Professor. This is 45 minutes. Good morning, everyone, if you can please take your seats. Good morning, everyone, im a partner at gibson dunn. I would like to welcome you all here on behalf of my committee to the fire side chat with fcc chair lina khan. Our committee is grateful. Before i turn over to lina of the thought leadership project, i would like to thank Federalist Society staff, emily and sam as well as ftc staff sarah miller and Elizabeth Wilkins for their assistance for todays event. I would like to wish everyone in the audience who is in the military or served in the military a happy veterans day. [applause] and lastly on patriotic note attendees must sign in and out once per day using qr code found in your program. The Federalist Society has been home for robust thought leadership on most important competition policy issue facing the nation from consumer welfare standard to the proper role of administrative agencies in the free market economy. We have array of webinars and we welcome those interested in antitrust policy including law students and Young Lawyers to contact me for more information. With that, i would like to welcome alina katz, thank you. [applause] thanks so much, im alina kats, director of freedom of thought project. Why are we here . Two thoughts. First its become useful i think to model good faith discussion, todd and lina khan might disagree on some things and they do not fear disagreement but embrace it and welcome this as ongoing process for the all of us in refining our own thinking. Secondly, i have been intrigued by some of the themes in lina khans work. Focused on structural protections against consolidated power in the private sector reminiscent to me of how we might discuss vertical and horizontal protections of liberty and the constitutional context the and thats just part of why i am still looking for this mornings conversation. Confidence that our speakers are well known so briefly lina khan is the chair of the federal trade commission. She wrote the amazon antitrust at Yale Law School and led congressional investigation before joining the faculty at Colombia Law School where shes currently on leave. Todd, professor of law and also Research Fellow and former director of the law of Economic Center and most relevant on long list of accomplishments served as direct o of office at policy planning at the ftc. Thank you so much for being here today, the floor is yours. [applause] ive never spread a single word of misinformation. You can read my complaint. Since that time ive had videos removed on youtube. Ive been shad dow banned on facebook and i have people that i follow for advice disappear. Google has manipulated search results with the respect to the Great Barrington declaration and other things that have been done. The dark horse podcast has been demonetized. Everybody said, well, if you dont like it, start your own social media company. There was one that was called parler. You may remember what happened to parler and we have seen really what amount today election interference with the suppression of new stories during the 2020 election and we know one in particular so im speaking for myself here but what i have experienced over the last few years is this the realization that there are these impacts on society and im a little slow u im getting older and these are things that you and your colleagues have been talking for some time at least broadly in terms of political influence and private power and that sort of thing and so i invite you to kick us off by just tell thing us a little bit about how your thinking is progressed on this and how you think we should be thinking about these sorts of questions so thanks for being with us. Well, thanks so much. Let me just say first of all, great to be here. Happy veterans and thanks to anybody who the audience who serves and ftc has been protecting. And i appreciate professor for the conversation and i admire the commitment for open hearted and openminded debate. I think its stiming from a clash between theories and models and reality and i think whats coming from that is a renewed appreciation for the ways in which concentrated economic power concentrated private power can also pose a real threat to core liberties and the rule of law. And for those of us who care about liberty and rule of law, recognizing not just the waying in which the power can threaten those core values but the ways in which unchecked economic power can threaten those values i see a such a rich area of discussion and debate at this moment. Im looking forward to this conversation. I got started through talking to farmers. Chicken farmers is an industry, thousands of farmers and connected by a handful of companies and talking to chicken farmers it became clear that a lot of them were oftentimes dependent on just a Single Company for their economic livelihood and that could lead to Business Practices but what was really striking was about a decade ago the federal government was doing whole set of listening session with chicken farmers and they invited chicken farmers to speak up and at that time, a whole set of them, decided not to show up, the chicken processors had threatened them and said you go and talk, we will retaliate against you. It was just a sharp illustration for me in the ways in which unchecked private power could also infringe some of our core rights, freedom of speech in ways that also, i think, deeply offend the Constitutional Values and its been interesting as we go to antitrust laws to see we can see as parallel to checks and balance that is we so training for granted in our political