WEBVTT - FTC Chief Andrew Ferguson on the Trump Vision for Antitrust 0:00:02.480 --> 0:00:19.320 Bloomberg Audio Studios, Podcasts, radio News. Hello and welcome to 0:00:19.400 --> 0:00:21.760 another episode of the Odd Lots podcast. 0:00:21.840 --> 0:00:24.120 I'm Joe Wisenthal and I'm Tracy Alloway. 0:00:24.600 --> 0:00:26.920 We got a special episode for listeners today. 0:00:27.040 --> 0:00:30.120 We do a very special episode. We had a live 0:00:30.320 --> 0:00:33.680 event over in Washington, d C. It was a very 0:00:33.680 --> 0:00:34.400 cool event. 0:00:34.240 --> 0:00:36.800 Joe, it was really fun. It's been a while, you know, 0:00:36.840 --> 0:00:39.680 we do live events, we do live recordings from time 0:00:39.720 --> 0:00:41.720 to time. It's been a while since we like put 0:00:41.760 --> 0:00:45.400 out a full evening of programming, a full show, if 0:00:45.440 --> 0:00:45.960 you will. 0:00:45.960 --> 0:00:47.639 Also our first show in DC. 0:00:47.960 --> 0:00:52.199 And our first live public show in DC. We've been 0:00:52.240 --> 0:00:54.600 wanting to do one for a while. We had a 0:00:54.640 --> 0:00:57.400 bunch of great guests. I actually really like going down 0:00:57.480 --> 0:00:57.840 to DC. 0:00:58.000 --> 0:01:00.160 Yeah, and it was a great crowd as well. I 0:01:00.200 --> 0:01:02.480 think we have the only audience that would devote two 0:01:02.560 --> 0:01:05.200 and a half hours on a Wednesday night to listening 0:01:05.200 --> 0:01:07.840 about the Jones Act and anti trust policy. 0:01:08.080 --> 0:01:10.280 Yes, that's right. It was sort of a late night too. 0:01:10.720 --> 0:01:12.600 It's sort of awkward timing because it was sort of 0:01:12.640 --> 0:01:14.200 dinner so people had to skip. 0:01:14.520 --> 0:01:17.200 But there was popcorn. It included with the tickets. 0:01:17.240 --> 0:01:20.360 It was popcorn anyway, so we're going to release all 0:01:20.400 --> 0:01:24.880 of the conversations that we had on that evening as episodes. 0:01:25.360 --> 0:01:27.720 But to start, we had a conversation about anti trust. 0:01:27.760 --> 0:01:30.400 We spoke to Andrew Ferguson. He's the new chair of 0:01:30.440 --> 0:01:33.960 the FTC for the Trump administration. Obviously, there's a lot 0:01:33.959 --> 0:01:36.959 of curiosity about how much continuity there may or may 0:01:37.000 --> 0:01:41.600 not be between antitrust under the Biden administration, under Lena Kahn, 0:01:41.640 --> 0:01:44.200 who we've also spoken to on the podcast, and what 0:01:44.319 --> 0:01:46.759 this new era might look like. So it was really 0:01:46.760 --> 0:01:48.920 interesting to sit down with him and get a better 0:01:49.040 --> 0:01:49.400 sense of it. 0:01:49.840 --> 0:01:52.960 That's right, and it's got pretty interesting implications really for 0:01:53.120 --> 0:01:55.520 multiple reasons. I mean, if you recall, one of the 0:01:55.520 --> 0:01:59.080 themes sort of when the election happened, was a lot 0:01:59.080 --> 0:02:02.360 of excitement on Wall Street because of a perception that 0:02:02.360 --> 0:02:05.320 there would be a lot of mergers in deals would 0:02:05.400 --> 0:02:07.480 get a green light that they would be going forward 0:02:07.920 --> 0:02:12.960 the new era of deal making activity. Incidentally, the new chair, 0:02:13.120 --> 0:02:16.680 Andrew Ferguson, kept the merger guidelines that were put in 0:02:16.720 --> 0:02:19.880 place under his predecessor, but they're clearly going to be differences. 0:02:19.880 --> 0:02:22.120 There are areas of alignment, There are areas of differences, 0:02:22.440 --> 0:02:25.400 and so we talked to Andrew about sort of what 0:02:25.560 --> 0:02:29.600 a conservative or what a maga vision of antitrust might 0:02:29.639 --> 0:02:30.040 look like. 0:02:30.200 --> 0:02:33.200 Maga m and A was my suggestion, I think, and 0:02:33.520 --> 0:02:35.760 he took it. So all right. Here it is our 0:02:35.840 --> 0:02:39.480 live conversation with the new FTC chief, Andrew Ferguson. 