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Speaker 1: Hello, and welcome to another episode of the ad Thoughts Podcast.

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Speaker 2: I'm Tracy Alloway.

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Speaker 3: And I'm Joe Wisenthal.

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Speaker 1: Joe, you remember last month we spoke with Jared Bernstein,

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Speaker 1: who's the head of the White House Council of Economic Advisors,

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Speaker 1: and we were talking about Bidenomics.

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Speaker 3: Yeah. Great, chat always appreciates sort of getting a sense

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Speaker 3: of how policy makers are thinking about things. And obviously

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Speaker 3: we've talked a lot about this sort of like industrial

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Speaker 3: policy domestic investment side, but there is still more.

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Speaker 1: Yeah, So he outlined these kind of three basic planks

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Speaker 1: of Bidenomics, and you already mentioned the big one, which

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Speaker 1: is public investment slash industrial policy, whatever you want to

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Speaker 1: call it. The second one is sort of empowering workers.

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Speaker 1: And then there's this third one about promoting competition, and

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Speaker 1: we touched on it with Jared. We spoke a little

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Speaker 1: bit about how the Biden administration is approaching anti trust.

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Speaker 1: But I think it's one of those topics we really

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Speaker 1: need to get into because it keeps coming up in

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Speaker 1: various ways.

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Speaker 3: Can I just say I don't know anything about this topic.

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Speaker 3: That's true for most episodes that we do, but I

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Speaker 3: feel very comfortable saying that like when it comes you know,

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Speaker 3: the law is not an area in which you know,

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Speaker 3: I'm like you just like reading like cell side research

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Speaker 3: about like Okay, the fit is going to do this,

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Speaker 3: so inflation is going to do this. And when it

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Speaker 3: comes to things like sort of like the legal philosophies

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Speaker 3: related to mergers, et cetera, like I really genuinely know

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Speaker 3: very little. All right, nothing.

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Speaker 1: There's a market opportunity out there to become the antitrust

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Speaker 1: guy on Twitter, so maybe that should be our goal,

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Speaker 1: but you have to admit it does keep coming up. Yes,

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Speaker 1: So we recorded an episode with Scott Hildenbrand recently about

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Speaker 1: bank consolidation and whether or not we're going to be

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Speaker 1: seeing a lot more bank mergers in the wake of

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Speaker 1: the deposit drama in March. And then it came up again,

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Speaker 1: I think on our episode with Josh Wolfe right where

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Speaker 1: he was talking about how big tech companies are investing

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Speaker 1: in artificial intelligence, but they're doing it in a very

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Speaker 1: specific way to possibly evade regulatory scrutiny.

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Speaker 3: Yeah, that was one of the things I hadn't appreciated before,

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Speaker 3: and he pointed out that you have all these big

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Speaker 3: companies making these huge investments VC looking investments in AI startups,

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Speaker 3: and he posited that one reason they may be making

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Speaker 3: these investments Microsoft and making investments Google making investments is because, well,

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Speaker 3: maybe anti trust authorities aren't going to be very happy

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Speaker 3: if they buy some of these companies, but they can

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Speaker 3: maybe perhaps like make something that resembles a VC style investment.

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Speaker 3: So it's coming up enough in different sectoral conversations that

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Speaker 3: we have that I think we need to drill deeper

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Speaker 3: into the environment right now.

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Speaker 1: Absolutely well, I am very pleased to say that we two,

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Speaker 1: in fact have the perfect guest. We're going to be

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Speaker 1: speaking with Jonathan Canter, the Assistant Attorney General for the

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Speaker 1: Anti Trust Division at the Department of Justice. So, Jonathan,

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Speaker 1: thank you so much for coming on all thoughts, thank.

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Speaker 2: You for having me. It's a pleasure to be with

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Speaker 2: you today.

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Speaker 1: Maybe just to begin with, you can give us an

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Speaker 1: overview of what does anti trust actually mean in twenty

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Speaker 1: twenty three versus you know, maybe in previous administrations or

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Speaker 1: previous decades.

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Speaker 2: Yeah, so let's take a look back through history and

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Speaker 2: think about the importance of a competition and a competitive economy.

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Speaker 2: It's been the cornerstone of our society since the Tea Party,

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Speaker 2: but you can think back historically to Standard Oil and

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Speaker 2: AT and t IBM Microsoft. At major inflection points in

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Speaker 2: our economy, we've confronted monopoly choke points, and anti trust

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Speaker 2: has been Some have referred to it as the magna

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Speaker 2: carta free enterprise. It's the way in which we open

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Speaker 2: opportunity so that companies who want to compete can compete

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Speaker 2: on the merits. So anti trust can deliver lower prices,

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Speaker 2: it can deliver better wages, better working conditions, It could

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Speaker 2: deliver opportunities to build and grow a business. These are

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Speaker 2: the arteries of commerce, and Congress made a value judgment

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Speaker 2: over one hundred years ago that competition matters, and so

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Speaker 2: our job is to enforce the law. And sitting here

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Speaker 2: in twenty twenty three, you mentioned by the nomics. You

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Speaker 2: mentioned the interest in anti trust globally and domestically, and

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Speaker 2: that flows from, I think an appreciation on so many

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Speaker 2: different dimensions that we can't have a democratic society, we

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Speaker 2: can't have a free society, and we can't have a

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Speaker 2: market based economy without opportunities for competition. And so our

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Speaker 2: job is to enforce the law in order to keep

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Speaker 2: competition thriving in our country and to do so in

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Speaker 2: a way that's consistent with the will of Congress.

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Speaker 3: So my impression is that historically, when it came to

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Speaker 3: industry consolidation, which I guess on some level always maybe

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Speaker 3: reduces the amount of competition out there, but that when

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Speaker 3: it came to D street consolidation, a key factor was

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Speaker 3: this idea. It's like, well, if a company has monopoly power,

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Speaker 3: or if oligopoly power, then they can raise prices more

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Speaker 3: and that's bad for consumers, and so that should be blocked.

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Speaker 3: And my understanding is that there's been some evolution of

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Speaker 3: thinking where maybe there's more than just raising prices. And

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Speaker 3: obviously this comes up in tech because we use a

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Speaker 3: lot of tech products that they don't charge us anything

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Speaker 3: except for the check mark on Twitter, which I haven't

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Speaker 3: paid for, but other than that, Like, so, so I

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Speaker 3: get the impression that, like, the sort of thinking about

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Speaker 3: what actually constitutes something that would harm competition has changed.

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Speaker 2: So I guess I will start by saying, in many respects,

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Speaker 2: nothing fundamentally has changed. The law is still exactly the

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Speaker 2: same as it was when it was written. And the

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Speaker 2: law says, for example, in the context of mergers, that

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Speaker 2: we should prevent mergers that's may substantially lessen competition or

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Speaker 2: tend to create a monopoly, and that we should bring cases,

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Speaker 2: or we should prevent monopolization of markets or restraints of trade.

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Speaker 2: The law and competition hasn't changed, and that the benefits

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Speaker 2: of competition are many. Competition delivers certainly lower prices, but

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Speaker 2: not just lower prices. I think we can see that

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Speaker 2: in our everyday lives, and if anything, I would say,

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Speaker 2: there's today perhaps then in the recent past, a greater

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Speaker 2: appreciation of why we should care about competition. I think

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Speaker 2: it resonates with people in so many different corners of

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Speaker 2: our country. Whether it's somebody looking to start a business,

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Speaker 2: somebody competing with an established business who wants to break

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Speaker 2: into a new market, somebody who wants the ability to

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Speaker 2: switch jobs or get the benefits of competition for labor,

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Speaker 2: an author looking for a book advance, a traveler looking

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Speaker 2: for fewer cancelations and better conditions on their flights. All

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Speaker 2: of this is competition. It also relates to the marketplace

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Speaker 2: of ideas. Competition in the media space, for example, generates

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Speaker 2: the flow of information which is foundational to our place,

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Speaker 2: discourse and you know in the United States that that

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Speaker 2: distinguishes us as a on the world stage, as a democracy,

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Speaker 2: and I think we are proud of that, but we

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Speaker 2: have to protect it.

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Speaker 4: And we have to invest in it through a competitive economy.

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Speaker 1: Are we allowed to say hipster antitrust in this conversation?

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Speaker 1: I mean, that's really that's kind of what you are

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Speaker 1: alluding to, right, Joe, Well, yeah.

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Speaker 3: I mean like there is some change, right, Like there

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Speaker 3: is some shift.

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Speaker 4: Yeah.

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Speaker 2: So let me start by saying it's a good thing

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Speaker 2: that we're audio only, or maybe it's a bad thing,

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Speaker 2: because if you saw me in person, you would recognize

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Speaker 2: that I am definitely not a hipster.

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Speaker 4: My hairlines, I am.

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Speaker 3: I'm wearing a Western.

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Speaker 4: Yeah, there you go.

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Speaker 2: So I think we can dispense with that right away.

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Speaker 2: I think we're talking about anti trust, and I think

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Speaker 2: we're talking about restoring anti trust that really reflects the

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Speaker 2: will of Congress. So the anti trust laws were written

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Speaker 2: at a time when members of Congress and presidents who

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Speaker 2: signed bills didn't want to concentrated economy, they didn't want

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Speaker 2: clogs on competition. And I think what going back to

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Speaker 2: a few moments ago, it's not that something has changed

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Speaker 2: in terms of the law, but it's really that something

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Speaker 2: has changed in terms of awareness. And I think what

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Speaker 2: I've found, at least throughout my evolution, I'm someone who

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Speaker 2: spent my entire career in the anti trust space, going

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Speaker 2: back to my summers in law school working at the

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Speaker 2: FTC to my first job at the Federal Trade Commission

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Speaker 2: in nineteen ninety eight. I've been practicing anti trust ever since.

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Speaker 2: And when I started, it was in many respects in

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Speaker 2: niche area that was really interesting, perhaps a bit wonky,

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Speaker 2: did not generate a lot of attention, certainly was not

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Speaker 2: the subject of a presidential executive order or the third

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Speaker 2: pillar in a presidential economic platform. But I think what

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Speaker 2: we've found out, what I find today is that the

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Speaker 2: awareness outside of the insular anti trust bubble is greater

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Speaker 2: than ever, or perhaps that is greater than in at

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Speaker 2: least you know, or about one hundred years. And so

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Speaker 2: why well, I think so many different people have experiences

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Speaker 2: with monopoly choke points in their lives, and they're all

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Speaker 2: very different. It could again be a worker looking to

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Speaker 2: be mobile. It could be the small business, It could

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Speaker 2: be the traveler, it could be the concert co or

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Speaker 2: it could be the person who cares about their privacy.

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Speaker 2: People want control over their lives. They believe that freedom

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Speaker 2: and choice and competition go hand in hand. And so

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Speaker 2: what we've seen is a greater awareness, and I think

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Speaker 2: there's an important opportunity to meet that moment, but we

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Speaker 2: have to do it in a way. And I would

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Speaker 2: remind at least folks listening now that my job at

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Speaker 2: the Anti Trust Division at the Department of Justice is

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Speaker 2: a law enforcer. So I don't write the law. I

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Speaker 2: don't right the law. In many respects, the policy judgments

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Speaker 2: have already been made. They've been made by Congress interpreted

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Speaker 2: by courts over a century, and our job is to

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Speaker 2: enforce the law the way Congress wrote it. Now, I

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Speaker 2: personally believe there's a lot of wisdom in the anti

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Speaker 2: trust laws and it is a really important part of

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Speaker 2: our free and democratic society and open markets and economic freedom.

