The Stigler Center for the Study of the Economy and the State hosted its annual antitrust and competition conference in late April. The following is a transcript of the Tim Wu’s keynote in conversation with Binyamin Appelbaum of The New York Times.
Hello, hello. Good morning from Chicago everyone who’s watching online, and good morning to all of you in the room. Thank you for joining us again. This morning, we’re very happy to host the breakfast keynote. Tim Wu and Binyamin Appelbaum. And before we begin, please note again, we are on the record and live streaming, and we’ll post this on the Stigler Center YouTube channel later. And the opinions expressed are those of Tim and Binyamin, not those of the Stigler center or the University of Chicago. So it’s a good reminder. And always, of course, check out our website, check ProMarket.org, where we have a lot of publications for this conference in particular, and the Capitalisn’t podcast. So let me briefly introduce our speakers.
Tim Wu is the Julius Silver Professor of Law, Science and Technology at Columbia University. In 2021, he was appointed to serve in the White House as a special assistant to the President for technology competition policy, a post he has just left. His most recent book is “The Curse of Bigness: Antitrust in the New Gilded Age.” And Tim Wu actually wants to explain net neutrality to Stephen Colbert on a rollercoaster. I watched this last night, it is a fascinating movie I recommend everyone.
Binyamin Appelbaum is the lead writer on economics and business for the New York Times editorial board. Before joining the editorial board, he worked a decade as the Washington correspondent for The Times covering the feds. His work has often explored the evolution of economic policy, in particular the rise of faith in markets and the solution to a wide range of problems. And in 2019, he told that story in his first book, “The Economist’s Hour: False Hope, False Prophets, Free Markets, and the Fracture of Society”. He actually explained it also at a Stigler Center event you can find online. If you’re interested for a summary, you can find the discussion online. So please, Binyamin, please take it from here.
Good morning, all. Thanks for getting up and joining us. We’re going to do this basically as a conversation and hope to keep it free flowing and interesting. So I’m just going to dive right in.
A couple of years ago, the American people engaged the law firm of Cantor, Cohn, and Wu to handle our antitrust business. You’ve recently left the firm. Tell us how it went? What was accomplished during those two years?
Yeah, thanks. That’s great. Thanks for having me. And this Stigler, this antitrust conference is great, I’m really happy to come back to it. So, I was thinking about this this morning. And thinking about what we did. We had this metaphor inside the White House where we said, you know, what we’re trying to do here is to turn the aircraft carrier, you know? Antitrust is big. It involves judges, enforcement officials. It’s not going to be like, snap your fingers and everything moves. So we need to change that direction of things. We feel that, you know, the last 40 years or so, we’ve gone too far in one direction. We want to turn to another direction. And we had this internal document called “the grand unified theory of antitrust revival.” And we had, I can’t remember how many points, but like a five point plan for what we wanted to do. And, you know, we did a lot of it. It’s a stereotype, it’s hard to get things done in government. It’s true. But the first two years of administration, if you’re going to try and do something, that’s the time.
Some of the things we wanted to do were that, we wanted to reset what the United States and what President was saying is the US policy in antitrust. And fairly firmly put the president, you know the president historically has played a role talking about antitrust, back in that role. Back in the role of Theodore Roosevelt or FDR of saying, you know, he believes in a strong antitrust enforcement. Believes that, you know, we should do these things. And, obviously not getting involved in individual cases, but have the President, democratically elected leader of United States, be saying what he thinks antitrust policy should be. And you know, a lot of that came in the early parts of our executive order on competition of July 9, 2021.
We wanted to begin a whole-of-government antitrust effort. This is something we had, to give credit where is due and the Obama administration started to do. Jason Furman, many other people in this room were involved. Howard Lansky. But the idea was to double down and institutionalize that effort, and to, you know, collect the agencies outside the antitrust agencies that have relevant authority. That’s one thing you notice. There’s a lot of competition statutes in the US codebook, whether it’s at the FCC, the DOT, even HHS, where there’s some commitment to competition or improving conditions of competition or something. To try to use that authority, and also sort of unify and coordinate how it was being used. We created this body, which, hopefully people in this room are familiar with, the Competition Council, headed by the National Economic Council. But I think most importantly, set it up to have meetings with the president every six months, so that the Cabinet Secretaries would feel like there’s a little bit of, like, “what have you done lately” kind of sense, that there’s some feeling that part of their job was to pay attention to competition areas, in their authority in their industries. And that, you know, I don’t want to go on forever on this, but it was based on the, you know, the premise of, there’s a lot of good work to be done there. But that agencies, in some ways, lacked a sort of direction when it came to competition policy.
