Assistant attorney general for antitrust, discussed antitrust enforcement during a conversation hosted by the Brookings Institution in washington dc, topics include revising the guidelines for mergers, labor market impacts, the importance of acting competition and innovation in how the courts interpret antitrust regulation and how the courts interpret antitrust regulation. Good morning everybody. Welcome to brookings. Welcome to those in person and those online and those on cspan. Before i introduce our distinguished guests, i thought i would give you a sense of how we propose to run the program today. Were going to do 60 minutes of discussion among the three of us. Then we will open up for 30 minutes of questions, from before, as well as question submitted online. We ask, if youre going to ask a question, identify yourself, and any appropriate affiliation. Lets get on with the program. The Brookings Institution and the governance studies program, of which i am part of. Im in the brookings study program. Were honored to welcome back two brookings chairs. Let me quickly introduce both, they need no introduction but i will give them a short one. Lena,s most recent job prior to the ftc, she was counsel to the house antitrust subcommittee. Before that she was an attorney visor to then commissioner chopra who is chair of the Consumer Finance protection board care get she is a prolific contributor to the antitrust debate including the widely read peace while she was a student at yale on tech platform dominance. She was nominated by President Biden to be a commissioner on the ftc. She was confirmed by the senate in june of 2020 one. 2021. She set a record of time as commissioner before becoming chair. The president was going to designate her as ftc chair. Jonathan, he has set up an trustn d. C. Like the chair, he has been a vocal advocate for figures antitrust enforcement. He is tough and determined, as demonstrated early in his career by surviving two years working for me. So let us get to the questions. I should note that he was confirmed by the senate in november of 2021, coming up on two years. First of all, welcome. Thank you for coming. The first question is about at 10,000 feet. Both of you before assuming your roles in government had been critical of the enforcement of the antitrust laws and traditional interpretation of the ftc act. I think the bottomline position you have articulated is that past antitrust enforcement has left a lot of consumer injury unaddressed or underdressed. That means harm to consumers, to workers, that antitrust enforcement should be ration and had not been doing. I think it is fair to say the president appointed you because you saw the need to be a game changer. So the first question is that an accurate characterization of the role, specifically as you approach the job on senate confirmation. What goals did you have in mind, and can you offer a little selfassessment of progress thus far . Lena, why dont we start with you as a more Senior Member of the antitrust administration . Y it is so great to be here. Thank you for hosting and it is an honor to share the stage with bail. Dale is an antitrust legend and ive been so grateful for his support and help over the years. Look, theres no question that at the president noted in his 2021 executive order on competition, there is been a serious reassessment of antitrust in the need for reinvigorated competition policy. I think there is an understanding that over recent decades, weve seen waves of consolidation across markets so that many markets across the u. S. Dominated by a small number of companies, and that that lack of competition is harming the american people. With higher prices, lower wages, innovation decline, it has made it more difficult for entrepreneurs and startups to get a foothold in the market and overall, as the president noted, it also means our democracy is worse off. And i think there is most governmentwide effort to reinvigorate competition policy and it has been an honor to be part of that effort at the ftc. At the ftc, we have a whole set of Law Enforcement tools but we also have policy tools firing on all cylinders to make sure we are faithfully enforcing the laws that Congress Passed as the reinforcement of the sherman act in the clayton act but also critically, the ftc act. A number of things that weve been doing at the ftc really going back to the statutes including section five of the ftc act and understanding what was the goal when congress wrote unfair methods of competition, how we interpret that, and how we can make sure we are being faithful to the text of the statute and the legal precedent on the books. So thats what weve been engaged in. We always want to be moving with even greater urgency and greater speed, but with the progress weve already made in the last months, we had two major monopolization lawsuits this past summer with the doj proposed draft merger guidelines. A whole set of rulemaking underway, both on the concealed protection side as well as the competition side that would eliminate noncompete clauses in contracts. We are thrilled with the progress weve already made. We have around 1200 people really devoted to antitrust. We are smaller today than we were in the 1970s, so we are small but id and really looking fire on all cylinders because we recognize the urgency of the problem we are looking to address. Thanks. Allow me to echo the sentiments that lena shared. When i started at the ftc as a bright eyed summer intern in the summer of 1996 and eventually as a first year lawyer in 1990, i looked up and saw two giants. And i thought to myself, if im fortunate, i will grow up to be like bill and bob. With more hair than bill. Not much. So being here with you is unbelievably humbling and very meaningful. I do think that lena encapsulated a lot of what it is we are trying to do. Where are the goals . I think it is a wise value judgment that competition matters. Why . Because the Democratic Society depends on opportunity, access to