March 17, 2025 • 47 mins
When Donald Trump won in November, one of the things that Wall Street was excited about was an expected liberalization of merger rules. There was a popular view that under Chair Lina Khan, the Biden FTC was overly stringent about what deals it would let go through, and that the new administration would give the greenlight more often. But at least so far, reality hasn't proven to be so simple. There hasn't been a big merger wave yet. And, in fact, the FTC under new Chair Andrew Ferguson has decided to keep the merger guidelines that Khan put in place. So does this mean continuity? At a live episode of the podcast taped in Washington DC, we spoke with Ferguson about the Trump administration's vision for antitrust. He talked about his philosophy of keeping corporate power in check and the tests he's using to preserve a competitive environment. He also walked us through the long history of the FTC and the notion of consumer welfare, plus why he thinks a more expansive interpretation of the term (beyond just lower prices) is in keeping with the history of conservative legal thought.
Read More: New DOJ Antitrust Chief Builds Team From Prior Administrations
Trump’s FTC Moves Ahead With Broad Microsoft Antitrust Probe
Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. Hello and welcome to
another episode of the Odd Lots podcast.
Speaker 2 (00:21):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 1 (00:24):
We got a special episode for listeners today.
Speaker 3 (00:27):
We do a very special episode. We had a live
event over in Washington, d C. It was a very
cool event.
Speaker 1 (00:34):
Joe, it was really fun. It's been a while, you know,
we do live events, we do live recordings from time
to time. It's been a while since we like put
out a full evening of programming, a full show, if
you will.
Speaker 3 (00:45):
Also our first show in DC.
Speaker 1 (00:47):
And our first live public show in DC. We've been
wanting to do one for a while. We had a
bunch of great guests. I actually really like going down
to DC.
Speaker 3 (00:58):
Yeah, and it was a great crowd as well. I
think we have the only audience that would devote two
and a half hours on a Wednesday night to listening
about the Jones Act and anti trust policy.
Speaker 1 (01:08):
Yes, that's right. It was sort of a late night too.
It's sort of awkward timing because it was sort of
dinner so people had to skip.
Speaker 3 (01:14):
But there was popcorn. It included with the tickets.
Speaker 1 (01:17):
It was popcorn anyway, so we're going to release all
of the conversations that we had on that evening as episodes.
But to start, we had a conversation about anti trust.
Speaker 3 (01:27):
We spoke to Andrew Ferguson. He's the new chair of
the FTC for the Trump administration. Obviously, there's a lot
of curiosity about how much continuity there may or may
not be between antitrust under the Biden administration, under Lena Kahn,
who we've also spoken to on the podcast, and what
this new era might look like. So it was really
interesting to sit down with him and get a better
(01:49):
sense of it.
Speaker 1 (01:49):
That's right, and it's got pretty interesting implications really for
multiple reasons. I mean, if you recall, one of the
themes sort of when the election happened, was a lot
of excitement on Wall Street because of a perception that
there would be a lot of mergers in deals would
get a green light that they would be going forward
the new era of deal making activity. Incidentally, the new chair,
(02:13):
Andrew Ferguson, kept the merger guidelines that were put in
place under his predecessor, but they're clearly going to be differences.
There are areas of alignment, There are areas of differences,
and so we talked to Andrew about sort of what
a conservative or what a maga vision of antitrust might
look like.
Speaker 3 (02:30):
Maga m and A was my suggestion, I think, and
he took it. So all right. Here it is our
live conversation with the new FTC chief, Andrew Ferguson.
Speaker 1 (02:39):
Thank you so much for coming. I'm really annoyed actually,
because one of your lawyers gave me like the perfect
first question for the podcast today. I was like, Oh,
this is amazing, and then you sort of walked it back.
I don't exactly know what happened, so that dulled it
a little bit. But anyway, apparently in court today one
of your lawyers said, we need a pull for this
(03:00):
case against Amazon because we don't have the resources and
we can't pay for transcripts. Like, oh, this is an
amazing first question for Andrew, and then he walked away.
Is there a constraint though, between this impulse and we'll
get into it, you know, in terms of headcount and
(03:20):
your desire for what you know looks like going to
be a sort of vigorous new antitrust uh enforcement approach.
Speaker 2 (03:30):
Thank you for having me a lot to unwrapped there. Yeah,
first on constraints. No, okay, I've got the people I
need to protect Americans from monopolies, to protect them from fraud.
And you know, no, I don't think anyone in Washington
has taken sort of the threat that big tech poses
to American consumers more seriously than I have. When President
Trump announced my appointment, this is one of the things
(03:52):
he said he really cared about was taking the threats
that big tech pose to American consumers very seriously. There,
I will throw every re resource the agency has at
prosecuting cases against big tech that we've got going. So unequivocally, No,
there are no resource constraints on protecting Americans from monopolies
and fraud.
Speaker 1 (04:10):
Can you explain what happened today?
Speaker 2 (04:12):
I think a lawyer had a bad day in court.
He was wrong. He filed a letter almost immediately after
saying I was wrong. We don't have resource constraints, and
we are ready to prosecute this case on whatever timeline
the court wants for us. So we're ready to go.
Speaker 3 (04:24):
Okay, but presumably there is this broader drive to streamline
some agencies yours included at the same time that you
have these really lofty targets that you're trying to reach.
I just saw the very good Bloomberg story out today
about the Microsoft probe. This is a huge company that's
going to take a lot of effort, a lot of resources. Again,
(04:45):
presumably you're doing this with less resources than you had,
say a year ago.
Speaker 2 (04:49):
At the FTC, I would not presume that. Look, the
Americans voted for major reform. President Trump ran on major
reform and he's giving it to him. And government should
not be bigger than is necessary to deliver the services
that Americans need to protect Americans from the problems that
Americans have. The FTC we are engaged in the streamlining process.
(05:10):
The goal is to maximize Americans' returns on their taxpayer dollars.
When they send their money off to Washington, they expect
their government to do a lot with that money, and
that the government shouldn't be any bigger than is necessary
to do those tasks. And so at the FTC, we've
got the resources we need to protect Americans from fraudam monopoly.
And look, you know, no government official in history has
(05:32):
ever said, no, I want fewer resources. Which is why
the President's efficiency agenda is so important, because government will
always keep sucking up resources. The goal here is to
maximize the return on investment for American taxpayers, and that's
what we're doing the FTC. Okay, So what.
Speaker 3 (05:47):
Does Trump actually think about antitrust? Because he has a
lot of opinions, Sometimes it's hard to get a handle
on what exactly those opinions are. Sometimes he seems to
contradict himself. You know, a lot of people think he's
pro business, but at the same time he has talked
about antitrust and competition and the power of the big
tech platforms as you just mentioned. What does he tell
(06:07):
you about how he thinks of all of this.
Speaker 2 (06:10):
I think President Trump is pro innovation, pro growth, and
in that sense, he is pro business. But I'm going
to push back a little bit on the way you
frame the question. I don't think that there's any inconsistency
with being pro business and favoring vigorous anti trust enforcement.
Those two have to go hand in hand. Look, I
like most Republicans, and I think like most Americans and
(06:32):
pro free markets. Anti trust is how we keep our
markets free markets that are infected with monopoly, that are
infected with collusion, that are infected with foreclosure. These are
not free. They move value from consumers from innovative businesses
to giant monopolies, who then are focused mostly on protecting
those monopolies rather than innovating, rather than growing, rather than
(06:55):
coming up with the next great idea that changes americans lives. So,
you know, I think President Trump up his pro American markets.
He's pro business, but that is easily reconcilable with favoring
vigorous anti trust enforcement. And President Trump, you know, he's
been president for four years before this, we sort of
have seen what President Trump's anti trust agenda looks like.
And he favors vigorous enforcement. He favors following the law,
(07:19):
and he favors clarity and certainty for people who have
to participate in these markets.
Speaker 1 (07:25):
Right, no, no, no, no, no, no, a live recording, So
hold on, hold, hold on, no, it's a live recording.
It's a live recurd.
Speaker 2 (07:32):
President Trump spent four years as the victim of endless lawfare.
He's president of the United States. Yeah, all right, it's
DC audience, I get it. He has spent the last
several months picking people so in his cabinet or an
agencies like mine who are focused on enforcing the laws
as they are written and carrying out this agenda.
Speaker 1 (07:54):
All right, let me ask you, all right, Uh, you
mentioned streamlining, uh the FTC. One way that you could
imagine streamlining from a government's perspective is that we don't
need an FTC. And obviously you have your counterparts at
the Department of Justice. You yourself have talked about the
sort of philosophy of the sort of disputing the premise
(08:16):
of sort of these independent agencies. Why do we need
two separate antitrust uh enforcement agencies?
Speaker 2 (08:24):
So I think we can get to independence in a minute.
But I think the FTC sort of adds value to
the enforcement regime regime because it combines the consumer protection
and the anti trust enforcement program in a single agency,
and those two can cross pollinate and they protect consumers
more fully than you know, just a singular anti trust
(08:46):
enforcement necessarily would.
Speaker 1 (08:48):
Uh.
Speaker 2 (08:48):
And the you know, the two missions sort of like
learn from each other. The anti trust people when they're
doing investigations, they can find problems that violate the consumer
protection laws, and then the FTC can continue those investigations
with the other side of the house. So I think
there's some benefits to that. But you know, there's Also,
I think some benefits in certain circumstances to having multi
member agencies with people from both parties. I mean, look,
(09:11):
if you have an agency that is exceeding the law,
abusing the companies that are purports to regulate, it's helpful
for markets, for courts, for litigants, for government transparency to
have people in the other party pointing this out and
saying it in dissents. Like you know, I wrote four
hundred plus pages of descents during my time as a
Minority commissioner. I think that that adds value. But I
(09:32):
think that the FTC's particular value add is you combine
the two missions, consumer protection and antitrust in a single house,
and they both sort of like help reinforce the other.
Speaker 3 (09:44):
I know it's early days, but one of the things
you've done so far is you said you were going
to maintain the merger guidelines from the Biden administration, and
some people were really surprised about that. You said that
you thought stability is good for enforcement agencies. I think
maybe some some people are confused because this doesn't necessarily
seem to be an administration that is obsessed with stability
(10:05):
or continuity. Walk us through the thinking there. Why did
you commit to those particular guidelines, especially given the you know,
they got a lot of criticism from multiple sides of
the aisle.
Speaker 2 (10:17):
Yeah. So we've had various iterations of the merger guidelines
dating back to the sixties and then when the FTC
and DJ started doing it together in the nineteen eighties.
