Panel Two: Where We Might Be Headed [Antitrust Paradox Conference]

[Music] great why don't we get started um uh with this panel i'm brent mcintosh i'm an adjunct senior fellow at the council on foreign relations uh and uh previously was at the the treasury department uh both as under secretary for international affairs and as general counsel we have a terrific panel today on uh the excuse me on where we might be headed the the various uh anti-trust bills pending on the hill and their marketplace implications and we have a truly expert set of speakers to address that from from the far left uh mark whitener who is an adjunct professor at georgetown's mcdonough school of business and a senior fellow at the georgetown center for business and public policy marcus spent 35 years practicing antitrust law including including at ge and he served at the ftc as deputy director of the bureau of competition and then darren baxt who's a senior research fellow at the heritage foundation prolific on a variety of public policy topics uh in the regulatory space previously also with the chamber of commerce and then maureen ulhausen who's a partner at baker botts formerly the acting chair and a commissioner at the ftc before becoming a commissioner led the fbc's internet access task force we're gonna have each of our uh of uh those up on stage speak for a few minutes i have some questions and then we will open it for audience questions so have your questions ready i'm gonna without further ado turn it over to mark for his comments okay thank you our topic i guess is antitrust policy and legislation um you know begin by saying that the the antitrust debate is unfortunately becoming ideological again a brief history the early antitrust populism expressed most notably in lewis brandeis's curse of bigness was really only supplanted durably supplanted by the ascendancy of the economics movement and while i think it'd be inaccurate to say that that movement was entirely non-ideological it didn't contain any normative sort of economic ideology in some of its origins that movement the economics movement really became fundamentally about positive economic analysis and so for several decades we've had we've been in almost i hesitate to say a golden era of reasonably objective reasonably non-political um rigorous analytical approach to antitrust issues but now we're seeing a resurgence of ideology literally in the curse of bigness redux tim wu's 2018 version in his book so why is this happening i think there are a couple of reasons to some extent the antitrust policy debate is starting just to resemble other dysfunctional policy debates in this country immigration climate policy voting rights where ideology and partisan divides are crowding out evidence-based analysis and so i think some of the would-be anti-trust revolutionaries certainly are ideologues in this sense driven by the urge to take down big business so remake the economy and what they see is a more egalitarian image but also to some extent i think the antitrust turmoil reflects something else and i'll just call it political opportunism for lack of a better term driven more by anti-big tech populism than by any real ideology and the fact that some of the most extreme ideas in antitrust reform today are coming from opposite ends of the political spectrum elizabeth warren and josh hawley i think is an indication of this now i'm not too interested in ideology particularly when it comes to antitrust you know brandeis versus bork is not a useful or even relevant debate today brandeis never articulated a workable or constructive approach in my view to thinking about antitrust nor do robert bork's views today represent the way antitrust is applied in every respect it was seminal in prompting and bringing about the economics movement that movement movement has evolved so i think the current movement seeking antitrust reform or really even revolution is gaining traction and so i think we need to refocus the nhs debate on more rational analytical grounds the same grounds that we should be focusing on in any policy formation area start with a clear-eyed assessment of current policy what are its goals and motivating principles how is it working in practice based on empirical analysis if it's working reasonably well then basically leave it alone or at a minimum avoid legislation and allow the antitrust agencies and the courts to continue doing what they've done for the last several decades which is apply antitrust flexibly to evolving facts and theories let's call that option one basically things are working leave them alone and allow continued if you will evolution by those who are implementing the law now the goals and principles are solid after a a real assessment but the assessment's shown there are some deficiencies in how they're applied or implemented well then propose alternatives and subject the alternatives to the same analysis you subject the original policy to this is the purported they'll call this the middle ground or option two approach which is contained in a number of legislative proposals now i'm not going to walk through all i couldn't possibly walk through all the legislative proposals either actually proposed in congress or suggested by think tanks or others but but this middle ground could be captured i think perhaps best by referring to senator klobuchar's proposal some of them captured in the senate cholera bill now i say this is the purported middle ground because some of the proposals that are being made in this category are actually more radical than they appear but at least they acknowledged that fundamental elements of current and a trust doctrine doctrine should be remained kept in place and maureen has written on this subject and has laid out a very helpful taxonomy and discussion of these proposals and put them into i'll i'll claim somewhat similar categories now the third approach is to challenge the whole thing um blow scrap it blow it up and start over and this is i would say a serious um accurate description of some of the more radical proposals so option three starts over supplements or replaces the current framework with a range of proposals but many of which resort to essentially categorical prescriptions of certain types of transactions sizes of transactions and types of business conduct or if it doesn't outright prohibit them it puts very strong uh limits on business activity well here you need a cost-benefit analysis of starting from not only is the current approach working or not or how well is it working to what are the proposed alternatives whatever else we might say about blowing up the current system and starting over one thing that has to be said is there has not been any serious cost benefit analysis of any of the alternatives and if they're going to be taken seriously that has to happen and maybe today we'll start talking a little bit about some of the consequences of some of these things if they were ever actually to become law now obviously the policy world the real world we live in doesn't typically work in this nice linear analytical fact-based approach to policy formation but here's the point i would make and i don't know who in the room our antitrust people or have worked in antitrust and i have and so obviously you know one tends to usually prefer the group we've come from the antitrust world has typically been populated by some pretty smart analytical people and the agencies for better or worse have tended to perform well have tended to apply a fairly transparent analysis to their cases and that analysis tends to hold up reasonably well when it's examined in retrospect so antitrust can and should do better than some of these other policy areas where we have you know dysfunction and cacophony the evidence so far does not satisfy even the first condition of blowing up the current system and