WEBVTT - DOJ's Jonathan Kanter on the Bidenomics Approach to Antitrust 0:00:10.119 --> 0:00:13.440 Hello, and welcome to another episode of the ad Thoughts Podcast. 0:00:13.520 --> 0:00:14.880 I'm Tracy Alloway. 0:00:14.680 --> 0:00:15.880 And I'm Joe Wisenthal. 0:00:16.280 --> 0:00:20.520 Joe, you remember last month we spoke with Jared Bernstein, 0:00:20.600 --> 0:00:24.079 who's the head of the White House Council of Economic Advisors, 0:00:24.079 --> 0:00:26.000 and we were talking about Bidenomics. 0:00:26.520 --> 0:00:30.200 Yeah. Great, chat always appreciates sort of getting a sense 0:00:30.560 --> 0:00:34.760 of how policy makers are thinking about things. And obviously 0:00:34.800 --> 0:00:37.200 we've talked a lot about this sort of like industrial 0:00:37.240 --> 0:00:40.200 policy domestic investment side, but there is still more. 0:00:40.600 --> 0:00:44.440 Yeah, So he outlined these kind of three basic planks 0:00:44.520 --> 0:00:47.120 of Bidenomics, and you already mentioned the big one, which 0:00:47.159 --> 0:00:50.240 is public investment slash industrial policy, whatever you want to 0:00:50.280 --> 0:00:53.760 call it. The second one is sort of empowering workers. 0:00:53.840 --> 0:00:58.640 And then there's this third one about promoting competition, and 0:00:58.720 --> 0:01:01.120 we touched on it with Jared. We spoke a little 0:01:01.160 --> 0:01:04.559 bit about how the Biden administration is approaching anti trust. 0:01:05.000 --> 0:01:07.279 But I think it's one of those topics we really 0:01:07.319 --> 0:01:09.640 need to get into because it keeps coming up in 0:01:09.720 --> 0:01:10.360 various ways. 0:01:10.640 --> 0:01:13.200 Can I just say I don't know anything about this topic. 0:01:13.800 --> 0:01:16.680 That's true for most episodes that we do, but I 0:01:16.720 --> 0:01:20.759 feel very comfortable saying that like when it comes you know, 0:01:21.080 --> 0:01:23.840 the law is not an area in which you know, 0:01:23.880 --> 0:01:26.120 I'm like you just like reading like cell side research 0:01:26.200 --> 0:01:27.920 about like Okay, the fit is going to do this, 0:01:27.959 --> 0:01:30.840 so inflation is going to do this. And when it 0:01:30.880 --> 0:01:33.440 comes to things like sort of like the legal philosophies 0:01:33.480 --> 0:01:36.760 related to mergers, et cetera, like I really genuinely know 0:01:36.920 --> 0:01:39.240 very little. All right, nothing. 0:01:39.400 --> 0:01:43.080 There's a market opportunity out there to become the antitrust 0:01:43.120 --> 0:01:45.360 guy on Twitter, so maybe that should be our goal, 0:01:45.480 --> 0:01:48.680 but you have to admit it does keep coming up. Yes, 0:01:48.800 --> 0:01:53.720 So we recorded an episode with Scott Hildenbrand recently about 0:01:53.920 --> 0:01:57.280 bank consolidation and whether or not we're going to be 0:01:57.320 --> 0:01:59.720 seeing a lot more bank mergers in the wake of 0:01:59.760 --> 0:02:02.720 the deposit drama in March. And then it came up again, 0:02:02.840 --> 0:02:06.520 I think on our episode with Josh Wolfe right where 0:02:06.520 --> 0:02:10.120 he was talking about how big tech companies are investing 0:02:10.520 --> 0:02:13.799 in artificial intelligence, but they're doing it in a very 0:02:13.840 --> 0:02:17.959 specific way to possibly evade regulatory scrutiny. 0:02:18.160 --> 0:02:20.520 Yeah, that was one of the things I hadn't appreciated before, 0:02:20.560 --> 0:02:22.119 and he pointed out that you have all these big 0:02:22.120 --> 0:02:28.400 companies making these huge investments VC looking investments in AI startups, 0:02:28.800 --> 0:02:32.000 and he posited that one reason they may be making 0:02:32.040 --> 0:02:36.679 these investments Microsoft and making investments Google making investments is because, well, 0:02:36.720 --> 0:02:39.520 maybe anti trust authorities aren't going to be very happy 0:02:39.520 --> 0:02:41.880 if they buy some of these companies, but they can 0:02:42.040 --> 0:02:45.280 maybe perhaps like make something that resembles a VC style investment. 