You know, we tend to have guidelines for pretty long
periods of time. Sometimes there are sort of iterative changes
made to those guidelines over the course of time, but
a complete rewrite of the guidelines relatively rare, and it happens.
(10:39):
You know, we had the guidelines we written in twenty ten.
But the general principle has been presidents of one party
maintain the guidelines from the previous They may add here
and there. They provide commentaries on those guidelines to sort
of explain to business how you know that current administration
understands the guidelines. But a complete read vamp is rare.
And if we get into this process where every single
(11:01):
time a new administration comes in they jettison the guidelines,
two things happen. First, the agencies spend all their time
writing the guidelines. I mean, the previous administration of jettison
the twenty ten guidelines and spent like two years having
to write this one. They were only effective for barely
a year of the last administration. If we get into
this process where every four years were yanking and rewriting,
it's all the agency you're going to do. Number one.
(11:23):
Number two, the guidelines will become basically meaningless if they
just are like one party's statement of its view of
anti trust policy. Courts won't follow them anymore if they
think that they're just openly partisan. Regulated entities won't rely
on them to plan. You know, businesses can't just plan
into your cycles. They have to plan longer than that.
And if the year of the view that every election
(11:44):
runs the risk of the guidelines being yanked, the guidelines
just become meaningless. And third, you know, there definitely were
parts of the guidelines that were you know, departures from
the twenty ten guidelines, but they generally are relatively well aligned.
They're built on case law, they preserve a lot of
the PC from previous guidelines, and I think just throwing
them all out all at once means A the agencies
(12:05):
are going to devote tremendous resources to rewriting them, and
b everyone will remain very uncertain about how the agencies
feel about it. And finally, you know, a lot has
been written about the sort of effects of the guidelines.
They're guidelines at the end of the day. They aren't law.
They're supposed to be explanations to the public about how
the agencies generally understand the merger program going forward. But
(12:26):
the most important feature of anti trust enforcement in the
United States isn't the guidelines. It's the commitment of particular
anti trust enforcers to following the laws is written, providing
certainty and clarity about how they understand the law. And
then when you go to court bringing the cases that
you think that you can win, and when you can't
win the cases, get the hell out of the way
and let the mergers close.
Speaker 1 (13:02):
So one of the things that obviously came up during
under the last DEPTC chair this idea of like, okay,
there's more than the consumer welfare standard that should be evaluated.
One nice thing about conceiving of consumer welfare narrowly in
terms of price a well, people like cheap things. But also,
you know, it creates a certain law, it eliminates a
(13:25):
certain subjectivity. You could plug. Okay, this is what's gonna
happen to market share companies. You can plug them into
some economist model. I don't know if those models actually
work or not, but theoretically spit out some answer where
we get lower prices, and then it's like, okay, this
is this is good or bad? When you start broadly
defining consumer welf welfare, rethinking that like, first of all,
(13:48):
what is that term? What do you when you hear
the consumer welfare standard? What does that mean to you?
Does it mean more than prices for one thing?
Speaker 2 (13:56):
In order to talk about this, I want to get
a little bit into history. Is sure?
Speaker 3 (14:00):
Do like history?
Speaker 2 (14:00):
Yeah, so you said.
Speaker 1 (14:02):
So.
Speaker 2 (14:03):
Congress passes its first competition law in eighteen ninety, the
Sherman Act. I don't know how many of you read
the Sherman Act, but the operative provisions of the Sherman
Acts Sections one, in sections two, it's like fifty words.
Like the most important provisions of American ads trust law
are fifty words. Adopted in eighteen ninety, the Congress has
not changed effectively since then. Then, in nineteen fourteen, they
(14:25):
passed the FTC Act, which both creates my Agency and
also creates a new antitrust provision that prohibits unfair methods
of competition, and then a couple months later it passes
the Clayton Act. And the Clayton Act is really important
because that's the law that prohibits mergers that promote tend
to create a monopoly or injured competition. So by nineteen fourteen,
(14:47):
and then with an important amendment called the Robinson Patman
Act in the nineteen thirties, our anti reslaws are basically
set like the operative provisions for merger purposes of Section
seven of the Clayton Act and sections one and two
of the Sherman Act are basically unchanged. They were originally adopted.
For decades, courts kind of cast about for a theory
(15:07):
about how to apply the anti trust laws. So we
know that the anta trust laws are about competition and
protecting competition, but that doesn't tell you a whole lot.
Does that mean like making sure that there are a
particular number of competitors in the marketplace. Does it mean
competitors have to do particular things and we don't care
how many there are. Does it mean that we care
about the economic effects of monopoly. Doesn't mean we care
(15:27):
about the political effects of monopoly? And this can matter
because you can imagine, you know, the existence of some
monopoly somewhere that ends up keeping prices low, or of
a duopoly but wield unbelievable economic power. Or you can
imagine businesses that aren't true monopolists, but they have tons
of economic power, or of political power. I'm sorry. And
so courts up through the nineteen fifties and sixties were
(15:50):
just sort of casting about, looking for some standard they
could articulate about when the anti trust laws are violated.
And by the fifties or sixties, it was very difficult
for anyone to predict what any given court was going
to say about any given transaction or conduct. You had
his you know, you could have premised it on what
the judges were having for breakfast when they were deciding
the cases, and that was as likely a predictor of
(16:11):
outcomes as anything else. Then this guy who you you know,
a lot of people in this audience, if you know
it's as sort of wonky as you say it is,
have probably heard of for other reasons. Who's a professor
at Yal's name was Robert Bork, and he writes a
book called The Anti Trust Paradox and the the you know,
the subheading of the book is a policy at war
with itself, And the position he articulates is the courts
(16:33):
are using anti trust to accomplish all sorts of things
that don't have anything to do with economic injuries, politics,
labor unions, all sorts of stuff that just don't have
anything to do with it. It's basically a choose your own
adventure legal regime. It makes no sense, and it's actually
injuring economic growth. Growth. The only thing the anti trust
laws should care about, Judge Borck said, are the welfare
(16:55):
is the welfare of consumers. So he articulates this few
in the seventies, and by nineteen seventy five, in this
famous case called Writer, the Supreme Court is citing Judge
Bork and saying the antitrust laws are a prescription for
consumer welfare. Okay, when Judge Bork writes about consumer welfare,
he says, look, low prices, that's important for consumer welfare.
(17:16):
High output, that's important. Other things are important too, like
the promotion of future competition, the protection of innovation, product quality.
All sorts of things sort of fit within consumer welfare.
But what we care about are economic injuries inflicted on
participants in marketplaces, not about stuff that isn't related to
sort of economic welfare of market participants. At the same
(17:38):
time this is happening, something else is happening in our system.
We have this sort of like economic libertarianism on the
right that sort of attaches itself to the consumer welfare standard,
and it has certain supposition like ideological suppositions about markets.
Markets always correct themselves as one of the suppositions. Professor
at NYU, Daniel Francis Bright Young anti trust scholars written
(17:59):
a lot about this, highly recommend him that government intervention
is almost always worse than anything happening in markets, even monopolies,
and so we should always preference against government intervention, even
if it's to correct market failures and monopolies. And a
strong deference to c suite decision making on the view
that they understand what should work best in a marketplace,
(18:21):
and government ought to be hands off and deferential to
c suite decision making. These two things right alongside each other,
and so by the nineteen nineties, consumer welfare has basically
been reduced to two questions. Is the transaction or conducted
issue likely to increase price in the shorter intermediate term
or reduce outcome in the shorter intermediate term. But that
(18:42):
isn't really what consumer welfare is about. Consumers can suffer
all sorts of injuries that aren't just about short term
prices or short term output. A loss of innovation is
a huge injury to consumers. A loss of product quality
huge injury consumers. But a lot of courts that started
to shift away and focus on the extremely qualitative question
(19:02):
about price and output, which also led to a deference
to econometrics and to economists and anti trust cases. Sorry
you make quantitative quantitative? Sorry, thank you, thank you. That's
right quantitative, which also ends up making anti trust cases
very expensive because everyone has to hire an army of
economists to talk about the case, makes it very difficult
for judges to decide these cases because the way these
often go is each side has their own army of economists,
(19:25):
identically trained, identical schools, fancy credentials on both sides, making
exactly opposite arguments about the same number, often predictive arguments,
and a judge untrained in any of this. I mean,
you know, I don't know how much how many lawyers
are on the room, but the average federal district judge
in the United States was like a local prosecutor or
a local defense attorney or a member of the local
(19:46):
bar has probably never dealt with anti trust in his
or her life before that case. And now you've got
MIT and Stanford trained economists having a really vicious dispute
about identical facts, and the judge is supposed to decid
The judge kind of goes, I don't know, it seems
like a wash, but it makes these cases long and expensive,
and so that is. You know, in my view, the
(20:09):
consumer welfare standard encompasses injuries to participant economic injuries to
participants in marketplaces. It includes consumers, obviously, it also includes laborers.
The Supreme Court has understood the antitrust laws to protect
laborers as sellers of labor to the same extent it
protects purchasers of goods. You know, the sort of fixation
(20:30):
on short and intermediate term price and output effects isn't
actually what consumer welfare was ever understood to me. And
it was supposed to encompass a broader range of injuries
to marketplace participants, but it got shrunk largely because of
ideological views about markets.
Speaker 3 (20:46):
Thank you for that history. That was useful, And Joe
and I keep joking that we need to we need
to add a bort clocks into our monopolies question library.
Speaker 2 (20:58):
But I guess, well, actually I didn't really answer your
question because the question is what I felt like.
Speaker 3 (21:03):
Yeah, I was building up to ask politely, but yeah,
go on.
Speaker 2 (21:07):
So then we get to President Trump's first administration, and
I'll just give a little background on myself. I was
a private practicing lawyer. I clerked off law school and
was a private practicing lawyer here at DC firms doing
anti trust work. And my parents back in rural Virginia
used to joke that I was a pro trust lawyer
because I represented the businesses who were resisting anti trust suits.
(21:29):
And then I went and clerked on the Supreme Court
for Justice Thomas during the twenty sixteen election, and I
would bike into work from Old Town and listen to
the news or podcast on the way in, and was
doing this as sort of a like lawyer who had
thought a lot about anti trust as a practitioner, but
very little about anti trust as a policy. You know,
when you're a practicing lawyer, you think about doctrines. How
can I help my client with these doctrines, you don't
(21:51):
go one step up and sort of think about the policy.