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Speaker 2: But those judgments were made, you know, initially in eighteen ninety,

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Speaker 2: and then again in nineteen fourteen, and then numerous times

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Speaker 2: thereafter as the antitrust laws were revised, updated and expanded.

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Speaker 1: So just on the awareness point, I think everyone can

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Speaker 1: appreciate the sense that maybe a big monopoly is bad

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Speaker 1: for either our personal lives in one way or another,

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Speaker 1: or for economic society as a whole. You kind of

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Speaker 1: get this nagging sense that, well, maybe Amazon prices are

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Speaker 1: really low, but it's not great that they're crowding out

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Speaker 1: other players in the market. And I know in Biden

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Speaker 1: has talked about using antitrust to also improve you know, workers'

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Speaker 1: lives and labor power and things like that. But how

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Speaker 1: do you actually measure these things? First of all, you know,

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Speaker 1: it's one thing to go out and look at prices

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Speaker 1: and say, well, there's a bad monopoly out there and

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Speaker 1: they're raising prices and that's bad. I imagine it must

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Speaker 1: be kind of different to go out and say, like, well,

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Speaker 1: you know, there are these other things happening that might

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Speaker 1: be detrimental to the economy as a whole.

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Speaker 4: Right, So.

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Speaker 2: That's why each investigation is highly fact intensive. And so

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Speaker 2: we start and we just talked about this in some

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Speaker 2: new merger guidelines that we'll probably talk about in a

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Speaker 2: little bit, but we talk about one of the first

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Speaker 2: questions we ask in an anti trust investigation is how

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Speaker 2: does competition in this market present itself and does the

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Speaker 2: merger or the conducting question threatn that competition, and then

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Speaker 2: we work backwards from that, because competition is not this

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Speaker 2: monolithic being, it's dynamic. It presents differently in markets throughout

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Speaker 2: the economy, and so we start by saying, how do

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Speaker 2: we have a sophisticated understanding of how markets function? And

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Speaker 2: so in a technology market, it might be a multi

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Speaker 2: sided platform with significant feedback effects, and where data itself

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Speaker 2: is a platform and this is something we're seeing increasingly

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Speaker 2: in AI, and the competitive dynamics in a market like

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Speaker 2: that might be very different than traditional vertical supply chain

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Speaker 2: where you have a manufacturer, wholesaler and retailer. And if

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Speaker 2: we don't adapt our thinking to make sure that we

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Speaker 2: understand the economics of how markets function in a modern economy,

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Speaker 2: then we're going to miss the competitive dynamics and then

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Speaker 2: we're not going to be able to enforce the law effectively.

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Speaker 2: And so our job is to make sure that we

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Speaker 2: have the expertise to do that. And so that's one

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Speaker 2: of the things that we've been doing over the last

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Speaker 2: year at the Anti Trust Division is we've been we've

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Speaker 2: been building our expertise to meet the needs of a

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Speaker 2: modern economy, and that includes hiding sorry hiring AI experts

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Speaker 2: and technologists in addition to labor economists and of course

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Speaker 2: our ioeconomists and competition experts. And that's a field of

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Speaker 2: expertise and a scope of expertise that I think we

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Speaker 2: have to expand in order to be relevant.

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Speaker 3: You know, since you mentioned multi sided marketplaces, I know

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Speaker 3: that this is something specific in the new merger guidelines

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Speaker 3: which you released in early July and which you just

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Speaker 3: sort of teased ahead. But why don't you just sort

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Speaker 3: of give us the little the summary as you see it,

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Speaker 3: of what's new in these new merger guidelines. And so

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Speaker 3: the companies think about doing deals like generally understand the

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Speaker 3: rules of the road.

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Speaker 2: Here, right, So just for a little bit of background,

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Speaker 2: in nineteen fourteen, Congress wrote the Clayton Act, and Section

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Speaker 2: seven of the Clayton Act prohibits mergers that may substantialize

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Speaker 2: in competition or tend to create a monopoly. That law

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Speaker 2: has been updated numerous times, including a significant amendment in

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Speaker 2: the fifties to make sure that the law captured a

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Speaker 2: broader range of acquisitions, including asset acquisitions, but also to

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Speaker 2: clarify and this was an important update that antitrust in

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Speaker 2: the Clayton at can apply to vertical acquisitions, or as

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Speaker 2: they termed it at the time, conglomerate acquisitions, something that

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Speaker 2: we would probably use a different term to describe today.

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Speaker 2: And so the statute was written broadly to protect competition,

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Speaker 2: and then it was updated again to provide a notification requirement.

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Speaker 2: Starting in nineteen sixty eight, the Department of Justice started

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Speaker 2: issuing guidelines to help provide a framework that the Department

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Speaker 2: could use with transparency to the public, to have a

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Speaker 2: little bit of discipline and transparency into how we go

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Speaker 2: about analyzing mergers. There have been updates since then, including

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Speaker 2: a significant update by the Reagan administration in nineteen eighty two,

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Speaker 2: updates in nineteen eighty four, nineteen ninety two, nineteen ninety seven,

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Speaker 2: twenty ten, and then a partial update in twenty twenty.

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Speaker 2: And so there's a rich history of updating these guidelines

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Speaker 2: to generally meet the needs of a modern economy, but

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Speaker 2: also to reflect changes in the law, both statutory and

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Speaker 2: interpretation by courts like the Supreme Court. There was an

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Speaker 2: executive order early on in this administration by President Biden

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Speaker 2: that encouraged or mandated that government cross agencies start taking

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Speaker 2: competition more seriously, and we pursue a whole of government

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Speaker 2: approach to how we think about competition policy. As part

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Speaker 2: of that, it asked the Department of Justice and the

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Speaker 2: Federal Trade Commission to revisit whether updates to the merger

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Speaker 2: guidelines were appropriate. We undertook that exercise. We solicited public comments,

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Speaker 2: of which we received very historic number relative to past endeavors,

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Speaker 2: and what we uncovered was that the merger guidelines had

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Speaker 2: largely been and there have been many really helpful updates

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Speaker 2: over the years, but it's largely been an update to

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Speaker 2: the same frame work, and that framework often started with

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Speaker 2: the question is this merger of vertical or is this

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Speaker 2: merger horizontal?

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Speaker 4: Right?

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Speaker 2: Because those were legally significant or economically significant questions.

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Speaker 4: But one of the things that we've.

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Speaker 2: Learned is that markets don't always present in that two

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Speaker 2: dimensional way. And often like to say that thinking about

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Speaker 2: markets is vertical and horizontal is like looking at four

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Speaker 2: K video through a black and white TV. You might

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Speaker 2: make out some of the images, but you're going to

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Speaker 2: miss all the nuance. And the fact of the matter

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Speaker 2: is today's economy is you know, the geometry is more

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Speaker 2: like a gemstone for fans of the show a righteous gemstone,

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Speaker 2: but it's more like a gemstone than it is a

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Speaker 2: you know, two dimensional drawing. And so if you think

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Speaker 2: about the realities of today's economy, certainly compared to fifty

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Speaker 2: years ago, it's different. Phones don't have rotors, documents are

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Speaker 2: stored in the cloud and not in you know, file cabinets,

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Speaker 2: and even ten years ago, most people are still stopping

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Speaker 2: at the gas station and asking for directions.

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Speaker 4: Our worlds have changed.

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Speaker 2: Data isn't something that is a byproduct of business, but

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Speaker 2: it's the product of business now that is itself is

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Speaker 2: becoming a platform, and markets are increasingly multi sided, multi dimensional,

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Speaker 2: and more sophisticated. And it's really important, at least to

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Speaker 2: me and I think to the public, that we adapt

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Speaker 2: our analytical frameworks to recognize those foundational shifts in our

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Speaker 2: economy and to use state of the art economics and

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Speaker 2: analysis to ensure that we are conducting investigations in a

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Speaker 2: way that accurately reflects the realities of today's market, and

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Speaker 2: that we are building the expertise necessary to understand those

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Speaker 2: nuances and ask the right questions so that we can

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Speaker 2: generate the right answers to determine whether the facts and

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Speaker 2: the law support enforcement.

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Speaker 1: I definitely want to ask you how you're applying those

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Speaker 1: analytical frameworks to specific industries. But maybe one more process

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Speaker 1: question from me, and you sort of touched on it

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Speaker 1: in that answer there. But one of the things that

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Speaker 1: has happened recently is, you know, the White House has

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Speaker 1: directed a bunch of different agencies to think more about competition,

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Speaker 1: think more about antitrust. How are you coordinating with some

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Speaker 1: other entities, like, for instance, the Federal Trade Commission. How

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Speaker 1: are you all collectively working together on this issue.

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Speaker 2: It's a great question. So we have a very good

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Speaker 2: relationship with the Federal Trade Commission in the Department of Justice,

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Speaker 2: and I Trust Division and the Federal Trade Commission have

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Speaker 2: worked closely together for decades across administrations. I think what

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Speaker 2: the Executive Order really unlocked was a broader hole of

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Speaker 2: government approach and an opportunity to really think about competition

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Speaker 2: in so many different dimensions. And so we've seen reports

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Speaker 2: come from you know, treasure relating to the spirits and

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Speaker 2: alcohol and beer business. We've seen reports relating to agriculture.

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Speaker 2: I've seen greater cooperation with our partners at the Department

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Speaker 2: of Transportation. What we're seeing, and I was actually thinking

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Speaker 2: about this a little bit earlier today. It's almost the

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Speaker 2: way in which in the eighties, cost benefit analysis was

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Speaker 2: infused into regulatory and policymaking across the government.

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Speaker 4: I think the.

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Speaker 2: Executive Order really elevated competition in a very similar way

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Speaker 2: and said it's a core value that we need to

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Speaker 2: carry forward in every dimension. So if we want a

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Speaker 2: competitive economy, we need to make sure that we're thinking

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Speaker 2: about competition in all aspects of our government. I think

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Speaker 2: that's a separate question from enforcement. Enforcement is more specific,

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Speaker 2: it's not covered by the Executive Order, but it's something

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Speaker 2: that we do on a case by case basis. But nonetheless,

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Speaker 2: we've still been pursuing a more whole of government approach.

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Speaker 2: And one example is we brought we believe for the

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Speaker 2: first time ever at the Anti Trust Division, a packers

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Speaker 2: and stockyards claim based on a referral from the Department

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Speaker 2: of Agriculture in order to address issues in connection with

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Speaker 2: the tournament system that was affecting farmers and growers and

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Speaker 2: processing poultry processing plant workers who were, in our view,

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Speaker 2: being deprived of better wages due to information sharing. And

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Speaker 2: so unlocking those tools is a very important part of

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Speaker 2: the agenda, both from a policy perspective, so that we

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Speaker 2: can weigh in and encourage our fellow agencies to think

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Speaker 2: about competition and competition policy and share our expertise, but

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Speaker 2: also in how we deploy our own enforcement tools.

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Speaker 3: Let's get into some of these. Actually, I was going

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Speaker 3: to ask you a question about banks, and I want

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Speaker 3: to start getting into the sectoral questions and how you

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Speaker 3: think about how this applies to different industries. But since

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Speaker 3: you mentioned the tournament system of poultry, which I had

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Speaker 3: never seen. You never heard this term, and I feel

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Speaker 3: I would be remissed to because now it's like, oh,

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Speaker 3: we're definitely going to do a tournament poultry episode. What

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Speaker 3: is the tournament system in poultry? And I do remember

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Speaker 3: like there was a lot of talk about stockyard consolidation,

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Speaker 3: particularly in twenty twenty when there is a scarcity of

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Speaker 3: meat due to supply chain issues and things like that.

