ProMarket interviewed Assistant Attorney General Jonathan Kanter at the 2024 Stigler Center Antitrust and Competition Conference.

“HIPS” is the key to understanding how the Department of Justice Antitrust Division selects the cases it pursues, revealed Assistant Attorney General Jonathan Kanter in an exclusive interview with Promarket on the sidelines of the 2024 Stigler Center Antitrust and Competition Conference. Kanter, along with Federal Trade Commission Chair Lina Khan, has spearheaded the Biden administration’s vigorous approach to competition enforcement in the United States. This includes a suite of lawsuits against Big Tech companies as the government considers how to enforce competition in digital markets. Notably, the antitrust agencies have also refocused attention on labor markets.

In the following interview, ProMarket and Kanter discuss the 2023 revised Merger Guidelines that articulate how the antitrust agencies plan to review mergers for anticompetetive effects, the Antitrust’s Division’s attention on goals and values that fell out of favor under the consumer welfare standard, and questions about the broader shifts in antitrust scholarship and enforcement.

The following interview has been lightly edited for clarity and length.

ProMarket: I’d like to ask you how you choose your cases? One thing that came up earlier [during the conference] was Tim Wu and Fiona Scott Morton were discussing these historical cases in the tech space that went after a technology that ended up impacting the next generation of technologies.

Jonathan Kanter: We have to cover the entire economy. So we have a lot on our shoulders. And we have limited resources. So we developed a methodology that I call “HIPS,” like hands on our hips. It stands for “high impact programmatically significant.” What the concept is, when we’re deciding where to devote our resources, whether it’s an investigation or litigation, we think about, okay, what are the issues that would have the biggest impact on society. An impact can be measured in terms of economic harm, it can be measured in the importance of the product or service, it can be measured in its significance to society broadly. We try to make sure that we are focusing on things that have high impact. Programmatically significant—the “P” and “S” stand for programmatically significant—those are cases that might help focus on an important legal principle or important precedent that can shape enforcement going forward. We think about, very broadly speaking, our program through that lens, and then we use it to help determine how best to focus. Within that process, we have a methodology for allocating our resources in a way that we think is in the best interest of the public. 

ProMarket: Earlier today in his keynote, Randy Picker argued that the Agencies should settle more cases. Basically, he was advocating for this idea that by settling you may come more quickly to a remedy that fixes whatever anticompetitive problem it is that you’re going after, and then you can move on to another case faster. I’m curious what your response is to Randy’s comment. 

Kanter: I think we have to look at each case on its own merits. And, you know, we are interested, always interested in bringing cases to a resolution. And sometimes that can be a negotiated resolution. Sometimes that can be litigation to an order. Ultimately, we’re interested in protecting competition. And so, however we can get there, we’ll get there. If we can do it efficiently, and companies are willing to go willingly, then that’s great. But that’s not always the case.

ProMarket: Two years ago at the 2022 Stigler Center Antitrust and Competition Conference, you sat down with ProMarket for an interview, during which you noted the bipartisan support for more robust antitrust enforcement. Since then, Congress has killed two monumental antitrust bills: the American Innovation and Choice Online Act (AICOA) and the Open App Markets Act (OAMA). Last month, Congress cut 20% of the Antitrust Division’s budget as part of its Fiscal Year 2024 Appropriations Minibus. Would you say the wind is still to your back? What has changed, if anything? What is missing for a truly bipartisan coalition that supports antitrust?

Kanter: I think that there’s still a tremendous amount of bipartisan support. We hear from folks across the political continuum, who are supportive of our work, who think that it’s important to protect the ability of farmers to get a fair return on investment from their livestock or physicians and nurses to have the ability to care for their patients—for competition, and the flow of information, and distribution of ideas. We hear from a wide variety of stakeholders. And support, I think it really does cut across the entire political continuum. So that hasn’t changed since our last discussion.

ProMarket: How do you anticipate the budget cuts impacting ongoing and future investigations and lawsuits? 

Kanter: Well, the Antitrust Division is a formidable group of people. I would never bet against the Division. We will use the resources that we have as effectively as we can. I am proud of the work that we’re doing. We’re often up against companies and firms with multiples of the lawyers and economists and paralegals and staff that we have. But I think we are extraordinarily effective. And we, you know, more than hold our own against teams that are ten times the size.

ProMarket: Your and the Federal Trade Commission’s work regulating Big Tech has stolen the show, at least at this conference, but another notable front the Agencies are waging is to support labor. Your victory in the Penguin Random House-Simon & Schuster merger case protected authors. Recently, the FTC sued to block the Kroger-Albertsons merger, citing the harm to union workers. Last year, the FTC also proposed banning most noncompete clauses. Are there other initiatives you plan to undertake to bolster labor?

Kanter: I think there have been numerous others that we have undertaken. So, we brought an extraordinary case that protected poultry processing plant workers in the Cargill case. We brought a case in the eSports space in connection with labor and people who are a part of Esports teams. And we got a consent decree in that matter. We played a very significant role here in Chicago arguing as amici in the Deslandes case, where we argued in favor of the plaintiff, and a really important matter involving franchise food workers and contributing to that successful outcome. And there are numerous other areas where we’ve engaged. We have a criminal trial coming up on the labor side. And so we are extremely busy and we are not letting down our guard with respect to the importance of antitrust with respect to labor competition.