certainly doesn't justify any of the proposals now the last thing i want to just talk to for a minute in addition to the ideological approach dana trust which doesn't really invite empirical response okay there are those who are urging a reform of antitrust who are making fact-based arguments and i would say the argument the central argument sort of collapses to this competition is declining in the united states uh as a real as a result in part of increasing concentration in various markets and this is due in large part to lacks and declining antitrust enforcement so if we look at each of those elements first is competition declining it's a rich economic debate it's still ongoing it can be studied it is being studied but i would just say i'd put to you that claims that the us economy is becoming more concentrated in a meaningful and a trust sense and less competitive at the expense of consumers has been sharply disputed and that literature is out there and still being added to second whether we believe that competition has declined or not has there been declining antitrust enforcement and here i would point to two papers that i and my colleagues at georgetown have put out in the last year or two one showing that if you look at a time period that basically covers all what i'll call the chicago school period and also happens to essentially cover the period in which mergers and acquisitions were subjected to this part scott rudino filing framework but since roughly the late 1970s antitrust enforcement against mergers has increased in fact it's nearly doubled as a proportion to the number of deals filed and second that when those cases go to court the government has been more likely to succeed over time not less one little corollary to that when we look at the court outcomes which some have said have been driven by ideology of judges and judicial appointments we find no correlation in the outcomes of litigated merger cases according to the party of the president who appointed the deciding judge and if you step outside mergers which are relatively easy to analyze because you've got good data looking at business conduct cases it's more complicated and undeniably there have been changes in the law that have made antitrust more rigorous and in some cases less amenable to enforcement against some kinds of business conduct but i would just say that first those changes have been based on a fairly rigorous consistent transparent doctrine which you can look at and discuss and agree or disagree on and secondly that i think most objective analysts if they looked at the actual practices that previously were condemned and now are either allowed or viewed more objectively in many cases various types of vertical restraints per se rules against the various types of conduct i think an objective analysis would say that the changes were for the good so antitrust is broad it's powerful it's potent it's serious we need to take it seriously and i think we need to go back to the fundamentals of good policy formation and try to apply those in antitrust even if we don't really see them being applied very often in other policy areas great thanks mark um darren thank you um it's my first in-person appearance since the start of the pandemic uh it's great to see people and but any time my head kind of just freezes and just look i'm staring at one place it's the zoom stuff presentation so bear with me um you know it's interesting it's when you're doing the zoom presentations you're normally just a look up and when you're presenting but during the zoom when you start looking up it looks like you're staring at the ceiling so hopefully i'm not gonna just be like staring at one person like freaking them out um so i wanna make three points regarding the current policy environment regarding antitrust first i want to go straight to the elephant in the room for conservatives and many others and that's it conservatives have a valid reason to be angry with some big tech companies and it arises from speech restrictions and because these concerns some conservatives are looking to federal policy solutions and i understand this desire if there's be to be a policy solution though it's important to be a you have to have a narrow solution to properly and directly address a public policy problem kind of mirroring what mark was saying antitrust doesn't meet that requirement antitrust is a specific tool that has nothing to do with addressing non-competition issues like bias and censorship applying antitrust to speech concerns is like trying to squeeze a scare a square peg into a round hole it's not going to solve the problems and it could give the far left its most powerful weapon to radically change the american economic system so justified anger towards big tech shouldn't lead conservatives to lose sight of their principles and to weaponize anti-trust to go after disfavored industries the left has plenty of targets that they would go after if it became kind of the thing to do with anti-trust second let's talk about how the far left would welcome the weaponization of antitrust and when i talk about weaponization i'm not just talking about going after his favorite industries i'm talking about amending existing antitrust legislation or implementing antitrust in a way to make it much easier to use antitrust and actually for almost any purpose they want they would welcome conservatives falling for what i think is basically a trojan horse i think this is a trap there are obviously some who want to move away from the consumer welfare standard so that the the antitrust is very subjective and arbitrary and as a tool for the government to not only address alleged economic issues but to address non-economic issues including things that have absolutely nothing to do with the economy so am i overstating my case well unfortunately i don't think so there's already proposed legislation out there that would force companies to divest businesses and punish economic success and block certain businesses from being able to grow the house democratic antitrust report from last year co-authored by the new ftc chair lena khan recommends amending existing anti-trust law to make it far more difficult for companies across the economy not just tech to merge or acquire other firms and then there's proposed legislation to make that happen and the ftc recently rescinded a bipartisan framework from 2015 that it developed during the obama administration which in part supported the consumer welfare focus of antitrust law and then we can look at other areas to get a glimpse of what could be on the horizon so there's many on the left that are turn basically trying to turn every policy issue into an issue or a means to address climate change and that provides a sneak peek of how antitrust could be used to do the same exact thing and address issues again not related to competition for example some are pushing regulation as a way to address environmental social and governmental objectives the use of antitrust would give i believe the far left an incredible probably their biggest weapon to achieve those objectives and other objectives and it wouldn't be a stretch to envision this because the far left to see the far left trying to break up companies for example because companies are investing in fossil fuels after all environmental pressure groups have already pushed treasury secretary janet yellen to take drastic action to fight climate change such as by forcing oil and gas companies to sell off fossil fuel assets third antitrust is a narrow tool with very powerful remedies to address anti-competitive conduct and therefore should be used very carefully not willy-nilly but conservatives and libertarians are rightfully concerned with heavy-handed regulation from the federal bureaucrats therefore imagine giving federal agencies the power of anti-trust it would