Governing Giants: Law, Politics, and Antitrust

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WOMAN’S VOICE: The Matrix Podcast is a production of Social Science Matrix, an interdisciplinary research center at the University of California, Berkeley.

SARAH HARRINGTON: Welcome. Thanks for coming today and joining us for this Matrix On Point panel discussion. My name is Sarah Harrington. I’m the program manager here at the Social Science Matrix. Today’s event is co-sponsored by the Department of Political Science. I want to thank the Matrix staff here for helping put on this event. And then also a big thank you to Ryan Brutger for bringing this group together today.

We’re pleased to have an outstanding group of scholars to help us examine the evolving landscape of antitrust policy in an era of multinational corporate power. Now, I would like to introduce our moderator, Ryan Brutger. Ryan is an associate professor of political science at the University of California, Berkeley. Professor Brutger specializes in experimental methodology, public opinion, and international relations. His research crosses political economy, international law, and international security, examining the domestic politics and political psychology of politics and economics. This is very challenging.

He’s also a 2024-2025 Matrix faculty fellow, so we’re really happy to have him here today. Without any further ado, let me hand it over to Ryan.

RYAN BRUTGER: Great. Sarah, thanks so much for that kind introduction and for helping organize this whole event. Thank you all for coming to be a part of it. And thanks to the panelists.

I’m excited to be talking about this because I think it’s a subject that is really important these days of thinking about how we regulate large firms and their influence on the economy, on politics, et cetera. And that’s why we’ve brought together a group of scholars who have studied corporate regulation and antitrust policy from a number of different angles. As you’ll learn, we have political scientists. We have economists. We have folks who work on international and domestic law, as well.

And by looking around in the audience, I think we have as much knowledge about antitrust in the audience, maybe more than we have in the front of the room, as well. So we’re going to progress by– I’ll do some quick introductions of our panelists, have them each share some thoughts on opening remarks.

I’ll facilitate some conversation and Q&A amongst our panelists initially. Then we’ll open it up to the room for more Q&A. And given who’s in the audience, I think, also just conversation about some of these topics and issues.

As a little background for those of you who maybe aren’t immersed in thinking about corporations and antitrust regulations and things, we’ve seen increasing consolidation of industries, especially over the last few decades. As someone who comes at this from an international relations perspective, this has been incredibly important when it comes to say, international trade.

For example, at the turn of the last century, we know that the world’s largest firms, just 10% of, say, the US exporting firms, were responsible for over 96% of the US’s total exports. So that’s a huge amount of business being done by a relatively small number of companies. And that concentration has continued to increase.

And so something that led me to be interested in this was actually a conversation that Professor Pond and I had years ago, when we were thinking about increasing power of these firms, not just in the economy, but their effects on democracy and governance. And I think that’s an issue that’s become increasingly important.

And so she and I have actually co-authored a couple of papers together on these topics and have really continued to just see a rising salience of these issues. And so that’s the motivation for today’s conversation. So I feel especially lucky to be joined by this group of panelists.

As I mentioned, Professor Amy Pond is joining us today. She’s an associate professor at Washington University in St. Louis. She received her PhD from the University of Michigan and was previously a professor at the Technical University of Munich at Texas A&M. She conducts research in a number of areas in international and comparative political economy, with a strand of current research that looks at how market concentration and international ownership affects domestic policies, including the provision of public goods like property rights and democratic representation. And so will bring a great deal of insights into today’s discussion.

Michael Allen is joining us from Stanford, where he is an assistant professor. He received his PhD in government from Cornell University and was also a postdoc at Yale and Harvard University before making the journey across the country. His research interests span international political economy, institutions, and law, with a focus on the politics of global capitalism. And he studies how the growth of private authority influences domestic legal developments and the power of countries to regulate foreign commerce. And he also has ongoing projects and related areas, including special economic zones, anti-corruption efforts, and global competition law.

Last but certainly not least, we have Prasad Krishnamurthy, who is with Berkeley’s Law faculty. He holds a JD from Yale Law School and a PhD in economics as well, so brings a wide variety of perspectives. His research includes financial regulation, antitrust and competition policy, consumer law and policy, and distributive justice.

I will say, in putting together this panel, I was more familiar with my fellow political scientists research, but really enjoyed reading some of your research on the regulation of banks and the consequences for, say, wages and small businesses. And I think that’s really relevant for the conversations we’ll be having today.

So without further ado, we can dive into some opening thoughts. And, Amy Pond, why don’t you kick us off, please?