0:02:39.680 --> 0:02:42.639 Thank you so much for coming. I'm really annoyed actually, 0:02:42.720 --> 0:02:46.000 because one of your lawyers gave me like the perfect 0:02:46.040 --> 0:02:49.040 first question for the podcast today. I was like, Oh, 0:02:49.080 --> 0:02:51.880 this is amazing, and then you sort of walked it back. 0:02:51.919 --> 0:02:53.960 I don't exactly know what happened, so that dulled it 0:02:54.000 --> 0:02:57.799 a little bit. But anyway, apparently in court today one 0:02:57.840 --> 0:03:00.640 of your lawyers said, we need a pull for this 0:03:00.800 --> 0:03:04.160 case against Amazon because we don't have the resources and 0:03:04.639 --> 0:03:07.040 we can't pay for transcripts. Like, oh, this is an 0:03:07.040 --> 0:03:11.840 amazing first question for Andrew, and then he walked away. 0:03:13.600 --> 0:03:17.240 Is there a constraint though, between this impulse and we'll 0:03:17.240 --> 0:03:20.560 get into it, you know, in terms of headcount and 0:03:20.840 --> 0:03:24.040 your desire for what you know looks like going to 0:03:24.040 --> 0:03:28.840 be a sort of vigorous new antitrust uh enforcement approach. 0:03:30.040 --> 0:03:33.000 Thank you for having me a lot to unwrapped there. Yeah, 0:03:33.240 --> 0:03:36.560 first on constraints. No, okay, I've got the people I 0:03:36.640 --> 0:03:40.400 need to protect Americans from monopolies, to protect them from fraud. 0:03:40.880 --> 0:03:43.320 And you know, no, I don't think anyone in Washington 0:03:43.400 --> 0:03:46.280 has taken sort of the threat that big tech poses 0:03:46.320 --> 0:03:49.720 to American consumers more seriously than I have. When President 0:03:49.760 --> 0:03:52.320 Trump announced my appointment, this is one of the things 0:03:52.360 --> 0:03:55.680 he said he really cared about was taking the threats 0:03:55.680 --> 0:03:59.040 that big tech pose to American consumers very seriously. There, 0:03:59.080 --> 0:04:01.760 I will throw every re resource the agency has at 0:04:01.800 --> 0:04:06.240 prosecuting cases against big tech that we've got going. So unequivocally, No, 0:04:06.680 --> 0:04:09.840 there are no resource constraints on protecting Americans from monopolies 0:04:09.840 --> 0:04:10.240 and fraud. 0:04:10.360 --> 0:04:12.760 Can you explain what happened today? 0:04:12.960 --> 0:04:14.560 I think a lawyer had a bad day in court. 0:04:14.640 --> 0:04:17.360 He was wrong. He filed a letter almost immediately after 0:04:17.400 --> 0:04:20.320 saying I was wrong. We don't have resource constraints, and 0:04:20.360 --> 0:04:22.880 we are ready to prosecute this case on whatever timeline 0:04:22.920 --> 0:04:24.720 the court wants for us. So we're ready to go. 0:04:24.920 --> 0:04:29.000 Okay, but presumably there is this broader drive to streamline 0:04:29.040 --> 0:04:32.200 some agencies yours included at the same time that you 0:04:32.279 --> 0:04:35.040 have these really lofty targets that you're trying to reach. 0:04:35.640 --> 0:04:38.239 I just saw the very good Bloomberg story out today 0:04:38.279 --> 0:04:41.840 about the Microsoft probe. This is a huge company that's 0:04:41.880 --> 0:04:44.839 going to take a lot of effort, a lot of resources. Again, 0:04:45.040 --> 0:04:48.360 presumably you're doing this with less resources than you had, 0:04:48.600 --> 0:04:49.760 say a year ago. 0:04:49.839 --> 0:04:52.880 At the FTC, I would not presume that. Look, the 0:04:52.920 --> 0:04:56.359 Americans voted for major reform. President Trump ran on major 0:04:56.400 --> 0:04:59.160 reform and he's giving it to him. And government should 0:04:59.160 --> 0:05:02.640 not be bigger than is necessary to deliver the services 0:05:02.680 --> 0:05:05.680 that Americans need to protect Americans from the problems that 0:05:05.720 --> 0:05:10.320 Americans have. The FTC we are engaged in the streamlining process. 0:05:10.680 --> 0:05:14.440 The goal is to maximize Americans' returns on their taxpayer dollars. 0:05:14.480 --> 0:05:17.080 When they send their money off to Washington, they expect 0:05:17.080 --> 0:05:20.040 their government to do a lot with that money, and 0:05:20.279 --> 0:05:22.560 that the government shouldn't be any bigger than is necessary 0:05:22.600 --> 0:05:25.840 to do those tasks. And so at the FTC, we've 0:05:25.839 --> 0:05:29.200 got the resources we need to protect Americans from fraudam monopoly. 