In an interview with ProMarket, assistant attorney general Jonathan Kanter, head of the Department of Justice’s antitrust division, explains why he believes that the doctrine that prevailed over American antitrust enforcement in the past 40 years has failed and why it’s necessary to broaden the debate over antitrust policy beyond lawyers and economists.
“I am here to declare that the era of lax enforcement is over, and the new era of vigorous and effective antitrust law enforcement has begun.”
Jonathan Kanter, the new head of the Department of Justice’s antitrust division, used his keynote speech at the Stigler Center’s antitrust conference last week to mark a significant shift in the way the US is enforcing its antitrust laws. In his “Five Pillar Speech”, Kanter identified the five principles of effective antitrust enforcement: Recognizing that the purpose of antitrust law is to protect competition; making the language of antitrust more participatory and inclusive; adapting to market realities, rather than relying on assumptions and static models; reviving enforcement of Section 2 of the Sherman Act, which makes it illegal for any single entity to “monopolize, attempt to monopolize, or combine or conspire” to monopolize; and enforcing the law through litigation.
It is the fifth pillar that garnered the most attention and signaled the most meaningful shift. “Our duty is to litigate, not settle,” said Kanter, who later on clarified his intention when he declared, “We are not part of the Chickenshit Club,” a reference to journalist Jesse Eisinger’s book of the same name. Kanter’s remarks at the Stigler conference followed earlier comments he made during the American Association Bar’s annual conference earlier this month, in which he said, “We’re not afraid to take big cases and we’re not afraid to take on big companies. Full stop.”
In order to learn more about Kanter’s vision for the future of US antitrust enforcement, we sat down with him for an interview. In his interview with ProMarket, Kanter explained why he believes that the doctrine that has prevailed over American antitrust enforcement in the past 40 years has failed, why it’s necessary to broaden the debate over antitrust policy and make it less exclusionary, and why he’s not afraid to go after tough cases, including criminal investigations.
[The following interview has been edited and condensed for length and clarity]
Q: You began your opening remarks today by saying, “We’re starting a new era in antitrust.’ What is the era we’re now leaving behind us, and when did it start?
Roughly, I think the new era coincides with the 1980s, when there was an effort to infuse new ideas to shift the law in a new direction and create a world in which there was significant deference to the decisions of businesses. There was a concern about antitrust chilling competition, chilling innovation, and a new framework was introduced for mergers, for monopolization. That framework, right or wrong, was tractable, and it became the prevailing approach for the next few decades.
Q: What in your view were the ramifications, or the price, of the past 40 years of antitrust?
I think the price of the last 40 years was that we lost the opportunity to develop a dialogue with the public. We lost the opportunity to educate the public why antitrust enforcement is important, why competitive markets are important to a democratic society. Instead, we created this very insular community, one that did not necessarily invite the viewpoints of others. We’ve now woken up 40 years later, and we have farmers who are unhappy, small businesses who are unhappy, there’s concern about platforms that control the flow of information in democratic society. There are people in the broader community who want to know how we got here and what we can do about it, and we have to make sure we’re having a conversation that’s inclusive and not exclusionary.
Q: Would you also say that it translated to a weakening of the democratic process and democratic institutions?
Yes. When we have information that is controlled and distributed by a very small number of entities, as a democracy we lose the diversity of viewpoints and ideas. Back in the late 70s, Bob Pitofsky wrote an article in the University of Pennsylvania Law Review where he said this was going to happen. He said that while the Chicago School approach is nice and tidy, it doesn’t take into account certain kinds of values about the importance of the marketplace of ideas and the free flow of speech in a democratic society and that’s going to come at a cost to the public. Today, the bipartisan view is that’s exactly what happened.
Q: Do you consider yourself a new Brandeisian?
I am a lawyer for the Department of Justice, I represent the United States of America, and I enforce the antitrust laws.
Q: In your address before the American Bar Association (ABA) earlier this month, you made some interesting opening remarks. You essentially delivered to a room full of corporate lawyers (via zoom), the following message: One, we have no fear; two, we have no fear of big companies; three, we are going after individuals; and four, we will pursue criminal investigations. Was the provocation intentional?
Well, my words are always intentional and I was aware of my audience at the time. I think it’s important to be transparent and direct. In that same set of remarks I said we have a client, and our client is the people of the United States. The antitrust bar is not our client, and we cannot make decisions in the best interest of the antitrust bar. It’s okay to say that out loud. The folks at the, [antitrust] bar, they’re grown ups. I’m sure they can take it,
Q: But we are social animals. Some of those were your colleagues, friends, and adversaries in the last 20 years.
People who know me well understand that this has been my philosophy for some time now. A lot of the work that I’ve been doing in private practice leading up to joining the DOJ has been in favor of more enforcement. I hope an honest, open, direct conversation will generate respect. But again, my job is not to please the defense bar. It’s to make sure we’re zealously representing the people of the United States.
Q: Did you decide to focus on individuals and on criminal investigations because it is your philosophy that this is the best way to get real deterrence?
It depends. We have a civil program and the criminal program. We are making it very clear: we’re going to hold individuals accountable. We’ve updated our leniency policy and our approach to criminal enforcement to reflect those priorities. We’re going to stick with it, we’re going to enforce the law to the fullest extent possible, and I think it’s important that people understand that. That means individuals and that means individuals from big companies.
We’re also going to hold big companies accountable. When I when I talk about big companies, it’s important to remember that they call it antitrust for a reason—the trusts were the biggest companies in the world, the ones with the size and significance of a government. There was a desire to make sure that we were not creating monarchies over our everyday lives through large corporations. Part of what we’re here to do as antitrust enforcers is to make sure we’re prioritizing the aspects of enforcement that have the greatest impact on the public.