AMY POND: Ryan, thank you so much. It’s just it’s a complete pleasure to be here. And thank you all also for joining us. It’s really nice to be here. It’s really nice to get to talk to people across different disciplines, because when you study antitrust, right, you really have to channel some divides. There’s people working on this in law and economics and political science and others.

And so sometimes I’m more familiar about the work in my area, but it’s so important to become informed about what others are doing as well. So I’m especially excited to be part of this.

I guess most of my work began with just this really simple motivation. So first, I’ll talk a little bit about what I think we know in terms of the parts of the field that I know the best, and then I’ll talk about what some of my research and most of this is co-authored with Ryan.

So in terms of the simple motivation, I mean, markets are becoming increasingly concentrated. If I were to put some– if I were to put a picture up right, I would have probably put this picture of the number of firms that are currently publicly traded in the United States, because the number has halved between 1997 and 2017.

And this isn’t necessarily a bad thing. And there are a lot of different explanations for this. When I think about the economics literature, I think the big one tends to be that it’s an increased number of mergers and acquisitions. And so we just have firms exiting the financial market. Another aspect of this is global trade and investment. It’s being dominated by the largest firms, that’s led to an increase in concentration in general.

So as I said, this isn’t necessarily a bad thing, but I think there are important reasons to be cautious about this. So in economics, we tend to think that more concentrated markets are going to be less competitive. This is going to lead to elevated prices and costs for consumers. There’s also some evidence that there are lower returns to labor, for example, as a share of value added. So firms are earning larger profits, but they’re not necessarily passing that along to laborers.

When we think about this in politics, we often think of these really large firms having an advantage in terms of overcoming collective action challenges. And so they’re better able to lobby and thus, have more political influence. And so this is kind of where I entered the literature. And I’ll talk about three separate projects.

I think the first one is just that– I argue that concentration doesn’t just affect the political influence of firms. It might also affect what they’re actually demanding from politicians. So if you think about potentially two ideal type markets, where you have one that’s focused on just one large firm, another that has many small firms, that large firm is going to be better able to secure their political preferences, so policies that are biased in their favor potentially creating entry barriers to their competitors, whereas if small firms tried to do that, there’d be a bunch of firms lobbying against them. And so those efforts would cancel out.

And so I argue that these markets that have many small firms are going to– the firms operating in those markets are going to prefer more public-goods policies that attempt to level the playing field, like strong property rights. And we in political science tend to think that property rights is a really important building block on the way to democratization.

And I have some survey evidence from business executives operating in Latin America. It’s consistent with this kind of argument. I’m happy to talk more about that research, if you all are interested. And then I have another set of papers looking at the context in which antitrust policy is made. And one of these papers just came out in Business and Politics. We have our editor here in the audience, so very excited to be here.

And so one of the arguments in this paper is that because these large firms are so effective at getting their policy preferences realized, they are going to earn larger profits. Like there’s more concentration, less competition. So they earn larger profits. They’re going to be able to use these profits to influence policy.

And so those firms that earn larger profits, we’re going to see them making larger tax payments and potentially also, unofficial payments like corrupt payments, are going to be better able to protect themselves from the enforcement of antitrust policy. And so in a cross-national sample, I show that firms that provide more revenue to governments are allowed to grow larger. This is controlling for their profit level, actually. It’s not sensitive to that.

And these effects are especially pronounced under authoritarian political institutions, which we think should be less attuned to consumer interests and also more able to violate the independence of regulators. So I think one crucial topic that we’re often talking about with antitrust law is how independent are regulators. And I’m happy to return to that any time if you all are interested.

And then the third project that Ryan and I have worked on is looking at citizen support for antitrust. So when do regular citizens, when are they willing to demand that the government do something about concentration? I think this is a really important question, because if you think about who benefits and who pays the costs of concentration, it’s going to be large firms are going to be demanding weak enforcement of antitrust, and the beneficiaries potentially have much harder time overcoming collective action problems. But politicians aren’t going to do anything unless citizens are motivating them to do so.

So we just to give you a preview of some of our results. We find that everyone is really worried about how competition might undermine the ability of firms to compete abroad. They’re also very attuned to fairness concerns. And we find that people who position their political ideology on the left are more concerned about the anti-democratic effects. And people on the right are more concerned about punishing companies who are successful.

And so, just to conclude, I think one of the big unanswered questions that we don’t know is how increases in concentration are going to be met. There’s a historical literature arguing that as you see more and more concentration, that’s going to foment support for antitrust and lead to stricter regulation. But there’s not a clear prediction about when that would happen or under what conditions it would happen.

