Speaker 2: A market isn't free if monopolists get to charge you

720
00:38:21,880 --> 00:38:25,640
Speaker 2: higher prices, degrade your product quality, deprive you of innovation

721
00:38:26,040 --> 00:38:27,240
Speaker 2: because of their market power.

722
00:38:27,800 --> 00:38:30,279
Speaker 1: How do you know in the case of sort of

723
00:38:31,640 --> 00:38:35,080
Speaker 1: the world of algorithms, right, So, there are certain instances

724
00:38:35,120 --> 00:38:39,560
Speaker 1: where okay, the platform is saying if you talk about X,

725
00:38:39,840 --> 00:38:42,600
Speaker 1: you are gone, And in some cases there are emails

726
00:38:42,680 --> 00:38:45,440
Speaker 1: and very clear trails about stuff like that. There are

727
00:38:45,440 --> 00:38:47,760
Speaker 1: other cases where it looks like there is a dial

728
00:38:47,840 --> 00:38:51,000
Speaker 1: that gets turned from time to time where suddenly, oh,

729
00:38:51,040 --> 00:38:53,760
Speaker 1: I'm starting to see a lot more people talk about

730
00:38:54,120 --> 00:38:58,240
Speaker 1: this perspective versus that perspective. Do you have a way

731
00:38:58,719 --> 00:39:04,120
Speaker 1: of measuring whether, outside of like say, emails, whether companies

732
00:39:04,280 --> 00:39:09,120
Speaker 1: are degrading their consumer experience with respect to those consumers'

733
00:39:09,120 --> 00:39:12,600
Speaker 1: ability to speak freely? Is there like, do you feel

734
00:39:12,640 --> 00:39:16,960
Speaker 1: confident in your way, in your ability to know whether

735
00:39:17,000 --> 00:39:19,759
Speaker 1: the company is serving their customers while in.

736
00:39:19,680 --> 00:39:22,680
Speaker 2: That Yeah, that's a good question, and you know, I'm

737
00:39:22,719 --> 00:39:27,440
Speaker 2: not gonna we anti trust enforcers are sort of taking

738
00:39:28,120 --> 00:39:31,960
Speaker 2: seriously the anti trust problems of the big tech companies

739
00:39:32,080 --> 00:39:33,960
Speaker 2: for the first time. I mean, twenty twenty is sort

740
00:39:33,960 --> 00:39:36,200
Speaker 2: of the watershed moment when President Trump brings the Meta

741
00:39:36,239 --> 00:39:39,440
Speaker 2: suit in the Google search suit. I litigated the Google

742
00:39:39,480 --> 00:39:42,440
Speaker 2: ad Tech case alongside the Biden Department of Justice when

743
00:39:42,480 --> 00:39:45,120
Speaker 2: I was the Solicitor General of Virginia. I'm not going

744
00:39:45,160 --> 00:39:47,440
Speaker 2: to pretend like applying the anti trust laws to new

745
00:39:47,480 --> 00:39:51,960
Speaker 2: context doesn't come with some difficulties, including potentially the difficulty

746
00:39:51,960 --> 00:39:54,960
Speaker 2: you're describing what I'm saying is that for a long time,

747
00:39:55,120 --> 00:39:58,680
Speaker 2: especially in the twenty tens, there was a strong preference

748
00:39:58,680 --> 00:40:01,880
Speaker 2: before President Trump became preference for saying this is difficult,

749
00:40:02,200 --> 00:40:05,600
Speaker 2: it's new, it's novel, let's not bring the anti trust

750
00:40:05,640 --> 00:40:07,719
Speaker 2: laws into these contexts. And my view is that that

751
00:40:07,880 --> 00:40:12,560
Speaker 2: sort of ideologically driven, hands off, laissez faire approach created

752
00:40:12,600 --> 00:40:16,600
Speaker 2: a system where we have super large, super powerful platforms

753
00:40:16,960 --> 00:40:20,040
Speaker 2: that in my view, there are instances where they were

754
00:40:20,120 --> 00:40:23,319
Speaker 2: quite obviously degrading their product quality in a way that

755
00:40:23,320 --> 00:40:26,279
Speaker 2: would surprise me in the presence of real competition. And

756
00:40:26,360 --> 00:40:28,960
Speaker 2: I also want to address the you know, in some

757
00:40:29,040 --> 00:40:31,440
Speaker 2: instances there were emails where it was like, ohay, this

758
00:40:31,520 --> 00:40:34,319
Speaker 2: person off. Look. I mean, I was involved in the

759
00:40:34,400 --> 00:40:39,640
Speaker 2: Murthy litigation, the Missouri against Biden litigation about alleged either

760
00:40:39,719 --> 00:40:43,640
Speaker 2: coordination or collusion between the government and big tech platforms

761
00:40:43,719 --> 00:40:45,840
Speaker 2: during twenty twenty. It's more than just a couple of emails.