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Speaker 3: What is the tournament system of poultry? And what are

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Speaker 3: some of the things that you identify within the sort

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Speaker 3: of meat or poultry or farm ecosystem that flashes on

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Speaker 3: your radar.

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Speaker 2: Yeah, So, without going into specifics of specific investigations, generally speaking,

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Speaker 2: the concern that's been expressed by farmers and growers throughout

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Speaker 2: the country is that the risk is being shifted from

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Speaker 2: the packers to the farmers. And so it's almost like

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Speaker 2: growing into a gig economy style model where the farmers

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Speaker 2: take all the risks where they're asked to be exclusive

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Speaker 2: or have elements of exclusivity and their commitments, but then

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Speaker 2: are under the thumb of larger companies who are at

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Speaker 2: their whims in terms of how much supply is being purchased,

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Speaker 2: how much of the risk of failure is on them,

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Speaker 2: and then on risk of loss. And so it's again,

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Speaker 2: without getting into too many specifics and talking about any

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Speaker 2: specific keys, there are elements of it that I think

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Speaker 2: are emblematic of other areas of our economy where workers

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Speaker 2: or entrepreneurs are being held at the thumb of really significant,

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Speaker 2: powerful companies who are imposing terms that not only exploit

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Speaker 2: but limit their ability to work with competitors.

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Speaker 3: Tracy. Two things. A I think I'll tell you have

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Speaker 3: an episode. I think I have a good chicken guest. Actually,

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Speaker 3: on more of this topic.

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Speaker 1: You know how I feel about chicken.

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Speaker 3: I know, and I've been meaning to tell you. And

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Speaker 3: two he Jonathan Just' point reminds me of our conversation

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Speaker 3: with Gordon McGill about the distribution of risk being distributed

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Speaker 3: outward onto the drivers rather than trucking companies. So this

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Speaker 3: broader theme in society comes up again.

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Speaker 1: I mean, this does seem to be something that companies

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Speaker 1: are becoming more sophisticated about the distribution of risk. And

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Speaker 1: also I guess pricing to some degree, and.

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Speaker 4: A lot of this is contractual too, right.

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Speaker 2: I think what we're when we start getting concerned is

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Speaker 2: when a lot of these are terms and conditions that

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Speaker 2: are being posed as to and are being imposed by

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Speaker 2: companies with power.

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Speaker 1: Jonathan, can I ask one more process question before we

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Speaker 1: move on to banks? And I promise we will get

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Speaker 1: to them. But how do these things land? This might

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Speaker 1: be a weird question or simplistic question. How do these

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Speaker 1: things actually end up on your radar?

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Speaker 5: You know?

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Speaker 1: Is it you're working at the DOJ and you wake

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Speaker 1: up one day and you think, hmm, I think I

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Speaker 1: see some problematic things happening in the poultry industry or

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Speaker 1: in tech or wherever, or do you kind of have

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Speaker 1: like a vision of how all this should work together? Like,

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Speaker 1: how does this actually land on a desk at the

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Speaker 1: DOJ so.

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Speaker 4: Many different ways.

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Speaker 2: I'll give you a little anecdote because I remember it

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Speaker 2: was the summer of nineteen ninety six, and I'm dating

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Speaker 2: myself here and revealing my unhipster like age. And it

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Speaker 2: was my first summer of law school and I was

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Speaker 2: working at the FTC and I walked in in the

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Speaker 2: morning and I was bright eyed and you know, excited

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Speaker 2: to roll up my slaves and dig in. And I

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Speaker 2: walked in in the morning and I saw attorneys and

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Speaker 2: this was common at the time. We can explain the technology,

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Speaker 2: but reading newspapers and people were flipping through newspapers and

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Speaker 2: I was like, oh, why are people reading the newspaper?

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Speaker 2: And what I was told at the time was looking

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Speaker 2: for potential leads, and it was very you know, intuitive point,

441
00:24:40,200 --> 00:24:42,600
Speaker 2: which is that you know, that was one source of

442
00:24:42,720 --> 00:24:44,920
Speaker 2: case generation. You know, I've come to learn that there

443
00:24:44,920 --> 00:24:48,160
Speaker 2: are many sources of case generation. Some of it is

444
00:24:48,520 --> 00:24:52,520
Speaker 2: we develop expertise in industries and we monitor those industries.

445
00:24:52,560 --> 00:24:54,480
Speaker 2: And that might be as simple as opening up a

446
00:24:54,480 --> 00:25:00,359
Speaker 2: newspaper or or logging online to local journalist, but it

447
00:25:00,440 --> 00:25:07,960
Speaker 2: also might be hearing from industry participants affected customers, consumers, farmers, entrepreneurs.

448
00:25:08,359 --> 00:25:11,240
Speaker 2: One of the biggest sources of case generation for US

449
00:25:11,359 --> 00:25:15,360
Speaker 2: tends to be from business. So I'm often asked the question, well,

450
00:25:15,760 --> 00:25:19,280
Speaker 2: is anti trust good for business? And if you ask

451
00:25:19,359 --> 00:25:21,960
Speaker 2: the folks who are coming to us asking for enforcement

452
00:25:22,000 --> 00:25:24,119
Speaker 2: of the anti trust laws, I think the answer is yes.

453
00:25:24,480 --> 00:25:26,880
Speaker 2: A lot of our cases are generated by businesses who

454
00:25:26,920 --> 00:25:29,919
Speaker 2: want the opportunity to compete or in a B to

455
00:25:29,960 --> 00:25:33,720
Speaker 2: B market or consumer market, don't want to be held

456
00:25:33,880 --> 00:25:36,760
Speaker 2: under the thumb of a dominant firm or dominant firms.

457
00:25:37,359 --> 00:25:38,720
Speaker 4: We have a number of other ways.

458
00:25:38,760 --> 00:25:40,680
Speaker 2: I think it's important for us as we as the

459
00:25:40,720 --> 00:25:45,439
Speaker 2: economy becomes more sophisticated, to use data analysis to identify

460
00:25:45,480 --> 00:25:49,679
Speaker 2: trends that might indicate problems and concerns. We have a

461
00:25:49,720 --> 00:25:52,159
Speaker 2: whole range of tools and methods that we are using

462
00:25:52,200 --> 00:25:54,879
Speaker 2: and modernizing to make sure that we are being proactive

463
00:25:54,880 --> 00:25:55,800
Speaker 2: in our case detection.

464
00:25:56,440 --> 00:25:57,880
Speaker 4: Now that's a little.

465
00:25:57,680 --> 00:26:00,639
Speaker 2: Bit different from there are a couple of distinctions in

466
00:26:00,680 --> 00:26:03,520
Speaker 2: some other areas of our enforcement. One is mergers, and

467
00:26:03,520 --> 00:26:05,320
Speaker 2: so I mentioned the update to the Clayton Act in

468
00:26:05,359 --> 00:26:09,159
Speaker 2: the seventies that required mergers of a certain size to

469
00:26:09,240 --> 00:26:12,240
Speaker 2: pre notify and wait to close until we've had the

470
00:26:12,320 --> 00:26:15,080
Speaker 2: chance to investigate. And that's called the Hart Scott Rodino Act.

471
00:26:15,440 --> 00:26:18,159
Speaker 2: So mergers at least above a certain size come to

472
00:26:18,280 --> 00:26:22,240
Speaker 2: us through merger filings. And then in the criminal context,

473
00:26:22,240 --> 00:26:25,479
Speaker 2: where we have criminally unitrust enforcement, we will get tips,

474
00:26:25,560 --> 00:26:29,000
Speaker 2: we will get proactive sources and methods that we use

475
00:26:29,080 --> 00:26:32,600
Speaker 2: to uncover violations. But we also have a vibrant leniency

476
00:26:32,640 --> 00:26:35,920
Speaker 2: program where we can have potential wrongdoers come to us

477
00:26:36,000 --> 00:26:39,080
Speaker 2: under certain conditions and self disclose.

478
00:26:39,760 --> 00:26:44,000
Speaker 3: So it's not reading the newspaper. But you know, there

479
00:26:44,080 --> 00:26:47,040
Speaker 3: was an episode of a podcast called odd Latch that

480
00:26:47,160 --> 00:26:50,879
Speaker 3: was released July seventeenth, twenty twenty three, in which our

481
00:26:50,920 --> 00:26:55,119
Speaker 3: guests said that large tech companies are making big investments

482
00:26:55,160 --> 00:26:58,679
Speaker 3: in AI startups because they can't they're worried about anti

483
00:26:58,680 --> 00:27:01,080
Speaker 3: trust enforcement and the not going to buy them out right.

484
00:27:01,480 --> 00:27:04,480
Speaker 3: But what they're doing is maybe a large company with

485
00:27:04,480 --> 00:27:08,560
Speaker 3: a big cloud division makes an investment in some company

486
00:27:08,600 --> 00:27:11,560
Speaker 3: that makes an AI model, and then that company spends

487
00:27:11,600 --> 00:27:14,679
Speaker 3: all of their money on the investor's cloud, and that

488
00:27:14,840 --> 00:27:18,439
Speaker 3: all of their future customers are implicitly customers of that cloud,

489
00:27:18,600 --> 00:27:21,280
Speaker 3: et cetera, and so I'm curious, you know, And he

490
00:27:21,320 --> 00:27:22,920
Speaker 3: said that, He's like, well, this is just because of

491
00:27:23,160 --> 00:27:26,479
Speaker 3: you know, a way to get around concerned about anti trust.

492
00:27:26,920 --> 00:27:31,000
Speaker 3: Are there non merger things that are anti competitive in

493
00:27:31,040 --> 00:27:35,400
Speaker 3: your view, such as business relationships that large tech companies

494
00:27:35,480 --> 00:27:40,359
Speaker 3: could make with say strategic investments that can you know,

495
00:27:40,720 --> 00:27:44,240
Speaker 3: raise red flags even if they're not formally or formally

496
00:27:44,280 --> 00:27:44,800
Speaker 3: a merger.

497
00:27:45,280 --> 00:27:46,320
Speaker 4: So that's a fun question.

498
00:27:46,359 --> 00:27:48,200
Speaker 2: I think you have a future in running law school

499
00:27:48,240 --> 00:27:51,320
Speaker 2: exams because that's like a perfect hypothetical scenario.

500
00:27:51,560 --> 00:27:54,280
Speaker 3: Again, I want to be careful, it's all hypothetic. I

501
00:27:54,280 --> 00:27:57,720
Speaker 3: didn't name any companies, but yeah, I didn't say Google,

502
00:27:58,000 --> 00:28:02,360
Speaker 3: open Ai, Microsoft, and topic. I just said large cloud companies,

503
00:28:02,400 --> 00:28:03,320
Speaker 3: companies with a model.

504
00:28:03,400 --> 00:28:04,240
Speaker 4: Well, thank you for that.

505
00:28:05,160 --> 00:28:07,000
Speaker 2: Let me let me take a little bit of a

506
00:28:07,000 --> 00:28:09,680
Speaker 2: step back and a different level of abstraction and try

507
00:28:09,720 --> 00:28:12,159
Speaker 2: to answer the question in a productive way here for you.

508
00:28:12,680 --> 00:28:14,840
Speaker 2: So in one of the things I often will say

509
00:28:15,040 --> 00:28:19,520
Speaker 2: across all industries is that substance overform. And so what

510
00:28:19,520 --> 00:28:22,960
Speaker 2: we're looking at is it's not just mergers. First of all,

511
00:28:23,520 --> 00:28:28,240
Speaker 2: one of that amendment that I mentioned in the fifties

512
00:28:28,440 --> 00:28:31,600
Speaker 2: made sure to cover other kinds of partial and asset acquisitions.