0:05:29.240 --> 0:05:32.240 And look, you know, no government official in history has 0:05:32.279 --> 0:05:34.920 ever said, no, I want fewer resources. Which is why 0:05:35.000 --> 0:05:38.440 the President's efficiency agenda is so important, because government will 0:05:38.440 --> 0:05:41.560 always keep sucking up resources. The goal here is to 0:05:41.600 --> 0:05:44.640 maximize the return on investment for American taxpayers, and that's 0:05:44.640 --> 0:05:47.080 what we're doing the FTC. Okay, So what. 0:05:47.000 --> 0:05:50.400 Does Trump actually think about antitrust? Because he has a 0:05:50.400 --> 0:05:53.240 lot of opinions, Sometimes it's hard to get a handle 0:05:53.320 --> 0:05:56.400 on what exactly those opinions are. Sometimes he seems to 0:05:56.640 --> 0:05:58.680 contradict himself. You know, a lot of people think he's 0:05:58.680 --> 0:06:01.479 pro business, but at the same time he has talked 0:06:01.480 --> 0:06:04.920 about antitrust and competition and the power of the big 0:06:04.960 --> 0:06:07.760 tech platforms as you just mentioned. What does he tell 0:06:07.800 --> 0:06:09.600 you about how he thinks of all of this. 0:06:10.240 --> 0:06:14.800 I think President Trump is pro innovation, pro growth, and 0:06:14.839 --> 0:06:17.680 in that sense, he is pro business. But I'm going 0:06:17.720 --> 0:06:19.279 to push back a little bit on the way you 0:06:19.320 --> 0:06:22.920 frame the question. I don't think that there's any inconsistency 0:06:23.240 --> 0:06:26.880 with being pro business and favoring vigorous anti trust enforcement. 0:06:27.040 --> 0:06:29.520 Those two have to go hand in hand. Look, I 0:06:29.640 --> 0:06:32.280 like most Republicans, and I think like most Americans and 0:06:32.440 --> 0:06:35.760 pro free markets. Anti trust is how we keep our 0:06:35.760 --> 0:06:39.760 markets free markets that are infected with monopoly, that are 0:06:39.880 --> 0:06:43.720 infected with collusion, that are infected with foreclosure. These are 0:06:43.760 --> 0:06:48.880 not free. They move value from consumers from innovative businesses 0:06:48.880 --> 0:06:51.680 to giant monopolies, who then are focused mostly on protecting 0:06:51.720 --> 0:06:55.560 those monopolies rather than innovating, rather than growing, rather than 0:06:55.600 --> 0:06:58.520 coming up with the next great idea that changes americans lives. So, 0:06:58.760 --> 0:07:01.919 you know, I think President Trump up his pro American markets. 0:07:02.080 --> 0:07:06.080 He's pro business, but that is easily reconcilable with favoring 0:07:06.160 --> 0:07:09.120 vigorous anti trust enforcement. And President Trump, you know, he's 0:07:09.120 --> 0:07:11.920 been president for four years before this, we sort of 0:07:12.000 --> 0:07:15.280 have seen what President Trump's anti trust agenda looks like. 0:07:15.600 --> 0:07:19.280 And he favors vigorous enforcement. He favors following the law, 0:07:19.640 --> 0:07:22.400 and he favors clarity and certainty for people who have 0:07:22.480 --> 0:07:24.280 to participate in these markets. 0:07:25.160 --> 0:07:27.160 Right, no, no, no, no, no, no, a live recording, So 0:07:27.800 --> 0:07:30.760 hold on, hold, hold on, no, it's a live recording. 0:07:30.760 --> 0:07:31.480 It's a live recurd. 0:07:32.160 --> 0:07:36.440 President Trump spent four years as the victim of endless lawfare. 0:07:36.920 --> 0:07:40.520 He's president of the United States. Yeah, all right, it's 0:07:40.560 --> 0:07:44.600 DC audience, I get it. He has spent the last 0:07:44.760 --> 0:07:48.000 several months picking people so in his cabinet or an 0:07:48.000 --> 0:07:50.840 agencies like mine who are focused on enforcing the laws 0:07:50.880 --> 0:07:53.640 as they are written and carrying out this agenda. 0:07:54.120 --> 0:07:56.600 All right, let me ask you, all right, Uh, you 0:07:56.720 --> 0:08:01.640 mentioned streamlining, uh the FTC. One way that you could 0:08:01.680 --> 0:08:06.080 imagine streamlining from a government's perspective is that we don't 0:08:06.120 --> 0:08:10.360 need an FTC. And obviously you have your counterparts at 0:08:10.400 --> 0:08:13.760 the Department of Justice. You yourself have talked about the 0:08:13.760 --> 0:08:16.760 sort of philosophy of the sort of disputing the premise 0:08:16.920 --> 0:08:21.119 of sort of these independent agencies. Why do we need 0:08:21.360 --> 0:08:24.640 two separate antitrust uh enforcement agencies? 