make the even the most extreme purgatory scheme look game by comparison instead of expanding anti-trust the server should ensure that existing anti-trust is used appropriately and judiciously again to address a specific and genuine public policy problem look the the principle of using antitrust judiciously doesn't mean that antitrust should never be applied but it does mean not weaponizing it so so closing out here's the closing takeaways the threat of weaponized anti-trust should be a critical concern so i mean we're here there's a reason why we're here there's a lot of people paying attention to this issue and it's something that we should definitely have on our radar screen i think it's a real threat policymakers shouldn't punish economic success and innovation they shouldn't confuse protecting competitors with protecting the competitive process and they shouldn't assume that the federal government somehow has a magic ability to essentially plan the economy or that big is bad they shouldn't assume that putting more power in the hands of government is going to help promote more speech it won't actually likely chill speech and we should certainly not want the government um involved with speech we want them to be the speech police and it won't help with competition it would actually probably make it less competitive and reduce innovation and really important for a lot of conservatives out there weaponizing anti-trust is not limited to big tech it affects the entire economy what would happen by gutting the consumer welfare standard and changing antitrust as you'd be giving federal agencies incredible discretionary power and as i speak here today we have a country with some very disturbing vaccine mandates really some serious attacks on private property rights an administration that is going on what i call the bill bureaucracy bigger campaign so we shouldn't need all these real scary life examples to know that giving the federal government almost unfettered power isn't a good idea so so what should be done again i said anti-press should be used appropriately and i think anti-trust as it is now is well suited to address new challenges if there is a genuine genuine concern regarding competition this is an incredible opportunity to go on offense policymakers should be focusing on how government itself hinders competition and innovation get rid of the barrage of unnecessary regulations and laws like occupational licensing laws that make it difficult from americans to even achieve them you know their their career path and policymakers should be going after cronyism and corporate welfare and i know that's kind of a uphill battle obviously too many firms go to congress expecting policy makers to give them some type of advantage that they haven't out that they haven't earned because they're being out competed by other firms um if you change if you if you special interest no the antitrust and weaponized antitrust is something that possibly makers will use that will definitely turn cronyism make it even far worse than it already is so the us is an economic model for the world because of its free enterprise system economic freedom and the innovation of american people not central planning of d.c and i just would suggest we can't forget those principles or what makes this country great i look forward to your questions thanks darren and uh now marine great thank you delighted to be here um so i really appreciate the two preceding speakers laying the groundwork for a good discussion of the future of antitrust and where things might be going i'm by nature an optimist so i will mention one bright spot that i saw in some of this which i really appreciate and darren you mentioned it occupational licensing reform that is actually something um that the obama administration had a very good report on that at the end of the obama administration it's something at the ftc going back to the bush administration we had focused on and when i was the acting chairman i had a task force an economic liberty task force to focus on this and i was quite pleased to see it continued in the recent executive order on competition so if we're forecasting the future let's hope that occupational licensing reform continues to be one of the um things that achieves bipartisan support but turning maybe to a little more of the the near term one of the things that i foresee happening is that there is this sense of frustration that the people who want to use antitrust to do more things to reduce bigness of companies to reduce their their power overall unrelated from consumer welfare effects that they are frustrated with the way the courts have interpreted the current antitrust laws right they don't they don't like certain outcomes in merger cases or in conduct cases and so some of the legislative proposals would address that right the idea that we we don't like this standard so we're going to undo it by legislation but we all know legislation is hard we all know that it is a long and winding path and i completely agree with um with darren that uh it's one thing when you say well it's only going to impact you know four or five companies uh and it's another thing when people begin to wake up to the to the wider economic wider indus you know economy-wide impacts and we might start to see some you know political pushback more broadly so so given that state of affairs one thing that i think the ftc the current leadership is very determined to go forward with is something that doesn't require congress to act in their mind that is a way to do an end run around unfavorable court decisions that they they don't care for and the current chair of the ftc lena khan with current commissioner um rohit chopra had done an article about saying that focusing on the ftc's long dormant if truly almost never exercised unfair methods of competition rule making authority um and so they are putting in place the apparatus the the the staff and kind of clearing the decks policy wise to be able to move forward to try to make what are essentially antitrust rules that are not um cabined by unfavorable sherman act or clayton act precedent so turning to so it's unfair methods of competition rule making so turning to the unfair methods of competition part of it first the rescission of the previous unfair methods of competition policy statement which tethered the interpretation of unfair methods of competition to uh the consumer welfare standard they rescinded that right so that certainly suggests that they are going to try to have a broader view so when you go back to the reason why the ftc was created one of the concerns at the time so the ftc was created in 19 i think 14 i think it came into existence in 1914 right so a lot of legislation was in 1913 was the idea that the the sherman act which was already in existence had been interpreted by the courts to be very very narrow extremely narrow interpretation and so there was this legislative language history talking about well we want unfair methods of competition to be broader than that and we want to have an expert body the ftc that on a case-by-case approach gives guidance to business about what the rules of the road for competition should be so using that idea that well unfair methodist competition is supposed to be broader than the sherman act the current leadership seems to have the idea that uh well then it can be used as a tool to reach conduct that isn't a violation of the sherman act now what they haven't contended with is over the years the sherman act has been greatly expanded through court interpretation so at what point does the ever expanding boundary of unfair methods of competition right is it always going to be no matter how big the sherman act gets unfair methods competition is going to be a little broader than that or was it you know going back to this very cramped view that now