And if I'm driving into work, I'm listening to President
Trump calling for more vigorous anti trust enforcement, you know,
pretty vocifically on the campaign trail, and I'm writing in
I'm going, what's happening? Like A We're talking about anti
trust in a presidential campaign? This is very strange. And
two a Republican calling for more vigorous anti trust enforcement.
(22:13):
And so when President Trump takes office, he's not calling
for a revolution in the consumer welfare standard like some
of his successors did. He wasn't saying, you know, get
rid of the consumer welfare standard. But he hires anti
trust enforcers who take seriously the idea that consumer welfare
isn't just about price and output and what a bunch
of economists say. It's about consumers participation in marketplaces and
(22:37):
protecting them from short term and long term injuries and
laborers as marketplace participants. And so, you know, a lot
of folks have talked, not incorrectly about the Biden administration
bringing lots of lawsuits against big tech. A lot of
people have talked about the Google search suit, which is
in the remedy phase right now, where the United States
is asking to split Chrome off for the rest of Google.
(22:58):
President Trump brought that case. President Trump brought that case
in twenty twenty, and it was litigated during the Biden administration.
But President Trump brought that case. The biggest attempted block
of a vertical merger in American history up to that
point was brought by President Trump and the AT and
T Time Warner case, and the Meta case that's going
to trial in my agency in just a month that
(23:18):
says that Meta's acquisition of Instagram and WhatsApp violated the
anti trust laws was brought by President Trump's administration. So
sort of the reconsideration of consumer welfare to encompass a
broader range of consumer injuries than just price and output
starts with President Trump. Now President Biden comes in and
picks my successor, who is an extremely talented anti trust thinker,
(23:43):
but was of the view that the consumer welfare standard
ought to be discarded entirely and ought to be replaced
with a far more open ended understanding of the anti
trust laws that protect which she calls the competitive process,
but is more than just economic injuries to laborers and consumer. It's,
you know, the political effects of consolidation, all sorts of
(24:04):
downstream non economic effects, and that consolidation itself is the enemy,
even irrespective of the relationship of that consolidation to sort
of economic injuries on market participants. And that was basically
a proposed revolution. A lot of people call this neo Brandisianism.
Brandeis was a very famous Supreme Court justice who articulated
(24:27):
a sort of anti consolidation view of the anti trust
laws in the first half of the twentieth century, and
they proposed sort of ripping the anti trust laws out
of the consumer welfare standard and opening up a much
broader range of interests. I think sort of two things
to think about there. The first is this is basically
go back to the fifties and sixties before Bork's book.
(24:50):
The rationale was that price and out part are too
narrow a consideration on which to base an anti trust regime.
And the answer to that is it's true. But Bor
didn't actually say just limited to price and output. He
understood consumer welfare standard to encompass consumers in all of
their aspects of participating in markets, including how things will happen. Further,
in the future with innovation and product quality. And you know,
(25:14):
I think if you measure the previous anti trust regime
by whether it achieved its neo Brandisian revolution, the answer
is it definitely did not. Every court in the country
still applies the consumer welfare standard.
Speaker 3 (25:27):
I prefer hipster anti trust to neo Brandisian. But I mean,
what what should we call your brand of anti trust?
Give us like a catchy name like hipster anti trust,
like anti woke anti trust, like maga m and a like,
give us something.
Speaker 2 (25:41):
Yeah, you can call it maga anti trust if you want.
I think there are two things I would say. The
first is it's conservative anti trust in the sense that
you know, we aren't behold into sort of libertarian ideology
about markets. We take markets actually as they actually are.
We take consumers as they actually are, how they actually
participate in markets. We take laborers as they actually are,
(26:03):
and we take very seriously that you know, consumers and
laborers suffer in markets short of things that just affect
short term price and output. And that the loss of
innovation even if you can't measure it the way, or
the loss of choice or product quality, even if you
can't measure it the way that an economist would measure
price and output still matter to consumers and still matter
(26:25):
to antitrust. And I think the second is, you know,
I really do see my view as just like a
cop on the beat, you know. I think the other
thing that was unusual about the previous administration was that
it had a really hardcore focus on x ANTI regulation.
You know, the FTC under my predecessor passed a record
(26:45):
shattering number of x anti rules for an agency that
doesn't pass very many x anty rules, including competition rules,
which it had not done in a long time, arguably
had in my view, had never lawfully done. And you know,
the only one that we passed has been vacated by
the courts. But you know, it was not just a
sort of neo Brandisian revolution. It was an emphasis on
(27:06):
x ANTI regulation. And my view is, as a cop
on the beat, if we really vigorously enforce the anti
trust laws, we avoid the need for regulation, because regulation
is what you have to do when monopolies have totally
consumed a market. I mean, all of us live in
some form of a utility monopoly. Grew up in Virginia.
We have a giant electric utility monopoly, it is heavily, heavily,
(27:28):
heavily regulated directly by the state legislature. But if you
vigorously enforce your and you know, utility monopolies, they're a
little different because of the sort of space constraints on
wires and cables and things like that. But if you
take the anti trust laws very seriously and you really
vigorously enforce them, and you don't pull your punches because
of ideological suppositions about markets, you can avoid the need
(27:51):
for ex anti regulation because vigorous market competition ensures monopolies
do not rise. Anti trust enforcement ensures vigorous market competition.
If you have market competition, you don't need heavy regulation
because you don't have giant monopoly problems.
Speaker 1 (28:04):
So I take I understand this point that you don't
need as much regulation if you take antitrust uh seriously.
There does seem to, however, be maybe you dispute this
this tendency towards centralization in the modern internet economy, and
you know, like it's very helpful that everyone you know
(28:27):
more or less goes to one place to share a
photo something like Instagram, or one place to review books,
et cetera. Like this is just one place to trol
on Twitter like I do. How do you like? Actually
that's a joke. I never troll. Sorry I slipped. I
slipped there, Tracy, I slip for a second. I do
(28:50):
not troll on Twitter?
Speaker 2 (28:51):
But how do you like?
Speaker 1 (28:53):
I guess what I'm trying to understand is many people
on both the right and the left feel this in
two of sense that there's a tremendous amount of power
being accrued in these gigantic tech platforms. And to your point,
like antitrust and the FTC seats specifically, how do you
measure when something is uncompetitive in a deal? Because again,
(29:16):
the nice thing about prices, et cetera is like you
can measure it, So like, what does it actually look
like to have a sort of more competitive internet?
Speaker 2 (29:24):
Yeah, And the additional layer of complication for a lot
of the Internet platforms that we all use is that
we use them without exchanging money for them, Right, It's like,
you know, Facebook X, not premium Google Search. You know,
we don't. We don't hand over money in exchange for
using those services. That doesn't mean that there aren't ways
to measure a loss of competition. So like, you know,
(29:46):
I'll just use an example, the position that the commission
is articulated in meta, which is, you know, purely, purely public.
But one of the ways you can measure a loss
of competition is if product quality is degraded without a
meaningful competitive impact to the company that's degrading product quality. So,
for example, the FTC has alleged, and you know, we've
got a trial coming up on this, but the FTC
(30:08):
has alleged in meta, for example, that Facebook was able
to massively increase the ad load on Facebook without losing
any consumers, which meant that they were able to degrade
the quality of their product, and consumers didn't have anywhere
else to go, and so they just sort of stayed.
And that you know, the anti trust laws and a
sort of fully formed understanding.
Speaker 1 (30:29):
I guess the question, I guess, And that makes a
lot of sense to me. On the other hand, how
much is that about some prior failure of antitrust versus
this tendency on the Internet for everyone to be while
their friends are and the sort of naturalization network effects exactly.
Speaker 2 (30:49):
Yeah, so you know, network effects are sort of a
natural part of the Internet environment. Yeah, and the anti
trust laws do not actually forbid monopoly itself. They don't
the courts of go and out of their way over
and over for decades to say, the acquisition of a
monopoly naturally and lawfully does not violate the anti trust laws.
You know, if someone is just really good at something
(31:10):
and way better than everyone else, they sort of will
naturally develop monopoly in that because people will prefer that
product or service. What you can't do is maintain your
monopoly from things unrelated to your skill or the quality
of your product, or sort of dumb luck. And you know,
in terms of like you know, failures of previous antitrust regimes.
(31:31):
Let me just touch on that a minute. Sure, let's
just take Google Search for example. A lot of the
Google Search case is a very traditional Section two case.
It's tying, it's ordinary monopolization conduct. It doesn't propose breaking
sort of our standards. It is a very normal thing.
And this case, the idea for this case is sort
of sat around for a long time. But there are
(31:53):
political decisions made by antitrust inform for serves in previous
administrations not to do it. But those are political decision,
those are political economy decisions driven either by some combination
of ideology or a prudential you know, preference against government intervention,
even if you think you can win the case, because
you know, you don't want to be the guy that
kills the goose laying the golden egg. But you know,
(32:15):
I think we need to be realistic about it. There
there were moments during the creation of the Internet and
during the sort of rise of these platforms where they
made decisions that even under ordinary anti trust theories would
have said, hey, this is potentially a problem. I mean,
for example, the FTC's theory and meta was that the
acquisition of Instagram was an anti trust violation, but the FTC,
(32:37):
you know, did not block the merger. My own view is,
I don't think that we should say if a monopoly
arose in any market, in any market, Internet platforms or
any of the other goods and services we use every day,
we shouldn't. Let you know, enforcement declinations in the past
that led to the creation of monopoly be a reason
(32:59):
not to conf front the monopoly today, because that's basically
just the sunk cost fallacies like oh, well, we already
did this once, Like you know, if they have the
monopoly now, it is what it is. My view is, no,
if we have monopolies and they're being maintained illegally, no
matter how they were formed, no matter who was asleep
at the wheel when their formation came about. My job
is an interest enforcers to do something about that if
(33:20):
I think I can win in court, and if I
don't think I can win in court, I need to
leave them alone.
Speaker 3 (33:39):
Okay, So, since we're on the topic of the Internet
big tech platforms, one of the things you've talked about
is potentially going after censorship on these platforms. Can you
connect that to You just gave us a great history
of the consumer welfare standard and how it's changed through time.
Connect that to the consumer welfare standard, whether it's you know,
a bork esque definition or something more broad.
Speaker 2 (34:01):
Sure, can I resist your premise lightly? Of course, I
don't want to go after censorship. Okay. The government is
not supposed to go after censorship qua censorship because we're
not the speech police. I do care about market power,
and if market power enables a business to mistreat its
consumers or to degrade the quality of its product by,
for example, throwing people off of their platform and suffering
(34:24):
no competitive consequences whatsoever, that antitrust cares about not the
censorship itself, the market power that makes it possible to
mistreat consumers without suffering competitive consequences. I just give you
some background this twenty twenty. I am Mitch McConnell's lawyer.