The third thing we wanted to do was personnel related. We wanted to appoint people who believe in strong antitrust enforcement and antitrust revival. And we did that with Jonathan Cantor and Lena Khan at the antitrust agencies. But we also, in something that we didn’t fully finish, wanted to seed the other agencies with antitrust expertise. So we wanted there to be more people thinking about prices inside HHS and CMS. What I mean is, people who were thinking about the problems of creating barriers to entry for their effects on drug prices, for example, certain regulatory conduct inside HHS, or the FDA. And that we got part of the way done.
And finally, we wanted to pay attention to judiciary We had felt that there had been sort of an indifference to antitrust, and I guess, economic justice issues on the part of our party, Democratic Party. Obviously, a lot of attention to people’s records on civil rights and other issues, but on economic issues, kind of a little bit more like anything goes. So we wanted to bring more attention and scrutiny to that. And, along with repopulate the judiciary.
So those were on our grand unified, obviously, this is just from memory, it’s probably totally wrong, but vaguely what we were trying to do. And, you know, I think we did a lot of it. That doesn’t mean we did everything. We did a lot of it. I’m particularly proud, I’d say of the competition, sorry, the executive order on competition. You know, we wrote that thing to be a document that we hope survives, and as a statement of principle, but also as a model for how to set up a whole-of-government program. And obviously the council at the front of it, at the center of it’s very important. And I’m also proud of the stuff the agencies did. Of course, the antitrust agencies who brought a lot of cases, blocked some very significant mergers. Some of them with the cooperation of agencies, which I was very happy with. A good example being the Lockheed Martin merger, that FTC, and the Eau de, to some degree collaborated on. But also our big antitrust rulemakings, like the hearing aid rulemaking, the electric vehicle, electrical vehicle net neutrality charging rulemaking, packers and stockyards acts, and also the, finally, the junk fees initiative. So I feel like we did a lot. I certainly felt busy. I was tired. I slept for a month after leaving. That’s kind of where I felt we did.
Step back from those particulars. When you talk about a grand unified theory of antitrust, articulate that for us. What is that?
Well, it was just sort of a goofy memo title, but part of the sense that, if we want it to turn that battleship, it wasn’t going to be, as I think sometimes other administration’s might have hoped, you just appoint a couple people and just let it go. We felt that there were so many areas where, if we wanted to turn things around, we had to be active. I guess that’s what I meant. Maybe that’s less ambitious than you were hoping for, less theoretical. If there was a theory, I think it was a sense that we had become, in some ways, allowed the antitrust laws to become too technocratic, too far from Democratic oversight in a sense. One of the things that I think is an innovation or a different, a change of perspective, was a sense that competition policy is economic policy. In other words, we felt that there had been a sense of seeing antitrust as, it’s obviously very case by case and, you know, merger and all these, and enforcement centered. But we thought the issue of the competitiveness of the economy was macro or a bigger kind of economic issue that the presidency and the White House should be concerned with. I’m not saying other White Houses weren’t concerned with that. But I think there was a tendency to sort of see antitrust as its own little world. And we thought, you know, I don’t know if this is rhetoric, but we often called competition, sort of, the third pillar of the President’s economic policy. So we wanted competition to be a big part of our broader economic policy. And that was what the grand unified theory was related to.
I mean, you’ve written that you think that one reason that antitrust enforcement declined over the course of the 20th century and into the 21st, is that it became too focused on sort of the details and the nuances and insufficiently focused on the pain that people experience as a result of corporate concentration and the exercise of monopoly power.