they should be the same and really up till now the ftc has generally said they are coterminous if something is a sherman act violation it's a violation of the ftc act and there has been this kind of flirtation with this idea that well unfair methods of competition has you know it's not like this right it's not sherman act um ftc act it's like this right there's a lot of overlap but there's some a penumbral unformative competition and the fdc has spectacularly lost that argument numerous times in court uh but but yet they'll try they'll probably try once again so that's the unfair method as a competition part of it but the rule making part of it is really interesting because the ftc has essentially promulgated one complete unfair methods of competition rule it had to do with the very very important issue of tailored men's and boys clothing it was never enforced but there was a rule that the ftc did uh where they did a combined unfair method as a competition and consumer protection rule because the ftc also has consumer protection authority and the dc circuit at the time which was kind of in the full flood of you know embracing rulemaking said that the ftc you know did have this authority it's not really in the statute it's sort of a in a um like a sort of sidebar of the of the statute but they the court said well the statute didn't say that they don't have it congress didn't say they don't have it rule making is a good thing ergo they have this authority so congress steps in and acts and passes something called the magnus and moss act that focuses on the ftc's consumer protection authority and says well they have consumer protection authority but they have to have all these extra protections in place notice and comment rulemaking apa rulemaking's not enough they need all these other kind of bells and whistles on it to make sure that it you know is there's public input and there's not bias and you know lots and lots of um guardrails there and then the ftc you know went forward and made some rules under that it never after that tried to make an unfair method as a competition rule until today and so now the current leadership believes that they have this streamlined apa rulemaking authority notice and comment and that they can use this tool to to um i i believe kind of get over the hurdle of having to get congress to authorize that uh the challenges of that and as a way to um sort of sidestep unfavorable um case law so there raises a lot of really interesting issues a lot of constitutional issues there's been a lot of interpretation uh statutory interpretation since that dc circuit opinion and it was called the petroleum refineries case and so it's very interesting to see what will come of that but they they seem very enthusiastic about moving ahead so even if things get hung up in congress and even if the courts continue to kind of have a strict interpretation of the nhs laws i think the ftc believes it has this newly revealed third path that for 100 years somehow the ftc didn't notice or act on uh but now this is going to lead them into the the future of an interpretation of unfair medicine's competition that could be quite expansive great thank thanks for those comments let me um as a first question uh ask you all to explore one one point that i think was presupposed by by darren's comments which is uh issues about the political valence uh here uh and and the idea that this is a sort of conservative liberal um uh divide in in the in the policy space because calls for major anti-trust legislation are are coming from both left and right uh and i wonder if you could talk about um the extent to which those are because of shared viewpoints whether on the current concerns that they're trying to vindicate or the policies they're trying to propose is this fundamentally about uh grounded in a sort of economic populism or or what is the what is the uh the reason for the fact that there seems to be an alignment of left and right uh on some of these issues again go ahead and okay i should clarify that that there definitely are some people on the right um that would actually weaponize antitrust which is kind of the big concern that i would have i think when you saw that the so the house just your committee had a package of bills and they it got through the judiciary committee but for the most part it was it was the democrats supporting that legislation there were a few republicans so i wanted to say it's kind of equal bipartisan support for weaponizing if i trust but it i don't want to make it sound like it's only a left right issue there is some common ground when it comes to the left and right especially as it relates to big tech and trying to reform a law called 230 which we don't need to get into but there's a concern regarding speech issues the problem is that the people on the left folks on the left have a completely different view on the speech issues as those partic particularly concerned about speech issues on the right whereas people the conservatives are concerned about the chilling of speech by certain tech companies company folks on the left are concerned that they're not doing enough so i think there's some common ground and some just general dislike of tech that's definitely motivating this and a lot of the legislation that is out there connected to antitrust is tech focused now i think it's important not to just think that it's just a tech issue and this will go away and it'll just be this little carve out anti-trust dealing with tech i think that even the tech specific laws are a template for using weaponized antitrust for other industries and of course there are other broader legislative proposed legislation like the klobuchar bill that's out there as well yeah as i think i said the beginning i think there are a couple of different um strains to this reform movement and one of them pretty clearly is ideologically driven from the left i think there are some conservatives who have bought into elements of the biggest bad but i think that's fundamentally a pro-regulatory anti-business doctrinal approach and the other one i guess i tend to think of as more generally populist and the thing about populism is it it will welcome all all uh adherents it depends on which people you're pandering to so you can put a lot of things into that populist bucket without both of those movements i don't think we'd be here today thinking or worrying too much about the prospect for legislative reform and even even with both movements i wouldn't put my money on any major reforms being enacted frankly but the two of them together i think are what's driving this this moment one of the problems or for those who want radical reform is though i think they'll have an extremely hard time coming up with a consensus on what to do about it precisely because of the very different interests and strains and viewpoints that are driving this this collective urge to throw throwing aside what's there now you could probably get a pretty big group for on the hill but replacing it with something in particular i think is going to be a pretty big lift to add one more thing to those very insightful comments so i also think you need to look at the whose traditional business model did these tech companies upset right so one of the things that you know we've really seen is this movement from traditional media right traditional media was supported by advertising right the newspaper you had all the ads in it the local news all the ads in it and so much of that really starting with craigslist where um it kind of replaced the you know the sort of classified ads in newspapers there's been this erosion of the support for the business model for traditional media and the beneficiaries of that um have been often these these tech companies so it's no surprise if you were no one uh you people recall this the first hearing