0:02:45.600 --> 0:02:49.440 So it's coming up enough in different sectoral conversations that 0:02:49.520 --> 0:02:51.560 we have that I think we need to drill deeper 0:02:51.600 --> 0:02:53.120 into the environment right now. 0:02:53.200 --> 0:02:55.959 Absolutely well, I am very pleased to say that we two, 0:02:56.040 --> 0:02:58.440 in fact have the perfect guest. We're going to be 0:02:58.480 --> 0:03:01.760 speaking with Jonathan Canter, the Assistant Attorney General for the 0:03:01.800 --> 0:03:05.720 Anti Trust Division at the Department of Justice. So, Jonathan, 0:03:05.720 --> 0:03:08.360 thank you so much for coming on all thoughts, thank. 0:03:08.200 --> 0:03:10.200 You for having me. It's a pleasure to be with 0:03:10.240 --> 0:03:10.720 you today. 0:03:11.120 --> 0:03:13.120 Maybe just to begin with, you can give us an 0:03:13.120 --> 0:03:18.480 overview of what does anti trust actually mean in twenty 0:03:18.639 --> 0:03:22.359 twenty three versus you know, maybe in previous administrations or 0:03:22.480 --> 0:03:23.359 previous decades. 0:03:24.000 --> 0:03:27.440 Yeah, so let's take a look back through history and 0:03:27.520 --> 0:03:31.440 think about the importance of a competition and a competitive economy. 0:03:31.800 --> 0:03:36.160 It's been the cornerstone of our society since the Tea Party, 0:03:36.480 --> 0:03:39.520 but you can think back historically to Standard Oil and 0:03:39.640 --> 0:03:44.800 AT and t IBM Microsoft. At major inflection points in 0:03:44.840 --> 0:03:49.280 our economy, we've confronted monopoly choke points, and anti trust 0:03:49.360 --> 0:03:51.920 has been Some have referred to it as the magna 0:03:52.000 --> 0:03:56.000 carta free enterprise. It's the way in which we open 0:03:56.520 --> 0:04:00.080 opportunity so that companies who want to compete can compete 0:04:00.240 --> 0:04:03.120 on the merits. So anti trust can deliver lower prices, 0:04:03.160 --> 0:04:06.960 it can deliver better wages, better working conditions, It could 0:04:07.000 --> 0:04:10.240 deliver opportunities to build and grow a business. These are 0:04:10.400 --> 0:04:13.840 the arteries of commerce, and Congress made a value judgment 0:04:14.200 --> 0:04:17.040 over one hundred years ago that competition matters, and so 0:04:17.120 --> 0:04:19.680 our job is to enforce the law. And sitting here 0:04:19.680 --> 0:04:22.760 in twenty twenty three, you mentioned by the nomics. You 0:04:22.839 --> 0:04:26.640 mentioned the interest in anti trust globally and domestically, and 0:04:26.680 --> 0:04:30.120 that flows from, I think an appreciation on so many 0:04:30.120 --> 0:04:34.000 different dimensions that we can't have a democratic society, we 0:04:34.040 --> 0:04:35.839 can't have a free society, and we can't have a 0:04:35.880 --> 0:04:40.440 market based economy without opportunities for competition. And so our 0:04:40.520 --> 0:04:43.280 job is to enforce the law in order to keep 0:04:43.560 --> 0:04:45.960 competition thriving in our country and to do so in 0:04:46.000 --> 0:04:48.120 a way that's consistent with the will of Congress. 0:04:48.720 --> 0:04:53.159 So my impression is that historically, when it came to 0:04:53.279 --> 0:04:56.880 industry consolidation, which I guess on some level always maybe 0:04:56.960 --> 0:04:59.280 reduces the amount of competition out there, but that when 0:04:59.279 --> 0:05:02.880 it came to D street consolidation, a key factor was 0:05:02.920 --> 0:05:05.880 this idea. It's like, well, if a company has monopoly power, 0:05:05.960 --> 0:05:08.640 or if oligopoly power, then they can raise prices more 0:05:08.680 --> 0:05:11.320 and that's bad for consumers, and so that should be blocked. 0:05:11.320 --> 0:05:14.480 And my understanding is that there's been some evolution of 0:05:14.520 --> 0:05:18.280 thinking where maybe there's more than just raising prices. And 0:05:18.440 --> 0:05:21.360 obviously this comes up in tech because we use a 0:05:21.360 --> 0:05:23.640 lot of tech products that they don't charge us anything 0:05:23.680 --> 0:05:25.880 except for the check mark on Twitter, which I haven't 0:05:25.880 --> 0:05:29.200 paid for, but other than that, Like, so, so I 0:05:29.200 --> 0:05:31.920 get the impression that, like, the sort of thinking about 0:05:32.400 --> 0:05:36.600 what actually constitutes something that would harm competition has changed. 