Speaker 1: Right now, though we are monitoring our DC bureau as
Speaker 1: our Peggy columns get ready gets ready to sit down
Speaker 1: with the head of the FTC.
Speaker 2: Lead a Coon. Let's take it to DC.
Speaker 1: FTC Chair, thank you so much for your time today
Speaker 1: and for joining us.
Speaker 2: Thanks for having me.
Speaker 1: And it's actually fun fact for all of you. It's
Speaker 1: the one hundred and ninth birthday of the FTC today,
Speaker 1: So happy birthday.
Speaker 2: Yes, joyous occasion.
Speaker 1: So Chair con let's start with the news, because there's
Speaker 1: a lot of it out there today. Just hours ago,
Speaker 1: the FTC dropped a case against one of the world's
Speaker 1: biggest companies, Amazon, and in the case, you allege that
Speaker 1: the company is monopolizing the online marketplace in a way
Speaker 1: that's harmful for consumers and for sellers on the platform.
Speaker 1: But Amazon's already come out and said it's going to
Speaker 1: fight you in terms of challenging the case, and that
Speaker 1: the case is a radical departure for the FTC from
Speaker 1: its core mission of protecting consumers. What is your strongest
Speaker 1: argument in the case.
Speaker 2: So, if this is a case about a set of
Speaker 2: unlawful tactics that Amazon has used to maintain its monopolies,
Speaker 2: we note in the complaint both a set of anti
Speaker 2: discounting tactics that Amazon uses to punish any seller or
Speaker 2: retailer that dares to discount, and ultimately these sets of
Speaker 2: tactics deter sellers and retailers from lowering prices and closes
Speaker 2: off an entire dimension of price competition. The other set
Speaker 2: of tactics we note is a coercive scheme that Amazon
Speaker 2: uses to effectively require sellers use its fulfillment service, and
Speaker 2: this in turn ends up stunting the development of independent
Speaker 2: fulfillment providers and ultimately also deprives actual and potential rivals
Speaker 2: of scale. And that's really the core theme here. These
Speaker 2: are a set of tactics, but ultimately Amazon has pursued
Speaker 2: them to deprive actual and potential competitors of the ability
Speaker 2: to gain scale and momentum needed to effectively compete online.
Speaker 2: And having achieved and protected its monopoly power, our complaint
Speaker 2: details how Amazon is now exploiting that monopoly power in
Speaker 2: ways that harm customers, both the sellers the tens of
Speaker 2: millions of American families that use Amazon to do their shopping,
Speaker 2: but also the sorry both the shoppers but also the sellers,
Speaker 2: the hundreds of thousands and tens of thousands of sellers
Speaker 2: that use Amazon to access those shoppers, and it's done
Speaker 2: that through actively raising prices. Amazon takes close to one
Speaker 2: out of every two dollars from sellers that they use
Speaker 2: its platform. It's also degraded its service by adding a
Speaker 2: whole set of pay to play ads that make it
Speaker 2: more difficult for consumers to find what they're looking for
Speaker 2: and steers them to higher price products. So really encourage
Speaker 2: everybody to read the complaint. It details all of this
Speaker 2: conduct in great detail, and we're really looking forward to
Speaker 2: moving forward with it.
Speaker 1: So one of the things in the complaint is this
Speaker 1: phrase structural relief that you're seeking structural relief in this case,
Speaker 1: which implies a breakup. What would that look like?
Speaker 2: So at this stage the complaint is really focused on
Speaker 2: the issue of liability. We lay out a scheme that
Speaker 2: we believe violates the US antitrust laws. What we note
Speaker 2: in the complaint is that these different aspects of Amazon's
Speaker 2: scheme have an aggregated effect, so the harm is accumulating,
Speaker 2: there are feedback loops between the harms, and so the
Speaker 2: net exclusionary effect of Amazon's conduct is quite significant. Ultimately,
Speaker 2: we'll want to make sure that any remedy is halting
Speaker 2: the illegal conduct, preventing a recurrence, and ensuring that Amazon
Speaker 2: is not able to profit and benefit from its illegal behavior.
Speaker 2: So right now we're squarely focused on the question of liability,
Speaker 2: but when we get to the issue of remedy, those
Speaker 2: are going to be the principles we'll be focused on.
Speaker 1: So, just staying on the issue of remedy for a
Speaker 1: minute there, what do you think the company should be
Speaker 1: doing differently?