opportunity, ability to start a business, realize the American Dream and the upwardly mobile as a worker, as an entrepreneur. The ability to benefit from innovation, lower prices. All of these are core fundamental values to our society. In the antitrust laws are the cornerstone of protecting those values. We have a very serious responsibility which is to do that, and we take that very seriously. And we have to look at the laws around us and not think about the antitrust at this overly technocratic exercise, but still think about the antitrust as Law Enforcement. Congress wrote a law, courts have interpreted it. Our job is to enforce that law. First and foremost when i had the privilege of a lifetime to take the position, this is an exercise in Law Enforcement. We start with the facts and we follow the law and we see where it leads. And ive also started with the appreciation that ive come to really appreciate that the key to success is not what i do. The key to success is harnessing the power of the antitrust division. That is someone who theyll, as someone who has sat in my chair, the talent is overflowing. The dedication, the wisdom. The institutional knowledge, fortitude, a commitment to the mission is unending. Answer part of my job as i see it and perhaps the most key ingredient to success is making sure we can unleash that. I look back and think about President Bidens executive order, that what we ought to see from attorney general garland and his dedication to reinvigorating antitrust and oarsman. We have a lot to do, but im really proud of where weve come. For example, weve challenged the first ever and succeeded in monopoly case in schuster. The first ever successful challenge to an airline transaction at trial. After the first time in over 45 years, we not only brought monopolization cases as criminal, but we brought to event including one that is pending trial. We had the first ever systematic enforcement which involved interlocking directorates which forced nearly 20 directors to resign from boards with many more investigations ongoing. Weve made it very clear that we are going to follow the puck where it is going and enforce the law in light of how markets actually work and as a result, we seen a decline in problematic mergers coming to us in the first place. It means that we dont have to use unnecessary taxpayer resources to Block Transactions because those transactions to quote one of my predecessors who might be on stage here, some transactions should never leave the board room. Weve seen many abandonments since we started, and these are transactions that have been abandoned. The first two years has been a long decade, but we are excited. We have an amazing team. Im blessed to have a bunch of been here today. An Extraordinary Team both in the front office of the antitrust department and more broadly, but most importantly, the antitrust division employees who are, with no offense to my friends at the ftc, second to none. Let me just follow up on a point. I think the Public Perception of the antitrust bar and the Business Community perception is that the two agencies have dramatically increased the number of matters particularly in a context of investigating and the number they are challenging. Jonathan just suggested that may not be quite right, but the percentage of problematic transactions is probably about the same as it had been previously. Is that your experience as well . I think overall it is true, but as a law enforcer, a key goal is deterrent and more and more we are hearing from senior lawmakers, the head of m a, a Prominent Investment Bank who said previously, considerations about antitrust needs to come in the middle of the deal, or even at the end of the deal. But now he is seeing that antitrust considerations or assessment of antitrust risk is happening at the very end. And the deals are not being proposed from an antitrust perspective with legal concerns, and that those deals are not getting out of the board room. And from a Law Enforcement perspective, that deterrent is absolutely a market our success. We are looking to continue building on that, i think the more we can achieve deterrence, the more we can make sure our resources are being deployed effectively and not having to go after the flagrant law violations we are seeing and really be able to shift attention to areas where we think there needs to be more on the conduct side until overall, we think that is the really important enhancement. I like the way both of you frame what you are doing as law and oarsman. Many people miss use the term antitrust regulation. Its not a lot of regulation. Its a lot of enforcement. Let me continue on. For those who are not antitrust nerds like me, you may be aware there are draftrevised guidelines for Public Comment periods i closed a few weeks ago. Merger guidelines in various forms. The most recent revision is 2010. Somewhat the peoples surprise, the courts of the years have embraced these as a helpful and informative statement of what the analytical frame ought to be with proposed m a transactions. The revised, proposed guidelines. I want to ask you some specific questions about what is in their. But you changed the format in a very significant way from the way they have been since 1982. Can you go into why the framework is changed . Lets start with 1982. I was nine years old and had a full head of hair. A lot can change for those of you can remember back that far. They get out what your lives were like in 1982. What cars look like, what phones look like. They had rotors. Documents were stored in file cabinets, not clouds. The world is very different. The idea that we are bringing a new format framework to how we think about mergers in 2023 vs. 1982 should be selfevident. The world has changed. The world has changed in many ways. The world has changed in terms of how competition presents itself. That is how we started this project. The goal of antitrust enforcement is to prevent competition, so the first question should be overly