0:05:37.360 --> 0:05:40.520 So I guess I will start by saying, in many respects, 0:05:40.560 --> 0:05:44.360 nothing fundamentally has changed. The law is still exactly the 0:05:44.400 --> 0:05:46.360 same as it was when it was written. And the 0:05:46.440 --> 0:05:48.920 law says, for example, in the context of mergers, that 0:05:48.960 --> 0:05:53.320 we should prevent mergers that's may substantially lessen competition or 0:05:53.440 --> 0:05:56.920 tend to create a monopoly, and that we should bring cases, 0:05:57.080 --> 0:06:00.520 or we should prevent monopolization of markets or restraints of trade. 0:06:01.040 --> 0:06:04.800 The law and competition hasn't changed, and that the benefits 0:06:04.800 --> 0:06:10.240 of competition are many. Competition delivers certainly lower prices, but 0:06:10.400 --> 0:06:12.560 not just lower prices. I think we can see that 0:06:12.920 --> 0:06:15.840 in our everyday lives, and if anything, I would say, 0:06:15.880 --> 0:06:20.200 there's today perhaps then in the recent past, a greater 0:06:20.279 --> 0:06:23.080 appreciation of why we should care about competition. I think 0:06:23.080 --> 0:06:26.440 it resonates with people in so many different corners of 0:06:26.480 --> 0:06:29.440 our country. Whether it's somebody looking to start a business, 0:06:30.279 --> 0:06:32.960 somebody competing with an established business who wants to break 0:06:33.000 --> 0:06:35.800 into a new market, somebody who wants the ability to 0:06:35.800 --> 0:06:38.720 switch jobs or get the benefits of competition for labor, 0:06:39.120 --> 0:06:42.480 an author looking for a book advance, a traveler looking 0:06:42.520 --> 0:06:47.720 for fewer cancelations and better conditions on their flights. All 0:06:47.760 --> 0:06:52.600 of this is competition. It also relates to the marketplace 0:06:52.640 --> 0:06:56.680 of ideas. Competition in the media space, for example, generates 0:06:57.360 --> 0:07:00.000 the flow of information which is foundational to our place, 0:07:00.320 --> 0:07:03.080 discourse and you know in the United States that that 0:07:03.680 --> 0:07:07.440 distinguishes us as a on the world stage, as a democracy, 0:07:07.520 --> 0:07:09.040 and I think we are proud of that, but we 0:07:09.120 --> 0:07:09.880 have to protect it. 0:07:09.880 --> 0:07:12.040 And we have to invest in it through a competitive economy. 0:07:12.480 --> 0:07:15.600 Are we allowed to say hipster antitrust in this conversation? 0:07:15.680 --> 0:07:17.480 I mean, that's really that's kind of what you are 0:07:17.480 --> 0:07:19.400 alluding to, right, Joe, Well, yeah. 0:07:19.200 --> 0:07:21.440 I mean like there is some change, right, Like there 0:07:21.520 --> 0:07:22.240 is some shift. 0:07:23.760 --> 0:07:24.040 Yeah. 0:07:24.120 --> 0:07:27.160 So let me start by saying it's a good thing 0:07:27.240 --> 0:07:30.680 that we're audio only, or maybe it's a bad thing, 0:07:30.800 --> 0:07:33.280 because if you saw me in person, you would recognize 0:07:33.280 --> 0:07:35.360 that I am definitely not a hipster. 0:07:36.520 --> 0:07:37.400 My hairlines, I am. 0:07:37.440 --> 0:07:38.680 I'm wearing a Western. 0:07:39.040 --> 0:07:39.880 Yeah, there you go. 0:07:40.400 --> 0:07:42.960 So I think we can dispense with that right away. 0:07:43.200 --> 0:07:45.560 I think we're talking about anti trust, and I think 0:07:45.560 --> 0:07:49.720 we're talking about restoring anti trust that really reflects the 0:07:49.760 --> 0:07:52.480 will of Congress. So the anti trust laws were written 0:07:52.640 --> 0:07:57.040 at a time when members of Congress and presidents who 0:07:57.080 --> 0:08:00.920 signed bills didn't want to concentrated economy, they didn't want 0:08:00.960 --> 0:08:05.040 clogs on competition. And I think what going back to 0:08:05.800 --> 0:08:09.440 a few moments ago, it's not that something has changed 0:08:09.480 --> 0:08:11.880 in terms of the law, but it's really that something 0:08:11.920 --> 0:08:14.800 has changed in terms of awareness. And I think what 0:08:14.880 --> 0:08:18.120 I've found, at least throughout my evolution, I'm someone who 0:08:18.200 --> 0:08:21.920 spent my entire career in the anti trust space, going 0:08:21.960 --> 0:08:23.920 back to my summers in law school working at the 0:08:24.000 --> 0:08:26.880 FTC to my first job at the Federal Trade Commission 0:08:26.880 --> 0:08:30.280 in nineteen ninety eight. I've been practicing anti trust ever since. 