762
00:40:45,920 --> 00:40:49,319
Speaker 2: This was rampant. It was systematic, and it was terrifying

763
00:40:49,520 --> 00:40:53,960
Speaker 2: the relationship between the big tech platforms and the government

764
00:40:54,000 --> 00:40:55,640
Speaker 2: about who was going to get to speak about what.

765
00:40:56,000 --> 00:40:57,879
Speaker 2: And you know, I think this leads me to another

766
00:40:57,880 --> 00:40:59,520
Speaker 2: important point and it's one I try to make to

767
00:40:59,600 --> 00:41:02,520
Speaker 2: my libertarian friends who think some of what I'm saying

768
00:41:02,760 --> 00:41:06,880
Speaker 2: sounds extreme, which is, if you are a libertarian and

769
00:41:06,920 --> 00:41:09,279
Speaker 2: you care a lot about personal liberty, you ought to

770
00:41:09,360 --> 00:41:12,680
Speaker 2: really care about monopoly because it is way easier for

771
00:41:12,719 --> 00:41:15,279
Speaker 2: the government to control all of our lives if they

772
00:41:15,360 --> 00:41:18,759
Speaker 2: only have to coerce a small handful of suppliers. If

773
00:41:18,800 --> 00:41:22,160
Speaker 2: you have a wide range of options for consumers, it's

774
00:41:22,160 --> 00:41:24,160
Speaker 2: harder for the government to pick up the phone over

775
00:41:24,200 --> 00:41:26,920
Speaker 2: and over and over and be calling executive after executive

776
00:41:26,920 --> 00:41:28,279
Speaker 2: and say we need you to do this to that

777
00:41:28,320 --> 00:41:30,560
Speaker 2: person and this to that person. But if it's just

778
00:41:30,560 --> 00:41:33,560
Speaker 2: a handful, that gets real easy, real quick. And I

779
00:41:33,560 --> 00:41:35,600
Speaker 2: think we saw that in the Murthy litigation. It's just

780
00:41:35,640 --> 00:41:38,240
Speaker 2: a couple platforms. You need a handful of government officials

781
00:41:38,280 --> 00:41:42,680
Speaker 2: who call and brate platform people to kick consumers off.

782
00:41:42,920 --> 00:41:45,719
Speaker 2: That's harder if there are more suppliers, if there are

783
00:41:45,760 --> 00:41:48,080
Speaker 2: more choices for consumers. And so even if you are

784
00:41:48,120 --> 00:41:51,680
Speaker 2: sort of libertarian and you have this ideological sort of

785
00:41:52,200 --> 00:41:57,120
Speaker 2: predisposition predispositional view that markets correct themselves and government intervention

786
00:41:57,320 --> 00:42:00,920
Speaker 2: is always worse than monopoly, my response is you don't

787
00:42:01,000 --> 00:42:03,600
Speaker 2: want a tiny number of suppliers because the government can

788
00:42:03,640 --> 00:42:06,279
Speaker 2: course them real easily, and if the government can course them,

789
00:42:06,480 --> 00:42:07,279
Speaker 2: they can course you.

790
00:42:08,360 --> 00:42:11,239
Speaker 3: So just on the content issue, I mean as part

791
00:42:11,280 --> 00:42:13,799
Speaker 3: of the problem the advertisers as well here, because we've

792
00:42:13,800 --> 00:42:16,680
Speaker 3: seen this happen where advertisers will say I don't want

793
00:42:16,719 --> 00:42:19,960
Speaker 3: to put money into this particular business because I think

794
00:42:20,000 --> 00:42:23,880
Speaker 3: there are a bunch of people saying racist or unacceptable things.