513
00:28:32,040 --> 00:28:34,720
Speaker 2: Our new merger guidelines has a whole new section that

514
00:28:34,840 --> 00:28:40,200
Speaker 2: specifically addresses partial ownership and acquisitions. And there are other

515
00:28:40,360 --> 00:28:44,640
Speaker 2: parts of the antitrust law. There's monopolization. There's an area

516
00:28:44,640 --> 00:28:49,040
Speaker 2: of anti trust enforcement that we have deployed perhaps more

517
00:28:49,080 --> 00:28:53,600
Speaker 2: extensively than any enforcement authority ever since it was an

518
00:28:53,640 --> 00:28:56,280
Speaker 2: act in nineteen fourteen, and that's called Section eight of

519
00:28:56,320 --> 00:29:01,080
Speaker 2: the Clayton Act, which prohibits interlocking directorates, meaning you can't

520
00:29:01,080 --> 00:29:03,440
Speaker 2: sit on the boards or have representatives on boards of

521
00:29:03,480 --> 00:29:07,240
Speaker 2: competing companies. And we've caused i think over fifteen nearly

522
00:29:07,320 --> 00:29:11,040
Speaker 2: twenty members of boards to step off boards and violation

523
00:29:11,080 --> 00:29:13,440
Speaker 2: of Section eight. We have a whole range of investigations

524
00:29:13,440 --> 00:29:16,920
Speaker 2: that are open. So the short answer to your question

525
00:29:17,040 --> 00:29:20,400
Speaker 2: is we have many tools that we can use, and

526
00:29:20,480 --> 00:29:24,160
Speaker 2: its substance over form and so attempts at evasion are

527
00:29:24,280 --> 00:29:28,280
Speaker 2: usually not successful. And so if the goal of a

528
00:29:28,480 --> 00:29:33,080
Speaker 2: transaction or investment is to monopolize a market, manipulate a market,

529
00:29:33,400 --> 00:29:37,400
Speaker 2: to exclude competition, then we have the tools necessary to

530
00:29:37,440 --> 00:29:37,920
Speaker 2: address that.

531
00:29:38,000 --> 00:29:38,720
Speaker 4: If we need to.

532
00:29:39,440 --> 00:29:41,440
Speaker 1: Let me ask the question in a slightly different way,

533
00:29:42,040 --> 00:29:46,400
Speaker 1: do you see any evidence currently of perhaps anti competitive

534
00:29:46,440 --> 00:29:50,040
Speaker 1: practices in some of the let's call it the AI

535
00:29:50,200 --> 00:29:53,360
Speaker 1: boom recently. And then secondly, I just be curious how

536
00:29:53,440 --> 00:29:56,760
Speaker 1: you're sort of looking at AI and its interactions with

537
00:29:56,840 --> 00:29:59,560
Speaker 1: tech and I know you mentioned beefing up staff and

538
00:29:59,600 --> 00:30:02,160
Speaker 1: technical expertise on that matter.

539
00:30:02,560 --> 00:30:04,760
Speaker 2: Yeah, So the first part of the question I will

540
00:30:05,160 --> 00:30:08,880
Speaker 2: artfully dodge because I can't. We have to specific industries.

541
00:30:08,880 --> 00:30:12,800
Speaker 2: I appreciate the efforts, it's noble and noted, But the

542
00:30:12,800 --> 00:30:17,040
Speaker 2: second part I can embrace. So our job is to

543
00:30:17,080 --> 00:30:20,160
Speaker 2: make sure that we are following the puck where it's going,

544
00:30:20,360 --> 00:30:22,640
Speaker 2: so much so that we have something at the Anitrust

545
00:30:22,640 --> 00:30:25,760
Speaker 2: division we call Project Retzki based on the famous quote

546
00:30:25,800 --> 00:30:28,960
Speaker 2: from Wayne Gretzky, which is he skates to where the puck.

547
00:30:28,800 --> 00:30:31,320
Speaker 4: Is going, not to where it is. And so AI

548
00:30:31,720 --> 00:30:32,040
Speaker 4: is a.

549
00:30:32,240 --> 00:30:37,960
Speaker 2: Significant inflection point and development in business, and it's going

550
00:30:38,040 --> 00:30:40,800
Speaker 2: it's changing the way a lot of things operate, and

551
00:30:40,840 --> 00:30:44,280
Speaker 2: it's changing economic realities, and so we have to understand

552
00:30:44,320 --> 00:30:47,840
Speaker 2: those significant changes. And it's really more that AI is

553
00:30:47,920 --> 00:30:49,960
Speaker 2: an umbrella term that's used to talk about a lot

554
00:30:49,960 --> 00:30:54,040
Speaker 2: of different things, but machine learning data as a platform

555
00:30:54,640 --> 00:31:00,280
Speaker 2: are all really important developments and they're also it's also

556
00:31:00,280 --> 00:31:04,840
Speaker 2: going to create many really great opportunities, right, So you know,

557
00:31:04,840 --> 00:31:08,600
Speaker 2: we're agnostic in many respects to the technology itself, at

558
00:31:08,680 --> 00:31:11,040
Speaker 2: least at the end of trust division. What we're trying

559
00:31:11,080 --> 00:31:14,240
Speaker 2: to do is make sure that, particularly at these inflection points,

560
00:31:14,280 --> 00:31:17,520
Speaker 2: that competition has the ability to thrive. It's also not

561
00:31:17,640 --> 00:31:20,840
Speaker 2: lost on us, and we've talked about this that AI

562
00:31:21,120 --> 00:31:23,760
Speaker 2: is you know, particularly for example, like a large language

563
00:31:23,800 --> 00:31:27,320
Speaker 2: model is based on data and mountains of it.

564
00:31:27,800 --> 00:31:29,200
Speaker 4: And so when you think.

565
00:31:29,120 --> 00:31:32,520
Speaker 2: About AI being deployed, you know, not just in the

566
00:31:32,520 --> 00:31:36,880
Speaker 2: consumer tech space, but in enterprise tech and healthcare and

567
00:31:37,080 --> 00:31:41,440
Speaker 2: energy and agriculture and everything in between. You know, we're

568
00:31:41,520 --> 00:31:45,080
Speaker 2: looking at a world where companies that have access to

569
00:31:45,200 --> 00:31:48,560
Speaker 2: the most data are going to be able to pay

570
00:31:48,600 --> 00:31:51,000
Speaker 2: the cost of entry. And so if you want to

571
00:31:51,000 --> 00:31:55,200
Speaker 2: build those foundational platforms, you're going to need a corpus,

572
00:31:55,280 --> 00:31:59,000
Speaker 2: You're going to need data at scale, and so competition

573
00:31:59,400 --> 00:32:04,160
Speaker 2: or lack there of in a predecessor technology could very

574
00:32:04,280 --> 00:32:07,680
Speaker 2: much limit the ability for there to be vibrant competition

575
00:32:08,160 --> 00:32:11,000
Speaker 2: for technologies in AI that depend on data. So we

576
00:32:11,120 --> 00:32:14,160
Speaker 2: have to think about making sure that we're opening up

577
00:32:14,600 --> 00:32:16,000
Speaker 2: all avenues.

578
00:32:15,480 --> 00:32:16,880
Speaker 4: To competition in this space.

579
00:32:17,120 --> 00:32:19,840
Speaker 2: But we can't do that effectively in my view, unless

580
00:32:19,880 --> 00:32:22,400
Speaker 2: we understand it, unless we have the right experts in

581
00:32:22,480 --> 00:32:27,200
Speaker 2: house in order to appreciate those nuances and see clearly

582
00:32:27,560 --> 00:32:30,479
Speaker 2: what is actually happening in the marketplace, and then skates

583
00:32:30,480 --> 00:32:44,000
Speaker 2: where the puck is going.

584
00:32:48,040 --> 00:32:51,840
Speaker 3: I want to ask a question about how anti trust

585
00:32:51,840 --> 00:32:54,520
Speaker 3: thinking dovetails with other priorities. And this is also sort

586
00:32:54,560 --> 00:32:58,240
Speaker 3: of a segue into consolidation in banks. So obviously Silicon

587
00:32:58,320 --> 00:33:02,160
Speaker 3: Valley Bank blew up in March, and perhaps one reason

588
00:33:02,240 --> 00:33:05,040
Speaker 3: that it blew up is because there are lower sort

589
00:33:05,080 --> 00:33:08,880
Speaker 3: of regulatory requirements for smaller banks. And I wonder if

590
00:33:08,920 --> 00:33:11,320
Speaker 3: there is a tension where you want there to be

591
00:33:11,520 --> 00:33:14,880
Speaker 3: competition with the gigantic money center banks that are based

592
00:33:15,240 --> 00:33:17,520
Speaker 3: in New York. But on the other hand, there are

593
00:33:17,560 --> 00:33:20,680
Speaker 3: many who argue that say, a Canadian style banking system

594
00:33:20,720 --> 00:33:23,040
Speaker 3: of essentially like six banks, all of which are very

595
00:33:23,040 --> 00:33:26,680
Speaker 3: big and regulated to the max, is the most stable system.

596
00:33:27,120 --> 00:33:30,080
Speaker 3: And so I wonder how you think about tension where

597
00:33:30,080 --> 00:33:32,719
Speaker 3: it's like, Okay, we want there to be a competitor

598
00:33:33,120 --> 00:33:35,560
Speaker 3: to the big ones. One way to make sure that

599
00:33:35,600 --> 00:33:39,240
Speaker 3: there's competition is to lower maybe the capital requirement standards,

600
00:33:39,280 --> 00:33:43,200
Speaker 3: et cetera. But if you want have this competition, then

601
00:33:43,360 --> 00:33:47,240
Speaker 3: does that run into priorities potentially a financial stability.

602
00:33:47,680 --> 00:33:51,760
Speaker 2: Sure, it's a great question. So the word dovetail or words.

603
00:33:51,840 --> 00:33:54,120
Speaker 2: I guess it's a word, right, I'll look it up

604
00:33:54,160 --> 00:33:56,600
Speaker 2: all your yes, is the perfect way to describe it. So,

605
00:33:57,160 --> 00:34:01,480
Speaker 2: because you know, we have some authority here, but that

606
00:34:01,600 --> 00:34:06,520
Speaker 2: authority dovetails with the bank regulators, and the two sides

607
00:34:06,560 --> 00:34:10,359
Speaker 2: of the coin worked very well together and are important compliments.

608
00:34:10,520 --> 00:34:13,319
Speaker 2: And so there's something called the Bank Merger Act which

609
00:34:13,360 --> 00:34:17,040
Speaker 2: gives us the Anti Trust Division the ability to provide

610
00:34:17,160 --> 00:34:19,720
Speaker 2: a report to the bank regulators.

611
00:34:19,239 --> 00:34:21,480
Speaker 4: To assess competition.

612
00:34:21,920 --> 00:34:24,239
Speaker 2: And we do that on the regular when there are

613
00:34:24,440 --> 00:34:28,360
Speaker 2: certain bank mergers that were obligated to address. And then

614
00:34:28,920 --> 00:34:31,799
Speaker 2: if we decide we want to challenge an acquisition, we

615
00:34:31,840 --> 00:34:34,239
Speaker 2: still have independent authority to do that even after the

616
00:34:34,280 --> 00:34:38,359
Speaker 2: bank regulators weigh in. What I gave a speech at

617
00:34:38,400 --> 00:34:42,800
Speaker 2: Brookings a few weeks ago where I talked about many respects,

618
00:34:42,840 --> 00:34:44,720
Speaker 2: a lot of the things that we've already discussed today,

619
00:34:44,840 --> 00:34:48,880
Speaker 2: which is how our economy has changed in the context

620
00:34:48,880 --> 00:34:53,319
Speaker 2: of banks. I talked about how competition and banking might

621
00:34:53,360 --> 00:34:56,840
Speaker 2: have been reflected in giving away free toasters when you

622
00:34:56,840 --> 00:34:59,440
Speaker 2: sign up for an account, but those days are over

623
00:35:00,040 --> 00:35:03,880
Speaker 2: and banking is very different today than it was thirty

624
00:35:03,960 --> 00:35:08,040
Speaker 2: years ago. And the last bank merger guidelines were written

625
00:35:08,080 --> 00:35:12,360
Speaker 2: in the nineties when people still got toasters, and that's outdated.