I'm sitting in my Senate office. The George Floyd protests
are sort of at their peak, and I start getting
(34:46):
calls from the gcs of Giant Fortune one hundred businesses
and business groups, and I pick up the phone and
they say, hey, cops are really racist. We the business
community want you to pass a bunch of police reform bills.
And you know, I was a sort of like conservative
that had relatively strong deference for markets and for market
(35:08):
actors and people making decisions in those markets. And I
was shocked by this. And my response was, why are
you calling me about this. You're supposed to make widgets
at low prices for Americans. Why are you calling me
about police reform? What the hell does this have to
do with you? Leave the political debates to Americans and
to voters. Stop calling me about this. If anything, don't
you want more police to protect your businesses? And they're like, no,
(35:32):
this is it's really important to us, Like we want
this done. And I remember sitting in my office and going,
it's weird that these big businesses with all this economic
power are leveraging that economic power to accomplish social and
political objectives. And then in twenty twenty we have this
censorship crisis. People want to question the efficacy of masks,
(35:53):
You're not going to be on a platform. You want
to question the safety of vaccines, you're not going to
be on the platform. You want to question whether it's
like fair to change voting laws in the middle of
the election, you're not going to be on the platform.
You want to question whether there's something at Hunter Biden's
laptop that we should know about, you're not going to
be on the platform, and we're not going to let
you publish it. But it wasn't just censorship. Like any
consumer in twenty twenty, you couldn't watch TV, you couldn't
(36:16):
go online, you couldn't shop in a store without having
nakedly political messages, almost exclusively the platform of one party
being thrown in your face. And as a consumer, I said,
how can it be that there are all these businesses
who are willing to alienate huge swaths of their consumer
base with these messages that they throw on our face
and suffer no economic or competitive consequences at all. And
(36:40):
I started to understand sort of the critique of the
very narrow understanding the consumer welfare standard and the libertarianism
that had sort of clommed onto it, which is, large
businesses with market power will sometimes leverage that market power
to injure consumers, and sometimes do it in politically motivated ways,
and we should really care about the market power that
(37:02):
makes that sort of mistreatment possible. But that's the thing
I care about, is the market power that makes the
treatment possible. I don't want to police people's speech, but
I do want a police market power. But do Okay, I.
Speaker 3 (37:12):
Guess my question is do people have a right to
be platformed? And then secondly, I mean, I would really
like an Ermes Burken bag. Ormas will not sell it
to me because I do not buy thousands and thousands
of dollars worth of luxury goods every year. They have
the option whether or not to sell me, and they
are famously very exclusive in their decisions to do that.
Speaker 1 (37:33):
Yeah.
Speaker 2 (37:33):
So I don't think that anyone has a right to
be on any particular platform, but you do have a
right to participate in a market that isn't infected by monopoly,
and you do have a right not to have the
quality of the product that you want, including speech on platforms,
be degraded by someone who will suffer no competitive consequences
from doing that. For the same reason ermez does not
(37:54):
have to lower its prices to sell you a burken bag.
Speaker 3 (37:57):
I think they should, but yeah, okay.
Speaker 2 (38:00):
But what they don't have the right to do is
engage in conduct that maintains a monopoly where they can
charge you higher prices than they could otherwise charge you
in a competitive marketplace. Yeah, of course we're gonna have
luxury goods, but we don't want a market, and we
shouldn't have a market. And it isn't a free market
for anyone who cares about free markets like I do.
A market isn't free if monopolists get to charge you
(38:21):
higher prices, degrade your product quality, deprive you of innovation
because of their market power.
Speaker 1 (38:27):
How do you know in the case of sort of
the world of algorithms, right, So, there are certain instances
where okay, the platform is saying if you talk about X,
you are gone, And in some cases there are emails
and very clear trails about stuff like that. There are
other cases where it looks like there is a dial
(38:47):
that gets turned from time to time where suddenly, oh,
I'm starting to see a lot more people talk about
this perspective versus that perspective. Do you have a way
of measuring whether, outside of like say, emails, whether companies
are degrading their consumer experience with respect to those consumers'
(39:09):
ability to speak freely? Is there like, do you feel
confident in your way, in your ability to know whether
the company is serving their customers while in.
Speaker 2 (39:19):
That Yeah, that's a good question, and you know, I'm
not gonna we anti trust enforcers are sort of taking
seriously the anti trust problems of the big tech companies
for the first time. I mean, twenty twenty is sort
of the watershed moment when President Trump brings the Meta
suit in the Google search suit. I litigated the Google
ad Tech case alongside the Biden Department of Justice when
(39:42):
I was the Solicitor General of Virginia. I'm not going
to pretend like applying the anti trust laws to new
context doesn't come with some difficulties, including potentially the difficulty
you're describing what I'm saying is that for a long time,
especially in the twenty tens, there was a strong preference
before President Trump became preference for saying this is difficult,
it's new, it's novel, let's not bring the anti trust
(40:05):
laws into these contexts. And my view is that that
sort of ideologically driven, hands off, laissez faire approach created
a system where we have super large, super powerful platforms
that in my view, there are instances where they were
quite obviously degrading their product quality in a way that
would surprise me in the presence of real competition. And
(40:26):
I also want to address the you know, in some
instances there were emails where it was like, ohay, this
person off. Look. I mean, I was involved in the
Murthy litigation, the Missouri against Biden litigation about alleged either
coordination or collusion between the government and big tech platforms
during twenty twenty. It's more than just a couple of emails.
This was rampant. It was systematic, and it was terrifying
(40:49):
the relationship between the big tech platforms and the government
about who was going to get to speak about what.
And you know, I think this leads me to another
important point and it's one I try to make to
my libertarian friends who think some of what I'm saying
sounds extreme, which is, if you are a libertarian and
you care a lot about personal liberty, you ought to
really care about monopoly because it is way easier for
(41:12):
the government to control all of our lives if they
only have to coerce a small handful of suppliers. If
you have a wide range of options for consumers, it's
harder for the government to pick up the phone over
and over and over and be calling executive after executive
and say we need you to do this to that
person and this to that person. But if it's just
a handful, that gets real easy, real quick. And I
(41:33):
think we saw that in the Murthy litigation. It's just
a couple platforms. You need a handful of government officials
who call and brate platform people to kick consumers off.
That's harder if there are more suppliers, if there are
more choices for consumers. And so even if you are
sort of libertarian and you have this ideological sort of
predisposition predispositional view that markets correct themselves and government intervention
(41:57):
is always worse than monopoly, my response is you don't
want a tiny number of suppliers because the government can
course them real easily, and if the government can course them,
they can course you.
Speaker 3 (42:08):
So just on the content issue, I mean as part
of the problem the advertisers as well here, because we've
seen this happen where advertisers will say I don't want
to put money into this particular business because I think
there are a bunch of people saying racist or unacceptable things.
And then secondly, I mean you've pressed first Section to
thirty reform. I think this is something you're interested in,
(42:30):
and that's always an interesting thought experiment to think what
the world would look like if we never had Section
two thirty. But I mean that exists that currently exempts
Internet platforms from a lot of liability here, but if
you were to reform it, surely that would come into
conflict in one way or another with content and censorship.
Speaker 2 (42:52):
Let me talk about two thirty really quickly. So as
a state enforcer, which is what it was before I
was at the FTC trying to protect Virginians, the amount
of time I spent trying to come up with complaints
that had to plead around Section two thirty was like shocking.
Section two thirty, on its face, seems to care mostly
about protecting tech platforms in the early nineteen nineties from
(43:16):
the liability for torts committed by people who are speaking
on their platforms, and it has over the course of
years been interpreted basically to immunize tech platforms from anything
relating to content moderation. In my view, that isn't what
Section two thirty says, but that is what the courts
have done. My view about Section two thirty is that
(43:38):
it's very difficult to justify immunizing the biggest companies in
the history of the world from state and federal enforcement actions.
And the FTC has tried to enforce Section five, our
pre eminent statute against online platform companies, and we have
lost cases because of Section two thirty where private businesses,
large private businesses are interposing Section two thirty between the
(44:01):
government and trying to protect Americans through government enforcement actions.
In my view, that just categorically cries out for reform,
but I don't think that that runs into conflict with
censorship in the following sense. One of the some of
the Section two thirty cases that have troubled me the
most are people who were alleged that they were thrown
(44:21):
off of a platform in violation of the platform's terms
of service. It's just a contract claim, like, hey, I
entered into this relationship with you, the platform, and I
did so on the basis of what you had in
your TOSS which governed, you know, the kind of things
I'm allowed to say, the kind of conduct in which
I'm permitted to engage, et cetera. And you kicked me
off in violation of your own TOS. And the platforms
(44:42):
have been able to interpose Section two thirty between consumers
and say it doesn't you know, it doesn't matter what
our TOS said. You don't we kicked you off. That's
a content decision. Therefore you don't get to bring the lawsuit.
And my view is, you know, consumers can protect themselves
better from censorship if they're able to at least hold
platforms to their terms of service. And one of the
questions that we've asked consumers to provide us info on
(45:05):
in our own tech platform investigation on this issue is
give us examples if you have them, of times that
you think that you were deplatformed or shadow band or
whatever in violation of the terms you agreed to when
you got on the platform and you know so on
section two thirty, I do think it has been interpreted wildly,
belong what anyone thought was going to say, and that
(45:25):
at the very least, you know, Trump administration proposed these
changes in twenty twenty. It should not provide immunity from
government enforcement actions that are designed to protect Americans.
Speaker 1 (45:37):
Andrew Ferguson, FTC Chief, thank you so much for uh
coming out a blah flah. Thanks for having me.
Speaker 3 (46:02):
That was our conversation with FTC Chair Andrew Ferguson. I'm
Tracy Alloway. You can follow me at Tracy.
Speaker 1 (46:08):
Alloway and I'm Joe Wisenthal. You can follow me at
the Stalwart. Follow our guest Andrew Ferguson, he's at a
Ferguson FTC. Follow our producers Kerman Rodriguez at Kerman armand
Dashel Bennett at dashbod and Kelbrooks at Kelbrooks. From our
odd loads content, go to Bloomberg dot com slash odd Lots.
We have all of our episodes in a daily newsletter
(46:28):
that you should sign up to, and you can chat
about all of these topics, including regulation, including deals, including
politics in our discord discord dot gg slash, odd Lots.