795
00:42:23,960 --> 00:42:27,920
Speaker 3: And then secondly, I mean you've pressed first Section to

796
00:42:28,200 --> 00:42:30,719
Speaker 3: thirty reform. I think this is something you're interested in,

797
00:42:30,800 --> 00:42:33,440
Speaker 3: and that's always an interesting thought experiment to think what

798
00:42:33,480 --> 00:42:35,680
Speaker 3: the world would look like if we never had Section

799
00:42:35,719 --> 00:42:39,920
Speaker 3: two thirty. But I mean that exists that currently exempts

800
00:42:40,040 --> 00:42:43,680
Speaker 3: Internet platforms from a lot of liability here, but if

801
00:42:43,680 --> 00:42:46,600
Speaker 3: you were to reform it, surely that would come into

802
00:42:46,800 --> 00:42:51,839
Speaker 3: conflict in one way or another with content and censorship.

803
00:42:52,960 --> 00:42:55,160
Speaker 2: Let me talk about two thirty really quickly. So as

804
00:42:55,200 --> 00:42:57,879
Speaker 2: a state enforcer, which is what it was before I

805
00:42:58,000 --> 00:43:01,920
Speaker 2: was at the FTC trying to protect Virginians, the amount

806
00:43:02,000 --> 00:43:04,719
Speaker 2: of time I spent trying to come up with complaints

807
00:43:04,800 --> 00:43:08,400
Speaker 2: that had to plead around Section two thirty was like shocking.

808
00:43:08,719 --> 00:43:12,280
Speaker 2: Section two thirty, on its face, seems to care mostly

809
00:43:12,320 --> 00:43:16,800
Speaker 2: about protecting tech platforms in the early nineteen nineties from

810
00:43:16,880 --> 00:43:20,560
Speaker 2: the liability for torts committed by people who are speaking

811
00:43:20,719 --> 00:43:24,040
Speaker 2: on their platforms, and it has over the course of

812
00:43:24,120 --> 00:43:29,320
Speaker 2: years been interpreted basically to immunize tech platforms from anything

813
00:43:29,400 --> 00:43:32,200
Speaker 2: relating to content moderation. In my view, that isn't what

814
00:43:32,239 --> 00:43:34,800
Speaker 2: Section two thirty says, but that is what the courts

815
00:43:34,840 --> 00:43:37,799
Speaker 2: have done. My view about Section two thirty is that

816
00:43:38,000 --> 00:43:41,920
Speaker 2: it's very difficult to justify immunizing the biggest companies in

817
00:43:41,920 --> 00:43:45,760
Speaker 2: the history of the world from state and federal enforcement actions.

818
00:43:45,960 --> 00:43:49,560
Speaker 2: And the FTC has tried to enforce Section five, our

819
00:43:49,680 --> 00:43:53,680
Speaker 2: pre eminent statute against online platform companies, and we have

820
00:43:53,880 --> 00:43:57,160
Speaker 2: lost cases because of Section two thirty where private businesses,

821
00:43:57,320 --> 00:44:01,440
Speaker 2: large private businesses are interposing Section two thirty between the

822
00:44:01,480 --> 00:44:05,920
Speaker 2: government and trying to protect Americans through government enforcement actions.

823
00:44:05,920 --> 00:44:09,040
Speaker 2: In my view, that just categorically cries out for reform,

824
00:44:09,280 --> 00:44:11,880
Speaker 2: but I don't think that that runs into conflict with

825
00:44:11,920 --> 00:44:14,759
Speaker 2: censorship in the following sense. One of the some of

826
00:44:14,800 --> 00:44:17,239
Speaker 2: the Section two thirty cases that have troubled me the

827
00:44:17,280 --> 00:44:21,480
Speaker 2: most are people who were alleged that they were thrown

828
00:44:21,520 --> 00:44:24,360
Speaker 2: off of a platform in violation of the platform's terms

829
00:44:24,360 --> 00:44:27,160
Speaker 2: of service. It's just a contract claim, like, hey, I

830
00:44:27,280 --> 00:44:30,080
Speaker 2: entered into this relationship with you, the platform, and I

831
00:44:30,160 --> 00:44:32,000
Speaker 2: did so on the basis of what you had in

832
00:44:32,040 --> 00:44:35,160
Speaker 2: your TOSS which governed, you know, the kind of things

833
00:44:35,200 --> 00:44:36,920
Speaker 2: I'm allowed to say, the kind of conduct in which

834
00:44:36,920 --> 00:44:39,880
Speaker 2: I'm permitted to engage, et cetera. And you kicked me

835
00:44:39,920 --> 00:44:42,280
Speaker 2: off in violation of your own TOS. And the platforms

836
00:44:42,280 --> 00:44:46,440
Speaker 2: have been able to interpose Section two thirty between consumers

837
00:44:46,440 --> 00:44:48,040
Speaker 2: and say it doesn't you know, it doesn't matter what

838
00:44:48,040 --> 00:44:50,319
Speaker 2: our TOS said. You don't we kicked you off. That's

839
00:44:50,320 --> 00:44:53,400
Speaker 2: a content decision. Therefore you don't get to bring the lawsuit.