626
00:35:12,560 --> 00:35:16,640
Speaker 2: And I think we realize now that bank fees and

627
00:35:17,000 --> 00:35:19,480
Speaker 2: overdraft fees, I think something one of your guests a

628
00:35:19,480 --> 00:35:22,920
Speaker 2: few weeks ago, Jared Bernstein, talked about that those are

629
00:35:23,239 --> 00:35:28,520
Speaker 2: in different technologies and customer service are all nuances of

630
00:35:28,560 --> 00:35:31,040
Speaker 2: a modern banking economy, and we want to make sure

631
00:35:31,040 --> 00:35:34,600
Speaker 2: we understand that well so that we can provide appropriate

632
00:35:34,760 --> 00:35:39,160
Speaker 2: analysis to the bank regulators. The other distinction that I

633
00:35:39,280 --> 00:35:41,160
Speaker 2: called out in that speech is that a lot of

634
00:35:41,760 --> 00:35:46,400
Speaker 2: bank merger analysis, at least on the competition concentration side,

635
00:35:46,800 --> 00:35:51,000
Speaker 2: had been done using a very stylized model of what

636
00:35:51,040 --> 00:35:55,279
Speaker 2: we called HHI index Herfriendal Herschman index, which is just

637
00:35:55,640 --> 00:35:58,600
Speaker 2: a fancy way to talk about measuring market shares and

638
00:35:58,640 --> 00:36:05,240
Speaker 2: concentration levels. It's actually relatively simple mathematical exercise quantitative exercise,

639
00:36:05,280 --> 00:36:10,920
Speaker 2: but it's based on deposits in local branch overlaps and

640
00:36:11,160 --> 00:36:13,360
Speaker 2: one of the things you know, I tried to stress

641
00:36:13,400 --> 00:36:16,200
Speaker 2: is that you know, while in some instances that may

642
00:36:16,239 --> 00:36:21,920
Speaker 2: be helpful, that it's probably not the most sophisticated or

643
00:36:22,800 --> 00:36:27,160
Speaker 2: relevant way to assess competition in today's markets. So we

644
00:36:27,200 --> 00:36:29,480
Speaker 2: want to make sure that we're also updating our bank

645
00:36:29,560 --> 00:36:32,479
Speaker 2: merger guidelines, which is something that we're working on also

646
00:36:32,560 --> 00:36:37,000
Speaker 2: under the executive order from President Biden. And in that discussion,

647
00:36:37,360 --> 00:36:40,080
Speaker 2: we're going to think about all these different dimensions of competition.

648
00:36:40,120 --> 00:36:43,680
Speaker 2: There's different roles of banks, but also making sure that

649
00:36:43,800 --> 00:36:47,040
Speaker 2: we understand that different banks have different kinds of customers,

650
00:36:47,080 --> 00:36:50,719
Speaker 2: and so making sure that local communities have access to

651
00:36:50,760 --> 00:36:55,560
Speaker 2: banking and competition and viable, resilient banks is a really

652
00:36:55,600 --> 00:36:59,520
Speaker 2: important part of making sure that it's competitive, because, after all,

653
00:37:00,120 --> 00:37:02,799
Speaker 2: the needs of a local business might be different than

654
00:37:02,840 --> 00:37:06,960
Speaker 2: a multinational and you know, local banks and regional banks

655
00:37:07,120 --> 00:37:10,239
Speaker 2: you are quite good at investing in their local communities

656
00:37:10,280 --> 00:37:14,640
Speaker 2: because they want to build that vibrant, local, competitive economy.

657
00:37:14,680 --> 00:37:18,520
Speaker 2: And so this is all agnostic to specific deals. It's

658
00:37:18,520 --> 00:37:21,239
Speaker 2: simply just saying that it's important for us to make

659
00:37:21,280 --> 00:37:26,560
Speaker 2: sure that our analysis understands those considerations. But that's against

660
00:37:26,560 --> 00:37:30,359
Speaker 2: the backdrop if a multi factor analysis that the bank

661
00:37:30,400 --> 00:37:34,200
Speaker 2: regulators have to undertake, and we have a part of that,

662
00:37:34,320 --> 00:37:37,600
Speaker 2: but it's just a part including convenience and needs and

663
00:37:37,600 --> 00:37:41,880
Speaker 2: and other factors that are related to but not perfectly

664
00:37:41,920 --> 00:37:43,120
Speaker 2: overlapping with competition.

665
00:37:43,719 --> 00:37:45,839
Speaker 1: You know, it feels like there's sort of a high

666
00:37:45,960 --> 00:37:50,720
Speaker 1: level philosophical tension or disagreement here where on the one hand,

667
00:37:50,840 --> 00:37:54,640
Speaker 1: it might be nice to have thousands of local banks

668
00:37:54,840 --> 00:37:59,319
Speaker 1: with significant expertise and they know their customers and are

669
00:37:59,400 --> 00:38:02,880
Speaker 1: able to sort of decide who gets alone and who doesn't,

670
00:38:03,920 --> 00:38:08,520
Speaker 1: versus the financial stability sort of efficiency concerns where maybe

671
00:38:08,800 --> 00:38:11,840
Speaker 1: it would make more sense to have a Canada style

672
00:38:12,160 --> 00:38:16,000
Speaker 1: model where we have six dominant banks or something like that.

673
00:38:16,239 --> 00:38:20,640
Speaker 1: And I think we've seen various expressions of those disagreements recently.

674
00:38:20,680 --> 00:38:23,480
Speaker 1: I think Elizabeth Warren has sort of, you know, clapped

675
00:38:23,520 --> 00:38:26,280
Speaker 1: back at some of Janet Yellen's thinking on this topic.

676
00:38:26,719 --> 00:38:29,680
Speaker 1: But when you're at the DOJ, do you think about

677
00:38:29,680 --> 00:38:32,920
Speaker 1: this from a sort of holistic, top level perspective. Do

678
00:38:32,960 --> 00:38:36,720
Speaker 1: you think this is maybe what the banking system should

679
00:38:36,760 --> 00:38:39,000
Speaker 1: look like, or this is where we would like to

680
00:38:39,000 --> 00:38:41,640
Speaker 1: see the banking system go. Does it kind of reach

681
00:38:42,239 --> 00:38:45,640
Speaker 1: that level. So I'll leave it to the banking experts

682
00:38:45,640 --> 00:38:50,200
Speaker 1: and regulators and policy makers and legislators to determine, you know,

683
00:38:50,680 --> 00:38:53,480
Speaker 1: or discuss that big picture. We have the luxury, I

684
00:38:53,480 --> 00:38:57,640
Speaker 1: guess of focusing on this one narrow question is how

685
00:38:57,680 --> 00:39:00,799
Speaker 1: do we make sure that these portions of.

686
00:39:00,800 --> 00:39:02,040
Speaker 4: Our economy are competitive?

687
00:39:02,120 --> 00:39:04,600
Speaker 2: And how do we make sure that we are enforcing

688
00:39:04,640 --> 00:39:09,000
Speaker 2: the law and providing expert reports to the regulators on

689
00:39:09,560 --> 00:39:12,440
Speaker 2: the impacts of competition. And as I talked about in

690
00:39:12,480 --> 00:39:15,719
Speaker 2: my Brooking speech, you know, our belief is that the

691
00:39:15,800 --> 00:39:20,239
Speaker 2: law promotes and encourages there to be a competitive economy,

692
00:39:20,320 --> 00:39:23,799
Speaker 2: including in banking, and we try to enforce that faithfully.

693
00:39:25,040 --> 00:39:29,680
Speaker 3: I'm curious about just firm size, and this comes up.

694
00:39:29,719 --> 00:39:32,160
Speaker 3: I see a lot of Twitter fights about this, which

695
00:39:32,239 --> 00:39:35,879
Speaker 3: is that there is this sort of school of progressive

696
00:39:36,000 --> 00:39:40,000
Speaker 3: thought which says small businesses aren't really that great, that

697
00:39:40,080 --> 00:39:42,400
Speaker 3: we like to extol them, that we like the idea

698
00:39:42,480 --> 00:39:45,160
Speaker 3: of like, you know, competition and all these like small businesses,

699
00:39:45,520 --> 00:39:48,759
Speaker 3: but that by and large, you know, labor protections at

700
00:39:48,800 --> 00:39:53,399
Speaker 3: small businesses are worse, that wages are worse, that environmental

701
00:39:53,440 --> 00:39:56,440
Speaker 3: concerns are worse, that large companies are more likely to

702
00:39:56,440 --> 00:39:59,880
Speaker 3: be unionized, that large companies are more likely to invent

703
00:40:00,360 --> 00:40:04,640
Speaker 3: in things related to decarbonization and so forth, and that

704
00:40:04,800 --> 00:40:08,120
Speaker 3: you know, there's the economy is run by too much

705
00:40:08,160 --> 00:40:10,360
Speaker 3: of the economy is run by small business owners that

706
00:40:10,400 --> 00:40:14,880
Speaker 3: have incredible leverage over their own employees and their own area.

707
00:40:14,960 --> 00:40:17,560
Speaker 3: I'm curious, like how you think about like size, is

708
00:40:18,000 --> 00:40:22,080
Speaker 3: size good or bad? Per se? Are there concerns about

709
00:40:22,120 --> 00:40:25,600
Speaker 3: too much deconsolidation? I mean, I get most of the

710
00:40:25,600 --> 00:40:28,799
Speaker 3: conversations about consolidation, but are there concerns about like too

711
00:40:28,920 --> 00:40:32,839
Speaker 3: much distribution and some of the costs that sort of

712
00:40:32,880 --> 00:40:36,160
Speaker 3: come with the management labor relationship. And I'm curious how

713
00:40:36,160 --> 00:40:37,160
Speaker 3: that fits into your thinking.