Speaker 3 (46:38):
And if you enjoy odd Lots. If you like it
when we do these live recordings, then please leave us
a positive review on your favorite podcast platform. And remember,
if you are a Bloomberg subscriber, you can listen to
all of our episodes absolutely ad free. All you need
to do is find the Bloomberg channel on Apple Podcasts
and follow the instructions there. Thanks for listening it in
Bloomberg Audio Studios, Podcasts, radio News. Hello and welcome to
another episode of the Odd Lots podcast.
Speaker 2 (00:21):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 1 (00:24):
We got a special episode for listeners today.
Speaker 3 (00:27):
We do a very special episode. We had a live
event over in Washington, d C. It was a very
cool event.
Speaker 1 (00:34):
Joe, it was really fun. It's been a while, you know,
we do live events, we do live recordings from time
to time. It's been a while since we like put
out a full evening of programming, a full show, if
you will.
Speaker 3 (00:45):
Also our first show in DC.
Speaker 1 (00:47):
And our first live public show in DC. We've been
wanting to do one for a while. We had a
bunch of great guests. I actually really like going down
to DC.
Speaker 3 (00:58):
Yeah, and it was a great crowd as well. I
think we have the only audience that would devote two
and a half hours on a Wednesday night to listening
about the Jones Act and anti trust policy.
Speaker 1 (01:08):
Yes, that's right. It was sort of a late night too.
It's sort of awkward timing because it was sort of
dinner so people had to skip.
Speaker 3 (01:14):
But there was popcorn. It included with the tickets.
Speaker 1 (01:17):
It was popcorn anyway, so we're going to release all
of the conversations that we had on that evening as episodes.
But to start, we had a conversation about anti trust.
Speaker 3 (01:27):
We spoke to Andrew Ferguson. He's the new chair of
the FTC for the Trump administration. Obviously, there's a lot
of curiosity about how much continuity there may or may
not be between antitrust under the Biden administration, under Lena Kahn,
who we've also spoken to on the podcast, and what
this new era might look like. So it was really
interesting to sit down with him and get a better
(01:49):
sense of it.
Speaker 1 (01:49):
That's right, and it's got pretty interesting implications really for
multiple reasons. I mean, if you recall, one of the
themes sort of when the election happened, was a lot
of excitement on Wall Street because of a perception that
there would be a lot of mergers in deals would
get a green light that they would be going forward
the new era of deal making activity. Incidentally, the new chair,
(02:13):
Andrew Ferguson, kept the merger guidelines that were put in
place under his predecessor, but they're clearly going to be differences.
There are areas of alignment, There are areas of differences,
and so we talked to Andrew about sort of what
a conservative or what a maga vision of antitrust might
look like.
Speaker 3 (02:30):
Maga m and A was my suggestion, I think, and
he took it. So all right. Here it is our
live conversation with the new FTC chief, Andrew Ferguson.
Speaker 1 (02:39):
Thank you so much for coming. I'm really annoyed actually,
because one of your lawyers gave me like the perfect
first question for the podcast today. I was like, Oh,
this is amazing, and then you sort of walked it back.
I don't exactly know what happened, so that dulled it
a little bit. But anyway, apparently in court today one
of your lawyers said, we need a pull for this
(03:00):
case against Amazon because we don't have the resources and
we can't pay for transcripts. Like, oh, this is an
amazing first question for Andrew, and then he walked away.
Is there a constraint though, between this impulse and we'll
get into it, you know, in terms of headcount and
(03:20):
your desire for what you know looks like going to
be a sort of vigorous new antitrust uh enforcement approach.
Speaker 2 (03:30):
Thank you for having me a lot to unwrapped there. Yeah,
first on constraints. No, okay, I've got the people I
need to protect Americans from monopolies, to protect them from fraud.
And you know, no, I don't think anyone in Washington
has taken sort of the threat that big tech poses
to American consumers more seriously than I have. When President
Trump announced my appointment, this is one of the things
(03:52):
he said he really cared about was taking the threats
that big tech pose to American consumers very seriously. There,
I will throw every re resource the agency has at
prosecuting cases against big tech that we've got going. So unequivocally, No,
there are no resource constraints on protecting Americans from monopolies
and fraud.
Speaker 1 (04:10):
Can you explain what happened today?
Speaker 2 (04:12):
I think a lawyer had a bad day in court.
He was wrong. He filed a letter almost immediately after
saying I was wrong. We don't have resource constraints, and
we are ready to prosecute this case on whatever timeline
the court wants for us. So we're ready to go.
Speaker 3 (04:24):
Okay, but presumably there is this broader drive to streamline
some agencies yours included at the same time that you
have these really lofty targets that you're trying to reach.
I just saw the very good Bloomberg story out today
about the Microsoft probe. This is a huge company that's
going to take a lot of effort, a lot of resources. Again,
(04:45):
presumably you're doing this with less resources than you had,
say a year ago.
Speaker 2 (04:49):
At the FTC, I would not presume that. Look, the
Americans voted for major reform. President Trump ran on major
reform and he's giving it to him. And government should
not be bigger than is necessary to deliver the services
that Americans need to protect Americans from the problems that
Americans have. The FTC we are engaged in the streamlining process.
(05:10):
The goal is to maximize Americans' returns on their taxpayer dollars.
When they send their money off to Washington, they expect
their government to do a lot with that money, and
that the government shouldn't be any bigger than is necessary
to do those tasks. And so at the FTC, we've
got the resources we need to protect Americans from fraudam monopoly.
And look, you know, no government official in history has
(05:32):
ever said, no, I want fewer resources. Which is why
the President's efficiency agenda is so important, because government will
always keep sucking up resources. The goal here is to
maximize the return on investment for American taxpayers, and that's
what we're doing the FTC. Okay, So what.
Speaker 3 (05:47):
Does Trump actually think about antitrust? Because he has a
lot of opinions, Sometimes it's hard to get a handle
on what exactly those opinions are. Sometimes he seems to
contradict himself. You know, a lot of people think he's
pro business, but at the same time he has talked
about antitrust and competition and the power of the big
tech platforms as you just mentioned. What does he tell
(06:07):
you about how he thinks of all of this.
Speaker 2 (06:10):
I think President Trump is pro innovation, pro growth, and
in that sense, he is pro business. But I'm going
to push back a little bit on the way you
frame the question. I don't think that there's any inconsistency
with being pro business and favoring vigorous anti trust enforcement.
Those two have to go hand in hand. Look, I
like most Republicans, and I think like most Americans and
(06:32):
pro free markets. Anti trust is how we keep our
markets free markets that are infected with monopoly, that are
infected with collusion, that are infected with foreclosure. These are
not free. They move value from consumers from innovative businesses
to giant monopolies, who then are focused mostly on protecting
those monopolies rather than innovating, rather than growing, rather than
(06:55):
coming up with the next great idea that changes americans lives. So,
you know, I think President Trump up his pro American markets.
He's pro business, but that is easily reconcilable with favoring
vigorous anti trust enforcement. And President Trump, you know, he's
been president for four years before this, we sort of
have seen what President Trump's anti trust agenda looks like.
And he favors vigorous enforcement. He favors following the law,
(07:19):
and he favors clarity and certainty for people who have
to participate in these markets.
Speaker 1 (07:25):
Right, no, no, no, no, no, no, a live recording, So
hold on, hold, hold on, no, it's a live recording.
It's a live recurd.
Speaker 2 (07:32):
President Trump spent four years as the victim of endless lawfare.
He's president of the United States. Yeah, all right, it's
DC audience, I get it. He has spent the last
several months picking people so in his cabinet or an
agencies like mine who are focused on enforcing the laws
as they are written and carrying out this agenda.
Speaker 1 (07:54):
All right, let me ask you, all right, Uh, you
mentioned streamlining, uh the FTC. One way that you could
imagine streamlining from a government's perspective is that we don't
need an FTC. And obviously you have your counterparts at
the Department of Justice. You yourself have talked about the
sort of philosophy of the sort of disputing the premise
(08:16):
of sort of these independent agencies. Why do we need
two separate antitrust uh enforcement agencies?
Speaker 2 (08:24):
So I think we can get to independence in a minute.
But I think the FTC sort of adds value to
the enforcement regime regime because it combines the consumer protection
and the anti trust enforcement program in a single agency,
and those two can cross pollinate and they protect consumers
more fully than you know, just a singular anti trust
(08:46):
enforcement necessarily would.
Speaker 1 (08:48):
Uh.
Speaker 2 (08:48):
And the you know, the two missions sort of like
learn from each other. The anti trust people when they're
doing investigations, they can find problems that violate the consumer
protection laws, and then the FTC can continue those investigations
with the other side of the house. So I think
there's some benefits to that. But you know, there's Also,
I think some benefits in certain circumstances to having multi
member agencies with people from both parties. I mean, look,
(09:11):
if you have an agency that is exceeding the law,
abusing the companies that are purports to regulate, it's helpful
for markets, for courts, for litigants, for government transparency to
have people in the other party pointing this out and
saying it in dissents. Like you know, I wrote four
hundred plus pages of descents during my time as a
Minority commissioner. I think that that adds value. But I
(09:32):
think that the FTC's particular value add is you combine
the two missions, consumer protection and antitrust in a single house,
and they both sort of like help reinforce the other.
Speaker 3 (09:44):
I know it's early days, but one of the things
you've done so far is you said you were going
to maintain the merger guidelines from the Biden administration, and
some people were really surprised about that. You said that
you thought stability is good for enforcement agencies. I think
maybe some some people are confused because this doesn't necessarily
seem to be an administration that is obsessed with stability
(10:05):
or continuity. Walk us through the thinking there. Why did
you commit to those particular guidelines, especially given the you know,
they got a lot of criticism from multiple sides of
the aisle.
Speaker 2 (10:17):
Yeah. So we've had various iterations of the merger guidelines
dating back to the sixties and then when the FTC
and DJ started doing it together in the nineteen eighties.
You know, we tend to have guidelines for pretty long
periods of time. Sometimes there are sort of iterative changes
made to those guidelines over the course of time, but
a complete rewrite of the guidelines relatively rare, and it happens.
(10:39):
You know, we had the guidelines we written in twenty ten.
But the general principle has been presidents of one party
maintain the guidelines from the previous They may add here
and there. They provide commentaries on those guidelines to sort
of explain to business how you know that current administration
understands the guidelines. But a complete read vamp is rare.