0:08:24.760 --> 0:08:27.560 So I think we can get to independence in a minute. 0:08:27.600 --> 0:08:30.280 But I think the FTC sort of adds value to 0:08:30.320 --> 0:08:34.920 the enforcement regime regime because it combines the consumer protection 0:08:35.120 --> 0:08:38.839 and the anti trust enforcement program in a single agency, 0:08:38.880 --> 0:08:42.319 and those two can cross pollinate and they protect consumers 0:08:42.840 --> 0:08:46.120 more fully than you know, just a singular anti trust 0:08:46.200 --> 0:08:47.720 enforcement necessarily would. 0:08:48.320 --> 0:08:48.440 Uh. 0:08:48.640 --> 0:08:50.880 And the you know, the two missions sort of like 0:08:50.960 --> 0:08:52.800 learn from each other. The anti trust people when they're 0:08:52.800 --> 0:08:56.400 doing investigations, they can find problems that violate the consumer 0:08:56.440 --> 0:08:59.600 protection laws, and then the FTC can continue those investigations 0:08:59.600 --> 0:09:01.320 with the other side of the house. So I think 0:09:01.360 --> 0:09:03.640 there's some benefits to that. But you know, there's Also, 0:09:03.720 --> 0:09:07.480 I think some benefits in certain circumstances to having multi 0:09:07.679 --> 0:09:11.320 member agencies with people from both parties. I mean, look, 0:09:11.360 --> 0:09:15.000 if you have an agency that is exceeding the law, 0:09:15.360 --> 0:09:19.200 abusing the companies that are purports to regulate, it's helpful 0:09:19.320 --> 0:09:23.680 for markets, for courts, for litigants, for government transparency to 0:09:23.760 --> 0:09:26.320 have people in the other party pointing this out and 0:09:26.400 --> 0:09:28.120 saying it in dissents. Like you know, I wrote four 0:09:28.200 --> 0:09:30.400 hundred plus pages of descents during my time as a 0:09:30.440 --> 0:09:32.839 Minority commissioner. I think that that adds value. But I 0:09:32.880 --> 0:09:36.640 think that the FTC's particular value add is you combine 0:09:36.679 --> 0:09:40.400 the two missions, consumer protection and antitrust in a single house, 0:09:40.600 --> 0:09:43.360 and they both sort of like help reinforce the other. 0:09:44.640 --> 0:09:46.880 I know it's early days, but one of the things 0:09:46.880 --> 0:09:48.880 you've done so far is you said you were going 0:09:48.960 --> 0:09:53.080 to maintain the merger guidelines from the Biden administration, and 0:09:53.320 --> 0:09:55.760 some people were really surprised about that. You said that 0:09:55.800 --> 0:09:59.600 you thought stability is good for enforcement agencies. I think 0:09:59.600 --> 0:10:02.240 maybe some some people are confused because this doesn't necessarily 0:10:02.320 --> 0:10:05.760 seem to be an administration that is obsessed with stability 0:10:05.880 --> 0:10:10.640 or continuity. Walk us through the thinking there. Why did 0:10:10.679 --> 0:10:13.680 you commit to those particular guidelines, especially given the you know, 0:10:13.679 --> 0:10:16.640 they got a lot of criticism from multiple sides of 0:10:16.640 --> 0:10:17.000 the aisle. 0:10:17.800 --> 0:10:21.199 Yeah. So we've had various iterations of the merger guidelines 0:10:21.320 --> 0:10:23.520 dating back to the sixties and then when the FTC 0:10:23.600 --> 0:10:27.120 and DJ started doing it together in the nineteen eighties. 0:10:27.400 --> 0:10:29.520 You know, we tend to have guidelines for pretty long 0:10:29.559 --> 0:10:32.720 periods of time. Sometimes there are sort of iterative changes 0:10:32.720 --> 0:10:34.640 made to those guidelines over the course of time, but 0:10:34.720 --> 0:10:39.560 a complete rewrite of the guidelines relatively rare, and it happens. 