0:08:30.920 --> 0:08:33.520 And when I started, it was in many respects in 0:08:33.640 --> 0:08:37.000 niche area that was really interesting, perhaps a bit wonky, 0:08:37.400 --> 0:08:40.520 did not generate a lot of attention, certainly was not 0:08:40.559 --> 0:08:43.640 the subject of a presidential executive order or the third 0:08:43.679 --> 0:08:46.840 pillar in a presidential economic platform. But I think what 0:08:46.920 --> 0:08:50.400 we've found out, what I find today is that the 0:08:50.480 --> 0:08:55.400 awareness outside of the insular anti trust bubble is greater 0:08:55.480 --> 0:08:58.120 than ever, or perhaps that is greater than in at 0:08:58.200 --> 0:09:00.480 least you know, or about one hundred years. And so 0:09:01.120 --> 0:09:06.320 why well, I think so many different people have experiences 0:09:06.440 --> 0:09:09.400 with monopoly choke points in their lives, and they're all 0:09:09.480 --> 0:09:11.880 very different. It could again be a worker looking to 0:09:12.559 --> 0:09:14.800 be mobile. It could be the small business, It could 0:09:14.840 --> 0:09:16.640 be the traveler, it could be the concert co or 0:09:16.640 --> 0:09:19.760 it could be the person who cares about their privacy. 0:09:20.320 --> 0:09:23.400 People want control over their lives. They believe that freedom 0:09:23.800 --> 0:09:26.440 and choice and competition go hand in hand. And so 0:09:27.000 --> 0:09:30.400 what we've seen is a greater awareness, and I think 0:09:30.400 --> 0:09:33.480 there's an important opportunity to meet that moment, but we 0:09:33.559 --> 0:09:36.200 have to do it in a way. And I would 0:09:36.400 --> 0:09:39.920 remind at least folks listening now that my job at 0:09:39.920 --> 0:09:42.000 the Anti Trust Division at the Department of Justice is 0:09:42.120 --> 0:09:44.160 a law enforcer. So I don't write the law. I 0:09:44.160 --> 0:09:47.440 don't right the law. In many respects, the policy judgments 0:09:47.440 --> 0:09:50.680 have already been made. They've been made by Congress interpreted 0:09:50.720 --> 0:09:53.440 by courts over a century, and our job is to 0:09:53.559 --> 0:09:56.440 enforce the law the way Congress wrote it. Now, I 0:09:56.480 --> 0:09:58.680 personally believe there's a lot of wisdom in the anti 0:09:58.679 --> 0:10:01.880 trust laws and it is a really important part of 0:10:02.320 --> 0:10:07.280 our free and democratic society and open markets and economic freedom. 0:10:07.360 --> 0:10:11.400 But those judgments were made, you know, initially in eighteen ninety, 0:10:11.440 --> 0:10:14.120 and then again in nineteen fourteen, and then numerous times 0:10:14.160 --> 0:10:18.280 thereafter as the antitrust laws were revised, updated and expanded. 0:10:18.880 --> 0:10:22.400 So just on the awareness point, I think everyone can 0:10:22.440 --> 0:10:26.360 appreciate the sense that maybe a big monopoly is bad 0:10:26.440 --> 0:10:29.720 for either our personal lives in one way or another, 0:10:29.920 --> 0:10:32.760 or for economic society as a whole. You kind of 0:10:32.760 --> 0:10:37.000 get this nagging sense that, well, maybe Amazon prices are 0:10:37.040 --> 0:10:39.960 really low, but it's not great that they're crowding out 0:10:40.040 --> 0:10:44.680 other players in the market. And I know in Biden 0:10:44.760 --> 0:10:49.199 has talked about using antitrust to also improve you know, workers' 0:10:49.320 --> 0:10:52.800 lives and labor power and things like that. But how 0:10:52.840 --> 0:10:57.040 do you actually measure these things? First of all, you know, 0:10:57.080 --> 0:10:58.679 it's one thing to go out and look at prices 0:10:58.679 --> 0:11:00.960 and say, well, there's a bad monopoly out there and 0:11:00.960 --> 0:11:04.200 they're raising prices and that's bad. I imagine it must 0:11:04.280 --> 0:11:07.520 be kind of different to go out and say, like, well, 0:11:07.720 --> 0:11:10.400 you know, there are these other things happening that might 0:11:10.440 --> 0:11:13.199 be detrimental to the economy as a whole. 