before the house judiciary committee subcommittee mr cicelini was on an antitrust exemption for media for traditional media to bargain or negotiate collectively with tech companies so it's it's a little ironic and i think revealing that hearings that were all about how there's not enough any trust enforcement the first hearing was about having an exemption from antitrust enforcement and i think you know so that doesn't say who's right and who's wrong but i do think it explains why media across the traditional media across the spectrum has been really very enthusiastic about these antitrust reforms because they have been impacted their business model has been impacted from these tech companies that's a great point uh okay just add one more point i think it's actually even bigger than tech i think there is a it's it's also not just simply this kind of big is bad problem there is a lot of issues that are being conflated together by a lot of people and by me i got to make sure i don't complete the issues is the tech chilling of speech but there are these big companies out there that are part of at least from a conservative perspective cancer culture wokeness and you hear the terminology of companies and all that and so a lot of conservatives are just getting really angry about it and i appreciate that but then you don't you but you still have to like take a step back identify what problem there is is there even a public policy problem and then if there is then fine you take your most narrow solution to address that particular problem and it maybe government intervention may not be but one thing and i i just trying to stress my remarks on continuous stress for however long i have to stress it is that anti-trust is the wrong tool to address that anger can i chime in on that one it's a great point just to add to it antitrust is kind of the first resort often in police for policy issues where people either can't come up with a workable solution in another regulatory area or can't get a consensus for it so a lot of the issues we hear around let's say big tech sound more in privacy or speech for data protection those may or let's just say they may be concerns or they're certainly issues to be discussed but the solutions for those are almost never going to sound in antitrust as it's been understood for decades so yeah and in part it's because antitrust is so broad and potentially vague to the point of being stretched in any direction one wants that that's where people go to try to try to get redress the other thing i just want to say i mean having talked about the ideological movement as anti-big business yeah i i want to go back and correct something it's anti-certain maybe this is a point that the other panelists have made is anti-certain aspects of certain businesses if you ask in any regulatory debate who wins and who loses the losers would seem to be an identifiable small group of firms who are under attack for various things the winners include however other businesses i mean many of the protagonists for many of these reforms are competitors of the firms who are in the gun sites so to say it's anti-business no it's anti-certain businesses and very much special pleading or rent seeking by others and i guess finally is it what i would ask is it pro or anti-consumer and so many of the practices that we're talking about are things in which consumers whether products or goods or services or speech have have spoken and for better or worse they've said we're attracted to some of these things that you're trying to take down that doesn't mean those things are necessarily always good or shouldn't be regulated but i think there's too little focus on consumers as an important constituency here and i would mention when you read the the bills there's very little discussion of consumer interests in them well that's um that is a great segue into another topic which is um fundamentally the question of who who benefits here cui bono um and and i think one aspect of that that we haven't talked about yet and that i think is worth talking about is what is the what are the international implications here what are the implications for uh for u.s businesses operating globally of the potential proposed changes here anyone want to talk about that uh well let me let me jump in on that and maybe from a slightly different different angle which is uh so the u.s any trust agencies has spent many years across republican democrat administrations very consistently saying any trust is about consumer welfare it shouldn't be used for industrial policy if it's going to be used for you know if there are other interests that um outweigh any trust say for example like national security you have to be clear about that right that that's a sep like we have cyphus in the u.s right it shouldn't be part of an anti-trust analysis um and we spent a lot of time advocating for that worldwide and now we're stepping back from it now we're stepping away from that and i think that raises very serious questions about what that means for american interests writ large going forward because now you know any trust agencies around the world can say well you know you've talked about this value and that value and everything in you know in the kitchen sink and not just consumer welfare we're just doing what you what what you do so i am concerned about that and then one other thing that i do want to mention is in a number of the bills that were considered in the house it allowed state-owned enter foreign state-owned enterprises to bring to be plaintiffs and the the companies who would be on the other end of the lawsuit had to have this very high bar to defend against these claims by plaintiffs such customer available or it's other kinds of platform data um and regardless of what the liability would ultimately be found they would have had this opportunity to do that and i think that's very concerning and so i'll just mention one other thing some people might have seen it was reported this morning that a number of former high-level national security figures sent a letter to congress raising serious concerns about the impact of this antitrust legislation on national security interests so there's there's a lot at stake here that's interesting um so i mean we'll get into i think more detail as to why um some of the reforms will wind up hurting innovation and it's just bad policy and undermine economic freedom but if quite honestly getting rid of the consumer welfare standard or just i think what's woods and not providing i mean the consumer i know you guys discussed this earlier today about the benefit of the consumer welfare standards i want to rehash it but it provided a focus for antitrust and it didn't maybe there's some subjectivity to it and it's broad but it's nowhere near as broad as what exists kind of a neo-brandeisan type of approach where you're you're worried about protecting competitors not the competitive process which is just basically cronyism and then when you're doing that you're completely ignoring um consumers and my i've worked in the ag subsidy space and the only thing that's people focus on are the farmers but they never think about consumers or taxpayers and it's really important to kind of think about everybody and particularly when we're dealing with antitrust again it's the process it's making sure that certain companies are not bad actors not simply because they're big therefore we've got to go after them um i think that moving away from resisting anti-trust policy will hurt us in the global marketplace in 2020 the u.s was a global leader we had 22 businesses um and all across all industries in the top 50 uh the fortune global 500 businesses and and that number goes up to 26 if you exclude state-owned enterprises and you know there's this constant talk about how the us needs to be a leader on the global stage