Yeah, I think that’s right. I think there’s often been a question of why did antitrust, you know, historically, become quiet? And I do think it’s partially because it became more technocratic. It went away from elected leaders, the president, figures like that, and towards, you know, small cases. And conferences, not unlike this one, where you debate things that are very interesting to us, but don’t always feel that important to people. The president in particular, you know, Joe Biden is not into the minutia of Section 7 analysis or anything like that. He wants everything to be translated into, like, what does this mean for Scranton, people in Scranton? What’s going on? What’s this mean for the workers? I think that the thing that got the President, in fact, so into antitrust was the sense that it was going to be important for workers as well as for consumers. That there had been, you know, in areas like noncompete agreements, that was something he was very passionate about, spoke at length and in then launched the executive order. And so the, sort of, visceral nature of bringing back the sense of antitrust as, particularly after a period, the antitrust winter, of weak enforcement, to fire things up again in a visceral nature was very important.
I also think it was important for the Competition Council that we had things that the President, or other elected officials or cabinet secretaries, wanted and liked talking about. Junk fees is a good example of that. Sometimes I thought of us as having, you know, a dual track of whole-of-government initiatives. Some of them were more visible, talkable, you know, politically important for the President. The other is something, you know, like the merger guidelines. It’s not like you’re gonna have a president out there giving a speech about the merger guidelines. Maybe in another, maybe in 1912 or something like that. But, you know, it’s a little difficult to get people other than this room jazzed up about merger guideline reform. But junk fees, you know, airline seating, that kind of stuff, is a way, and I think it’s important. I think it’s important that we communicate in government why we’re doing things where people understand. I think everyone agrees with that.
You know, I think it was a fault of the Obama administration, I think we meant well, but we sometimes assumed that people would get what we were doing. You know, we figured out the smartest stuff, a lot of smart people there, and then sort of assumed that the public would figure it out. And sometimes, you know, famously, there was people who thought we should hide what we’re doing so it wouldn’t distort behavior. But that wasn’t particularly, I think, effective when what you want is people to feel like government is on their side, and facing up to challenges they feel. You know, a lot of people in the last 10 years have felt that they fall into the cracks. You know, government’s not doing anything to help them against China, against big employers, against whatever, hospital consolidation. So the government, I think, to be democratically responsible, has to be sort of out there. And is that precisely, exactly describing what you’re doing? Every murder case? No, but it is giving, whether it’s the President or other visible figures, a sense of why we’re working for you, so that people don’t, and this was important with the president, you know, believe in democracy, believe in voting. For people to believe there’s some accountability. As opposed to thinking that we have a government that doesn’t really care about you, and that’s why we need some really strong guy who’s gonna do what we really want.
So there was this background of being concerned about democracy and authoritarianism in the background of some of our efforts to make antitrust big and visible in people’s lives. If that succeeded, I’m not fully certain, but that is certainly what we thought was very important. This relates to our conversation a little bit yesterday, about what role nonmarket factors should have. I don’t know if they should be in individual cases. But in terms of giving people a sense that they’re standing up for things, this is why Theodore Roosevelt did when he started enforcing in 1904, he said, “We need to show the people that the government rules this country, not the corporation’s.” And this is what FDR was, especially during Second New Deal, was doing, as well as saying, “We need to show people that we’re still in charge here, or they’re gonna want something else.” So that has a background. And it wasn’t necessarily informing individual decisions, but it’s a background of making it feel like the government is accountable to people, and will stand up to power that is greater than them. That the idea of popular sovereignty is that the people can be together stronger than other private or public forces in life. That was a big part of what we were trying to do.
So there’s 20 months left on the clock for this administration. What is the unfinished business? What needs to be accomplished from that time?
It’s a good question. Like I said, I think we’ve done a lot and I think that, using “we,” past “we.” I think we did a lot and I’m proud of what we did. There is some, as suggested by the question, unfinished business. The Competition Council which we created was, like many early White House things, sort of thrown together. Staffed by the NEC, and, you know, effective. But I do think it needs to be staffed in a slightly more institutionalized way. In other words, we have to institutionalize some of the ideas of having a constant oversight, constant pressure on agencies to take seriously the mission of competition and prevent creating barriers to entry or regulatory entrenchment, things like that. That is partially the National Economic Council, partially OMB and OIRA, partially the Council on Economic Advisors. But an institutionalized competition office or presence inside the White House, I think, is very important.