sphere and there was a recognition that in the same ways that if you have unchecked concentration of public power that that would pose a deep threat to liberty, similarly you needed safeguards against each the concentrations of economic power and the antitrust and antimonopoly law as we are seeing as form of those. One of the things i find strikes about this the about all this in your example is a gad one and when i look at the history, the original antitrust laws, we do see consumer welfare, discus and we will come back to that. We also see the sort of sense of competition of being a social in some sense in protecting liberties and political process, you want to elaborate on that at all . Yeah. As enforcer we want to be faithful the laws that congress passed. We have seen a departure from some of the core values and interpretation tools and i think thats what is leading to a lot of the reassessment. Youre saying big is bad, right . But tell us then, given all this how does economic weigh, how do you weigh Economic Analysis with the sort of the values of competition . As an enforcer our goal is to be faithful to the statute. There are a whole sets of statutes, we have the sherman act. And said, hold up, we dont want the rule of reason to basically be a blank check for judges to import whatever social values they have into the law. We want through the ftc act, want to create different statutory schemes, want to create ftc to also be a set of experts who can be, you know, complement to the case by case adjudication that we see. We try to honor that there are 3 different schemes and those have different statutes and so one thing that we have been looking to do with the ftc making sure we are fully faithful. So the ftc act prohibits unfair methods of competition and theres been an effort over the last couple of decades and theres been a sen that the word unfair is distasteful and lets pretend its not there and lets just assume that the ftc act and the sherman act are basically all in one and the same and as an enforcer that approach worried me. Substituting their own judgment and supplanting what is actually written in our statutes. Our core principal is that we are fully enforcing the law as written by congress in a way that is consistent that the statute sets out. Economics is a tool that can inform our analysis but i do worry about tendency that we seem to import words that are not in our statute and let those words override what actually is in our statutes be it consumer welfare, be it forms of efficiencies, struck by comments this is actually created a regime thats, you know, produced uncertainty, produced unpredictability and from a whole set of metrics i think theres impetus to go back to core values. Lets pick up on that then because you alluded and antitrust has gone in deferent directions over the past decades, Chicago School revolution and one of the things i wonder is sticking back to that time, sort of the direction antitrust law didnt really just kind of fall out of the sky and wake up one day and say we need to turn, robert had a right. Lets go for it. If you look back at the history, within of the reasons we had the antitrust laws developed was in 60s and 70s, the United States had declining competitiveness globally and stagflation, sluggish Economic Growth and there was a big movement at the time for Regulatory Reform that was bipartisan. Started under Carter Airline Deregulation and trucking deregulation and part of it was reform of antitrust laws and thats the way i see history and so im curious how for somebody like me who is thinking about that, how should i think that the world is not less competitive than it was then, a lot of the companies that we think about as the ones i was just criticizing, like i think its horrible that amazon can and does essentially decide whether a book will get published. One company can basically decide whether a book gets published because they have so much control over distribution and if they wont carry it, they are not going to publish it. Its very dangerous, the private power but at the same time im just speaking to myself obviously but a lot of these companies are also sort of global leaders, competitiveness and the 80s it was japan, today its china. How should i be thinking about those issues and how general broader economic and Global Competitiveness issues relate to how we think of antitrust. Thats a long question. Its a very important question and during the discussion we hear a lot. Back in the 70s we similarly faced these questions and as the Justice Department was investigating at t, the department of defense said hold up, dont go with the antitrust action because it will jeopardize our National Security. Ultimately we did see the Justice Department take action against at t and we saw Justice Department take action in the ibm, most important antitrust actions that we had this n which they positioned the u. S. To get ahead. They i knew that as key set of antitrust actions and if you do comparative advantage in japan, parts of europe that actually double don on national champion, the u. S. Ended upcoming out ahead because National Champions werent able to innovate in the same way. Especially with the Large Tech Companies that we should hold up on antitrust these companies are actually deeply engrained in china. And economic dependencies can actually leave the u. S. More vulnerable and we have seen how foreign states can use that economic leverage as a way to, you know, impose their own social values on the u. S. And we heard about some companies censoring, changing the content of their products