especially in technology and and we are i mean we're a leader just name the industry we're a leader i think why do we want to kind of undermine that and i think that there's a very significant risk that that's exactly what would happen you know for most of the past 30 years or so as antitrust who is spreading to central and eastern europe asia developing world u.s law and u.s authorities were essentially trying to hold the line on the expansion or the creep of policy toward the sort of neo-brandisian approach and they did that relatively successfully with some some losses i advised a global global company that encountered one of the big dust-ups of antitrust in terms of the european super-regulatory approach versus what the u.s and others viewed as a more sensible policy well you know any standard analysis of regulation always asks what are the implications for regulatory creep if we do this what happens either in the same regulatory area or others if this approach starts to proliferate and expand and so what i think we're seeing now is that the u.s threatens to not be in any way sort of the touchstone for sensible policy that resists uh aggressive or opportunistic expansion in by china or european union or anyone else and becomes really the the leader in the other direction and i know and i from experience anytime the u.s takes a move that expands liability expands flexibility by regulators most other jurisdictions will very happily jump on board and who has the most to lose if any trust policy becomes even more potent for going after in particular large successful us firms i think the answer is obvious we've been talking primarily about legislation i think i would be remiss if i didn't ask a question about president biden's executive order on competition um i know maureen referenced earlier uh occupational licensing reform there are there are a wide variety of provisions of that executive order i wonder if uh if you could talk about what you see as the good and the bad there uh and the general uh philosophy behind it okay i'll take it um good occupational licensing but even even there if you read the executive order and the fact sheet even there it kind of qualifies um qualifies it more than it should there's i think like 72 i might be wrong 72 different little regulatory proposals i i've joked it's really kind of like a they did a survey of what really pisses off customers or the public and then just decided to throw in those things this is the laundry list of items basically the underlying assumption is that the government needs to intervene to i think almost address customer service complaints there's a lot of efforts to dictate ordinary business practices across the economy in airlines shipping they want to you know violate property rights for railroads and um they they talk about trying to make things more competitive but then they want to bring back the net neutrality rules which is actually anti-competitive when actually helping existing incumbent firms and i think what's i mean i could go on and on about this thing but like the uh the meat process they talk about me processing issues if they don't talk about how the government is sell is part of the reason why there might be higher concentration than meat processing industry so if you want to sell meat in across state lines you can only use a federally inspected facility a state inspected facility that meets all that the usda itself says meets all the federal requirements since equivalent you cannot sell meat across state lines you've created what what's happened in the 60s is effectively we've reduced the number of processing facilities the government itself is sometimes shockingly the cause of anti-competitive uh actions and then ironically not see i think this executive order is an opportunity for conservatives libertarians and anybody i think who's interested in economic freedom and that is to focus on how the government itself and i brought this up how the government itself enters competition and hurts innovation and there's nothing in the vitamin administer the eo that talks about how there's this barrage of regulation that's going to be coming over the next few years how is that going to impact consumers it's going to hurt consumers it's going to drive up prices for food and energy and then when you drive up prices for basic needs like food and energy that hurts the lower income households the most and therefore you have disproportionate impact on the poor i don't see anything like that in the eo so overall i think it's not a great executive order it looks to the government for solutions for non-existent problems for the most part and also should be looking if we're really concerned about competition we should be looking for how the federal government and states are actually earning competition in the first place maureen or mark do you want to so so let me weigh in with a nerdy point but that i think might resonate with this audience um so apart even from the substance of the executive order i think we are entering some dangerous constitutional waters involving separation of powers right so you've got an independent agency the federal trade commission up on the dais with the president who is directing the agency to do things now in the executive order it's couched i think very sort of cautiously as encouraging but during the oral remarks it was directing um and so okay you know maybe that's kind of you know persnickety um but one of the things that i think is an even bigger issue is actually the non-delegation doctrine right so i talked about this ftc rulemaking under this extraordinarily broad grant of authority from congress to do unfair methods of competition and you know one of the things that we've seen is certainly um an increasing attention by the courts on separation of powers issues on oversight issues so the ftc the head of the ftc and all the commissioners are not removable at will by the president and yet they're now going to be exercising a good bit of you know executive authority and now they're also going to be exercising a good bit of legislative authority from congress through this their interpretation of this broad delegation so i think there are some you know the executive order it just kind of exemplifies some of the real important i think constitutional challenges administrative law challenges uh as well as you know substantive antitrust challenges that that lie ahead for the agency i guess i agree with all the comments a lot of in that executive order is directionally somewhat helpful some of it most of it isn't i suspect it won't have a great impact at some point perhaps the court will take more cases to try to decide or limit the creeping assertion of executive power even leaving aside the important issue of independent agencies but just sort of policy by executive order is something that's been i think increasingly a problem but i i don't think any executive order is likely to significantly move the needle excuse me on anti-trust policy much of that policy is now enshrined in case law and it's and so the courts are going to be driving um law and policy formation unless and until there's major legislation which as i said i'm skeptical that we'll see but my main concern really about what's happening today is less what the executive does in terms of orders and more what the agencies do in terms of exercising their discretion particularly in areas like mergers where they have a lot of ability through the process to hold things up maybe a topic we'll talk about separately well i want to open the i have lots more questions i could ask but i do want to open the floor to questions from the floor so um any questions pending well i'm happy to oh please sir uh hi maury just a quick follow-up on on your non-delegation point um one of the fascinating things that's gone on during the byte