We didn’t complete the job of seating agencies to a degree I would have liked. I think we need more. There’s people like Andy Green in agriculture who have been terrific, and Jen Howard inside of the Department of Transportation, are some of the people who are seated. But I think having an ambassador might be too strong. But you know, people who have some competition expertise, more competition expertise in agencies is important. Healthcare is in competition, as everyone knows, I think is unfinished business. Obviously, the merger guidelines, which I know are underway, need to get done.
Legislatively, we did not succeed in getting tech antitrust laws passed. That was something the President wanted to do. That was something we wanted to do. Remains to be seen. I haven’t seen a lot. The Republican Party certainly talks good line about their concerns with big tech, but hasn’t particularly seemed to be advancing very much. But the President called for the passage, recently called Wall Street Journal, I guess in January, to pass the major tech antitrust laws, Klobuchar Grassley being the major example. That’s unfinished business and that ideally will get done
So far as I can tell, the fifth item on your original sort of grand plan list was the judiciary.
And so far as I can tell, the Biden administration has yet to nominate anyone to the federal bench who has any discernible experience on antitrust issues. Why did that fail? Why has this administration not taken that seriously?
I don’t think it’s true. Well, I guess I challenge the premise. I think that we have appointed people who have backgrounds in plaintiff-side antitrust work. I have trouble remembering all of the names, but I know that we did appoint at least one or a few judges with that kind of background. I think it is true that we have not met the Reagan administration’s bar, maybe very hard bar to meet, of appointing Robert Bork, Frank Easterbrook, and Richard Posner to the bench, who obviously came to the position with views on antitrust law, and were an enormous influence over the laws in the years to come. So by that measure, we certainly have fallen short. This is going to sound sort of defensive. But there are a lot of people who have a lot of issues that they would like federal judges to be in accord with them on. And that was something we did sometimes run into. But I think we can do better. And I think we have to get more federal judges appointed, period. And that’s a big priority. But I do think we can do better to get more antitrust judges with, judges that have a track record in antitrust that’s in accord with the President’s would be something we should do.
You’ve returned to Twitter since leaving the administration, and recently lamented that a paper you wrote in 2016 called “Antitrust via Rulemaking” never got as much attention as you would have liked. So I’m here to remedy that. And I want you to talk a little bit about the ideas in that paper, which is basically focused on the idea that we focus so much on enforcement and on the agencies going after companies, but that there are opportunities for the federal government to create a more competitive marketplace, administratively, through rulemaking. Talk a little bit about those opportunities.
Sure, thanks. That does make me sound kind of whiny, doesn’t it? I think I was saying that it’s surprising which papers become popular and which don’t. It’s never predictable to academics. But that paper contains the seeds of what ultimately, I think, is expressed in the Competition Council, the idea that there’s considerable work that can be done through rulemaking, as opposed to just cases. Now, nothing wrong with cases. Cases are important. But, you know, for a set of reasons well studied in the administrative law literature, there are situations where rules make a lot of sense. Where, you know, trying to do everything case by case doesn’t always work the way you might think, or it takes too long. I think, personally, I don’t second-guess the FTCs approach to (I guess I am going to second-guess a little bit) approach to pay for delay settlements in the pharmaceutical industry. But, maybe a rule would have settled that question a lot quicker. There were so many of them, it was obvious what the competitive harm was, and so forth. So, when you have scattered conduct, a lot of situations call for rules. I think noncompetes is another good example, where rulemaking makes a lot more sense than trying to establish something through case by case adjudication.
I, in that piece, was particularly interested in the certain kind of rule that I think we almost underplay. The best kind of rules, pro-competitive rules, are ones not necessarily that stop and narrow practice we know as anticompetitive, but ones that manage to open an entire new industry that people didn’t really realize could exist. These were some, in the paper, I think I call them tiebreakers, where there’s sort of a “tie” that people haven’t realized.That’s an antitrust term. But in some ways, two kinds of businesses or services that have traditionally been tied together, that if you untie can create a big boom.