And there’s a recent formal literature in economics looking at how concentration can create a vicious cycle. And if concentration begets political control, then they’re going to implement policies that just further that concentration. And so you can see this cycle. So I’m really looking forward to your comments and just having a conversation with all of you.

RYAN BRUTGER: Great. Thanks so much, Amy. Appreciate that. And Michael, we’ll turn it over to you.

MICHAEL ALLEN: All right. So I made some slides. So I’ll just go over here to share these. Yeah, so while I’m getting this, thanks, Ryan, so much for– and the Matrix– for hosting us. Yeah, super interesting panel. Very happy to take part in it.

What I thought I would spend my time and, I guess, your time to doing was just presenting some data on the kind of global diffusion of antitrust laws around the world. And then also just to give a high-level overview of how political scientists and historians and economists have thought about how to make sense of these kind of global patterns in enactment of antitrust legislation around the world.

So just to give a quick sense of how this stuff has changed over time. So this is just a snapshot, this is presenting data from this great project called the Comparative Competition Law Data Set, which was led by Andrew Bradford at Columbia and Adam Chilton at Chicago.

And so what they do is they coded all of these different antitrust laws around the world, going back to 1889 with the first law that was passed in Canada. And so as you can see here, the ones in blue signify the countries that have passed some kind of law. And so by the end of World War II, there’s basically limited to the US, Europe, and some commonwealth countries and Canada.

By the end of the Cold War, though, it had been a pretty dramatic expansion. Though it was limited, it seems to be kind of biased towards countries that heavily trade with the United States. So you see, a lot of the expansion is in East Asia, with Korea, Japan, Latin America, India, and some of the commonwealth countries.

But this changed a lot after the end of the Cold War and the decline of the Soviet Union. Countries are transitioning to market economies. And you see this really dramatic expansion in every region of the world and countries that have enacted these kind of general antitrust or competition policies. So this is not looking at sector-specific policies that we might get into during the discussion. But these are laws that set the rules of the road for competition across the economy as a whole.

And so I thought I’d categorize these different buckets of explanations into things that are kind of purely domestic factors that might explain why a country might adopt a competition law. And then I’m going to end with talking a bit about the international forces, in particular, like the role of global trade and how that affects the incentives to enact these laws.

And so the simplest, earliest explanation that you might see related to what I was just saying is that there’s been this kind of gradual transition amongst a number of economies around the world, away from planned economies towards market-oriented economies. And so competition authorities, obviously, play a bigger role in those kinds of jurisdictions.

Particularly, you can see on the right-hand side there, which plots the number of any type of antitrust law. So even reforming existing antitrust laws per year, there’s been this huge explosion after the end of the– dissolution of the Soviet Union at the end of the Cold War. These countries are transitioning to market economies.

And then another way that political scientists have thought about this, too, is not so much related to the structure of the economy as a whole, but to think about the kinds of interest groups that might benefit or lose from policies like competition policy or antitrust laws. And so one way to think about it is that antitrust law is they promote competition, which lowers prices, increases quality, incentivizes innovation, and which benefits consumers and consumers vote. And so in a democracy, they prioritize the interests of– these types of interests. And you might get more antitrust laws in those types of settings.

To add a kind of twist to it, you can then add different twists to this type of story. So, for example, Steve Weymouth has an argument that says, well, you might think that labor would benefit from antitrust rules, but there’s some types of labor organizations that have real leverage over their employers and might be able to extract some of the benefits of operating in a concentrated market. And so he finds in countries, where you have larger amounts of labor power, that you don’t see as strong of a connection between democratic transitions and enactment of democracy.

So the basic idea, though, is however you want to– what theory you want to apply, the idea is that– you might think about how different kinds of interest groups benefit or lose, and how the political institutions prioritize some types of groups over others as a way to predict how whether or not a country will enact its something like a competition law.

And then the second aspect of the domestic feature is– so I’m borrowing this term from a Robert Pitofsky, who is the chair of the FTC under Clinton, who, in an article in 1979, drew this distinction between what he called the political content of antitrust law and its economic content. And so this quote, there’s a lot to debate about it.

And so setting aside whether or not it is good or bad policy to incorporate political values in how you interpret the antitrust laws. I never find that it’s a kind of a useful distinction in thinking about how politicians or activists generate political coalitions that support the enactment of antitrust laws, or maybe oppose them.

And so what he meant by the economic content was kind of just what I was just describing. So there’s certain winners and losers, and you can see how those preferences get aggregated within the domestic political system. But then there’s something else that he argued, that there’s something kind of resonant between the goals of antitrust and just general democratic values writ large. So the basic idea is that there’s this fear that excessive corporate concentration can disrupt or corrupt democratic political processes.