administration is that they're using the old cfpb case as an excuse that he can now fire um people that are on board so you just fired all the people around the military academies and you just made a line that says well gee you know the ftc commissioners can't be fired do you think it'll go that far where the president i mean that's just this new wrinkle that just hit me as you were sort of talking about that i was wondering if you have any thoughts about presidents not liking what he's doing fine i fire you commissioner under this new president that he thinks that he has um so i i don't think that that's how it will be used um i i think that you know the president you know the ftc by organic statute can have more than three commissioners from the same political party so if he fired the two republican commissioners he would still have to he couldn't put democrats in to to take their place but one direction i do think it's going is the idea that under sila law you might get a challenge to finally say the leadership of the ftc has to be removable at will and then perhaps that would raise that issue right so it's a kind of a one-step to remove thing that are we going to change the character because the agency is acting in a different way it's no longer engaging in kind of case-by-case enforcement which is sort of why it was always carved out of humphreys the humphreys executor decision and now is moving towards promulgating legislative-like rules therefore shouldn't it be we've got the non-delegation problem but also shouldn't there be um you know agency leadership that's removable at will and then you kind of end up i think in the scenario you're talking about where when you have a new administration you could have a wholesale change at the ftc which of course it wasn't it was created to have continuity and bipartisan kind of expert expertise applied commissioners have seven year terms to specifically go beyond any individual administration so i think it could change the character of the agency quite quite a bit and it's the result of the actions that they're taking it's not it's not inevitable that that would have to happen so just a quick follow-up um and we've known each other for years i mean one of the things i'm finding fascinating i would really like to have your your insights on this is that for years and admittedly i come out of the telecom space you know for those people who have been under the yoke of abuse of regulation the argument has always been oh you know we'll get it over the ftc they're dispassionate they're case specific they're non-political and i would submit the developments over the last couple months that argument has just now gone right out the window um and the agency is now moving towards almost an uber regulator how do you see this all playing out um i've seen the argument being made that section five it's not really anti-trust that's only the sherman act of the clayton act it's something different um as an institutionalist of the ftc who's been there for years where do you think this is all going are we going now will this effect be the now national the re-emergence of the national nanny are they really going to do as far as what i can tell they haven't been they claim they're following the apa that's kind of squishy um and then still if as an enforcement agency and i realize they're trying to now do rule makings but you know anybody's involved in any major rule making at any administrative agency a highly political one i should say or even an adjudication of a merger you get what i call collectivism and i've just thousands and thousands of auto generated is is the ftc even are they even thinking that that's where it's going to go because that whole political apparatus is just going to go right over to independence avenue now so your thoughts on that please well one of the things that happened at the ftc's open meeting today is that they are putting into place some kind of process and i'm sorry i didn't get to watch the whole open meeting so i was driving here but um to have essentially petitions from third parties um be not just published on the ftc website which was already the case but i believe you know have to be considered by be considered by the ftc and commissioner wilson made a remark at least according to twitter reports of her remarks that um this will just create like a petition machine right and so you know just kind of this drive again towards regulation and rule making and away from historic case-by-case enforcement so that and they've created a rule making division in the office of the general counsel and they've changed um uh procedural rules to streamline rulemaking so i all signs point to lots of rule making is what i would say sir you'd wait for the mic so that our uh former acting chair olhausen made a reference to uh unfair methods of competition rules but might the ftc uh attempt to magnus and moss unfair axe rule for example in labor in labor area to go after labor markets because arguably that type of rulemaking is more defined has its complexities but it has it's it's much better established an unfair method of competition so in effect to the back door going after competition problems under magnus and moss sure i think i think that that could be one option it takes away the argument that congress didn't give them the world making authority because congress very clearly did uh in the magnus and mossa give them unfair and deceptive now there are you know additional requirements of prevalence and you know some of the other issues that the standards they need to meet to promulgate a udap rule unfair interceptive action practices rule um or we could see some kind of combined rule which is what they did back in the day in the petroleum refineries case so i think uh you know we may see several flavors and they'll they might see what which one works out best other questions sir could you could you just hold on till we get a mic so that our remote audience can hear you as well thank you thank you i think part of the fundamental problem in using antitrust and article 3 solutions is that the market itself isn't really understood because you have companies like ibm where you know they produced the mainframes and they really were the only one in the market and they produced a product what the the problem here is that the market the user is is not the consumer the the user is is is the raw material that google is is using to produce the final product so you have a user you have google who is a consumer of that user and then you have advertising companies and data aggregation that's a consumer of google so the people that are paying the bills and keeping the lights on at google are not the users they're they're basically the people that are paying for google services so without legislation article 1 solutions to fix the user problem and the exploitation of the raw material and the resource which is the user i don't see how any other solution would work because what google is doing is they're actually mining all of this this intelligence out of all of these communities and monetizing it and as you can see like like these companies are making billions of dollars off of you know on the backs of the users so maybe putting some of that user uh money back into the communities that they're pulling it out of maybe that be one part of the solution but i i i mean unless you can see another way of applying antitrust because the consumer again is not is not the user you're trying to protect the user but the user is not the consumer anyone want to react to them darren i think you can have multiple users you have multiple consumers and quite honestly if there's not value for the i guess you're talking about the person doing google searches as being the user if they don't find google to be of value then they're not going to get these other