0:11:13.920 --> 0:11:14.400 Right, So. 0:11:16.000 --> 0:11:19.400 That's why each investigation is highly fact intensive. And so 0:11:19.480 --> 0:11:22.240 we start and we just talked about this in some 0:11:22.360 --> 0:11:24.920 new merger guidelines that we'll probably talk about in a 0:11:24.920 --> 0:11:27.720 little bit, but we talk about one of the first 0:11:27.800 --> 0:11:31.000 questions we ask in an anti trust investigation is how 0:11:31.000 --> 0:11:34.520 does competition in this market present itself and does the 0:11:34.559 --> 0:11:38.760 merger or the conducting question threatn that competition, and then 0:11:38.760 --> 0:11:42.680 we work backwards from that, because competition is not this 0:11:43.400 --> 0:11:49.080 monolithic being, it's dynamic. It presents differently in markets throughout 0:11:49.080 --> 0:11:52.000 the economy, and so we start by saying, how do 0:11:52.040 --> 0:11:56.200 we have a sophisticated understanding of how markets function? And 0:11:56.240 --> 0:11:58.800 so in a technology market, it might be a multi 0:11:58.800 --> 0:12:04.160 sided platform with significant feedback effects, and where data itself 0:12:04.720 --> 0:12:07.520 is a platform and this is something we're seeing increasingly 0:12:07.520 --> 0:12:11.160 in AI, and the competitive dynamics in a market like 0:12:11.200 --> 0:12:16.160 that might be very different than traditional vertical supply chain 0:12:16.160 --> 0:12:19.600 where you have a manufacturer, wholesaler and retailer. And if 0:12:19.600 --> 0:12:21.640 we don't adapt our thinking to make sure that we 0:12:21.720 --> 0:12:25.520 understand the economics of how markets function in a modern economy, 0:12:25.600 --> 0:12:28.160 then we're going to miss the competitive dynamics and then 0:12:28.160 --> 0:12:30.880 we're not going to be able to enforce the law effectively. 0:12:30.960 --> 0:12:32.840 And so our job is to make sure that we 0:12:32.880 --> 0:12:35.120 have the expertise to do that. And so that's one 0:12:35.120 --> 0:12:37.200 of the things that we've been doing over the last 0:12:37.240 --> 0:12:39.760 year at the Anti Trust Division is we've been we've 0:12:39.800 --> 0:12:42.360 been building our expertise to meet the needs of a 0:12:42.400 --> 0:12:46.280 modern economy, and that includes hiding sorry hiring AI experts 0:12:46.320 --> 0:12:51.959 and technologists in addition to labor economists and of course 0:12:52.040 --> 0:12:57.000 our ioeconomists and competition experts. And that's a field of 0:12:57.040 --> 0:12:59.200 expertise and a scope of expertise that I think we 0:12:59.280 --> 0:13:12.560 have to expand in order to be relevant. 0:13:17.559 --> 0:13:22.000 You know, since you mentioned multi sided marketplaces, I know 0:13:22.080 --> 0:13:26.359 that this is something specific in the new merger guidelines 0:13:26.400 --> 0:13:28.480 which you released in early July and which you just 0:13:28.520 --> 0:13:31.000 sort of teased ahead. But why don't you just sort 0:13:31.000 --> 0:13:33.320 of give us the little the summary as you see it, 0:13:33.679 --> 0:13:37.400 of what's new in these new merger guidelines. And so 0:13:37.480 --> 0:13:40.240 the companies think about doing deals like generally understand the 0:13:40.280 --> 0:13:41.040 rules of the road. 0:13:40.920 --> 0:13:43.960 Here, right, So just for a little bit of background, 0:13:44.160 --> 0:13:47.640 in nineteen fourteen, Congress wrote the Clayton Act, and Section 0:13:47.760 --> 0:13:51.640 seven of the Clayton Act prohibits mergers that may substantialize 0:13:51.679 --> 0:13:54.760 in competition or tend to create a monopoly. That law 0:13:54.800 --> 0:13:58.120 has been updated numerous times, including a significant amendment in 0:13:58.160 --> 0:14:01.400 the fifties to make sure that the law captured a 0:14:01.440 --> 0:14:05.480 broader range of acquisitions, including asset acquisitions, but also to 0:14:05.559 --> 0:14:09.800 clarify and this was an important update that antitrust in 0:14:09.840 --> 0:14:13.480 the Clayton at can apply to vertical acquisitions, or as 0:14:13.520 --> 0:14:16.280 they termed it at the time, conglomerate acquisitions, something that 0:14:16.280 --> 0:14:19.040 we would probably use a different term to describe today. 