Speaker 2: So the complaint lays out a set of tactics that
Speaker 2: we believe are illegal and that are illegally elevating and
Speaker 2: inflating prices for the American people. So at the very least,
Speaker 2: any relief would require that the company halt those tactics.
Speaker 2: But as I noted, effective relief also needs to be
Speaker 2: restoring competition to this market, which we'll be asking the
Speaker 2: judge to do as well.
Speaker 1: And when you think about the prospect for winning the case,
Speaker 1: how would things change for consumers and sellers if you do,
Speaker 1: in fact win.
Speaker 2: So this case is ultimately about competition and competition that
Speaker 2: has been foregone because of Amazon's unlawful tactics. As the
Speaker 2: complaint lays out as a result of that, people are
Speaker 2: paying higher prices right Consumers are paying more than they
Speaker 2: otherwise would. Small businesses are having to pay a fifty
Speaker 2: percent Amazon tax right now, and so ultimately the complaint
Speaker 2: is seeking to restore the law promise of competition. Greater
Speaker 2: competition will mean lower prices, better quality, better selection, and
Speaker 2: greater innovation. And that's ultimately what this case is about.
Speaker 1: So Amazon will say that it's providing a platform that
Speaker 1: has a mix of products on it, but also when
Speaker 1: it comes to merchants on its platform, it's offering more
Speaker 1: and more services to them, shipping, delivery, advertising. In terms
Speaker 1: of why they're like the charges that they have, how
Speaker 1: do you respond to that?
Speaker 2: So the complaint really goes in some detail about the
Speaker 2: different ways that this tax effectively has been increasing steadily
Speaker 2: and the way that that can be evidence of direct
Speaker 2: evidence of monopoly power. Interestingly, at various points, Amazon did
Speaker 2: experiment with giving sellers more leeway to use seller fulfilled prime,
Speaker 2: but once Amazon recognized that would threaten its monopoly power,
Speaker 2: it twitched that off. Even those sellers were effectively meeting
Speaker 2: the same standards that FBA does, So you know, the
Speaker 2: complaint really goes through all of this in great detail
Speaker 2: and lays out why we believe these are unlawful tactics
Speaker 2: that are hurting the American people.
Speaker 1: And you mentioned just a bit ago paid advertising that
Speaker 1: Amazon's doing more of this, and that comes up in
Speaker 1: the complaint as well. What concerns you there?
Speaker 2: So, look, ads can be useful, ads can be relevant.
Speaker 2: What the complaint surfaces is that Amazon has used ads
Speaker 2: in ways that actually degrade the experience for shoppers, that
Speaker 2: make it more difficult for shoppers to find relevant search results,
Speaker 2: and that actually steers shoppers to higher price products. So
Speaker 2: that's actually a degradation of service that we claim is
Speaker 2: also direct evidence of Amazon's monopoly power. You know, in
Speaker 2: a competitive world, if you have a company that's both
Speaker 2: hiking prices and worsening services for customers, that's the type
Speaker 2: of situation that should create an opening for rivals to
Speaker 2: come in to attract business, to grow. But it's really
Speaker 2: Amazon's exclusionary scheme that is keeping that from happening, and
Speaker 2: what's in enabling Amazon to effectively be exploiting its monopoly
Speaker 2: power with impunity.
Speaker 1: What do you say to critics who say, by doing
Speaker 1: these types of cases, these big swings that you're actually
Speaker 1: getting the way of business and the free markets.
Speaker 2: So this case is entirely pro business. It is you know,
Speaker 2: tens of thousands of businesses that are dependent on Amazon
Speaker 2: to reach shoppers, that increasingly are paying one out of
Speaker 2: every two dollars, as well as being subjected to all
Speaker 2: sorts of you know, arbitrary tactics. So we believe that
Speaker 2: this lawsuit, if we're successful, will actually entirely restore the
Speaker 2: promise of free competition. Our free enterprise system is one
Speaker 2: where companies should be competing on the merits and not
Speaker 2: be able to protect their monopoly power through illegal tactics.
Speaker 1: If you are successful, Just going back to that question
Speaker 1: about structural relief, could you see a world where Amazon is,
Speaker 1: you know, not one big company, but has you know,
Speaker 1: different parts of it and in terms of breaking it
Speaker 1: up and having different parts of the business soul entities.
Speaker 2: So look, we'll want to get to the question of
Speaker 2: remedy when we get there, but ultimately the key is
Speaker 2: going to be making sure we understand what's required in
Speaker 2: digital markets to fully compete and what the aggregated harm
Speaker 2: has been in these markets through Amazon's unlawful conduct and
Speaker 2: how do we make sure that competition is fully being restored.