840
00:44:53,719 --> 00:44:56,800
Speaker 2: And my view is, you know, consumers can protect themselves

841
00:44:56,880 --> 00:44:59,120
Speaker 2: better from censorship if they're able to at least hold

842
00:44:59,120 --> 00:45:02,000
Speaker 2: platforms to their terms of service. And one of the

843
00:45:02,080 --> 00:45:05,080
Speaker 2: questions that we've asked consumers to provide us info on

844
00:45:05,239 --> 00:45:08,759
Speaker 2: in our own tech platform investigation on this issue is

845
00:45:09,719 --> 00:45:11,920
Speaker 2: give us examples if you have them, of times that

846
00:45:11,960 --> 00:45:14,320
Speaker 2: you think that you were deplatformed or shadow band or

847
00:45:14,360 --> 00:45:17,200
Speaker 2: whatever in violation of the terms you agreed to when

848
00:45:17,200 --> 00:45:20,160
Speaker 2: you got on the platform and you know so on

849
00:45:20,239 --> 00:45:23,040
Speaker 2: section two thirty, I do think it has been interpreted wildly,

850
00:45:23,080 --> 00:45:25,759
Speaker 2: belong what anyone thought was going to say, and that

851
00:45:25,840 --> 00:45:29,319
Speaker 2: at the very least, you know, Trump administration proposed these

852
00:45:29,400 --> 00:45:33,560
Speaker 2: changes in twenty twenty. It should not provide immunity from

853
00:45:33,680 --> 00:45:36,799
Speaker 2: government enforcement actions that are designed to protect Americans.

854
00:45:37,600 --> 00:45:40,920
Speaker 1: Andrew Ferguson, FTC Chief, thank you so much for uh

855
00:45:41,680 --> 00:45:44,239
Speaker 1: coming out a blah flah. Thanks for having me.

856
00:46:02,520 --> 00:46:06,040
Speaker 3: That was our conversation with FTC Chair Andrew Ferguson. I'm

857
00:46:06,120 --> 00:46:08,719
Speaker 3: Tracy Alloway. You can follow me at Tracy.

858
00:46:08,400 --> 00:46:11,319
Speaker 1: Alloway and I'm Joe Wisenthal. You can follow me at

859
00:46:11,320 --> 00:46:14,600
Speaker 1: the Stalwart. Follow our guest Andrew Ferguson, he's at a

860
00:46:14,719 --> 00:46:19,399
Speaker 1: Ferguson FTC. Follow our producers Kerman Rodriguez at Kerman armand

861
00:46:19,440 --> 00:46:23,080
Speaker 1: Dashel Bennett at dashbod and Kelbrooks at Kelbrooks. From our

862
00:46:23,120 --> 00:46:25,919
Speaker 1: odd loads content, go to Bloomberg dot com slash odd Lots.

863
00:46:26,000 --> 00:46:28,480
Speaker 1: We have all of our episodes in a daily newsletter

864
00:46:28,520 --> 00:46:30,719
Speaker 1: that you should sign up to, and you can chat

865
00:46:30,719 --> 00:46:34,120
Speaker 1: about all of these topics, including regulation, including deals, including

866
00:46:34,200 --> 00:46:38,799
Speaker 1: politics in our discord discord dot gg slash, odd Lots.

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Speaker 3: And if you enjoy odd Lots. If you like it

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Speaker 3: when we do these live recordings, then please leave us

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Speaker 3: a positive review on your favorite podcast platform. And remember,

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Speaker 3: if you are a Bloomberg subscriber, you can listen to

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Speaker 3: all of our episodes absolutely ad free. All you need

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Speaker 3: to do is find the Bloomberg channel on Apple Podcasts

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Speaker 3: and follow the instructions there. Thanks for listening it in