businesses along the way and the ad revenue or whatever so ultimately they're they are benefiting consumer consumers are getting all kinds of benefits for it so if we look at all the things that the end user's getting that's great there's nothing new about providing all kinds of data to private firms and then firms aggregating data and matching it up so i don't really know what's particularly unique in that sense and if we're concerned about a privacy issue and in a data specific type of issue then as mark was talking about we would to have a specific discussion on those narrow issues not necessarily antitrust so i'm not sure what and i i hear people talk about that google's you know making money off the back of the consumer but that presumes that we're not getting anything out of using google i mean the truth is people use google for a reason they have other choices they can go to other choices but they do use google and there's all kinds of benefits it's free granted we do give data to them and apparently we like the search results and the ease of its use so i'm not sure what the why what the issue is and what is the anti-competitive conduct at issue here what is the the bad action that that's at play so i mean we have all kinds of different issues we have to think about with antitrust you know um is there monopoly power um and that's just not specifically we have to answer um not just market share questions but that's not what monopoly power is by itself it's market it's uh market share within the relevant market and do they have actual can they sustain the monopoly prices and then you got to combine that with then the bad action i'm not sure we need to identify what that specific action is then it's easier i think for me at least to respond to uh you know whether or not antitrust is appropriate use article 3 solutions for for unconscionable contracts where one party has no no bargaining power against the other it's the same as google or even for that matter facebook where people try to get their views out but there's no way of getting the views out once they limit them or suppress them so so we use laws to fix those issues um i don't you know i don't see how i i don't know whether it's necessarily anti-trust but but we do use the power of the courts to fix those solutions we do use legislation to fix those solutions i don't see why google would the terms of agreement could be compared to an unconscionable contract which i'm not sure they can be but that would maybe be a way of going about doing it but i don't think i don't think that we would compare it that way but i don't know what my colleagues think but i don't but that is a way of looking i mean it's a possible way of looking at it but i don't think it would of course a reluctant to do that anyway but even if they did i don't see it necessarily the the agreement between the users and google being kind of that kind of unconscionable type of contract where they're well all over there me we have about five minutes left so let me ask i'll sing a few bars of something while uh thank you this is for all members of the panel most people in this room i i know don't like the democratic proposals or legislative uh changes to any trust law i'm wondering if any of you have republican proposals that you like or your own proposals that you'd you know like to in an ideal world see enacted or i guess third choice is just think we should you know basically leave it to the courts and not have any legislative fixes that's a great concluding question so let's absolutely tell you a minute great so so let me jump in i have been very supportive of the any trust agencies getting more resources to do the case by case any trust enforcement that's economically based you need skill danny chesslers and you need economists and you need economic experts uh and those are costly and i think it but that doesn't mean you know therefore we should throw over the whole system and make the standards different why don't we give the agencies more funding to do more of the traditional case-by-case economically driven anti-trust analysis so bills that would give the agencies more money have my support yeah oh sorry one of the other interesting things from the research that my colleagues and i did when we looked at factors that influenced output of any trust enforcement the one variable we found that was significant was agency budgets not shocking but it wouldn't necessarily be true it turns out um at least in the data set we looked at over a period of time it was quite extensive but that that that was that was that was what we found now i don't know if we need more antitrust or not but if the problem is seen as well antitrust is basically doing an okay job but there's not enough of it i think that's that's probably the thing that i would that i would do and to the gentleman's point about google i mean if nothing else one can say it's it's complicated and to sort out what to do about a google you want some good rigorous work done by people who are resourced to do it they're not going to get very far if they don't aren't resourced to go in and get data and look at it in very large quantities and and do a serious analysis and that does cost money so if if the goal is to do more uh along the lines of the way the law is currently structured then i think you know agency budgets are probably the way to go done i'm not sure if i brought this up in my remarks or not um but i i don't know it's kind of i think when we get maybe when you get big government solutions like when we go to people interested in free markets and economic freedom we go up to the hill and we talk to staffers and we try to identify kind of say hey this big government solution is not a good idea then the often response is okay what big government solution do you recommend that's when the problems of being somebody who actually believes in free markets it's tough to give them so i think it's really important again for us not to respond to big government solutions but then okay we better come up with our smaller big government solution i don't know what i mean again we need to identify what problem we're trying to address if there's a concern i have heard a concern whether or not the consumer welfare standard really does address non-price types of issues if that's a concern that's something that if we need to codify that fine that might be something worth doing i know one piece of legislation we tried to codify the super welfare standard i don't know that it's not going to get very far because if you did that you would have to compromise on some really bad things um as well so i don't and again i i just think it's important to try i'm trying to i don't know if by doing very well but try to reframe a lot of this to if we're concerned about making sure that people have the opportunity to engage in voluntary transactions and to be able to start businesses and to choose their career paths and to be able to compete effectively without the government meddling and others meddling or and quite honestly um private firms actually violating like doing being involved price fixing whatever there are actions that can be taken should be taken but we what we need to be doing is focusing again on how um the government itself does create problems and it does create a lot of problems so why not that's not a bad place to start i think that was a great wide-ranging panel we did everything from tailored men's and boys clothing to persnickety separation of powers analysis so um i will you all join me in giving a hand to our three panelists [Applause] [Music]

Channel: The Federalist Society

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Keywords: #fedsoc, federalist society, conservative, libertarian, fedsoc, federalism, fed soc

Id: bh67TpkY4CI

Length: 72min 32sec (4352 seconds)

Published: Thu Sep 30 2021