Speaker 1: So a lot of people will point to this paper
Speaker 1: that you wrote in twenty seventeen about Amazon, and they
Speaker 1: point to that as rooted in your approach to antitrust
Speaker 1: and what you've brought to the job. Do you feel
Speaker 1: like today by dropping this case, you actually have come
Speaker 1: full circle from that paper in twenty seventeen.
Speaker 2: Look, in this job, I'm a law enforcer. It took
Speaker 2: an oath to really enforce the laws, and this case
Speaker 2: is the results of really meticulous, careful work by our
Speaker 2: staff over many years. We really followed the evidence where
Speaker 2: it took us and is the complaint details. We believe
Speaker 2: there are facts that show Amazon is violating the antitrust laws,
Speaker 2: and that's what the case is really about.
Speaker 1: So this is actually not the first case that you
Speaker 1: brought against Amazon. I believe it's the fourth, and one
Speaker 1: of the others was more focused on Prime services, and
Speaker 1: earlier this month you actually added three executives to that complaint.
Speaker 1: In terms of the charges are alleging that the company
Speaker 1: has duped consumers in terms of signing up for Prime services,
Speaker 1: but also made it really hard to cancel. What was
Speaker 1: what a message were you trying to get across by
Speaker 1: adding those three Amazon executives to the case.
Speaker 2: Look, these are decisions that we always make on a
Speaker 2: case by case basis. There's a legal standard you have
Speaker 2: to meet in order to show that individuals you know,
Speaker 2: had the direct ability and authority to participate or direct
Speaker 2: the conduct. And so you know, the the amended complaint
Speaker 2: really lays out why we believe that's the case. We
Speaker 2: want to make sure that we apply the law in
Speaker 2: an even handed fashion and are not just going after
Speaker 2: fraudsters and you know, fly by night scammers while ignoring
Speaker 2: unlawful conduct by larger entities. And so we want to
Speaker 2: make sure that we're even handed and applying the law
Speaker 2: without fear of favor before.
Speaker 1: We move on from Amazon. Because you've been very busy
Speaker 1: at the FTC. So there's other things we want to
Speaker 1: get to. But what's the most important thing you want
Speaker 1: consumers to take away from how you're approaching Amazon because
Speaker 1: it's so much of a part of different people's daily lives.
Speaker 2: So, look, this case is about the competition that has
Speaker 2: been lost because of Amazon's monopolization and their unlawful tactics.
Speaker 2: And consumers should be entitled to lower prices, to more competition,
Speaker 2: to more innovation. Similarly, sellers should be entitled to greater competition.
Speaker 2: And this alternative universe of greater competition, greater innovation, lower prices,
Speaker 2: better quality has been lost because of these taxs, and
Speaker 2: that's what we're really trying to get justice for.
Speaker 1: So one of the other things we write a lot
Speaker 1: about in addition to big tech at Bloomberg is private equity.
Speaker 1: And the Amazon case that came out today is a
Speaker 1: landmark case, but you actually have a case that came
Speaker 1: out earlier this month that involves the private equity industry,
Speaker 1: which is the first of its kind as well. And
Speaker 1: in that case, you're really looking at the practice of
Speaker 1: roll ups in the private equity industry, where they're buying
Speaker 1: multiple companies in the same industry. What concerns you there.
Speaker 2: So this was a losses that the FTC filed last
Speaker 2: week against USAP and Welsh Carson, the private equity firm,
Speaker 2: And as the complaint lays out, you know, there was
Speaker 2: this scheme here to roll up the market. There was
Speaker 2: a concerted scheme to do serial acquisitions by a whole
Speaker 2: set of anesthesiology practices and then after buying them, raising
Speaker 2: the price, raising the price for Texas patients, for businesses,
Speaker 2: and so those are the practices that were going after.
Speaker 2: Historically there's been less attention paid to stealth consolidation through
Speaker 2: theial acquisitions or acquisitions, each one of which may not
Speaker 2: trigger concern but where in the aggregate you have a
Speaker 2: roll up, and so we thought it was incredibly important
Speaker 2: to be scrutinizing these practices. And as the complaint lays out,
Speaker 2: you know this ended up monopolizing all sorts of markets
Speaker 2: in Texas, ultimately raising prices. We also in the complaint
Speaker 2: detail certain price setting agreements as well as market allocation
Speaker 2: schemes that we think also unlawfully resulted in Texas businesses
Speaker 2: and patients paying more than they otherwise would have.