714
00:40:38,440 --> 00:40:41,759
Speaker 2: Yeah, so again I think, you know, I try to

715
00:40:41,840 --> 00:40:44,640
Speaker 2: start from the premise of, well, what does the law say, yeah,

716
00:40:44,680 --> 00:40:46,919
Speaker 2: and how do we go from there? And so when

717
00:40:46,960 --> 00:40:50,640
Speaker 2: you're talking about you I trust historically or talking you know,

718
00:40:50,760 --> 00:40:53,840
Speaker 2: we mentioned earlier the standard oils and AT and ts

719
00:40:53,880 --> 00:40:56,400
Speaker 2: and such of the world. We're often talking about some

720
00:40:56,440 --> 00:40:59,640
Speaker 2: of the biggest companies exclusively. But those are a lot

721
00:40:59,680 --> 00:41:02,600
Speaker 2: of the big as Tike points occur, and that's sort

722
00:41:02,640 --> 00:41:05,320
Speaker 2: of at the origin of anti monopoly and anti trust

723
00:41:05,400 --> 00:41:10,840
Speaker 2: law statutes provide different requirements, and so we talked about

724
00:41:10,960 --> 00:41:15,120
Speaker 2: the Clayton Act and mergers, and it takes the view

725
00:41:15,200 --> 00:41:19,320
Speaker 2: that not only a merger is problematic for substantial lessons competition,

726
00:41:19,400 --> 00:41:22,040
Speaker 2: but also if it tends to create a monopoly. So

727
00:41:22,040 --> 00:41:24,160
Speaker 2: that's a value judgment that if something tends to create

728
00:41:24,200 --> 00:41:27,440
Speaker 2: a monopoly, it could be illegal. There is a monopolization

729
00:41:27,640 --> 00:41:30,640
Speaker 2: prong of the Scharmanac Section two of the Sherman Act,

730
00:41:31,080 --> 00:41:35,000
Speaker 2: So you know, certain kinds of conduct that is used

731
00:41:35,040 --> 00:41:38,960
Speaker 2: to create a monopoly can be illegal. And that was

732
00:41:39,000 --> 00:41:42,280
Speaker 2: a judgment that Congress made and we have the obligation

733
00:41:42,520 --> 00:41:45,440
Speaker 2: to enforce. And I would also say in terms of

734
00:41:45,520 --> 00:41:48,480
Speaker 2: small there's a lot of and I'll refer you to

735
00:41:48,640 --> 00:41:52,680
Speaker 2: some of the legislative history and discussions around the creation

736
00:41:52,800 --> 00:41:55,400
Speaker 2: and amendments to the anti trust laws about the importance

737
00:41:55,440 --> 00:42:00,640
Speaker 2: of small business opportunity. But I guess I approach this

738
00:42:00,719 --> 00:42:06,360
Speaker 2: discipline from the perspective of that we're preserving economic opportunity.

739
00:42:06,400 --> 00:42:09,800
Speaker 2: And so to me, opportunity and freedom go hand in hand.

740
00:42:10,560 --> 00:42:12,680
Speaker 2: And you know, one of the things that makes our

741
00:42:12,719 --> 00:42:17,200
Speaker 2: country so amazing and so such a wonderful place to

742
00:42:17,280 --> 00:42:22,359
Speaker 2: be is that we provide opportunities to everybody when things

743
00:42:22,360 --> 00:42:25,400
Speaker 2: are going well and things are going right, and the

744
00:42:25,440 --> 00:42:28,600
Speaker 2: small business on the corner, you know, can lead to

745
00:42:28,640 --> 00:42:35,400
Speaker 2: upward mobility for the next generation, for industrious and ambitious people.

746
00:42:36,080 --> 00:42:40,480
Speaker 2: And we want to make sure that we're providing those opportunities.

747
00:42:41,040 --> 00:42:45,120
Speaker 2: And if those opportunities in those avenues to upward mobility

748
00:42:45,120 --> 00:42:50,200
Speaker 2: are clogged, not only are we depriving citizens of the

749
00:42:50,360 --> 00:42:53,760
Speaker 2: of the freedoms, the fundamental economic freedoms that they crave

750
00:42:53,920 --> 00:42:58,120
Speaker 2: and that we are we promise to our citizens, but

751
00:42:58,120 --> 00:43:00,799
Speaker 2: we're also losing out on all of those benefit and

752
00:43:00,880 --> 00:43:04,880
Speaker 2: so competition is a is a value. It's a value

753
00:43:04,920 --> 00:43:08,680
Speaker 2: that we have invested in as a country because we

754
00:43:08,800 --> 00:43:14,400
Speaker 2: believe that providing opportunity and freedom of opportunity can generate

755
00:43:14,560 --> 00:43:18,279
Speaker 2: so many benefits in so many different ways. And you know,

756
00:43:18,320 --> 00:43:20,719
Speaker 2: I often say it's not a switch that you can

757
00:43:20,760 --> 00:43:22,960
Speaker 2: flip on and on when you need it. You have

758
00:43:23,040 --> 00:43:25,040
Speaker 2: to invest it, and I invest in it. And I

759
00:43:25,040 --> 00:43:28,640
Speaker 2: think that's why Congress, you know, was wise when it

760
00:43:28,680 --> 00:43:32,640
Speaker 2: wrote the NI Trust laws, because it preserved those avenues

761
00:43:32,680 --> 00:43:36,600
Speaker 2: for opportunity and competition. And you know, the courts and

762
00:43:36,680 --> 00:43:40,520
Speaker 2: Congress have been clear that those avenues and opportunities should

763
00:43:40,560 --> 00:43:43,919
Speaker 2: not be limited to select few. They should be open

764
00:43:44,000 --> 00:43:48,839
Speaker 2: to everyone, including small businesses, farmers who are themselves small

765
00:43:48,880 --> 00:43:53,600
Speaker 2: business owners, entrepreneurs. They should be geographically dispersing those opportunities,

766
00:43:53,920 --> 00:43:55,760
Speaker 2: and they should be merit based. They should be based

767
00:43:55,800 --> 00:44:00,200
Speaker 2: on the merits of your innovations, your customer service, your

768
00:44:00,239 --> 00:44:04,359
Speaker 2: commitment in your imagination. And so to me, we don't

769
00:44:04,400 --> 00:44:06,920
Speaker 2: have any of that as a society unless we have

770
00:44:07,000 --> 00:44:08,200
Speaker 2: competitive marketplaces.

771
00:44:09,280 --> 00:44:14,000
Speaker 1: So the polar opposite perhaps of the iconic American small

772
00:44:14,040 --> 00:44:18,680
Speaker 1: business is probably American private equity. And there have been

773
00:44:18,800 --> 00:44:21,319
Speaker 1: tons of negative headlines over the years, and I know

774
00:44:21,400 --> 00:44:24,240
Speaker 1: this is something that's on your radar that you've talked about.

775
00:44:24,560 --> 00:44:27,799
Speaker 1: I think you specifically talked about private equities ability to

776
00:44:28,000 --> 00:44:32,400
Speaker 1: exercise command and control over markets. Can you tell us

777
00:44:32,400 --> 00:44:35,880
Speaker 1: a little bit more about how you're thinking of private

778
00:44:35,960 --> 00:44:39,839
Speaker 1: equities role in competition and what exactly the issues might

779
00:44:39,880 --> 00:44:40,200
Speaker 1: be there.

780
00:44:42,360 --> 00:44:44,759
Speaker 2: Yeah, So let me start by saying that the anitrust

781
00:44:44,840 --> 00:44:49,120
Speaker 2: laws are business agnostic or business model agnostic, and so

782
00:44:50,440 --> 00:44:53,719
Speaker 2: you know, I think they apply equally across all businesses,

783
00:44:53,960 --> 00:44:57,000
Speaker 2: including private equity. As I mentioned before, you know, it's

784
00:44:57,040 --> 00:45:00,920
Speaker 2: important for us as enforcers to be mindful of developments

785
00:45:01,719 --> 00:45:04,719
Speaker 2: on the ground, including economic realities. And I think we

786
00:45:04,760 --> 00:45:08,759
Speaker 2: can all agree that private equity you know today means

787
00:45:08,760 --> 00:45:11,319
Speaker 2: something very different than it did thirty years ago, and

788
00:45:11,680 --> 00:45:16,200
Speaker 2: its prevalence and importance or at least impact on our

789
00:45:16,239 --> 00:45:22,600
Speaker 2: economy and our industry is quite significant and different than

790
00:45:22,600 --> 00:45:25,279
Speaker 2: it was in the past. And again that's just in

791
00:45:25,280 --> 00:45:28,480
Speaker 2: an agnostic way. I'm not suggesting it's good, better otherwise,

792
00:45:29,040 --> 00:45:31,799
Speaker 2: simply a fact. And so if we want to be

793
00:45:31,880 --> 00:45:35,880
Speaker 2: relevant in understanding whether there is an antitrust violation or

794
00:45:35,920 --> 00:45:38,360
Speaker 2: where to focus, we just need to make sure that

795
00:45:38,400 --> 00:45:44,080
Speaker 2: we understand those market realities. And so, you know, issues

796
00:45:44,080 --> 00:45:46,839
Speaker 2: that show up in non private equity markets can show

797
00:45:46,880 --> 00:45:49,640
Speaker 2: up in private equity too, But there also might be

798
00:45:50,480 --> 00:45:54,360
Speaker 2: you know, distinguishing characteristics. So for example, you know, private

799
00:45:54,360 --> 00:45:57,400
Speaker 2: equity might lead to greater number of board interlocks and

800
00:45:57,600 --> 00:46:00,719
Speaker 2: it might result in more need to inform or Section eight.

801
00:46:01,360 --> 00:46:04,880
Speaker 2: We talk about roll ups, and we talk about serial acquisitions,

802
00:46:04,960 --> 00:46:07,279
Speaker 2: which is something we see in private equity and out

803
00:46:07,280 --> 00:46:10,000
Speaker 2: of private equity, but it might be an issue that

804
00:46:10,200 --> 00:46:14,879
Speaker 2: becomes something we have to address with greater frequency. If

805
00:46:15,000 --> 00:46:18,520
Speaker 2: the business model, you know, is in fact to roll

806
00:46:18,600 --> 00:46:22,000
Speaker 2: up industries in order to reduce competition. Again, I think

807
00:46:22,000 --> 00:46:23,880
Speaker 2: we just have to call the balls and strikes as

808
00:46:23,920 --> 00:46:26,839
Speaker 2: we see them. But if there are changes in how

809
00:46:26,920 --> 00:46:30,839
Speaker 2: companies or businesses are run invested in, then I think

810
00:46:30,840 --> 00:46:32,719
Speaker 2: we have to be mindful of that, and we also

811
00:46:32,719 --> 00:46:35,600
Speaker 2: have to be mindful of you know, what are what

812
00:46:35,640 --> 00:46:39,000
Speaker 2: it's what is improving productivity and what's not. Again, these

813
00:46:39,000 --> 00:46:43,320
Speaker 2: are all business model agnostic, but they are important concepts

814
00:46:43,360 --> 00:46:47,000
Speaker 2: that apply to anti trust and if we are being relevant,

815
00:46:47,040 --> 00:46:50,960
Speaker 2: we have to be aware and knowledgeable of those developments.

816
00:46:51,320 --> 00:46:51,480
Speaker 5: You know.

817
00:46:51,600 --> 00:46:53,960
Speaker 3: I know, in the beginning of the conversation, I think

818
00:46:53,960 --> 00:46:58,120
Speaker 3: you sort of perhaps downplayed the degree to which the

819
00:46:58,239 --> 00:47:00,600
Speaker 3: sort of you're thinking about anti tire as like some

820
00:47:00,680 --> 00:47:03,719
Speaker 3: big departure, like you know, some new thinking, and you're like, look,

821
00:47:03,719 --> 00:47:06,640
Speaker 3: there's the law, and over time the rules get rewritten

822
00:47:06,680 --> 00:47:10,360
Speaker 3: and maybe there's some interpretations, but basically you're enforcing the

823
00:47:10,480 --> 00:47:14,359
Speaker 3: law as written by Congress. They being said and it's

824
00:47:14,400 --> 00:47:17,200
Speaker 3: been you know, there's Bloomberger's report on this. The DJ

825
00:47:17,560 --> 00:47:21,239
Speaker 3: and the FTC have suffered a handful of setbacks in

826
00:47:21,320 --> 00:47:24,719
Speaker 3: courts relating to some of these deals and mergers. I

827
00:47:24,719 --> 00:47:27,000
Speaker 3: think there was recently a sugar deal. I know we're

828
00:47:27,000 --> 00:47:30,480
Speaker 3: not going to talk about specific deals, but when you

829
00:47:30,480 --> 00:47:33,320
Speaker 3: think about how you think about anti trust and perhaps

830
00:47:33,400 --> 00:47:36,520
Speaker 3: how maybe the sitting judiciary, which may have judges who

831
00:47:36,520 --> 00:47:39,560
Speaker 3: have been sitting there for twenty thirty years, maybe appointed

832
00:47:39,560 --> 00:47:43,880
Speaker 3: by the Reagan administration, think about antitrust, does that affect

833
00:47:44,040 --> 00:47:47,680
Speaker 3: your strategy in terms of thinking about which cases you

834
00:47:47,719 --> 00:47:51,120
Speaker 3: can bring essentially based on like, you know, you have

835
00:47:51,640 --> 00:47:55,480
Speaker 3: your perspective on what antitrust law says, and maybe the

836
00:47:55,760 --> 00:47:57,960
Speaker 3: sort of stock of judges that are out there have

837
00:47:58,040 --> 00:47:59,000
Speaker 3: a separate perspective.