and services to please the political leaders of other countries and so these higher paradigms here are a bit more scrambled when the companies have interest that may be aligned against u. S. National security interests. I think the other area where some of this comes the bear the Defense Industrial base and for several years we have seen top military leaders come out and say degree of consolidation that we see in Defense Industrial base poses risk in National Security. This happened across administrations but really during the Clinton Administration where there was a policy choice to spur consolidation and we see 50 major defense contractors wheedled down to 5 today and for major weapon systems oftentimes the government is dependent on one or two or sometimes three contractors and that can be a problem both from the perspective of the government paying more but also perspective of just challenges and scaling up at moments when you need. Take another example. A couple of years ago there was a factory in louisiana that blew up and as a result of that one explosion the u. S. Production of particular type of gun powder, black powder which was input that has hundreds of military uses, we no longer had any factories in the u. S. That produced that gun powder. That factory is still offline and just another example of how concentrated of production can concentrate risk in ways that leave us vulnerable from a National Security perspective and so, you know, those two examples strike me as areas where more competition and more antitrust is really whats going to promote our National Interest rather than propping up National Champions, promoting consolidation especially when you have interests of these companies aligned with those in china. Youre talking about appropriately by about the other values of competition other than consumer welfare standard, one of the things bork describes, consumer welfare is imperfect whereas if we are are you suggesting we kind of open up antitrust to something more than just consumer welfare and then the following question would be how do we balance these goals, predictability if its consumer welfare versus competition in some way, concerns that i share with you about private power. You ask five people what consumer welfare means and you will get different answers. The idea that consumer welfare is standard that everybody agrees what it means i think its overstated. Now people have said, well, actually it means trading partner welfare and actually its compatible to Worker Welfare and so you have, its not in any of the statutes. Its an example of things that we should be worried about. Unelected bureaucrats supplanting their own standards into the text of the statute and a world in which that standard is not even providing a single set of values across is burden is not providing a regime thats providing certainty. I think that has serious shortcomings. When i look at the economic literature from 60s and 70s, one of the things thats related to this is at that point when, you know, and this is an area where its less of a problem than that time, literature, economic literature if i find pc choice, interference with the merger process and that sort of thing and one of the arguments thats been made, again, opening, trying to do something other than consumer welfare, whatever that might mean raises the potential for more political interference, rent seeking, competitors, protecting themselves from more efficient competitors and the lake. Should i be concerned about that . Yeah, lack, i think those are reasonable things to be worried about although in practice what we see more is dominant best position today the engage in regulatory capture at the expense of smaller and independent firms and i think these are some of the concerns that we hear today including in context of ai where a lot of the startups are seeing, you know, the big tech ceos be invited to congress and are worrying are these bigtech execs going to help crack out regulation. I think more generally, look, the Supreme Court has said the sherman act is a consumer wellversed statute and as enforcers we are bound by that and its important that they are separate statutes that are supposed to lay out different standards and so one thing that we at the ftc have been doing is going back to the text the and looking at all the precedent on the books. We put out a policy Statement Last year, section 5 looking to move away from the effort which we didnt see a faithful execution of the statute and unfair methods of competition. It has to be a method of competition and unfair. Yes, unfair is broad but lets look at what support system of unfairness means. So we went through and read every single Court Decision where the court had actually interpreted what standalone section 5 of the ftc actually means. I think these can be hard questions but we have tried and true set of tools when we are trying to figure out what does the text of the statute means and its been striking to me that antitrust is an area where rules are suspended an theres this the special and exceptional set of tools and mode of reasoning that get applied and i think we should be worried about that. Ic this is an important point that i did not really appreciate and general cantor oh talking about these questions, we think about everything being the sherman act. I think perhaps because its been so influential for people like me as well as the courts but i think youre making an important point here which is, its not just the sherman act, its the clayton act and the like and they were passed at different times and not necessarily