technocratic like this horizontal or vertical. Terms that have lots of means antitrust lawyers that in my 25 years of practice i dont think i ever saw an executive refer to a market as horizontal or vertical. We have platform businesses, data, privacy issues. People pay with privacy and data just as much as they pay with their wallet now. How people pay, how people communicate has changed. How we understand market has changed. A lot of economics has shifted from theoretical abstracts to applied research. We have data signs. We have cognitive science and behavioral economics. By starting with the question how does competition present itself, we can be faithful to the statute. So weve made a number of ways we see competition presenting itself. Might affect a traditional supply chain with a manufacturerdistributor retailer, you look at it one way. There are lots of different ways in which competition presents itself and by organizing the guidelines around the realities of the market, we certainly hope that we dont miss those market realities as we enforce the law. Thanks. The first time, the guidelines site case law. The rationale behind deciding to refer to antitrust jurisprudence. What we are looking to do his fidelity to the law. As we went through that exercise, we both identified instances in which there had been a bit of a gap between what some of the guidelines had laid out and what the law on the books had said, as well as just entire doctrinal frameworks that had not really been front and center. Support of this exercise comes we wanted to make sure we were closing that gap, making sure the guidelines were fully faithful to the precedent on the books and that we were also ensuring that it was comprehensive. And so they were accounting for different ways that mergers may threaten competition even if they hadnt been top of mind in recent years. So as part of that exercise, we wanted to make sure that we were showing our work, to make sure that if these guidelines are going to look different, explain how they are grounded in the law and seems like a natural part of that exercise. I think reflecting more generally, theres been greater reliance on a whole set of tools including economic tools that are really important, but ultimately this is a Law Enforcement exercise and the law is the core anchor. We wanted to make sure that we were giving due respect and appreciation to the law. More generally, one thing that i think the current structure of the guidelines also does really nicely is it does a lot of analytical work on the front end. There are at least 12 different ways that you can analyze mergers on the front end. Internally, as we think about how does our staff, with the very limited resources they have on a very expedited timeline except mergers, it is already providing a lot of analytical efficiency on the frontend because you can look at a deal and say this is raising concerns. Whatever combination. And that just anchors the analysis and provides a lot more efficiency and effectiveness in knowing what are going to be the key dimensions we are going to be looking at. Both from a fidelity to law perspective but also easeofuse for our teams, hopefully for the Business Community, i think it is going to mark a big step forward. Thank you. And a comment, ive seen some of the comments, ive not read them all. Most of them have suggested that we are citing Old Supreme Court cases. The challenges arent all that many new Supreme Court cases involving mergers. They did a Little Research and found that in the last 10 years, 50 different merger decisions have been cited. It is not as though the agencies has resurrected them from the grave. They are alive and punching. In a Law Enforcement exercise, you have to look at the law. Has anyone out here heard of the case brown v. Board of education . Seriously. Raise your hand if youve heard of it. Do you think we should still cite it as valid case law . Let the record reflect that most people dont. I want to talk to those who are not. That was decided 1954. My recollection from law school, it has been a while, is that Supreme Court cases do not expire. And so the question is how you take those questions of law and apply them to fax on the ground today. And as you point out, these are the cases not only that we are citing in timelines, but the case the courts are citing two. In the case of key legal principles like mergers should increase concentration to a certain level, mergers shouldnt take monopoly power and entrench it further, mergers shouldnt cut off supply of key inputs to rivals. These are core principles. Questions of law, as they are often referred to in law school. That is separate from questions of fact. How you analyze a fact in any particular merger depends on the facts of any particular merger. But the key principles are the same. The other thing i would point out is a lot of the seminal cases in merger enforcement were decided and this is actually, i think, important historically by the amendments and merger act. That is actually updated in the 50s. To strengthen it, to close some loopholes, to make sure that not just horizontal mergers as we call them were covered. And so what followed after a statute is updated or written, there were a bunch of cases that were decided to determine what that statute meant. And so cases like brown shoe and Philadelphia National bank and numerous others were decided in the following decade in order to determine what congress meant when it revised the statute. And they went back and looked at the text of the statute, looked at what Congress Said when they were enacting the statute, and they decided that certain legal principles applied. So it is not surprising to me that a lot of the key cases interpreting the law were decided after the law was updated. For that reason among others, perhaps, there had not been a lot of Supreme Court cases year. The last one didnt even involve a merger, probably in the early 1990s, before that in the 1970s. They dont go to Supreme Court t