ProMarket: Last summer, ProMarket hosted a symposium responding to the release of the draft Merger Guidelines. Much of the debate pivoted on a defense of the consumer welfare standard (CWS)—which by most definitions prioritizes consumer prices, output, innovation, quality, or variety—versus a shift toward “protecting competition,” which to me is about maintaining freedom of choice in the marketplace and encouraging creative destruction and the market entry of new firms. Relatedly, it’s about the dispersal of market power. Some of the critics of the “protecting competition” model argue that competition is not a goal in itself but an avenue to achieving traditional CWS goals. Thus, we should just keep the focus on the CWS. How would you defend the shift toward “protecting competition” against this argument?

Kanter: Well, it’s not a shift. It’s adhering to the language of the statute, which talks about substantial lessening of competition as tending to create a monopoly. There’s no mention of consumer welfare in the Clayton Act, but there is a mention of competition. And so the value that Congress sought to protect, the value judgment Congress made, was competition, the competitive process. Now, that can lead to all sorts of benefits, including the welfare of consumers, including innovation, including the welfare of workers. But Congress, in its wisdom, determined that concentration of power, whether it’s lessening of competition or tending to create a monopoly, is something important and worth protecting. And so I think our revised 2023 Merger Guidelines are more faithful to the language of the Clayton Act and more faithful to the history of antitrust laws and over a century of [court] precedent.

ProMarket: Another critique that arose during the symposium was that the new Merger Guidelines try to do too much: it is not just defending the traditional goals of the consumer welfare standard, such as consumer prices, and less common goals such as labor wages, but also abstract principles such as liberty and democracy. Are there limits to antitrust and antitrust enforcement? How do we determine them? 

Kanter: So, we’ve taken the approach that competition and the process of competitive process, rivalry, and concentration of power is what we are asked to protect under the Clayton Act. At the Department of Justice, that’s what we focus on with respect to mergers: competition. Congress decided to protect competition because it has a wide range of benefits. And those benefits can include lower prices. Congress believed that dispersion of power can affect liberty and freedom and democracy. I think those are legitimate goals. So we preserve competition in order to protect all those attendant values and benefits.

ProMarket: Maybe one of the reasons these critiques arise is because, according to the critics, it’s hard to measure certain metrics such as liberty and democracy and things that steer away from the consumer welfare standard goals. 

Kanter: I think that misses the point, right? Well, we can measure competition. It’s hard sometimes. We can measure the extent to which two firms compete or whether information might be competitively sensitive, or whether an acquisition might threaten competition. We protect competition because competition leads to all those benefits with respect to liberty, democracy, the flow of information—which is critical to the political discourse—prices, innovation, all of those are benefits of competition. But what we try to protect and we try to measure is competition itself. 

ProMarket: In a Capitalisn’t episode this summer on antitrust, Luigi Zingales noted that the drift toward softer government enforcement beginning in the 1970s and ‘80s was in part a response to a period of overregulation and the popular perception that American businesses were not prepared to compete on a globalizing market. One of the foremost concerns for many Americans today is wealth inequality. This isn’t an issue that antitrust scholars speak much about explicitly, though perhaps broach via concerns about prices and labor. Do you and your agency think about income and wealth inequality or is this an issue beyond the remit of antitrust?

Kanter: It’s important to engage with scholars and to engage with academics, but we also engage with people who are directly affected by concentration of power and who directly benefit from antitrust enforcement. And so whether that’s an ER doctor, or a family farmer, they understand that concentration of power and violations of the antitrust laws might affect their opportunities, their freedoms, their ability to build a thriving business in a rural community. Or in the case of an ER doctor, the ability to adequately care for a patient when life and death is on the line. Those are very worthwhile goals. It’s important that we make sure that we maintain that human connection in the work we do.

ProMarket: ProMarket is a publication frequented by academics. As you and your agency revisit old legal questions and face new market realities, what gaps in the literature would you challenge scholars to pursue in order to inform a more sophisticated antitrust enforcement strategy?

Kanter: Yeah, I think it’s important. And we’ve invested a lot into being more interdisciplinary in our approach. I think, for a long time, antitrust was the exclusive domain of lawyers and IO economists, but there’s a lot of interesting research and expertise that we can bring to bear. Whether it’s data science, behavioral science, agriculture experts, healthcare experts, strategy consultants who understand how business decisions are made. It’d be worthwhile for us to take a broader view of expertise and make sure that we are really focusing on the state of the art rather than limiting ourselves just to a couple of narrow disciplines. I’d also say it’s important that we distinguish between expertise and advocacy. I think the two have, often sadly, often become indistinguishable.

ProMarket: I have one last question. Which of your wins in court have you liked the most and why? Which of your losses have you liked the most and why?

Kanter: You’re like asking me to choose which child I like best. Listen, they’re all important. Every case we bring we believe is important. The amount of confidence that I have in our team is extraordinarily high. The amount of gratitude and pride I have, and in our successes, cannot be overstated. And in instances where we haven’t been successful, I’ve been extremely proud of our teams and how they fought for what they believed was right. I give them total credit for that and I have their back. 

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