Q: You talked a lot recently about broadening the language of antitrust, moving away from exclusionary language toward something more inclusive. Why is that so important to the rejuvenation of American antitrust?
Because we lose touch with the people we’re trying to protect. How can we say we’re trying to protect the public? How can we say we’re trying to protect farmers if we’re not talking to farmers? How do we say we’re trying to protect small businesses if we’re not talking to small businesses? How do we say we want to protect the health care system if we’re not talking to nurse practitioners and emergency room technicians? These are conversations we have to have in order to understand the impact of what we’re doing. It’s a necessity.
Q: For the past 30-40 years, antitrust enforcers and practitioners have not been concerned with protecting nurses or workers or suppliers, but rather with prices and consumers—the so-called “consumer welfare standard.” Is the CWS something that needs to be done away with?
If you ask five antitrust lawyers, “What does the consumer welfare standard mean?”, you’ll get six different answers. I don’t think there is a uniform view about what it means. The whole point of a standard is to have something that everybody agrees on, and when you have such widespread view of just a few small number of words, it’s hard to call that a standard in my view. Also, I think it’s been used and weaponized. Does consumer welfare just mean the welfare of consumers, or does it mean something else? The approach that I’ve been trying to advocate for is one that’s really more faithful to the language of the antitrust laws, which is to value competition. We can talk in an academic sense about benefits to workers and suppliers and consumers, and all that’s important. But ultimately, our point of view that competition is the best way to ensure that those benefits reach the public.
Q: Before your keynote address, we had a session on academic capture and Tommaso Valletti said when he was the chief economist for DG Comp, he observed two kinds of economists: economists who were somewhat naive and liked to play intellectual games, not noticing they’re being used by corporations. And then there were the “old foxes,” as he called them, who really knew what they’re doing there were paid by corporations. Do you think that academic capture contributed to what happened to antitrust in the last 40 years?
I’m not an expert in academic capture, but I can say that it’s been difficult to find independent points of view. That’s not just true for economists. It’s true for lawyers, for lobbyists, for technologists—everybody’s associated with something. I think that makes them advocates. There’s nothing wrong with being an advocate, but there’s a difference between an expert and an advocate. Academia has always been perceived by the outside as pristine, and I think it’s important to have an honest conversation about what it is and what it isn’t. If everyone knows where you’re coming from, then we can have a discussion, and advocates can make their case, and then we’ll see where things end up. What I take issue with is when there’s a sense of purity that’s being put forward, but the motivations are not pure.
Q: You mentioned earlier that antitrust has become a bipartisan effort. Is that a tailwind for you?
It’s a huge lift. When I talk to people on Capitol Hill or in the broader political community, it’s refreshing and invigorating to hear support from folks who may disagree on other issues that this is not a partisan issue.
Q: How would you explain the resurgence of antitrust in the last five years? What happened that brought people like you and Lina Khan and Tim Wu to such important regulatory positions?
I think this started five years ago at the Stigler conference. I think it was it was one of the more important inflection points. I think there was courage to have the conversation, and once there was courage to have the conversation, it wasn’t long before people started agreeing.
From my experiences, people tend to believe in antitrust enforcement when a monopoly has a negative effect on their lives. What has happened in recent years is an increasing number of people have had negative experiences with monopolies across a broad range of issues. Farmers are extremely concerned about the power of Big Agriculture. We hear a lot about Big Tech, we hear a lot about Big Health Care. We hear a lot about about big airlines. As more Americans are affected by monopoly power, more Americans are supportive of antitrust enforcement.
Q: You bemoaned the disappearance of independent expertise. In the session about academic capture, Valletti—an economist—said economics can be dangerous for policymaking because it can create uncertainty and self-doubt.
Everything can be dangerous if you use it the wrong way. There’s a role for economics and antitrust, of course there is. There’s a role for expertise in antitrust enforcement. We just need to make sure we have clarity about what it is we’re trying to achieve. We need to make sure we understand the motivations of the people who are speaking out, and we need to understand our goals: what is it we’re trying to achieve through antitrust enforcement? But yes, economics can be very dangerous if it’s used by the wrong people for the wrong reasons, and I think some of the backlash we’re hearing is because of this view that became somewhat pervasive over the last 20 years in particular, that only economists are capable of understanding what’s good for competition, and that quantification of welfare effects is the key to solving all of our problems. The best articulation I’ve heard of that comes from Nancy Rose, who’s an economist. I think there are many economists who have a broader view of the economy and the importance of competition and have articulated very clearly and articulately why we need more competition, and I celebrate that—I think there’s an important role for that. But part of that is also ripping the band aid off and saying: let’s understand our strengths and limitations.
Q: Do you recognize a process of self-reflection among economists these days?
Yes, but I’m not interested in declaring war on economists any more than I am on anyone else. Lawyers have been a bigger problem than economists. I think we all have to look in the mirror and understand what it is we’re trying to achieve and why. There’s a lot of defensive reaction to the conversation and I get that—I grew up in the antitrust establishment. It’s difficult to engage in self-reflection. It can often mean that you have to sometimes say you’re wrong about some things. That’s okay, but we have to be honest in our self-reflection. We have a mission, which is to promote competition because it’s important. And if we agree that it’s important, then we all have a role to play in achieving that mission, just as we all could have a role to play in destroying it.
Q: And you’re confident that with the resources that you currently have, you can achieve that mission, going up against big companies with much larger budgets?
I don’t think we have a choice.