0:10:39.640 --> 0:10:42.120 You know, we had the guidelines we written in twenty ten. 0:10:42.360 --> 0:10:45.320 But the general principle has been presidents of one party 0:10:45.440 --> 0:10:48.079 maintain the guidelines from the previous They may add here 0:10:48.120 --> 0:10:50.920 and there. They provide commentaries on those guidelines to sort 0:10:50.920 --> 0:10:55.040 of explain to business how you know that current administration 0:10:55.160 --> 0:10:58.240 understands the guidelines. But a complete read vamp is rare. 0:10:58.760 --> 0:11:01.439 And if we get into this process where every single 0:11:01.440 --> 0:11:04.280 time a new administration comes in they jettison the guidelines, 0:11:04.320 --> 0:11:07.320 two things happen. First, the agencies spend all their time 0:11:07.400 --> 0:11:11.079 writing the guidelines. I mean, the previous administration of jettison 0:11:11.160 --> 0:11:13.400 the twenty ten guidelines and spent like two years having 0:11:13.480 --> 0:11:16.199 to write this one. They were only effective for barely 0:11:16.240 --> 0:11:18.400 a year of the last administration. If we get into 0:11:18.440 --> 0:11:20.960 this process where every four years were yanking and rewriting, 0:11:21.040 --> 0:11:23.240 it's all the agency you're going to do. Number one. 0:11:23.440 --> 0:11:27.200 Number two, the guidelines will become basically meaningless if they 0:11:27.400 --> 0:11:30.920 just are like one party's statement of its view of 0:11:30.920 --> 0:11:33.280 anti trust policy. Courts won't follow them anymore if they 0:11:33.280 --> 0:11:36.920 think that they're just openly partisan. Regulated entities won't rely 0:11:37.040 --> 0:11:39.800 on them to plan. You know, businesses can't just plan 0:11:39.880 --> 0:11:41.839 into your cycles. They have to plan longer than that. 0:11:42.160 --> 0:11:44.440 And if the year of the view that every election 0:11:44.600 --> 0:11:47.120 runs the risk of the guidelines being yanked, the guidelines 0:11:47.200 --> 0:11:51.000 just become meaningless. And third, you know, there definitely were 0:11:51.120 --> 0:11:54.080 parts of the guidelines that were you know, departures from 0:11:54.120 --> 0:11:57.280 the twenty ten guidelines, but they generally are relatively well aligned. 0:11:57.440 --> 0:11:59.719 They're built on case law, they preserve a lot of 0:11:59.760 --> 0:12:02.480 the PC from previous guidelines, and I think just throwing 0:12:02.520 --> 0:12:05.440 them all out all at once means A the agencies 0:12:05.480 --> 0:12:09.120 are going to devote tremendous resources to rewriting them, and 0:12:09.200 --> 0:12:12.520 b everyone will remain very uncertain about how the agencies 0:12:12.600 --> 0:12:15.160 feel about it. And finally, you know, a lot has 0:12:15.160 --> 0:12:17.319 been written about the sort of effects of the guidelines. 0:12:17.360 --> 0:12:19.520 They're guidelines at the end of the day. They aren't law. 0:12:19.720 --> 0:12:22.199 They're supposed to be explanations to the public about how 0:12:22.240 --> 0:12:26.080 the agencies generally understand the merger program going forward. But 0:12:26.120 --> 0:12:28.800 the most important feature of anti trust enforcement in the 0:12:28.840 --> 0:12:32.439 United States isn't the guidelines. It's the commitment of particular 0:12:32.440 --> 0:12:35.760 anti trust enforcers to following the laws is written, providing 0:12:35.840 --> 0:12:38.680 certainty and clarity about how they understand the law. And 0:12:38.720 --> 0:12:41.000 then when you go to court bringing the cases that 0:12:41.080 --> 0:12:43.120 you think that you can win, and when you can't 0:12:43.120 --> 0:12:44.839 win the cases, get the hell out of the way 0:12:44.880 --> 0:12:45.880 and let the mergers close. 0:13:02.600 --> 0:13:05.079 So one of the things that obviously came up during 0:13:05.280 --> 0:13:08.000 under the last DEPTC chair this idea of like, okay, 0:13:08.000 --> 0:13:12.280 there's more than the consumer welfare standard that should be evaluated. 