The most famous and maybe obvious examples in telecom, where, over the 1970s, the FCC took these steps to try to separate or untie the provision of the phone service and the services over the phone lines. Now, these are sort of the ancestors to net neutrality, the technical word is “computer inquiries,” along with rules that said you could hook up anything that mandated a phone jack. It used to be obvious your telephone came with a, your telephone service came with a telephone. That was just the way things were. So the FCC, in a sense, broke that tie or made a cut at that point. And so you can plug everything in. At the time, people were like, “Well, this is going to promote competition in telephones. You could have a Mickey Mouse telephone or something.” That was true. But that was trivial compared to what it really made possible, which was innovation around that phone jack on top of the phone lines. Things, first, like answering machines, fax machines, but then the modem. So then when you had the modem, you get the possibility of an industry that provides dial-up service and bulletin board access and so forth, like CompuServe, AOL. Those go on and eventually seed the beginnings of home internet service eventually gets connected to the main internet, you get the internet revolution, you get, you know, billions, maybe trillions of dollars in value. I’m not gonna say it’s all based on that one little rule. But that starts things. And also the rule that says that AT&T couldn’t mess with, or even at some point be in, the industries over the phone lines.
So those kinds of creation, by breaking these ties can do a great deal. Another example, maybe not as much value created, was the eyeglass rule in the late 70s by the FTC, where they had noticed that the way things work (it was actually consumer protection, but with competition consequences), they had noticed that eye doctors control the market for eyeglasses. You go in, you have a test, and then you didn’t get a prescription necessarily. So the FTC mandated you get a prescription, which made possible third party eye sales, eventually companies like Warby Parker, and so forth. But it’s the possibilities created by these cuts that can create a whole industry.
We tried to do that, when I was in the White House, with the hearing aid rule. Our thinking… Frankly, it started, to give credit where it’s due, it started back in the Obama years as well. The hearing aid industry is dominated by a couple of firms. They sell their products for extraordinarily high prices. And one of the reasons is, you need a, needed a prescription. Go in. they measure you, and here’s your, you know, $3,000 pair of hearing aids. Internal components, maybe $500, something like that. Tight oligopoly, not much innovation. And we’ve hoped, and we’ll see how this works out, that if we made it over the counter, certain classes that can be sold, maybe it can open that market. Maybe you’ll start to see other companies get into it, you know, Apple, speaker companies, just like, consumer electronic companies, not medical equipment companies.
So that’s the kind of thought I was looking for in that paper. And also the kind of stuff I think we should all be looking for. Because you can talk about saving consumers a couple of dollars by breaking up price-fixing rings, and it is important, I think, really important. But the real stakes, the big game hunt, are when you open industries that create trillions of dollars of value, like the cut on the software, IBM’s, bundling of software. That wasn’t a rulemaking, it was a Justice Department thing. But you know, seeding the beginning of the software industry. What’s the value of the software industry? I don’t know how you measure it. But maybe what happened, the United States created for itself a big leap forward and a big jump forward in software, which ultimately has arguably become one of America’s most important industries. So that’s a long winded way of saying there is, I think, enormous potential in looking for these spots where, for whatever reason, there’s an industry that’s waiting to be born. And if we can manage to midwife that, through government cuts in existing industry ties, you can accomplish a great deal.
I’m going to invite questions from the audience in a couple of minutes. But first, I want to ask you about the official subject of this conference, which is moving beyond the consumer welfare standard. Those who were here yesterday heard you describe the consumer welfare standard as basically boiling down to a competition to show whether or not prices are going to increase. And you’ve argued that we ought to instead focus on what you call the protection of the competitive process. Describe how that would work?
I think we are beginning to move away from a strict consumer welfare sort of approach. It’s not ever clear whether we fully adopted it, in any case. Particularly, as Judge Wood said last night, in any case that isn’t Section 2, any case that is not about collusion, but is about keeping companies out of an industry. You have, in most exclusion cases, it’s very challenging to see how, and it’s always been challenging to see how the test should work. So I think we are moving beyond it. I think one thing I took from yesterday’s panel and also Judge Wood and Judge Easterbrook’s discussion, is a sense that, what much of the world is wanting is something more along the rule set. Something more along the lines of a set of rules, or a set of presumptions at least, that give us more guidance, more of a sense of rule of law, and are not a sort of case by case free-for-all.