Speaker 1: So you also indicate that this is an area that
Speaker 1: you're looking at and will continue to look at. And
Speaker 1: actually one law firm out there said, you know, it's
Speaker 1: required reading for investors in private equity firms that are
Speaker 1: doing the practice of buying multiple companies in the same industry.
Speaker 1: So if you're in the private equity industry, where can
Speaker 1: they expect you to look at next?
Speaker 2: So look we follow where the facts take us. This
Speaker 2: investigation in case was in the context of anesthesiology, but
Speaker 2: to no a secret. There's been a lot of reporting
Speaker 2: about other areas where we may have seen these types
Speaker 2: of roll ups, and so we want to make sure
Speaker 2: you know we're scrutinizing where there may be the most harm.
Speaker 1: So in the past these type of acquisitions have gone through,
Speaker 1: how hard is it going to be for you to
Speaker 1: convince people to change course? And maybe, you know, look
Speaker 1: at blocking some of these type of acquisitions in the future.
Speaker 2: So the FTC recently, alongside the Justice Department, rolled out
Speaker 2: proposed merger guidelines that lay out the kind of analytical
Speaker 2: tools and frameworks that we'll be using to assess whether
Speaker 2: mergers or acquisitions violate the US anti trust laws. In
Speaker 2: those guidelines, we note that serial acquisitions can also violate
Speaker 2: the anti trust laws, and when enforcers are looking at
Speaker 2: a particular transaction, we may look at that transaction not
Speaker 2: just in a silo, but as a part of an
Speaker 2: overall pattern of acquisitions. We also recently propose an update
Speaker 2: to the HSR form. This is the set of information
Speaker 2: that companies provide to us if they're proposing a deal
Speaker 2: that triggers notification. As part of that additional information, we
Speaker 2: would also be seeking a list of prior acquisitions that
Speaker 2: companies made in a particular market, and so we're hoping
Speaker 2: that that could also give us more visibility on the
Speaker 2: front end to be blocking any type of unlawful roll
Speaker 2: up scheme and preventing front harm on the front end
Speaker 2: rather than years later.
Speaker 1: So, as I said, FTC has been very busy of late.
Speaker 1: One of the cases where you actually had a loss
Speaker 1: and courts pushed back was the Microsoft activision case against
Speaker 1: that deal. What is one of the lessons that you
Speaker 1: learned from that experience.
Speaker 2: So, look, I'm not going to be able to talk
Speaker 2: about that matter because it's still in pending litigation. But
Speaker 2: anytime we suffer a set back in the courts, we
Speaker 2: always look at that very closely, as you know, and
Speaker 2: appeal is pending and so we're hopeful about next steps.
Speaker 1: Another area of renewed focus for you is the issue
Speaker 1: of labor. So we're seeing strikes across the country right now,
Speaker 1: from Hollywood to Detroit, and your agency announced collaboration or
Speaker 1: further collaboration with the Department of Labor recently to look
Speaker 1: at labor market and antitrust issues there, Can you tell
Speaker 1: us a little about what you're looking at there and
Speaker 1: what concerns you.
Speaker 2: So overall, we want to make sure that we're enforcing
Speaker 2: the antitrust laws to protect everybody. That means protecting consumers,
Speaker 2: but it also means protecting workers. There's been a whole
Speaker 2: set of empirical work over the last decades showing that
Speaker 2: markets can be highly concentrated in ways that harm not
Speaker 2: just sellers, but concentrated in ways that harm labor, harm workers,
Speaker 2: and the monopsony power may be more prevalent than we
Speaker 2: had previously realized, So that's something that we've been scrutinizing.
Speaker 2: More generally. The FTC in January proposed a rule that
Speaker 2: would eliminate non compete clauses and employment contracts. We've also
Speaker 2: pursued enforcement actions that resulted in non competes being dropped
Speaker 2: for thousands of workers. So this is wanting to make
Speaker 2: sure we're protecting workers from anti competitive conduct and unlawful
Speaker 2: abuses of monopoly power is a focus for us across
Speaker 2: the board. We've entered into MOUs with the Labor Department
Speaker 2: as well as the NLRB to make sure that we're
Speaker 2: able to share information as appropriate and eliminate blind spots
Speaker 2: and make sure we're not just working in silos and
Speaker 2: able to pursue areas where we may have shared goals.
Speaker 1: And what conserned you most in terms of labor with
Speaker 1: some of these trends that we're seeing, especially since the
Speaker 1: pandemic in terms of wages, and where the FTC may
Speaker 1: be able to help there well.