0:13:12.640 --> 0:13:17.040 One nice thing about conceiving of consumer welfare narrowly in 0:13:17.120 --> 0:13:21.800 terms of price a well, people like cheap things. But also, 0:13:22.520 --> 0:13:25.319 you know, it creates a certain law, it eliminates a 0:13:25.360 --> 0:13:29.280 certain subjectivity. You could plug. Okay, this is what's gonna 0:13:29.280 --> 0:13:32.720 happen to market share companies. You can plug them into 0:13:32.760 --> 0:13:35.520 some economist model. I don't know if those models actually 0:13:35.559 --> 0:13:38.040 work or not, but theoretically spit out some answer where 0:13:38.080 --> 0:13:40.000 we get lower prices, and then it's like, okay, this 0:13:40.080 --> 0:13:43.880 is this is good or bad? When you start broadly 0:13:44.000 --> 0:13:47.920 defining consumer welf welfare, rethinking that like, first of all, 0:13:48.120 --> 0:13:49.920 what is that term? What do you when you hear 0:13:50.000 --> 0:13:52.760 the consumer welfare standard? What does that mean to you? 0:13:52.880 --> 0:13:55.640 Does it mean more than prices for one thing? 0:13:56.640 --> 0:13:58.079 In order to talk about this, I want to get 0:13:58.080 --> 0:13:59.839 a little bit into history. Is sure? 0:14:00.000 --> 0:14:00.760 Do like history? 0:14:00.840 --> 0:14:01.959 Yeah, so you said. 0:14:02.000 --> 0:14:02.080 So. 0:14:03.640 --> 0:14:06.840 Congress passes its first competition law in eighteen ninety, the 0:14:06.840 --> 0:14:09.079 Sherman Act. I don't know how many of you read 0:14:09.080 --> 0:14:11.120 the Sherman Act, but the operative provisions of the Sherman 0:14:11.160 --> 0:14:14.360 Acts Sections one, in sections two, it's like fifty words. 0:14:14.400 --> 0:14:16.959 Like the most important provisions of American ads trust law 0:14:16.960 --> 0:14:20.440 are fifty words. Adopted in eighteen ninety, the Congress has 0:14:20.480 --> 0:14:25.160 not changed effectively since then. Then, in nineteen fourteen, they 0:14:25.280 --> 0:14:28.320 passed the FTC Act, which both creates my Agency and 0:14:28.400 --> 0:14:32.760 also creates a new antitrust provision that prohibits unfair methods 0:14:32.760 --> 0:14:35.320 of competition, and then a couple months later it passes 0:14:35.320 --> 0:14:37.360 the Clayton Act. And the Clayton Act is really important 0:14:37.360 --> 0:14:41.480 because that's the law that prohibits mergers that promote tend 0:14:41.560 --> 0:14:46.160 to create a monopoly or injured competition. So by nineteen fourteen, 0:14:47.000 --> 0:14:49.520 and then with an important amendment called the Robinson Patman 0:14:49.560 --> 0:14:52.120 Act in the nineteen thirties, our anti reslaws are basically 0:14:52.200 --> 0:14:55.360 set like the operative provisions for merger purposes of Section 0:14:55.400 --> 0:14:58.080 seven of the Clayton Act and sections one and two 0:14:58.080 --> 0:15:01.480 of the Sherman Act are basically unchanged. They were originally adopted. 0:15:02.080 --> 0:15:07.200 For decades, courts kind of cast about for a theory 0:15:07.200 --> 0:15:09.200 about how to apply the anti trust laws. So we 0:15:09.280 --> 0:15:11.560 know that the anta trust laws are about competition and 0:15:11.600 --> 0:15:14.240 protecting competition, but that doesn't tell you a whole lot. 0:15:14.320 --> 0:15:15.960 Does that mean like making sure that there are a 0:15:15.960 --> 0:15:19.920 particular number of competitors in the marketplace. Does it mean 0:15:20.040 --> 0:15:22.360 competitors have to do particular things and we don't care 0:15:22.400 --> 0:15:24.520 how many there are. Does it mean that we care 0:15:24.560 --> 0:15:27.360 about the economic effects of monopoly. Doesn't mean we care 0:15:27.360 --> 0:15:30.200 about the political effects of monopoly? And this can matter 0:15:30.240 --> 0:15:32.760 because you can imagine, you know, the existence of some 0:15:32.880 --> 0:15:36.280 monopoly somewhere that ends up keeping prices low, or of 0:15:36.280 --> 0:15:40.520 a duopoly but wield unbelievable economic power. Or you can 0:15:40.560 --> 0:15:43.520 imagine businesses that aren't true monopolists, but they have tons 0:15:43.600 --> 0:15:47.160 of economic power, or of political power. I'm sorry. And 0:15:47.200 --> 0:15:50.040 so courts up through the nineteen fifties and sixties were 0:15:50.040 --> 0:15:52.480 just sort of casting about, looking for some standard they 0:15:52.480 --> 0:15:55.960 could articulate about when the anti trust laws are violated. 