And if we get into this process where every single
(11:01):
time a new administration comes in they jettison the guidelines,
two things happen. First, the agencies spend all their time
writing the guidelines. I mean, the previous administration of jettison
the twenty ten guidelines and spent like two years having
to write this one. They were only effective for barely
a year of the last administration. If we get into
this process where every four years were yanking and rewriting,
it's all the agency you're going to do. Number one.
(11:23):
Number two, the guidelines will become basically meaningless if they
just are like one party's statement of its view of
anti trust policy. Courts won't follow them anymore if they
think that they're just openly partisan. Regulated entities won't rely
on them to plan. You know, businesses can't just plan
into your cycles. They have to plan longer than that.
And if the year of the view that every election
(11:44):
runs the risk of the guidelines being yanked, the guidelines
just become meaningless. And third, you know, there definitely were
parts of the guidelines that were you know, departures from
the twenty ten guidelines, but they generally are relatively well aligned.
They're built on case law, they preserve a lot of
the PC from previous guidelines, and I think just throwing
them all out all at once means A the agencies
(12:05):
are going to devote tremendous resources to rewriting them, and
b everyone will remain very uncertain about how the agencies
feel about it. And finally, you know, a lot has
been written about the sort of effects of the guidelines.
They're guidelines at the end of the day. They aren't law.
They're supposed to be explanations to the public about how
the agencies generally understand the merger program going forward. But
(12:26):
the most important feature of anti trust enforcement in the
United States isn't the guidelines. It's the commitment of particular
anti trust enforcers to following the laws is written, providing
certainty and clarity about how they understand the law. And
then when you go to court bringing the cases that
you think that you can win, and when you can't
win the cases, get the hell out of the way
and let the mergers close.
Speaker 1 (13:02):
So one of the things that obviously came up during
under the last DEPTC chair this idea of like, okay,
there's more than the consumer welfare standard that should be evaluated.
One nice thing about conceiving of consumer welfare narrowly in
terms of price a well, people like cheap things. But also,
you know, it creates a certain law, it eliminates a
(13:25):
certain subjectivity. You could plug. Okay, this is what's gonna
happen to market share companies. You can plug them into
some economist model. I don't know if those models actually
work or not, but theoretically spit out some answer where
we get lower prices, and then it's like, okay, this
is this is good or bad? When you start broadly
defining consumer welf welfare, rethinking that like, first of all,
(13:48):
what is that term? What do you when you hear
the consumer welfare standard? What does that mean to you?
Does it mean more than prices for one thing?
Speaker 2 (13:56):
In order to talk about this, I want to get
a little bit into history. Is sure?
Speaker 3 (14:00):
Do like history?
Speaker 2 (14:00):
Yeah, so you said.
Speaker 1 (14:02):
So.
Speaker 2 (14:03):
Congress passes its first competition law in eighteen ninety, the
Sherman Act. I don't know how many of you read
the Sherman Act, but the operative provisions of the Sherman
Acts Sections one, in sections two, it's like fifty words.
Like the most important provisions of American ads trust law
are fifty words. Adopted in eighteen ninety, the Congress has
not changed effectively since then. Then, in nineteen fourteen, they
(14:25):
passed the FTC Act, which both creates my Agency and
also creates a new antitrust provision that prohibits unfair methods
of competition, and then a couple months later it passes
the Clayton Act. And the Clayton Act is really important
because that's the law that prohibits mergers that promote tend
to create a monopoly or injured competition. So by nineteen fourteen,
(14:47):
and then with an important amendment called the Robinson Patman
Act in the nineteen thirties, our anti reslaws are basically
set like the operative provisions for merger purposes of Section
seven of the Clayton Act and sections one and two
of the Sherman Act are basically unchanged. They were originally adopted.
For decades, courts kind of cast about for a theory
(15:07):
about how to apply the anti trust laws. So we
know that the anta trust laws are about competition and
protecting competition, but that doesn't tell you a whole lot.
Does that mean like making sure that there are a
particular number of competitors in the marketplace. Does it mean
competitors have to do particular things and we don't care
how many there are. Does it mean that we care
about the economic effects of monopoly. Doesn't mean we care
(15:27):
about the political effects of monopoly? And this can matter
because you can imagine, you know, the existence of some
monopoly somewhere that ends up keeping prices low, or of
a duopoly but wield unbelievable economic power. Or you can
imagine businesses that aren't true monopolists, but they have tons
of economic power, or of political power. I'm sorry. And
so courts up through the nineteen fifties and sixties were
(15:50):
just sort of casting about, looking for some standard they
could articulate about when the anti trust laws are violated.
And by the fifties or sixties, it was very difficult
for anyone to predict what any given court was going
to say about any given transaction or conduct. You had
his you know, you could have premised it on what
the judges were having for breakfast when they were deciding
the cases, and that was as likely a predictor of
(16:11):
outcomes as anything else. Then this guy who you you know,
a lot of people in this audience, if you know
it's as sort of wonky as you say it is,
have probably heard of for other reasons. Who's a professor
at Yal's name was Robert Bork, and he writes a
book called The Anti Trust Paradox and the the you know,
the subheading of the book is a policy at war
with itself, And the position he articulates is the courts
(16:33):
are using anti trust to accomplish all sorts of things
that don't have anything to do with economic injuries, politics,
labor unions, all sorts of stuff that just don't have
anything to do with it. It's basically a choose your own
adventure legal regime. It makes no sense, and it's actually
injuring economic growth. Growth. The only thing the anti trust
laws should care about, Judge Borck said, are the welfare
(16:55):
is the welfare of consumers. So he articulates this few
in the seventies, and by nineteen seventy five, in this
famous case called Writer, the Supreme Court is citing Judge
Bork and saying the antitrust laws are a prescription for
consumer welfare. Okay, when Judge Bork writes about consumer welfare,
he says, look, low prices, that's important for consumer welfare.
(17:16):
High output, that's important. Other things are important too, like
the promotion of future competition, the protection of innovation, product quality.
All sorts of things sort of fit within consumer welfare.
But what we care about are economic injuries inflicted on
participants in marketplaces, not about stuff that isn't related to
sort of economic welfare of market participants. At the same
(17:38):
time this is happening, something else is happening in our system.
We have this sort of like economic libertarianism on the
right that sort of attaches itself to the consumer welfare standard,
and it has certain supposition like ideological suppositions about markets.
Markets always correct themselves as one of the suppositions. Professor
at NYU, Daniel Francis Bright Young anti trust scholars written
(17:59):
a lot about this, highly recommend him that government intervention
is almost always worse than anything happening in markets, even monopolies,
and so we should always preference against government intervention, even
if it's to correct market failures and monopolies. And a
strong deference to c suite decision making on the view
that they understand what should work best in a marketplace,
(18:21):
and government ought to be hands off and deferential to
c suite decision making. These two things right alongside each other,
and so by the nineteen nineties, consumer welfare has basically
been reduced to two questions. Is the transaction or conducted
issue likely to increase price in the shorter intermediate term
or reduce outcome in the shorter intermediate term. But that
(18:42):
isn't really what consumer welfare is about. Consumers can suffer
all sorts of injuries that aren't just about short term
prices or short term output. A loss of innovation is
a huge injury to consumers. A loss of product quality
huge injury consumers. But a lot of courts that started
to shift away and focus on the extremely qualitative question
(19:02):
about price and output, which also led to a deference
to econometrics and to economists and anti trust cases. Sorry
you make quantitative quantitative? Sorry, thank you, thank you. That's
right quantitative, which also ends up making anti trust cases
very expensive because everyone has to hire an army of
economists to talk about the case, makes it very difficult
for judges to decide these cases because the way these
often go is each side has their own army of economists,
(19:25):
identically trained, identical schools, fancy credentials on both sides, making
exactly opposite arguments about the same number, often predictive arguments,
and a judge untrained in any of this. I mean,
you know, I don't know how much how many lawyers
are on the room, but the average federal district judge
in the United States was like a local prosecutor or
a local defense attorney or a member of the local
(19:46):
bar has probably never dealt with anti trust in his
or her life before that case. And now you've got
MIT and Stanford trained economists having a really vicious dispute
about identical facts, and the judge is supposed to decid
The judge kind of goes, I don't know, it seems
like a wash, but it makes these cases long and expensive,
and so that is. You know, in my view, the
(20:09):
consumer welfare standard encompasses injuries to participant economic injuries to
participants in marketplaces. It includes consumers, obviously, it also includes laborers.
The Supreme Court has understood the antitrust laws to protect
laborers as sellers of labor to the same extent it
protects purchasers of goods. You know, the sort of fixation
(20:30):
on short and intermediate term price and output effects isn't
actually what consumer welfare was ever understood to me. And
it was supposed to encompass a broader range of injuries
to marketplace participants, but it got shrunk largely because of
ideological views about markets.
Speaker 3 (20:46):
Thank you for that history. That was useful, And Joe
and I keep joking that we need to we need
to add a bort clocks into our monopolies question library.
Speaker 2 (20:58):
But I guess, well, actually I didn't really answer your
question because the question is what I felt like.
Speaker 3 (21:03):
Yeah, I was building up to ask politely, but yeah,
go on.
Speaker 2 (21:07):
So then we get to President Trump's first administration, and
I'll just give a little background on myself. I was
a private practicing lawyer. I clerked off law school and
was a private practicing lawyer here at DC firms doing
anti trust work. And my parents back in rural Virginia
used to joke that I was a pro trust lawyer
because I represented the businesses who were resisting anti trust suits.
(21:29):
And then I went and clerked on the Supreme Court
for Justice Thomas during the twenty sixteen election, and I
would bike into work from Old Town and listen to
the news or podcast on the way in, and was
doing this as sort of a like lawyer who had
thought a lot about anti trust as a practitioner, but
very little about anti trust as a policy. You know,
when you're a practicing lawyer, you think about doctrines. How
can I help my client with these doctrines, you don't
(21:51):
go one step up and sort of think about the policy.
And if I'm driving into work, I'm listening to President
Trump calling for more vigorous anti trust enforcement, you know,
pretty vocifically on the campaign trail, and I'm writing in
I'm going, what's happening? Like A We're talking about anti
trust in a presidential campaign? This is very strange. And
two a Republican calling for more vigorous anti trust enforcement.