So one thing I really like these old comics, I just felt like this kind of characterized some of the popular attitudes around antitrust in this was in, I think, the late 1880s from Puck magazine– that’s a P at the top of the page there– where it’s showing this snake with monopoly on its chest. Snakes have chests.

And then it’s wrapped around the US Capitol and it’s threatening Lady Liberty. And it says down here, Puck [INAUDIBLE] is asking Uncle Sam, what are you going to do about it? And so this has led to a kind of greater expectation that democracies have this– on top of the types of people, types of interest that democracies tend to prioritize, there’s this kind of deeper connection between democracy and the goals of antitrust that we should allow us to expect to find a more democratically oriented political systems to adopt similar kinds of policies.

So in one paper that I have jointly with Ken Scheve at Yale and David Stasavage, we use the– we find that– so when a lot of these early antitrust laws were passed in the United States, it was during a period in which not all senators were popularly elected. And so one of the things that we found is that senators that are popularly elected are more likely to support antitrust reform, like strict, more stricter antitrust laws than those that were nominated or selected by their state legislatures.

And then just from a global perspective, this is plotting similar data from that comparative competition law data set. And so on the y-axis is just this goes from 0 to 1. You can happy to talk about it more, but you can think about this as just higher values stricter antitrust laws. And then I’ve just plotted the average across democracies and non-democracies over time.

So you can see there’s this pretty consistent democratic advantage or preference for antitrust that shifts after 1990, when you have more countries that are transitioning to market economies, but not transitioning to democratic political systems. But the gap between democracy and non-democracies stays pretty consistent and actually kind of grows over time.

Now, the last point I want to make is about the kind of international aspects of antitrust law. So from the very beginning of these debates, there’s this connection made between trade and concentration. And so you see this, this is just a screenshot of a speech that was given at a pretty influential conference in Chicago in 1899 about the trust problem in the United States. And this is a common political refrain at the time that the tariff was the mother of the truss.

And so there are some scholars that argue– [INAUDIBLE] argues that the Canadian law, passed in 1889 prior to the Sherman Act of 1890, was primarily passed because as a kind of compensation for enacting after that a really high tariff. So you’d have the tariff that would protect the domestic industry. But to prevent some of the other ills of having concentration that might be caused by the tariff, there was an antitrust law to try to mitigate some of those negative consequences.

And on the flip side, you might think that trade was seen as– the reason trade was the mother of the tariff was because it would make it more difficult for domestic firms to collude, because a foreign firm could then could undercut the agreement made by the domestic cartel. And there are two problems with this view. The first is more just empirical, is that just what you would expect there is that, as trade expands, there’d be this kind of negative relationship with antitrust. But that’s just not how the kind of global economic cookie crumbled.

So you have, in the ’90s, a dramatic expansion of global trade. And at the same time, lots of countries were enacting antitrust legislation. On the other side, it just turns out that, and some people argue, that it might actually– global trade might not just make it harder to clue. It might make it increase the incentive, because it might be harder for domestic regulators to track agreements between firms to carve up markets across multiple jurisdictions.

So this led to a separate view that rather than being substitute for each other, antitrust and trade might be complementary and serve the same goals. So you have some– so Anu Bradford and Adam Chilton, who developed this data set that I was just presenting some data from, find that there’s this very tight connection between a country’s level of trade openness and their antitrust policies. The more open you are, the stricter your antitrust laws are.

And because of this possibility of increased collusion across borders, you would expect to see more cooperation between jurisdictions over antitrust laws. And what you’ve seen in the last probably 30 years or so is that there are agreements between countries to share information, maybe assist in investigations that are cross borders.

What I’ve plotted here is just the countries in blue are the countries that have– whose competition authorities have signed cooperation agreements with the US Federal Trade Commission, which is one of the bodies that deals with antitrust in the United States, for cooperation specifically related to antitrust. And you can see there’s a pretty heavy bias here, too, towards the countries that the US trades with a lot, like it’s China and lots of South and Central American countries, Japan, India, the EU.

And then to add one last wrinkle before I stop talking, to build off of one of the points that Professor Pond made, is that there might be a kind of– in this world with trade and antitrust, there might be a kind of a disadvantage for enforcing or having strict antitrust laws domestically.

So suppose you have these big export firms that are trying to compete in global markets, you might be able to give them a little bit of a competitive edge by weakening your own laws. So it creates a kind of free rider problem or cooperation problem.