0:15:56.160 --> 0:15:58.840 And by the fifties or sixties, it was very difficult 0:15:58.920 --> 0:16:01.600 for anyone to predict what any given court was going 0:16:01.680 --> 0:16:04.720 to say about any given transaction or conduct. You had 0:16:04.760 --> 0:16:06.720 his you know, you could have premised it on what 0:16:06.720 --> 0:16:08.880 the judges were having for breakfast when they were deciding 0:16:08.920 --> 0:16:11.160 the cases, and that was as likely a predictor of 0:16:11.160 --> 0:16:14.720 outcomes as anything else. Then this guy who you you know, 0:16:14.800 --> 0:16:16.600 a lot of people in this audience, if you know 0:16:16.640 --> 0:16:18.440 it's as sort of wonky as you say it is, 0:16:18.480 --> 0:16:21.120 have probably heard of for other reasons. Who's a professor 0:16:21.120 --> 0:16:23.320 at Yal's name was Robert Bork, and he writes a 0:16:23.320 --> 0:16:26.880 book called The Anti Trust Paradox and the the you know, 0:16:26.960 --> 0:16:29.560 the subheading of the book is a policy at war 0:16:29.600 --> 0:16:33.440 with itself, And the position he articulates is the courts 0:16:33.520 --> 0:16:36.000 are using anti trust to accomplish all sorts of things 0:16:36.000 --> 0:16:39.600 that don't have anything to do with economic injuries, politics, 0:16:40.000 --> 0:16:42.720 labor unions, all sorts of stuff that just don't have 0:16:42.760 --> 0:16:45.120 anything to do with it. It's basically a choose your own 0:16:45.160 --> 0:16:48.080 adventure legal regime. It makes no sense, and it's actually 0:16:48.120 --> 0:16:51.440 injuring economic growth. Growth. The only thing the anti trust 0:16:51.520 --> 0:16:54.960 laws should care about, Judge Borck said, are the welfare 0:16:55.040 --> 0:16:59.960 is the welfare of consumers. So he articulates this few 0:17:00.040 --> 0:17:02.520 in the seventies, and by nineteen seventy five, in this 0:17:02.560 --> 0:17:06.679 famous case called Writer, the Supreme Court is citing Judge 0:17:06.720 --> 0:17:09.919 Bork and saying the antitrust laws are a prescription for 0:17:10.040 --> 0:17:13.800 consumer welfare. Okay, when Judge Bork writes about consumer welfare, 0:17:13.840 --> 0:17:16.600 he says, look, low prices, that's important for consumer welfare. 0:17:16.800 --> 0:17:20.199 High output, that's important. Other things are important too, like 0:17:20.480 --> 0:17:24.720 the promotion of future competition, the protection of innovation, product quality. 0:17:24.720 --> 0:17:28.040 All sorts of things sort of fit within consumer welfare. 0:17:28.080 --> 0:17:30.800 But what we care about are economic injuries inflicted on 0:17:30.920 --> 0:17:34.960 participants in marketplaces, not about stuff that isn't related to 0:17:35.040 --> 0:17:38.720 sort of economic welfare of market participants. At the same 0:17:38.760 --> 0:17:41.560 time this is happening, something else is happening in our system. 0:17:41.880 --> 0:17:44.760 We have this sort of like economic libertarianism on the 0:17:44.840 --> 0:17:48.640 right that sort of attaches itself to the consumer welfare standard, 0:17:49.000 --> 0:17:52.600 and it has certain supposition like ideological suppositions about markets. 0:17:52.840 --> 0:17:56.120 Markets always correct themselves as one of the suppositions. Professor 0:17:56.119 --> 0:17:59.600 at NYU, Daniel Francis Bright Young anti trust scholars written 0:17:59.600 --> 0:18:02.960 a lot about this, highly recommend him that government intervention 0:18:03.160 --> 0:18:07.360 is almost always worse than anything happening in markets, even monopolies, 0:18:07.560 --> 0:18:11.320 and so we should always preference against government intervention, even 0:18:11.320 --> 0:18:14.960 if it's to correct market failures and monopolies. And a 0:18:15.040 --> 0:18:18.200 strong deference to c suite decision making on the view 0:18:18.280 --> 0:18:21.119 that they understand what should work best in a marketplace, 0:18:21.160 --> 0:18:23.960 and government ought to be hands off and deferential to 0:18:24.040 --> 0:18:27.560 c suite decision making. These two things right alongside each other, 0:18:27.840 --> 0:18:31.040 and so by the nineteen nineties, consumer welfare has basically 