aligned perfectly with each other. Thats right, in 1950 we had amendments in the clayton act because the clayton act was not viewed as adequately covering certain types of vertical mergers or certain types of conglomerate. It was during the cold war and lawmakers were worried that if we allowed economic consolidation that would really open us up to the type of communism that we saw elsewhere and there was a real recognition that preserving competition in the economic sphere was critical for preserving liberty values in our political sphere. One of the things you talked a lot about interestingly about structural protections for liberty that competition provides and that really resonates with me in a very powerful way. When i talk to people about this and i raise this, one of the things that people say to me is, well, yeah, i get your point but antitrust isnt the right tool, right, we should reform section 230 or we should do commentary or regulation or, you know, these sorts of things and my first question is, well, if you are concerned about government why do you think thats less intrusive way of regulating these things. Be at the railroad or Telecom Infrastructure if you allow them to discriminate, you allow them to choose who got to ride the rails and who didnt and that was a form of outside power that had affect us be it in the economy or the Public Discourse and so ive been interested by the move to re redesignate some of these modern day forms of common carriers and legal questions but i think fundamentally these are two different paradigms. Antitrust is about providing new competition providing checks and balances and limiting the outside power of any single entity. At the common carrier regime is more about accepting the competition is going to be insufficient. You will have concentrations of power and you need to something to check the unfettered power to check the ability for that entity to use its arbitrary power to pick winners and losers. These are both aimed at the same endpoints but doing it through different means. One of the things that dawned on me if you look at say the fifth circuit case on the censorship, they make it much easier if youve only got a handful of social Media Companies rather than a lot of them i think theres a structural protection. We will have a couple of minutes of questions for the floor. But i want to ask one area that youve tackled today in the same vein of sort of antitrust policy one of the other things that is part of my being mugged by Reality Experience something i never appreciated before because i was a tenured professor at an employer power and the idea that my employer was trying to force me between my physical health from an unnecessary treatment and my job that i love more than anything except for my wife and kids, my entire reason for being and luckily i was a tenured professor but i heard from hundreds of people around the country who were coerced between their career and their jobs and one of the things you tackle i would invite you to comment on how you see that aspect of it and talk about that specifically why you see this is an fpc issue sort of jurisdictionally. They were designed to protect everybody. There is a long history of recognizing they also protect workers, the Supreme Courts decision years ago. And also understanding this had been ongoing before i arrived at the agency over the last decade there had been a whole set of Empirical Research finding the labor markets are a much more concentrated than assumed and there is a power being exercised by an employers and that can result in a form of coercion. They are now applied to fast food workers, security guards, engineers, journalists and when you look at the research we found that this is harming those that are covered but also those that are not covered by them. We hear from the businesses that are able to get financing and entering the markets but they hit the ceiling in terms of how far they can scale because the workers are locked up. As part of the work i got the chance to talk to some religious liberty advocates and they were sharing how over the last few years people are coerced by their employers and wanting to exercise religious liberties and it can eliminate a whole set of important exit options and also then limit peoples ability to exercise those core rights so we see how these can see the end employers and employees relationship to be coercive but then the noncompete can kind of further make that in ways that can be a problem from the constitutional perspective and also from what you are noting. Also to go back briefly to the point on the structural protection because in this opinion i was struck by the doctrine and what that is to do. There are certain forms of restraint that are so intrinsically problematic because they have a chilling effect. So you dont need an actual exercise of government power with of the mere possibility of it to do certain types of statutory things it is intrinsically problematic because it is killing speech. I think there are analogs to that and antimonopolys where it was recognized that certain types of concentrations of power and certain types of mergers created structures that could intrinsically create certain types of chilling effects for competitive behavior such that you dont have to show endless types of affect is because the structure itself would create risks. So i think that there are interesting analogs between the First Amendment of doctrine and those that we see historically as well. Questions here upfront and then to the microphone in the back next. Hello, madame chairwoman. Thank