In some sense, I think that almost the more important thing is moving away from the idea that every single case is its own free-for-all and there’s nothing predictable about it. As opposed to a sense (which, you know, there’s there is some of this in the law already) that there’s a presumption as to certain behavior, and we’ve done a lot of thinking in advance as to what those presumptions should be, and that they can be adjusted through a common law process. But that we start with a set of rules of presumptions as to illegal conduct. And I think the older standard, the protecting competition, competitive process standard is an appropriate way to adjust or set up those presumptions or rules. So that’s how I would do it. I wrote a post on this, to have a little more detail. But I do think we need to get into it. I think Carl Shapiro said, you know, we need to work this through a lot of cases, figure out what we want to do in all these cases.
But what I want to guard against, and why I’m why I feel the consumer welfare standard is something we shouldn’t talk about anymore, is it does have this bad tendency of becoming a price burden on the plaintiff in every single case. Even cases where it’s utterly unsuitable, where the main concerns are innovation, or exclusionary conduct, it just always has this risk of becoming that. And, unlike Frank Easterbrook, I do think we have had a problem with under-enforcement over the last 30 or 40 years or so. And I think we need to move on.
One recurring theme that I’ve heard from the Biden administration, and from you in your own working comments, is that better economic policy, and specifically better competition policy, is ultimately necessary to preserve the health of our democracy. Is that something that needs to be more explicitly included in the way that we think about competition policy? Or is it sufficient for it to remain sort of an implicit benefit?
That’s an interesting question. I think my approach is more in the preamble than it is in the test, if that makes sense. In other words, I would like the President when specifying his or her antitrust policy, the enforcers when they’re speaking about what they’re doing, to have in mind they’re interested in shared prosperity of our citizens. A sense that democracy is responsive. I think it is challenging to say, well, the test of this particular Section 2 case is whether it’s going to improve democracy or not. I wouldn’t say it’s impossible. I think it’s maybe in some cases. But I do think, from my perspective, when I think about, historically, the figures who responded to the challenges of their era, particularly the rise of communist revolutions, anarchy in the early 20th (anarchy as a political philosophy, not just as a disposition) in the early 20th century, were very vocal about what they were doing. They were taking on the power of unelected private corporations who felt that they had the right to govern the economy. But, you know, we wanted to show and make it clear to the people that the people are actually in charge in those kinds of things.
But that doesn’t mean that’s what you have to plead when you go into court. You know, “Your Honor, we’re proving the people are in charge here,” or something like that. It’s kind of ridiculous way to start a case, I think. And so that’s kind of the way I think about it. Also in the Second New Deal during a period of fascist, you know, great fascist periods, or after World War Two. There was very, you know, after World War Two is a great example. We ran a campaign in Germany to break up most of the German industries that were overly centralized during the Nazi period, creating an easy command economy. And obviously, it was political. Obviously, the reason to do that was to prevent a re-rise of Germany. I don’t know what tests they applied, exactly. But I don’t think, you know what I’m saying? I think that motivation can be different than the precise legal test.
All right, let’s take some questions from the audience. There are lots of questions.
Hi, thank you. I have a question for Tim, that’s kind of on behalf of economists. Because I know, as an economist, that when I was asked about twelve years ago, do I know what rulemaking is? I didn’t. And now I do, because I look more closely at, you know, statute versus rules versus cases, all this stuff. And you mentioned also, say, Andy Green in USDA who I know back from when were his days in the Senate. And so I wanted to sort of ask you a couple of things.
First of all, in terms of this past discussion on democracy and the merger guidelines and all of that. I was yesterday, you weren’t here at that panel, I was looking at the original language of the Sherman Act, as well as the merger guidelines of 1996, which introduced the word “efficiency” for the first time into the merger guidelines. Saying in particular, that the purpose is to ensuring efficient allocation of resources and efficient market outcomes in free market economies. Which, you know, that’s a very circular thing, because I don’t even know what free market even means without rules. So in any case, so I have a couple part question, there’s one high level in one very detailed.