0:18:31.080 --> 0:18:35.280 been reduced to two questions. Is the transaction or conducted 0:18:35.359 --> 0:18:39.000 issue likely to increase price in the shorter intermediate term 0:18:39.200 --> 0:18:42.280 or reduce outcome in the shorter intermediate term. But that 0:18:42.359 --> 0:18:45.560 isn't really what consumer welfare is about. Consumers can suffer 0:18:45.600 --> 0:18:48.440 all sorts of injuries that aren't just about short term 0:18:48.440 --> 0:18:51.320 prices or short term output. A loss of innovation is 0:18:51.359 --> 0:18:55.360 a huge injury to consumers. A loss of product quality 0:18:55.520 --> 0:18:58.480 huge injury consumers. But a lot of courts that started 0:18:58.520 --> 0:19:02.399 to shift away and focus on the extremely qualitative question 0:19:02.440 --> 0:19:05.320 about price and output, which also led to a deference 0:19:05.320 --> 0:19:08.160 to econometrics and to economists and anti trust cases. Sorry 0:19:08.160 --> 0:19:11.360 you make quantitative quantitative? Sorry, thank you, thank you. That's 0:19:11.440 --> 0:19:14.119 right quantitative, which also ends up making anti trust cases 0:19:14.200 --> 0:19:16.359 very expensive because everyone has to hire an army of 0:19:16.400 --> 0:19:19.360 economists to talk about the case, makes it very difficult 0:19:19.359 --> 0:19:21.600 for judges to decide these cases because the way these 0:19:21.600 --> 0:19:25.359 often go is each side has their own army of economists, 0:19:25.800 --> 0:19:30.959 identically trained, identical schools, fancy credentials on both sides, making 0:19:31.240 --> 0:19:35.480 exactly opposite arguments about the same number, often predictive arguments, 0:19:35.760 --> 0:19:38.040 and a judge untrained in any of this. I mean, 0:19:38.080 --> 0:19:39.680 you know, I don't know how much how many lawyers 0:19:39.720 --> 0:19:41.600 are on the room, but the average federal district judge 0:19:41.600 --> 0:19:44.240 in the United States was like a local prosecutor or 0:19:44.280 --> 0:19:46.679 a local defense attorney or a member of the local 0:19:46.720 --> 0:19:49.520 bar has probably never dealt with anti trust in his 0:19:49.680 --> 0:19:52.240 or her life before that case. And now you've got 0:19:52.440 --> 0:19:56.960 MIT and Stanford trained economists having a really vicious dispute 0:19:56.960 --> 0:20:00.240 about identical facts, and the judge is supposed to decid 0:20:00.320 --> 0:20:01.960 The judge kind of goes, I don't know, it seems 0:20:02.000 --> 0:20:05.800 like a wash, but it makes these cases long and expensive, 0:20:06.359 --> 0:20:09.720 and so that is. You know, in my view, the 0:20:09.760 --> 0:20:15.040 consumer welfare standard encompasses injuries to participant economic injuries to 0:20:15.119 --> 0:20:20.080 participants in marketplaces. It includes consumers, obviously, it also includes laborers. 0:20:20.359 --> 0:20:23.199 The Supreme Court has understood the antitrust laws to protect 0:20:23.359 --> 0:20:26.520 laborers as sellers of labor to the same extent it 0:20:27.119 --> 0:20:30.520 protects purchasers of goods. You know, the sort of fixation 0:20:30.800 --> 0:20:34.800 on short and intermediate term price and output effects isn't 0:20:34.920 --> 0:20:37.600 actually what consumer welfare was ever understood to me. And 0:20:37.640 --> 0:20:40.240 it was supposed to encompass a broader range of injuries 0:20:40.280 --> 0:20:43.600 to marketplace participants, but it got shrunk largely because of 0:20:43.640 --> 0:20:45.960 ideological views about markets. 0:20:46.280 --> 0:20:48.960 Thank you for that history. That was useful, And Joe 0:20:48.960 --> 0:20:52.600 and I keep joking that we need to we need 0:20:52.640 --> 0:20:57.040 to add a bort clocks into our monopolies question library. 0:20:58.520 --> 0:21:01.000 But I guess, well, actually I didn't really answer your 0:21:01.040 --> 0:21:02.600 question because the question is what I felt like. 0:21:03.240 --> 0:21:07.280 Yeah, I was building up to ask politely, but yeah, 0:21:07.359 --> 0:21:07.520 go on. 0:21:07.720 --> 0:21:11.320 So then we get to President Trump's first administration, and 0:21:11.400 --> 0:21:13.919