(22:13):
And so when President Trump takes office, he's not calling
for a revolution in the consumer welfare standard like some
of his successors did. He wasn't saying, you know, get
rid of the consumer welfare standard. But he hires anti
trust enforcers who take seriously the idea that consumer welfare
isn't just about price and output and what a bunch
of economists say. It's about consumers participation in marketplaces and
(22:37):
protecting them from short term and long term injuries and
laborers as marketplace participants. And so, you know, a lot
of folks have talked, not incorrectly about the Biden administration
bringing lots of lawsuits against big tech. A lot of
people have talked about the Google search suit, which is
in the remedy phase right now, where the United States
is asking to split Chrome off for the rest of Google.
(22:58):
President Trump brought that case. President Trump brought that case
in twenty twenty, and it was litigated during the Biden administration.
But President Trump brought that case. The biggest attempted block
of a vertical merger in American history up to that
point was brought by President Trump and the AT and
T Time Warner case, and the Meta case that's going
to trial in my agency in just a month that
(23:18):
says that Meta's acquisition of Instagram and WhatsApp violated the
anti trust laws was brought by President Trump's administration. So
sort of the reconsideration of consumer welfare to encompass a
broader range of consumer injuries than just price and output
starts with President Trump. Now President Biden comes in and
picks my successor, who is an extremely talented anti trust thinker,
(23:43):
but was of the view that the consumer welfare standard
ought to be discarded entirely and ought to be replaced
with a far more open ended understanding of the anti
trust laws that protect which she calls the competitive process,
but is more than just economic injuries to laborers and consumer. It's,
you know, the political effects of consolidation, all sorts of
(24:04):
downstream non economic effects, and that consolidation itself is the enemy,
even irrespective of the relationship of that consolidation to sort
of economic injuries on market participants. And that was basically
a proposed revolution. A lot of people call this neo Brandisianism.
Brandeis was a very famous Supreme Court justice who articulated
(24:27):
a sort of anti consolidation view of the anti trust
laws in the first half of the twentieth century, and
they proposed sort of ripping the anti trust laws out
of the consumer welfare standard and opening up a much
broader range of interests. I think sort of two things
to think about there. The first is this is basically
go back to the fifties and sixties before Bork's book.
(24:50):
The rationale was that price and out part are too
narrow a consideration on which to base an anti trust regime.
And the answer to that is it's true. But Bor
didn't actually say just limited to price and output. He
understood consumer welfare standard to encompass consumers in all of
their aspects of participating in markets, including how things will happen. Further,
in the future with innovation and product quality. And you know,
(25:14):
I think if you measure the previous anti trust regime
by whether it achieved its neo Brandisian revolution, the answer
is it definitely did not. Every court in the country
still applies the consumer welfare standard.
Speaker 3 (25:27):
I prefer hipster anti trust to neo Brandisian. But I mean,
what what should we call your brand of anti trust?
Give us like a catchy name like hipster anti trust,
like anti woke anti trust, like maga m and a like,
give us something.
Speaker 2 (25:41):
Yeah, you can call it maga anti trust if you want.
I think there are two things I would say. The
first is it's conservative anti trust in the sense that
you know, we aren't behold into sort of libertarian ideology
about markets. We take markets actually as they actually are.
We take consumers as they actually are, how they actually
participate in markets. We take laborers as they actually are,
(26:03):
and we take very seriously that you know, consumers and
laborers suffer in markets short of things that just affect
short term price and output. And that the loss of
innovation even if you can't measure it the way, or
the loss of choice or product quality, even if you
can't measure it the way that an economist would measure
price and output still matter to consumers and still matter
(26:25):
to antitrust. And I think the second is, you know,
I really do see my view as just like a
cop on the beat, you know. I think the other
thing that was unusual about the previous administration was that
it had a really hardcore focus on x ANTI regulation.
You know, the FTC under my predecessor passed a record
(26:45):
shattering number of x anti rules for an agency that
doesn't pass very many x anty rules, including competition rules,
which it had not done in a long time, arguably
had in my view, had never lawfully done. And you know,
the only one that we passed has been vacated by
the courts. But you know, it was not just a
sort of neo Brandisian revolution. It was an emphasis on
(27:06):
x ANTI regulation. And my view is, as a cop
on the beat, if we really vigorously enforce the anti
trust laws, we avoid the need for regulation, because regulation
is what you have to do when monopolies have totally
consumed a market. I mean, all of us live in
some form of a utility monopoly. Grew up in Virginia.
We have a giant electric utility monopoly, it is heavily, heavily,
(27:28):
heavily regulated directly by the state legislature. But if you
vigorously enforce your and you know, utility monopolies, they're a
little different because of the sort of space constraints on
wires and cables and things like that. But if you
take the anti trust laws very seriously and you really
vigorously enforce them, and you don't pull your punches because
of ideological suppositions about markets, you can avoid the need
(27:51):
for ex anti regulation because vigorous market competition ensures monopolies
do not rise. Anti trust enforcement ensures vigorous market competition.
If you have market competition, you don't need heavy regulation
because you don't have giant monopoly problems.
Speaker 1 (28:04):
So I take I understand this point that you don't
need as much regulation if you take antitrust uh seriously.
There does seem to, however, be maybe you dispute this
this tendency towards centralization in the modern internet economy, and
you know, like it's very helpful that everyone you know
(28:27):
more or less goes to one place to share a
photo something like Instagram, or one place to review books,
et cetera. Like this is just one place to trol
on Twitter like I do. How do you like? Actually
that's a joke. I never troll. Sorry I slipped. I
slipped there, Tracy, I slip for a second. I do
(28:50):
not troll on Twitter?
Speaker 2 (28:51):
But how do you like?
Speaker 1 (28:53):
I guess what I'm trying to understand is many people
on both the right and the left feel this in
two of sense that there's a tremendous amount of power
being accrued in these gigantic tech platforms. And to your point,
like antitrust and the FTC seats specifically, how do you
measure when something is uncompetitive in a deal? Because again,
(29:16):
the nice thing about prices, et cetera is like you
can measure it, So like, what does it actually look
like to have a sort of more competitive internet?
Speaker 2 (29:24):
Yeah, And the additional layer of complication for a lot
of the Internet platforms that we all use is that
we use them without exchanging money for them, Right, It's like,
you know, Facebook X, not premium Google Search. You know,
we don't. We don't hand over money in exchange for
using those services. That doesn't mean that there aren't ways
to measure a loss of competition. So like, you know,
(29:46):
I'll just use an example, the position that the commission
is articulated in meta, which is, you know, purely, purely public.
But one of the ways you can measure a loss
of competition is if product quality is degraded without a
meaningful competitive impact to the company that's degrading product quality. So,
for example, the FTC has alleged, and you know, we've
got a trial coming up on this, but the FTC
(30:08):
has alleged in meta, for example, that Facebook was able
to massively increase the ad load on Facebook without losing
any consumers, which meant that they were able to degrade
the quality of their product, and consumers didn't have anywhere
else to go, and so they just sort of stayed.
And that you know, the anti trust laws and a
sort of fully formed understanding.
Speaker 1 (30:29):
I guess the question, I guess, And that makes a
lot of sense to me. On the other hand, how
much is that about some prior failure of antitrust versus
this tendency on the Internet for everyone to be while
their friends are and the sort of naturalization network effects exactly.
Speaker 2 (30:49):
Yeah, so you know, network effects are sort of a
natural part of the Internet environment. Yeah, and the anti
trust laws do not actually forbid monopoly itself. They don't
the courts of go and out of their way over
and over for decades to say, the acquisition of a
monopoly naturally and lawfully does not violate the anti trust laws.
You know, if someone is just really good at something
(31:10):
and way better than everyone else, they sort of will
naturally develop monopoly in that because people will prefer that
product or service. What you can't do is maintain your
monopoly from things unrelated to your skill or the quality
of your product, or sort of dumb luck. And you know,
in terms of like you know, failures of previous antitrust regimes.
(31:31):
Let me just touch on that a minute. Sure, let's
just take Google Search for example. A lot of the
Google Search case is a very traditional Section two case.
It's tying, it's ordinary monopolization conduct. It doesn't propose breaking
sort of our standards. It is a very normal thing.
And this case, the idea for this case is sort
of sat around for a long time. But there are
(31:53):
political decisions made by antitrust inform for serves in previous
administrations not to do it. But those are political decision,
those are political economy decisions driven either by some combination
of ideology or a prudential you know, preference against government intervention,
even if you think you can win the case, because
you know, you don't want to be the guy that
kills the goose laying the golden egg. But you know,
(32:15):
I think we need to be realistic about it. There
there were moments during the creation of the Internet and
during the sort of rise of these platforms where they
made decisions that even under ordinary anti trust theories would
have said, hey, this is potentially a problem. I mean,
for example, the FTC's theory and meta was that the
acquisition of Instagram was an anti trust violation, but the FTC,
(32:37):
you know, did not block the merger. My own view is,
I don't think that we should say if a monopoly
arose in any market, in any market, Internet platforms or
any of the other goods and services we use every day,
we shouldn't. Let you know, enforcement declinations in the past
that led to the creation of monopoly be a reason
(32:59):
not to conf front the monopoly today, because that's basically
just the sunk cost fallacies like oh, well, we already
did this once, Like you know, if they have the
monopoly now, it is what it is. My view is, no,
if we have monopolies and they're being maintained illegally, no
matter how they were formed, no matter who was asleep
at the wheel when their formation came about. My job
is an interest enforcers to do something about that if
(33:20):
I think I can win in court, and if I
don't think I can win in court, I need to
leave them alone.
Speaker 3 (33:39):
Okay, So, since we're on the topic of the Internet
big tech platforms, one of the things you've talked about
is potentially going after censorship on these platforms. Can you
connect that to You just gave us a great history
of the consumer welfare standard and how it's changed through time.
Connect that to the consumer welfare standard, whether it's you know,
a bork esque definition or something more broad.
Speaker 2 (34:01):
Sure, can I resist your premise lightly? Of course, I
don't want to go after censorship. Okay. The government is
not supposed to go after censorship qua censorship because we're
not the speech police. I do care about market power,
and if market power enables a business to mistreat its
consumers or to degrade the quality of its product by,
for example, throwing people off of their platform and suffering
(34:24):
no competitive consequences whatsoever, that antitrust cares about not the
censorship itself, the market power that makes it possible to
mistreat consumers without suffering competitive consequences. I just give you
some background this twenty twenty. I am Mitch McConnell's lawyer.
I'm sitting in my Senate office. The George Floyd protests
are sort of at their peak, and I start getting
(34:46):
calls from the gcs of Giant Fortune one hundred businesses
and business groups, and I pick up the phone and
they say, hey, cops are really racist. We the business
community want you to pass a bunch of police reform bills.