you. Im from newport beach, california. And thanks for coming. Would you please describe your concerns if any on whenever any other Regulatory Agency takes action, antitrust action the balancing between protecting competition as opposed to mold protecting competitors . Thank you. It often gets posed with the dichotomy and there are instances in which protecting competitors can be, but i think theres also the basic way which you need to have competitors to have competition where the potential competitors are in the market. Honestly it is a little oversimplified as a practical matter we look at the specific facts and other Entry Barriers and if it is a merger case and the presumptions. So it ends up being a case by Case Analysis that i do worry about the ways in which it is superimposed and kind of turn us away from wanting to make sure that we are preserving the opportunity for competition which includes preserving the opportunity for competitors to come into the market. I think the laws and the judicial process are very wellequipped to make sure the antitrust laws are not being weaponize in any way for any particular interest. Putting together the cases we certainly interview the third parties, but we have other investigative tools and look at what the documents say so its not like the cases are put together exclusively because you have the parties and you need to do a full briefing. That is one of the Big Questions when i look at the legislative history i see the competition is kind of ambiguous. They talk about it in terms of good competition but its also pretty clear that a lot of those things had, to me at least, he a lot of the antitrust laws were protecting competitors from more efficient competitors, the research on the local antitrust laws and we have the whole experience with these sort of things trying it seems like that is a hard line to navigate. The way that i read the common law and theres a lot more room of her academic work. Im researching these original understandings that a lot of the common law at the state level was designed to distinguish between permissible and impermissible forms of competition so if impermissible to compete by colluding with your arrival and trying to do that to compete against one of the others in the market. It is permissible through having to compete by having greater operational efficiency. So i think the language of competition as a standalone doesnt serve as well in terms of the underlining analytical inquiry. On the spare method of competition it creates a better anchor for realizing what we are doing and distinguishing between the methods of competition which ones are permissible and which ones are impermissible. There arent always going to be easy answers but i think some of the history provides that. So one of the thirdyear notes on the common law and antitrust maybe sometime you can. I will take a question from the back. The Civil Liberties alliance. Its our honor to represent the professor and his successful lawsuit but my question is i was struck by the statute to the clayton act and i wonder if you would further that by pledging to issue at the fcc. Now you know why i like having him as my lawyer. [laughter] we issued a draft mergers this summer and leading up to that we went back and looked at every litigated merger decision and want to make sure the guidelines were to the test of the clayton act and the precedent. One thing we found is in some instances the guidelines had departed from the case law on the books so thats been court of the inquiry and we got comments that we are in the process of digesting. One thing that i share publicly as we get companies coming before us saying we know it is problematic from a competition perspective, but let us make certain commitments to you all to waive that through and we firmly reject those types of commitments or any other type of social justice commitment can never rescuing an illegal merger so we try to be clear that they shouldnt come to us with of those type of nonstatutory commitments because we really are bound by the law. On this point it sounds like if you like the case law is departed from the understanding are you saying are you attempting to overturn the president or seeing the distinguished like the wall street journal for example in a lot of people have said this is on contrary. How do you respond to critics that talk about how this fits with the president that had been built up over time . So, the guidelines are entirely in the legal precedent including the major Supreme Court decisions in major decisions from the court of appeals. These are decisions that get cited routinely in the modern day antitrust decisions. One distinction, one change that we saw is before i believe it was the 1970s we had something called the expediting act where antitrust cases appealed by the Justice Department the Supreme Court has to take up so just through the 70s you have much more Supreme Courts jurisprudence on antitrust than we have seen since then and some people use that to suggest major cases from this entry are just outdated. We dont take that view and if you look at modern day merger decisions and the court, they are citing the same decisions that are kind of key pillars of antitrust jurisprudence and how they get applied in modern markets and how we apply them in that context. But we dont think for us as enforcers can justify the case law just out of fashion. We have to wait for it to be overruled. With that, we are out of time. I want to say thanks for being here with us. [applause] and you are welcome back anytime. So thanks. [inaudible conversations]