838
00:47:59,440 --> 00:48:02,480
Speaker 2: Yeah, so let me address that question and also, you know,

839
00:48:02,520 --> 00:48:06,160
Speaker 2: try to at least give you some perspective from the

840
00:48:06,160 --> 00:48:09,239
Speaker 2: Department of Justice. When we bring a case, it's a

841
00:48:09,239 --> 00:48:10,200
Speaker 2: matter of law enforcement.

842
00:48:10,280 --> 00:48:10,960
Speaker 4: We have the burden.

843
00:48:11,239 --> 00:48:13,400
Speaker 2: It's on us to make sure that we are following

844
00:48:13,400 --> 00:48:15,000
Speaker 2: the facts of the law and presenting it to a

845
00:48:15,040 --> 00:48:19,560
Speaker 2: court or jury in a way that convinces the court.

846
00:48:19,680 --> 00:48:22,920
Speaker 2: And so that burden is on us, and it's up

847
00:48:22,920 --> 00:48:25,120
Speaker 2: to us to make sure that we are bringing the

848
00:48:25,200 --> 00:48:28,000
Speaker 2: right tools, the right facts, and the right legal analysis

849
00:48:28,360 --> 00:48:31,839
Speaker 2: to persuade a court and we play to win. And

850
00:48:31,880 --> 00:48:35,320
Speaker 2: if we think we have a case that is sustainable

851
00:48:35,320 --> 00:48:37,279
Speaker 2: in the facts and the law, and then it is

852
00:48:37,320 --> 00:48:41,160
Speaker 2: the right use of our prosecutorial discretion, we move forward,

853
00:48:41,320 --> 00:48:45,080
Speaker 2: and we do so in a very passionate and fact

854
00:48:45,280 --> 00:48:48,960
Speaker 2: and legal based way. You know, I will speak just

855
00:48:49,000 --> 00:48:52,880
Speaker 2: from the Department of Justice perspective, because I've heard people

856
00:48:53,640 --> 00:48:55,799
Speaker 2: sometimes not all the information. It's all out there, but

857
00:48:55,840 --> 00:48:58,880
Speaker 2: it's sometimes harder to collect. I'm very proud of our

858
00:48:58,920 --> 00:49:03,760
Speaker 2: track record in this administration. We've filed nine cases in court.

859
00:49:04,920 --> 00:49:09,160
Speaker 2: We've had two litigated victories, including a significant victory and

860
00:49:09,200 --> 00:49:13,160
Speaker 2: a publisher merger Penguin, Random House, Simon and Schuster. We've

861
00:49:13,200 --> 00:49:17,680
Speaker 2: had the AA Jet Blue Northeast Alliance case in Boston.

862
00:49:18,160 --> 00:49:20,720
Speaker 2: We had an out of court settlement in a merger case.

863
00:49:21,160 --> 00:49:25,360
Speaker 2: Two cases were mergers were abandoned after we filed, and

864
00:49:25,440 --> 00:49:31,160
Speaker 2: we've had by our account, twelve mergers abandoned before right

865
00:49:31,160 --> 00:49:33,480
Speaker 2: before we were going to file or in the face

866
00:49:33,520 --> 00:49:34,880
Speaker 2: of filing litigation.

867
00:49:35,520 --> 00:49:36,680
Speaker 4: And we have one pending.

868
00:49:37,200 --> 00:49:39,520
Speaker 2: And so when you take that against the track record

869
00:49:39,760 --> 00:49:44,400
Speaker 2: of a few negative outcomes in court, which we accept

870
00:49:44,400 --> 00:49:47,680
Speaker 2: and learn from with humility, I think that's a pretty

871
00:49:47,719 --> 00:49:51,600
Speaker 2: strong record when you look at the whole of the significant,

872
00:49:51,600 --> 00:49:55,120
Speaker 2: programmatically significant cases that we've won, and I think, you know,

873
00:49:55,280 --> 00:49:59,360
Speaker 2: fifteen or more abandonments, including some after we filed in court.

874
00:50:00,000 --> 00:50:02,719
Speaker 2: It's a pretty good track record. And I'm proud of that.

875
00:50:02,760 --> 00:50:06,279
Speaker 2: And I'm proud of the hard working and professionals at

876
00:50:06,320 --> 00:50:09,279
Speaker 2: the Anti Trust Division and Department of Justice who have

877
00:50:09,480 --> 00:50:15,920
Speaker 2: fought capably and professionally and with vigor and sophistication on

878
00:50:15,960 --> 00:50:20,000
Speaker 2: behalf of the public and competition, and we're getting really

879
00:50:20,040 --> 00:50:22,080
Speaker 2: good results that I'm extremely proud of.

880
00:50:23,080 --> 00:50:29,000
Speaker 1: Can modern antitrust enforcement work without an update to existing

881
00:50:29,360 --> 00:50:32,440
Speaker 1: antitrust laws? In other words, do we need more work

882
00:50:32,520 --> 00:50:36,960
Speaker 1: on the actual legislative you know, underpinnings of this in

883
00:50:37,040 --> 00:50:38,480
Speaker 1: order to make it more effective.

884
00:50:38,960 --> 00:50:39,200
Speaker 4: Yeah.

885
00:50:39,239 --> 00:50:41,360
Speaker 2: So I have a couple of views on this. First is,

886
00:50:41,560 --> 00:50:43,839
Speaker 2: you know, our job is to enforce the law. It's

887
00:50:43,880 --> 00:50:47,440
Speaker 2: the job of Congress to write it. So on some level,

888
00:50:47,719 --> 00:50:49,759
Speaker 2: you know that is a decision that needs to be

889
00:50:49,840 --> 00:50:53,400
Speaker 2: made by Congress, and so they'll give us the tools

890
00:50:53,400 --> 00:50:56,719
Speaker 2: and we'll use them. I believe that the anti trust

891
00:50:56,840 --> 00:51:02,000
Speaker 2: laws today still matter, and they bill can protect competition

892
00:51:02,280 --> 00:51:05,560
Speaker 2: and the public, and we were going to enforce them

893
00:51:05,760 --> 00:51:09,160
Speaker 2: in a way that's appropriate and consistent with the facts

894
00:51:09,160 --> 00:51:11,279
Speaker 2: on the ground. At the same time, there have been

895
00:51:11,320 --> 00:51:15,719
Speaker 2: proposals in Congress to update the antitrust laws. We have

896
00:51:15,800 --> 00:51:18,360
Speaker 2: weight in as the Department of Justice and select instances,

897
00:51:18,400 --> 00:51:21,799
Speaker 2: both in terms of providing technical assistance and in other

898
00:51:21,880 --> 00:51:25,480
Speaker 2: instances with a full throated endorsement of legislation. And so

899
00:51:26,120 --> 00:51:28,280
Speaker 2: you know, we take that on a case by case basis,

900
00:51:28,360 --> 00:51:31,480
Speaker 2: but ultimately that's a decision that comes from Congress, and

901
00:51:31,520 --> 00:51:33,759
Speaker 2: we're very mindful of the fact that they write the law,

902
00:51:33,800 --> 00:51:36,520
Speaker 2: not us, and it's our job to enforce law as

903
00:51:36,520 --> 00:51:37,080
Speaker 2: they write it.

904
00:51:37,600 --> 00:51:40,399
Speaker 3: I just have one last small question. Can mergers be good?

905
00:51:40,760 --> 00:51:43,200
Speaker 3: And by that I mean, you know, companies when they

906
00:51:43,239 --> 00:51:47,120
Speaker 3: buy other companies are like efficiency gains one common platform

907
00:51:47,360 --> 00:51:51,360
Speaker 3: ways to like improve productivity, et cetera across firms, like

908
00:51:51,880 --> 00:51:55,120
Speaker 3: are you open? Is that a consideration? Do you believe

909
00:51:55,160 --> 00:51:57,839
Speaker 3: in that possibility or in your views that mostly like

910
00:51:57,880 --> 00:51:58,839
Speaker 3: spend when they say that.

911
00:52:00,160 --> 00:52:03,600
Speaker 2: So I'll start with the most diplomatic answer, which is

912
00:52:04,040 --> 00:52:08,480
Speaker 2: and the accurate one, which is my view doesn't matter, okay,

913
00:52:08,719 --> 00:52:11,919
Speaker 2: which and by that I mean our job is really

914
00:52:11,960 --> 00:52:16,040
Speaker 2: to determine whether the merger substantial lessons competition tends to

915
00:52:16,080 --> 00:52:17,320
Speaker 2: create a monopoly.

916
00:52:16,960 --> 00:52:17,319
Speaker 4: And so.

917
00:52:20,000 --> 00:52:22,520
Speaker 2: That that is what we are trying to do in

918
00:52:22,560 --> 00:52:25,640
Speaker 2: a very fact oriented way. I think that's kind of

919
00:52:25,640 --> 00:52:27,600
Speaker 2: different from like the separate, you know, state of the

920
00:52:27,680 --> 00:52:30,719
Speaker 2: union question on whether mergers are good or bad and

921
00:52:30,760 --> 00:52:34,279
Speaker 2: whether efficiencies are realized or not. In any given transaction,

922
00:52:35,280 --> 00:52:38,160
Speaker 2: companies will often, you know, explain why they think their

923
00:52:38,239 --> 00:52:42,239
Speaker 2: mergers will generate certain benefits that they either offset or

924
00:52:42,600 --> 00:52:46,440
Speaker 2: mitigate competition concerns, and we have a framework for how

925
00:52:46,480 --> 00:52:50,120
Speaker 2: we evaluate those efficiencies. This came up in our book

926
00:52:50,120 --> 00:52:52,800
Speaker 2: publishing case that we won, and I think the court

927
00:52:52,840 --> 00:52:56,000
Speaker 2: in that case laid out some pretty specific requirements for

928
00:52:56,200 --> 00:53:00,560
Speaker 2: verifiability and making sure that those claims are something that

929
00:53:00,640 --> 00:53:03,040
Speaker 2: can be supported in the court of law. And so

930
00:53:03,120 --> 00:53:07,759
Speaker 2: we are appropriately skeptical. It's not or not skeptical. We

931
00:53:07,800 --> 00:53:11,520
Speaker 2: are appropriately scrutinizing, I should say, to make sure that

932
00:53:11,640 --> 00:53:15,520
Speaker 2: if folks come in with claims that they're accurate and

933
00:53:15,719 --> 00:53:19,080
Speaker 2: that there are can be verified. But I also come

934
00:53:19,120 --> 00:53:23,000
Speaker 2: back to the foundation, which is anti trust. Merger law

935
00:53:23,760 --> 00:53:27,239
Speaker 2: is ultimately an exercise in risk assessment, and our job

936
00:53:27,320 --> 00:53:30,800
Speaker 2: is to assess the risk that the merger may harm

937
00:53:30,840 --> 00:53:33,920
Speaker 2: competition or tend to create a monopoly. And that requires

938
00:53:33,960 --> 00:53:37,160
Speaker 2: a whole range of considerations that have been laid out

939
00:53:37,160 --> 00:53:40,319
Speaker 2: in the statute but ultimately refined by courts over the

940
00:53:40,360 --> 00:53:43,560
Speaker 2: last century. And we deploy those considerations in a way

941
00:53:43,560 --> 00:53:49,200
Speaker 2: that's faithful to the legal precedent. But it is necessarily predictives,

942
00:53:49,239 --> 00:53:53,000
Speaker 2: necessarily forward looking, and does not require certainty and prediction.