0:14:19.480 --> 0:14:22.800 And so the statute was written broadly to protect competition, 0:14:22.920 --> 0:14:26.480 and then it was updated again to provide a notification requirement. 0:14:26.960 --> 0:14:31.360 Starting in nineteen sixty eight, the Department of Justice started 0:14:31.400 --> 0:14:36.160 issuing guidelines to help provide a framework that the Department 0:14:36.280 --> 0:14:39.680 could use with transparency to the public, to have a 0:14:39.720 --> 0:14:42.600 little bit of discipline and transparency into how we go 0:14:42.680 --> 0:14:47.120 about analyzing mergers. There have been updates since then, including 0:14:47.120 --> 0:14:50.200 a significant update by the Reagan administration in nineteen eighty two, 0:14:50.800 --> 0:14:54.160 updates in nineteen eighty four, nineteen ninety two, nineteen ninety seven, 0:14:54.760 --> 0:14:58.000 twenty ten, and then a partial update in twenty twenty. 0:14:58.440 --> 0:15:01.320 And so there's a rich history of updating these guidelines 0:15:01.600 --> 0:15:05.920 to generally meet the needs of a modern economy, but 0:15:06.040 --> 0:15:09.480 also to reflect changes in the law, both statutory and 0:15:09.760 --> 0:15:13.080 interpretation by courts like the Supreme Court. There was an 0:15:13.080 --> 0:15:16.440 executive order early on in this administration by President Biden 0:15:17.120 --> 0:15:23.120 that encouraged or mandated that government cross agencies start taking 0:15:23.160 --> 0:15:27.480 competition more seriously, and we pursue a whole of government 0:15:27.480 --> 0:15:31.200 approach to how we think about competition policy. As part 0:15:31.240 --> 0:15:34.800 of that, it asked the Department of Justice and the 0:15:34.800 --> 0:15:38.760 Federal Trade Commission to revisit whether updates to the merger 0:15:38.800 --> 0:15:43.960 guidelines were appropriate. We undertook that exercise. We solicited public comments, 0:15:44.040 --> 0:15:48.600 of which we received very historic number relative to past endeavors, 0:15:49.240 --> 0:15:53.120 and what we uncovered was that the merger guidelines had 0:15:53.200 --> 0:15:56.440 largely been and there have been many really helpful updates 0:15:56.480 --> 0:15:59.360 over the years, but it's largely been an update to 0:15:59.400 --> 0:16:02.920 the same frame work, and that framework often started with 0:16:02.960 --> 0:16:06.040 the question is this merger of vertical or is this 0:16:06.120 --> 0:16:07.160 merger horizontal? 0:16:07.480 --> 0:16:07.680 Right? 0:16:07.720 --> 0:16:12.600 Because those were legally significant or economically significant questions. 0:16:13.160 --> 0:16:14.280 But one of the things that we've. 0:16:14.200 --> 0:16:18.320 Learned is that markets don't always present in that two 0:16:18.400 --> 0:16:21.320 dimensional way. And often like to say that thinking about 0:16:21.400 --> 0:16:25.000 markets is vertical and horizontal is like looking at four 0:16:25.080 --> 0:16:27.400 K video through a black and white TV. You might 0:16:27.440 --> 0:16:29.080 make out some of the images, but you're going to 0:16:29.160 --> 0:16:32.040 miss all the nuance. And the fact of the matter 0:16:32.120 --> 0:16:35.520 is today's economy is you know, the geometry is more 0:16:35.640 --> 0:16:39.400 like a gemstone for fans of the show a righteous gemstone, 0:16:40.160 --> 0:16:42.440 but it's more like a gemstone than it is a 0:16:42.760 --> 0:16:45.880 you know, two dimensional drawing. And so if you think 0:16:45.880 --> 0:16:49.480 about the realities of today's economy, certainly compared to fifty 0:16:49.560 --> 0:16:53.320 years ago, it's different. Phones don't have rotors, documents are 0:16:53.360 --> 0:16:56.000 stored in the cloud and not in you know, file cabinets, 0:16:56.440 --> 0:16:59.240 and even ten years ago, most people are still stopping 0:16:59.240 --> 0:17:01.320 at the gas station and asking for directions. 