What is the role of agencies and their enforcement powers? Are they all just pushing FTC and DOJ or, and you’re from the White House, so Department of Agriculture? What is it that other departments do about competition, antitrust? You know, do they have any role? Or is it just an advocacy role in their sector? The chicken market or whatever is the market that, you know, the US Agriculture Department is interested in, for example?
Oh, do you want that question? So the agencies, I think, are not, I think the agencies have their own statutes that give them, in many cases, the authority to promote competition or prevent harms to competition on a more industry-specific basis. Good example is the Department of Agriculture, which has a statute known as the Packers and Stockyards Act, which has powers that clearly go beyond Sherman Act or Clayton Act for the oversight of the packing and stockyard industries for the meat processors. And we wanted… Another example is the Federal Communications Commission, which has the Telecom Act of 1996, which obviously has authority and powers to promote competition which go far beyond. Patents are another statute, with its own set of complications.
And the idea of the Competition Council was that we had felt that sometimes agencies had been hesitant to use those powers. They’re unfamiliar, lacking expertise, maybe sometimes lacking political will. Often, as everyone in this room knows, when you enforce competition-related measures, you make your industry angry, and they don’t want it. They’d like those parts of the authority to kind of go away or be ignored. And part of what we wanted to do was make the heads of the agencies know we had their back. Know also that the President was going to be seeing them every six months on this topic. Give them sort of the support, and it sounds a little crazy, but, support to take the measures that their constituents were asking for when the industry was not going to want to do that. Sometimes, we called it the landmine approach, because sometimes we said to agencies, “We think you should start enforcing this,” and they’re like, “Oh, no, that’d be like standing on a landmine.” And I said, “We’ll stand on the landmine for you. And we’ll stand on so many of them that, if your industry complains, we can tell them to just get in line.” And you know, your industry might seem very big to you. But, let’s say alcohol, you know? It’s a big industry relative to the alcohol regulating industry. But relative to the White House and all of us, you know, there’s people bothering us all the time. So you know, the big distillery’s angry? Well, get in line. There’s a lot of people angry. So we tried to, the political calculus was part of it. We tried to turn it. So that’s what we’re trying to do in activating those powers. And as I said, I think we got a good job. But we’ve got to keep it going and seek to institutionalize it.
And not just regulation, but in the case of agriculture, you actually funded new meat packers. New entrance into the industry.
Yeah, that was also something we wanted to do, was not… We have a chance to move beyond. Antitrust is all about what you do wrong and, you know, how do you break it? So, seeding new competition was something that I think agencies can do. We can fund people. We did some of this in broadband, but also in agriculture, we tried to fund new entrants. There’s some more creativity you can practice with rulemakings and other, and spending money.
Okay, you spoke very well of using unbundling to free up markets for innovation. But where does tech fit in exactly? We usually target markets because they have low innovation rates, fairly rigid market shares, lack of new entry, the things we generally associate with stagnation. Big Tech flunks every single one of those tests. They compete rigorously against each other. Economic growth in tech is three to four times higher than it is in the old economy. There’s a lot of new entry at the small level. So why all the resources to regulate, say Amazon, and not Walmart which is equally big? Aren’t we looking in the wrong place with the tech bills?
Well, I guess I challenge to some degree the premise of the question. One of the things I think was a thrust of the focus of, at least, the White House Competition Council’s efforts was to make the conversation not all about Big Tech. We had felt that the conditions of competition in agriculture were neglected. Cable broadband markets, which is closer to high tech. So I just want to start at the outset that it was a sense that, when we talked about antitrust, we didn’t want it to be, as sometimes happens, that antitrust and tech are exactly the same conversation, and there’s nothing beyond it.
That said, we do think the stakes are big in the tech sphere. We think that they’re, in some ways, more than an industry, but that the platform format makes them the essential industries of the 21st century so that small spillovers have much larger effects for competition across the economy.
You mentioned Amazon. You know, Amazon, they’re not, obviously, the only platform. But let’s just say the electronic selling platforms in general seem to be, you know, have already become the place where people sell, particularly on small businesses. So if we want to talk about where business happens, it’s there. So it starts to get into a sort of a different topic than pure antitrust, and more into the question of, what are the basic conditions of competition like over these platforms? And I think that’s why it was a particularly important focus. And if you look at the Klobuchar Grassley Bill, it is, in some ways, an antitrust bill, but in some ways, it is more of an old school, common carrier style, “We need to look at what the conditions of competition are.”