943
00:53:53,840 --> 00:53:57,080
Speaker 2: It's a risk assessment and that's how we treat it,

944
00:53:57,120 --> 00:54:00,120
Speaker 2: and we use the best evidence we have available, the

945
00:54:00,160 --> 00:54:03,640
Speaker 2: best date of the best analytics, the best economic evidence,

946
00:54:04,120 --> 00:54:07,640
Speaker 2: to try to be as accurate and responsive as we

947
00:54:07,680 --> 00:54:10,960
Speaker 2: can to the facts on the ground. But ultimately it's

948
00:54:10,960 --> 00:54:11,840
Speaker 2: a risk assessment.

949
00:54:12,880 --> 00:54:15,480
Speaker 1: Merger's good, monopoly is bad. I'm going to have that

950
00:54:15,520 --> 00:54:18,719
Speaker 1: made as a bumper sticker. I think, Jonathan Canter, thank

951
00:54:18,760 --> 00:54:20,120
Speaker 1: you so much for coming on all thoughts.

952
00:54:20,200 --> 00:54:21,160
Speaker 2: Really appreciate it.

953
00:54:21,920 --> 00:54:22,239
Speaker 4: Very good.

954
00:54:22,320 --> 00:54:24,000
Speaker 2: It's such a pleasure to be with you, and thanks

955
00:54:24,000 --> 00:54:27,040
Speaker 2: for such a fun conversation. And I'm going to go

956
00:54:27,080 --> 00:54:29,240
Speaker 2: home and tell my kids that I'm officially hipster.

957
00:54:30,520 --> 00:54:32,759
Speaker 4: Maybe not nan, I trust, but we did it.

958
00:54:32,760 --> 00:54:33,040
Speaker 3: We can.

959
00:54:33,760 --> 00:54:49,359
Speaker 5: On an Econ podcast, Yeah, Joe.

960
00:54:49,360 --> 00:54:51,719
Speaker 1: That was really interesting. There are so many things to

961
00:54:51,760 --> 00:54:56,360
Speaker 1: pick out of that conversation. I enjoyed hearing Jonathan's anecdote

962
00:54:56,360 --> 00:54:58,560
Speaker 1: from I think it was nineteen ninety six about how

963
00:54:58,640 --> 00:55:02,200
Speaker 1: people at the was the it wasn't it the FTC

964
00:55:02,320 --> 00:55:05,000
Speaker 1: at that time, how they were sort of generating leads

965
00:55:05,040 --> 00:55:05,719
Speaker 1: for cases.

966
00:55:06,840 --> 00:55:11,000
Speaker 3: I know, I think I've heard about that, and it's

967
00:55:11,040 --> 00:55:13,480
Speaker 3: like you're just like, oh, open the paper, open the

968
00:55:13,480 --> 00:55:15,239
Speaker 3: front page of the Wall Share Journal. It's like, hmm,

969
00:55:15,400 --> 00:55:18,520
Speaker 3: there's an interesting sounding deal. It's like we find they

970
00:55:18,560 --> 00:55:20,160
Speaker 3: find out about them the same way that we do.

971
00:55:20,400 --> 00:55:24,439
Speaker 1: Or a farmer comes complains about poultry tournaments. The other

972
00:55:24,480 --> 00:55:26,840
Speaker 1: thing that was interesting, just in the context of AI

973
00:55:27,719 --> 00:55:31,280
Speaker 1: tech was that new it does seem like more attention

974
00:55:31,400 --> 00:55:35,400
Speaker 1: being paid to perhaps new types of ownership structures. So

975
00:55:35,520 --> 00:55:39,160
Speaker 1: not outright mergers, but if you take a minority stake

976
00:55:39,280 --> 00:55:41,280
Speaker 1: or something like that in a company, it could still

977
00:55:41,400 --> 00:55:42,560
Speaker 1: garner interest.

978
00:55:43,080 --> 00:55:46,719
Speaker 3: That was really interesting, the fact that perhaps some of

979
00:55:46,760 --> 00:55:50,560
Speaker 3: the avenues of where anti competitive behavior could turn up

980
00:55:50,600 --> 00:55:53,440
Speaker 3: in data ownership. That's going to be huge obviously, right,

981
00:55:53,480 --> 00:55:56,080
Speaker 3: I mean, that's already this huge deal. You heard about

982
00:55:56,120 --> 00:55:58,760
Speaker 3: it in finance all the time, like who is access

983
00:55:58,800 --> 00:56:01,719
Speaker 3: to financial data which they charge for it? But now

984
00:56:01,760 --> 00:56:04,719
Speaker 3: if these data sources are the are basically what you

985
00:56:04,760 --> 00:56:06,759
Speaker 3: build a business off of. I thought that was super

986
00:56:06,760 --> 00:56:07,719
Speaker 3: interesting as well.

987
00:56:07,560 --> 00:56:10,560
Speaker 1: Right, and like throughout recent history, data has always been

988
00:56:10,560 --> 00:56:14,480
Speaker 1: a source of competitive edge and like almost a facto

989
00:56:14,640 --> 00:56:18,120
Speaker 1: proprietary right, Like this is how you become a big

990
00:56:18,160 --> 00:56:21,520
Speaker 1: and powerful tech company by having access to powerful and

991
00:56:21,640 --> 00:56:25,040
Speaker 1: exclusive data. It's going to be really interesting to see

992
00:56:25,440 --> 00:56:28,600
Speaker 1: how they sort of deal with with that aspect of it.

993
00:56:28,760 --> 00:56:32,239
Speaker 3: I'm still like really interested in. I don't think there's

994
00:56:32,280 --> 00:56:35,280
Speaker 3: like an answer that can be even given to the question.

995
00:56:35,640 --> 00:56:37,840
Speaker 3: But this idea that we talked about, like how it

996
00:56:37,960 --> 00:56:41,160
Speaker 3: fits into other priorities of like you know, going back

997
00:56:41,200 --> 00:56:44,719
Speaker 3: to like the sort of broader bidonomics question of like

998
00:56:44,760 --> 00:56:46,880
Speaker 3: you know there, I do think that there is like

999
00:56:46,960 --> 00:56:50,560
Speaker 3: some tension between do we want a consolidated banking system yes,

1000
00:56:50,840 --> 00:56:54,640
Speaker 3: really stable or a competitive one in which you know,

1001
00:56:54,800 --> 00:56:57,560
Speaker 3: some banks aren't too big to fail, et cetera. I

1002
00:56:57,600 --> 00:57:00,000
Speaker 3: think some of these questions about you know, how small

1003
00:57:00,160 --> 00:57:03,080
Speaker 3: we are, can small businesses be bad? There are some

1004
00:57:03,120 --> 00:57:06,560
Speaker 3: really interesting like fitting it into like the sort of

1005
00:57:06,600 --> 00:57:09,879
Speaker 3: like broader like bidonomics or maybe like the progressive frameworks

1006
00:57:09,920 --> 00:57:10,640
Speaker 3: like very.

1007
00:57:10,480 --> 00:57:13,880
Speaker 1: Interesting to me, right, And Jonathan was very diplomatic about,

1008
00:57:14,000 --> 00:57:16,080
Speaker 1: you know, saying that it's not his job to sort

1009
00:57:16,080 --> 00:57:19,360
Speaker 1: of sort out what the US banking landscape should look like.

1010
00:57:19,440 --> 00:57:21,960
Speaker 1: It's his job to enforce the existing law. But you

1011
00:57:22,040 --> 00:57:25,560
Speaker 1: do kind of wonder like who is making those decisions

1012
00:57:25,960 --> 00:57:28,120
Speaker 1: and whether or not they're being made on a sort

1013
00:57:28,120 --> 00:57:29,960
Speaker 1: of holistic, top down level.

1014
00:57:30,520 --> 00:57:32,880
Speaker 3: I think Jonathan would be a great law professor. You know,

1015
00:57:32,920 --> 00:57:34,920
Speaker 3: this is like no seriously, I like, like I, like

1016
00:57:34,920 --> 00:57:36,640
Speaker 3: I said at the beginning, I don't know anything about

1017
00:57:36,680 --> 00:57:40,280
Speaker 3: this stuff. This has really never been my like sort

1018
00:57:40,320 --> 00:57:42,880
Speaker 3: of like realm of like thinking. And I actually felt

1019
00:57:42,880 --> 00:57:45,080
Speaker 3: like I genuinely learned a little bit about how our

1020
00:57:45,080 --> 00:57:47,200
Speaker 3: anti trust system works by talking to Jonathan.

1021
00:57:47,360 --> 00:57:49,240
Speaker 1: Now you've been like Sherman act pills.

1022
00:57:49,360 --> 00:57:51,000
Speaker 3: I'm sure an act filled.

1023
00:57:51,080 --> 00:57:51,479
Speaker 2: All right.

1024
00:57:52,160 --> 00:57:53,919
Speaker 3: Shall we leave it there, Let's leave it there, all right.

1025
00:57:53,960 --> 00:57:56,640
Speaker 1: This has been another episode of the Odd Lots podcast.

1026
00:57:56,680 --> 00:57:59,000
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

1027
00:57:59,000 --> 00:57:59,760
Speaker 1: Tracy Alloway.

1028
00:57:59,840 --> 00:58:02,720
Speaker 3: And I'm Joe Wisenthal. You can follow me on Twitter

1029
00:58:02,800 --> 00:58:05,080
Speaker 3: at the Stalwart. I don't think Jonathan's on but you

1030
00:58:05,120 --> 00:58:09,800
Speaker 3: can follow the doj Antitrust Division at Justice at R,

1031
00:58:10,320 --> 00:58:14,680
Speaker 3: follow our producers Carmen Rodriguez at Carmen Arman and dash

1032
00:58:14,720 --> 00:58:16,840
Speaker 3: O Bennett at dashbot, and check out all of the

1033
00:58:16,880 --> 00:58:20,480
Speaker 3: Bloomberg podcasts under the handle at podcasts and form our

1034
00:58:20,480 --> 00:58:23,680
Speaker 3: odlogs content. Go to Bloomberg dot com slash odd lots,

1035
00:58:23,680 --> 00:58:26,800
Speaker 3: where we have transcripts, a blog, and a newsletter. And

1036
00:58:27,440 --> 00:58:31,120
Speaker 3: check out the discord discord dot gg slash odd logs

1037
00:58:31,120 --> 00:58:33,920
Speaker 3: listeners hanging out in their twenty four to seven chatting

1038
00:58:33,960 --> 00:58:35,439
Speaker 3: about all of these topics and more.

1039
00:58:35,720 --> 00:58:38,800
Speaker 1: And if you enjoy Oddlots, if you too have been

1040
00:58:38,840 --> 00:58:43,040
Speaker 1: anti trust pilled, then please leave us a favorable review

1041
00:58:43,160 --> 00:59:03,480
Speaker 1: on your favorite podcast platform. Thanks for listening in