0:17:01.840 --> 0:17:03.080 Our worlds have changed. 0:17:03.440 --> 0:17:07.760 Data isn't something that is a byproduct of business, but 0:17:07.840 --> 0:17:10.520 it's the product of business now that is itself is 0:17:10.560 --> 0:17:16.400 becoming a platform, and markets are increasingly multi sided, multi dimensional, 0:17:17.080 --> 0:17:20.840 and more sophisticated. And it's really important, at least to 0:17:20.880 --> 0:17:23.720 me and I think to the public, that we adapt 0:17:23.760 --> 0:17:28.119 our analytical frameworks to recognize those foundational shifts in our 0:17:28.160 --> 0:17:30.920 economy and to use state of the art economics and 0:17:30.960 --> 0:17:34.720 analysis to ensure that we are conducting investigations in a 0:17:34.720 --> 0:17:38.639 way that accurately reflects the realities of today's market, and 0:17:38.640 --> 0:17:42.000 that we are building the expertise necessary to understand those 0:17:42.080 --> 0:17:45.439 nuances and ask the right questions so that we can 0:17:45.520 --> 0:17:48.159 generate the right answers to determine whether the facts and 0:17:48.200 --> 0:17:49.400 the law support enforcement. 0:17:50.200 --> 0:17:52.760 I definitely want to ask you how you're applying those 0:17:52.840 --> 0:17:58.400 analytical frameworks to specific industries. But maybe one more process 0:17:58.600 --> 0:18:01.320 question from me, and you sort of touched on it 0:18:01.359 --> 0:18:03.480 in that answer there. But one of the things that 0:18:03.560 --> 0:18:07.080 has happened recently is, you know, the White House has 0:18:07.520 --> 0:18:13.160 directed a bunch of different agencies to think more about competition, 0:18:13.480 --> 0:18:18.560 think more about antitrust. How are you coordinating with some 0:18:18.960 --> 0:18:22.480 other entities, like, for instance, the Federal Trade Commission. How 0:18:22.480 --> 0:18:26.440 are you all collectively working together on this issue. 0:18:27.000 --> 0:18:29.920 It's a great question. So we have a very good 0:18:29.960 --> 0:18:32.879 relationship with the Federal Trade Commission in the Department of Justice, 0:18:32.920 --> 0:18:34.960 and I Trust Division and the Federal Trade Commission have 0:18:35.040 --> 0:18:39.600 worked closely together for decades across administrations. I think what 0:18:40.320 --> 0:18:44.359 the Executive Order really unlocked was a broader hole of 0:18:44.400 --> 0:18:48.080 government approach and an opportunity to really think about competition 0:18:48.760 --> 0:18:52.360 in so many different dimensions. And so we've seen reports 0:18:52.400 --> 0:18:55.560 come from you know, treasure relating to the spirits and 0:18:55.640 --> 0:18:59.680 alcohol and beer business. We've seen reports relating to agriculture. 0:19:00.000 --> 0:19:04.280 I've seen greater cooperation with our partners at the Department 0:19:04.320 --> 0:19:07.560 of Transportation. What we're seeing, and I was actually thinking 0:19:07.560 --> 0:19:10.119 about this a little bit earlier today. It's almost the 0:19:10.160 --> 0:19:14.639 way in which in the eighties, cost benefit analysis was 0:19:14.680 --> 0:19:20.160 infused into regulatory and policymaking across the government. 0:19:20.640 --> 0:19:21.520 I think the. 0:19:21.600 --> 0:19:25.880 Executive Order really elevated competition in a very similar way 0:19:25.960 --> 0:19:27.800 and said it's a core value that we need to 0:19:27.840 --> 0:19:30.760 carry forward in every dimension. So if we want a 0:19:31.000 --> 0:19:34.119 competitive economy, we need to make sure that we're thinking 0:19:34.119 --> 0:19:38.440 about competition in all aspects of our government. I think 0:19:38.480 --> 0:19:42.760 that's a separate question from enforcement. Enforcement is more specific, 0:19:43.200 --> 0:19:45.600 it's not covered by the Executive Order, but it's something 0:19:45.600 --> 0:19:49.080 that we do on a case by case basis. But nonetheless, 0:19:49.119 --> 0:19:52.919 we've still been pursuing a more whole of government approach. 