Speaker 2: Overall, we want to make sure that we're understanding what
Speaker 2: monopos any power looks like, and so in our draft
Speaker 2: merger guidelines, we for the first time lay out how
Speaker 2: we're going to be assessing whether a merger may undermine
Speaker 2: competition for labor and for workers. You know, switching jobs
Speaker 2: is different from buying a toaster, right. There are search frictions,
Speaker 2: there are other dynamics that are unique to labor markets.
Speaker 2: There are certain metrics that we want to be looking
Speaker 2: at in terms of impact on wages, but also impact
Speaker 2: on benefits. We've heard from people that you know, after
Speaker 2: certain mergers, the ways that the ways that the experience
Speaker 2: can be degraded for workers is not just through their
Speaker 2: pay being dock or frozen, but through people having less
Speaker 2: control over their schedules. Right, There are all sorts of
Speaker 2: ways in which the particular particularities of how monopsony power
Speaker 2: manifests is going to look different than how we analyze
Speaker 2: markets and harm to consumers. And so we're doing a
Speaker 2: lot of conversations and making sure we're hearing from workers
Speaker 2: to make sure our analysis is really robust in that area.
Speaker 1: Another area that we write about a lot of Ploomberg
Speaker 1: is AI. How are you thinking about AI in terms
Speaker 1: of antitrust and the mission of the FTC in terms
Speaker 1: of making sure that you protect consumers?
Speaker 2: So this is top of mind for us across our work.
Speaker 2: We've noted on the consumer protection side how this is
Speaker 2: already providing a lot of concern in the ways that
Speaker 2: AI can be used to turbocharge fraud and scams, in
Speaker 2: that these tools can really allow fraudsters to disseminate of,
Speaker 2: you know, fraud and scams much more cheaply, much more quickly,
Speaker 2: and on a much wider scale. We've all already heard
Speaker 2: about the way that voice cloning can be used to
Speaker 2: scam people out of thousands of dollars, and so this
Speaker 2: is an area that we're keeping a very close eye on.
Speaker 2: We're generally on the competition side. You know, we want
Speaker 2: to be mindful of the ways in which these moments
Speaker 2: of technological innovation can provide enormous opportunity for competition for
Speaker 2: new entry. These can also be moments where incumbents are threatened,
Speaker 2: and so you need to be very vigilant about unlawful
Speaker 2: efforts to maintain your monopoly and thwart new entrants and innovation.
Speaker 2: So those are just some of the dynamics that we're
Speaker 2: looking at quite closely. Overall.
Speaker 1: When you look ahead to the next year, we're going
Speaker 1: into twenty twenty four, there's a presidential election. Things could change.
Speaker 1: So when you think ahead to potentially you know, the
Speaker 1: last year of the Biden administration or maybe not, but
Speaker 1: either way, what are your top priorities for twenty twenty four.
Speaker 2: So look, we have a very full agenda underway. We
Speaker 2: have a whole set of rules, both on the anti
Speaker 2: trust side but also on the consumer protection side that
Speaker 2: we want to see through. We're hoping to be able
Speaker 2: to finalize our merger guidelines and then continue the lawsuits
Speaker 2: we already have underway and be able to move forward
Speaker 2: with ones that are currently being investigated in house.
Speaker 1: So I want to make sure to leave time for questions.
Speaker 1: But one criticism that people have of your approach to
Speaker 1: the chair position at the FTC is that you've been
Speaker 1: taking some of these big swings, like we've talked about
Speaker 1: about Amazon, and even reports are out there that some
Speaker 1: hedge funds are betting against you that you'll be able
Speaker 1: to be successful in some of these big swings because
Speaker 1: maybe they're unrealistic. What do you say to people who
Speaker 1: doubt your approach on this front.
Speaker 2: So, look, we've been enormously successful on the merger front.
Speaker 2: We've had around twenty abandonments where parties have walked away
Speaker 2: after the FTC has filed a lawsuit. We're generally, you know,
Speaker 2: the way I think about efficacy as deterrence, and we
Speaker 2: hear a lot from people about how we're having a
Speaker 2: deterrent effect right and in a situation in which you're
Speaker 2: seeing fewer illegal deals make it out of the boardroom,
Speaker 2: is really proof of concept in terms of how you
Speaker 2: want to be an effective enforcer. So on the deterrence front,
Speaker 2: we're quite pleased. We have some litigations that are still
Speaker 2: under way and we're excited to see those through