It might be like asking in the 19th century, why are you so focused on railroads, when there so much smaller than all these other industries? Because they’re the input into everything else. And that’s, I think, why they get special attention.
Thanks for taking the question. I guess it’s just a follow on to the last question. If you think about breaking these ties where they currently exist, are there a few examples of current ties that you look at and say, “Gee, that actually could create enormous value if we could actually break it?”
That’s a good question. I think that’s the ongoing mission of the Competition Council and, frankly, should be of academia and the people and lawyers who study these areas, is to try to find them. They’re not always easy. I mean, by their nature. You don’t have an industry that’s already there. When I think about software in the late 60s, early 70s, it was kind of a cottage joke industry. And so it’s not like you were protecting something that was there. You were hoping, with that unbundling of software, you were kind of hoping, or betting, or maybe they just got lucky, to create something that didn’t exist at all.
An example where we thought we saw something was in electrical vehicle charging networks. So one of the, this is something I think we’ve seen. We thought there was, it’s not exactly a tie, but we thought that one of the challenges for buyers of electric vehicles, or for potential manufacturers, was a sense that, “Well, what if you’re gonna buy it, is there going to be a place to really charge my vehicle out there?” So one of the things we did to spend about eight or nine billion dollars on funding a charging network nationwide, but then, importantly, specified that all those charges had to be nondiscriminatory and had to charge anyone who came their direction. And the idea was to create a network that companies would want to build to and then consumers would be more willing to buy. During that process, Tesla (I don’t think they carried through with this), Tesla said they were going to open their network in response to this, partially because they wanted some of the money themselves. So you know, that’s an example, I guess, I don’t know exactly a tie.
But I just want to encourage, I guess I’ll repeat it, looking for these. Trying to find them. I feel like as a, as a group, we can do better to look for these kinds of things. As opposed to, we’re used to looking for cases, bad conduct. But looking for these sorts of opportunities to break open parts of the economy that have become locked up is something that we can all spend more time on.
We’ve got time for one more, I think there in the in the back.
In fact, actually, the two ties that you talked about that both involve medical professionals and products is an example of a whole bunch of other ties that happen in the healthcare sector, with electronic health records and wearables. Physicians combined with products. So that last charge to come up with a whole bunch of ideas? I think I got a whole bunch of ideas. Which relates to the question. One of the most exciting things for me about the executive order was to challenge the non-antitrust agencies to come up with pro-competitive policies. And there are a, there’s a lodestar of possibilities that all the different agencies in HHS could come up with. Susan Athey yesterday said, there are lots of things that we don’t know about that were happening on that space. And I was wondering if there was a little bit more that you could tell us about that?
Well, I don’t think I can. I don’t know if I know stuff. I don’t know if I have any special knowledge of things that are coming down the pipeline. I do feel that, you know, and I know that I said earlier, we have a strong pitch culture in the United States. People pitch cases, or they bring them in private litigation. But sort of pitching rulemakings that would be helpful is something that is slightly undeveloped, in our view. I think we wanted more when I was at the White House. People to come in and say, here’s what you should suggest that HHS does, or order HHS to do. Now, they might be resistant.
Healthcare is big on my list of unfinished business. Maybe it’ll always be that way it is. You know, we always have been like, “This is the way things are.” And then we’d look at healthcare, like, “Oh, my God, things are just like on a whole different leve!” I mean, you start with there’s no price. Everyone knows this who’s in this area, that you start with, oh, there’s no prices. Or, we were talking about junk fees and problems with fees being added, and we’re like, “Well, in healthcare, we don’t even have the price to begin with,” and get this surprised look. It’s just a logarithmic degree worse.
So, but anyway, my bottom line is, first of all, I think the White House is open these pitches. They’d like to hear good ideas. They are hard to come by. You need economic expertise and very good legal expertise and some industry expertise to know what will work. But if you hit the jackpot, the payoff can be really big.
All right. Well, thank you very much.