0:19:52.960 --> 0:19:55.800 And one example is we brought we believe for the 0:19:55.840 --> 0:19:59.040 first time ever at the Anti Trust Division, a packers 0:19:59.040 --> 0:20:02.120 and stockyards claim based on a referral from the Department 0:20:02.160 --> 0:20:06.480 of Agriculture in order to address issues in connection with 0:20:06.520 --> 0:20:09.960 the tournament system that was affecting farmers and growers and 0:20:10.040 --> 0:20:14.080 processing poultry processing plant workers who were, in our view, 0:20:14.119 --> 0:20:17.080 being deprived of better wages due to information sharing. And 0:20:17.119 --> 0:20:21.560 so unlocking those tools is a very important part of 0:20:21.600 --> 0:20:24.560 the agenda, both from a policy perspective, so that we 0:20:24.560 --> 0:20:27.480 can weigh in and encourage our fellow agencies to think 0:20:27.520 --> 0:20:31.399 about competition and competition policy and share our expertise, but 0:20:31.480 --> 0:20:33.679 also in how we deploy our own enforcement tools. 0:20:34.600 --> 0:20:38.119 Let's get into some of these. Actually, I was going 0:20:38.160 --> 0:20:40.440 to ask you a question about banks, and I want 0:20:40.480 --> 0:20:42.800 to start getting into the sectoral questions and how you 0:20:42.840 --> 0:20:45.359 think about how this applies to different industries. But since 0:20:45.400 --> 0:20:48.359 you mentioned the tournament system of poultry, which I had 0:20:48.440 --> 0:20:51.040 never seen. You never heard this term, and I feel 0:20:51.320 --> 0:20:53.199 I would be remissed to because now it's like, oh, 0:20:53.200 --> 0:20:55.719 we're definitely going to do a tournament poultry episode. What 0:20:55.840 --> 0:20:58.160 is the tournament system in poultry? And I do remember 0:20:58.280 --> 0:21:01.920 like there was a lot of talk about stockyard consolidation, 0:21:02.040 --> 0:21:05.040 particularly in twenty twenty when there is a scarcity of 0:21:05.080 --> 0:21:07.520 meat due to supply chain issues and things like that. 0:21:08.000 --> 0:21:10.360 What is the tournament system of poultry? And what are 0:21:10.400 --> 0:21:13.480 some of the things that you identify within the sort 0:21:13.520 --> 0:21:18.159 of meat or poultry or farm ecosystem that flashes on 0:21:18.200 --> 0:21:18.680 your radar. 0:21:19.040 --> 0:21:24.880 Yeah, So, without going into specifics of specific investigations, generally speaking, 0:21:25.000 --> 0:21:28.000 the concern that's been expressed by farmers and growers throughout 0:21:28.040 --> 0:21:31.520 the country is that the risk is being shifted from 0:21:31.800 --> 0:21:36.159 the packers to the farmers. And so it's almost like 0:21:36.359 --> 0:21:40.600 growing into a gig economy style model where the farmers 0:21:40.640 --> 0:21:45.080 take all the risks where they're asked to be exclusive 0:21:45.359 --> 0:21:49.560 or have elements of exclusivity and their commitments, but then 0:21:49.720 --> 0:21:54.479 are under the thumb of larger companies who are at 0:21:54.480 --> 0:21:58.000 their whims in terms of how much supply is being purchased, 0:21:58.520 --> 0:22:02.800 how much of the risk of failure is on them, 0:22:03.000 --> 0:22:05.880 and then on risk of loss. And so it's again, 0:22:05.920 --> 0:22:09.320 without getting into too many specifics and talking about any 0:22:09.320 --> 0:22:12.400 specific keys, there are elements of it that I think 0:22:12.480 --> 0:22:16.840 are emblematic of other areas of our economy where workers 0:22:17.000 --> 0:22:23.760 or entrepreneurs are being held at the thumb of really significant, 0:22:24.040 --> 0:22:28.720 powerful companies who are imposing terms that not only exploit 0:22:28.920 --> 0:22:31.520 but limit their ability to work with competitors. 0:22:31.840 --> 0:22:34.920 Tracy. Two things. A I think I'll tell you have 0:22:35.000 --> 0:22:37.120 an episode. I think I have a good chicken guest. Actually, 0:22:37.200 --> 0:22:38.200 on more of this topic. 0:22:38.520 --> 0:22:39.720 You know how I feel about chicken. 0:22:39.920 --> 0:22:41.359