And you know, I was a sort of like conservative
that had relatively strong deference for markets and for market
(35:08):
actors and people making decisions in those markets. And I
was shocked by this. And my response was, why are
you calling me about this. You're supposed to make widgets
at low prices for Americans. Why are you calling me
about police reform? What the hell does this have to
do with you? Leave the political debates to Americans and
to voters. Stop calling me about this. If anything, don't
you want more police to protect your businesses? And they're like, no,
(35:32):
this is it's really important to us, Like we want
this done. And I remember sitting in my office and going,
it's weird that these big businesses with all this economic
power are leveraging that economic power to accomplish social and
political objectives. And then in twenty twenty we have this
censorship crisis. People want to question the efficacy of masks,
(35:53):
You're not going to be on a platform. You want
to question the safety of vaccines, you're not going to
be on the platform. You want to question whether it's
like fair to change voting laws in the middle of
the election, you're not going to be on the platform.
You want to question whether there's something at Hunter Biden's
laptop that we should know about, you're not going to
be on the platform, and we're not going to let
you publish it. But it wasn't just censorship. Like any
consumer in twenty twenty, you couldn't watch TV, you couldn't
(36:16):
go online, you couldn't shop in a store without having
nakedly political messages, almost exclusively the platform of one party
being thrown in your face. And as a consumer, I said,
how can it be that there are all these businesses
who are willing to alienate huge swaths of their consumer
base with these messages that they throw on our face
and suffer no economic or competitive consequences at all. And
(36:40):
I started to understand sort of the critique of the
very narrow understanding the consumer welfare standard and the libertarianism
that had sort of clommed onto it, which is, large
businesses with market power will sometimes leverage that market power
to injure consumers, and sometimes do it in politically motivated ways,
and we should really care about the market power that
(37:02):
makes that sort of mistreatment possible. But that's the thing
I care about, is the market power that makes the
treatment possible. I don't want to police people's speech, but
I do want a police market power. But do Okay, I.
Speaker 3 (37:12):
Guess my question is do people have a right to
be platformed? And then secondly, I mean, I would really
like an Ermes Burken bag. Ormas will not sell it
to me because I do not buy thousands and thousands
of dollars worth of luxury goods every year. They have
the option whether or not to sell me, and they
are famously very exclusive in their decisions to do that.
Speaker 1 (37:33):
Yeah.
Speaker 2 (37:33):
So I don't think that anyone has a right to
be on any particular platform, but you do have a
right to participate in a market that isn't infected by monopoly,
and you do have a right not to have the
quality of the product that you want, including speech on platforms,
be degraded by someone who will suffer no competitive consequences
from doing that. For the same reason ermez does not
(37:54):
have to lower its prices to sell you a burken bag.
Speaker 3 (37:57):
I think they should, but yeah, okay.
Speaker 2 (38:00):
But what they don't have the right to do is
engage in conduct that maintains a monopoly where they can
charge you higher prices than they could otherwise charge you
in a competitive marketplace. Yeah, of course we're gonna have
luxury goods, but we don't want a market, and we
shouldn't have a market. And it isn't a free market
for anyone who cares about free markets like I do.
A market isn't free if monopolists get to charge you
(38:21):
higher prices, degrade your product quality, deprive you of innovation
because of their market power.
Speaker 1 (38:27):
How do you know in the case of sort of
the world of algorithms, right, So, there are certain instances
where okay, the platform is saying if you talk about X,
you are gone, And in some cases there are emails
and very clear trails about stuff like that. There are
other cases where it looks like there is a dial
(38:47):
that gets turned from time to time where suddenly, oh,
I'm starting to see a lot more people talk about
this perspective versus that perspective. Do you have a way
of measuring whether, outside of like say, emails, whether companies
are degrading their consumer experience with respect to those consumers'
(39:09):
ability to speak freely? Is there like, do you feel
confident in your way, in your ability to know whether
the company is serving their customers while in.
Speaker 2 (39:19):
That Yeah, that's a good question, and you know, I'm
not gonna we anti trust enforcers are sort of taking
seriously the anti trust problems of the big tech companies
for the first time. I mean, twenty twenty is sort
of the watershed moment when President Trump brings the Meta
suit in the Google search suit. I litigated the Google
ad Tech case alongside the Biden Department of Justice when
(39:42):
I was the Solicitor General of Virginia. I'm not going
to pretend like applying the anti trust laws to new
context doesn't come with some difficulties, including potentially the difficulty
you're describing what I'm saying is that for a long time,
especially in the twenty tens, there was a strong preference
before President Trump became preference for saying this is difficult,
it's new, it's novel, let's not bring the anti trust
(40:05):
laws into these contexts. And my view is that that
sort of ideologically driven, hands off, laissez faire approach created
a system where we have super large, super powerful platforms
that in my view, there are instances where they were
quite obviously degrading their product quality in a way that
would surprise me in the presence of real competition. And
(40:26):
I also want to address the you know, in some
instances there were emails where it was like, ohay, this
person off. Look. I mean, I was involved in the
Murthy litigation, the Missouri against Biden litigation about alleged either
coordination or collusion between the government and big tech platforms
during twenty twenty. It's more than just a couple of emails.
This was rampant. It was systematic, and it was terrifying
(40:49):
the relationship between the big tech platforms and the government
about who was going to get to speak about what.
And you know, I think this leads me to another
important point and it's one I try to make to
my libertarian friends who think some of what I'm saying
sounds extreme, which is, if you are a libertarian and
you care a lot about personal liberty, you ought to
really care about monopoly because it is way easier for
(41:12):
the government to control all of our lives if they
only have to coerce a small handful of suppliers. If
you have a wide range of options for consumers, it's
harder for the government to pick up the phone over
and over and over and be calling executive after executive
and say we need you to do this to that
person and this to that person. But if it's just
a handful, that gets real easy, real quick. And I
(41:33):
think we saw that in the Murthy litigation. It's just
a couple platforms. You need a handful of government officials
who call and brate platform people to kick consumers off.
That's harder if there are more suppliers, if there are
more choices for consumers. And so even if you are
sort of libertarian and you have this ideological sort of
predisposition predispositional view that markets correct themselves and government intervention
(41:57):
is always worse than monopoly, my response is you don't
want a tiny number of suppliers because the government can
course them real easily, and if the government can course them,
they can course you.
Speaker 3 (42:08):
So just on the content issue, I mean as part
of the problem the advertisers as well here, because we've
seen this happen where advertisers will say I don't want
to put money into this particular business because I think
there are a bunch of people saying racist or unacceptable things.
And then secondly, I mean you've pressed first Section to
thirty reform. I think this is something you're interested in,
(42:30):
and that's always an interesting thought experiment to think what
the world would look like if we never had Section
two thirty. But I mean that exists that currently exempts
Internet platforms from a lot of liability here, but if
you were to reform it, surely that would come into
conflict in one way or another with content and censorship.
Speaker 2 (42:52):
Let me talk about two thirty really quickly. So as
a state enforcer, which is what it was before I
was at the FTC trying to protect Virginians, the amount
of time I spent trying to come up with complaints
that had to plead around Section two thirty was like shocking.
Section two thirty, on its face, seems to care mostly
about protecting tech platforms in the early nineteen nineties from
(43:16):
the liability for torts committed by people who are speaking
on their platforms, and it has over the course of
years been interpreted basically to immunize tech platforms from anything
relating to content moderation. In my view, that isn't what
Section two thirty says, but that is what the courts
have done. My view about Section two thirty is that
(43:38):
it's very difficult to justify immunizing the biggest companies in
the history of the world from state and federal enforcement actions.
And the FTC has tried to enforce Section five, our
pre eminent statute against online platform companies, and we have
lost cases because of Section two thirty where private businesses,
large private businesses are interposing Section two thirty between the
(44:01):
government and trying to protect Americans through government enforcement actions.
In my view, that just categorically cries out for reform,
but I don't think that that runs into conflict with
censorship in the following sense. One of the some of
the Section two thirty cases that have troubled me the
most are people who were alleged that they were thrown
(44:21):
off of a platform in violation of the platform's terms
of service. It's just a contract claim, like, hey, I
entered into this relationship with you, the platform, and I
did so on the basis of what you had in
your TOSS which governed, you know, the kind of things
I'm allowed to say, the kind of conduct in which
I'm permitted to engage, et cetera. And you kicked me
off in violation of your own TOS. And the platforms
(44:42):
have been able to interpose Section two thirty between consumers
and say it doesn't you know, it doesn't matter what
our TOS said. You don't we kicked you off. That's
a content decision. Therefore you don't get to bring the lawsuit.
And my view is, you know, consumers can protect themselves
better from censorship if they're able to at least hold
platforms to their terms of service. And one of the
questions that we've asked consumers to provide us info on
(45:05):
in our own tech platform investigation on this issue is
give us examples if you have them, of times that
you think that you were deplatformed or shadow band or
whatever in violation of the terms you agreed to when
you got on the platform and you know so on
section two thirty, I do think it has been interpreted wildly,
belong what anyone thought was going to say, and that
(45:25):
at the very least, you know, Trump administration proposed these
changes in twenty twenty. It should not provide immunity from
government enforcement actions that are designed to protect Americans.
Speaker 1 (45:37):
Andrew Ferguson, FTC Chief, thank you so much for uh
coming out a blah flah. Thanks for having me.
Speaker 3 (46:02):
That was our conversation with FTC Chair Andrew Ferguson. I'm
Tracy Alloway. You can follow me at Tracy.
Speaker 1 (46:08):
Alloway and I'm Joe Wisenthal. You can follow me at
the Stalwart. Follow our guest Andrew Ferguson, he's at a
Ferguson FTC. Follow our producers Kerman Rodriguez at Kerman armand
Dashel Bennett at dashbod and Kelbrooks at Kelbrooks. From our
odd loads content, go to Bloomberg dot com slash odd Lots.
We have all of our episodes in a daily newsletter
(46:28):
that you should sign up to, and you can chat
about all of these topics, including regulation, including deals, including
politics in our discord discord dot gg slash, odd Lots.
Speaker 3 (46:38):
And if you enjoy odd Lots. If you like it
when we do these live recordings, then please leave us
a positive review on your favorite podcast platform. And remember,
if you are a Bloomberg subscriber, you can listen to
all of our episodes absolutely ad free. All you need
to do is find the Bloomberg channel on Apple Podcasts
and follow the instructions there. Thanks for listening it in
Hosts And Creators
Joe Weisenthal
Tracy Alloway
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!