And so one of the things that you see when you look at preferential trade agreements today is there’s been this increasing shift towards including provisions in those treaties that stipulate different provisions of how the country’s antitrust laws or competition policy ought to be structured. So, particularly the EU, which is generally seen as having a pretty strict competition regime, has been at the forefront of conditioning trade agreements on the other country, also having and enforcing its own competition laws.

So there’s benefits in terms of maybe harmonizing rules across jurisdictions for firms that are operating across jurisdictions. But I think there’s also an element in which this might help resolve some of the competitive elements that might lead to weakening antitrust in a world of global trade. And so I will just leave it there. And thank you and looking forward to the discussion.

RYAN BRUTGER: Thank you. All right. We’re getting lots of interesting thoughts and conversation starters. What’s that? I know I’m just giving him time to come back to my seat. All right. So we’ll now turn it over to Prasad.

PRASAD KRISHNAMURTHY: Thank you, Ryan. Good afternoon, everyone. It’s been really interesting to hear this discussion of antitrust from a number of different perspectives, and I will keep with the theme of the afternoon so far by offering a very different perspective from than what has come before.

I am a lawyer and also an economist, and I’ll have a few things to say about economics, but I will take more of a US legal perspective on how to think about current trends in antitrust. So I hope, especially for some of the students here, that by the end of this, you’ll feel more confident reading articles about Google and Meta and so on and the cases against them. And I have a sense of what are the stakes in these.

So in preparing these remarks– there are hundreds of antitrust cases a year. In preparing these remarks, I read all the cases since the Trump administration in 2016. And that’s a lie. I looked at some of the big cases, and I thought, let me try to pull out some of the big themes.

So in my time here and I’ll try to finish an expedited way, I want to advance three main arguments. First is that contrary to a lot of what you might read in the media and even what some of the defense side law firms are circulating in their publications, I want to suggest to you that all of the recent cases that are being brought that you read about in the news are very traditional antitrust cases.

And the kind of claims that are being bought– I’m not saying whether the plaintiff or defendant should win, but the kind of claims that are being brought are kind very consistent with the US tradition of antitrust. There’s nothing kind of really radical or a departure from the past here as far as the major claims.

Second, that if you– I think, unfortunately, it’s hard to read anything in the media these days on US antitrust without the reporter at some point getting into a debate over whether antitrust follows a consumer welfare standard. So I want to try to clean some things up in that area. And I want to suggest that when you read that should more or less ignore it.

And the reasons why it will be that, in general, as a matter of ordinary language and law, antitrust does not follow a consumer welfare standard. That is the language that economists use for what antitrust does. But in what economists are doing, it’s perfectly fine. Within their self-understanding of what consumer welfare means, that approach is quite valid and quite useful. So I’ll say more about it, but that’ll be the basic line.

And then third, many of the issues that were talked about in this panel that the public is concerned with antitrust rising concentration in the United States and in many other countries, domination of certain key infrastructure by a few companies, the entire communication infrastructure and internet infrastructure by a few companies, all of online retail by a few companies, that these concerns are perhaps better addressed by laws and regulation and political action that is actually quite distinct from antitrust. That antitrust maybe has to be a little bit more humble with respect to what it can do in light of these issues.

So let me start with the first claim on the tradition of US law in the recent cases. So first, I have to describe US law. The nice thing about antitrust is that the structure of the law is very simple. There are two kinds of antitrust claims. There is a claim of collusion, and there is a claim of exclusion. What’s collusion?

Collusion is a situation in which firms get together and agree to, say, fixed prices on a consumer or fixed prices on some customer. And we can understand from the economics that we shouldn’t allow that because that’s going to create, under most economic models, a deadweight loss and a harm.

Now is this a harm that is focused on computers– or excuse me, on consumers? In the law, not at all. If firms get together and fix prices on a consumer, it’s illegal. If they fix prices on some customer, who’s a business, also illegal. Fixed prices on a supplier, illegal. Worker, illegal.

Any agreement between firms to limit prices, quantity, quality, innovation, investment levels, credit terms, it’s illegal. And it’s illegal because it causes that kind of a deadweight loss. So it applies across the board. And so as a matter of ordinary language and as a matter of law, because in law we have to define, well, who can bring the case? What are the damages/ to whom are the damages are owed? So we don’t use a consumer standard for the law because the claims can be bought by anyone who’s suffering a harm, any direct party to the transaction.

Now, economists will say this is governed by a consumer welfare standard. And they are correct, because the idea is that there’s a deadweight loss. And in economics, when there’s a deadweight loss, that means there must have been some harm to someone’s consumption. And that’s what the economists are talking about. And they can analyze antitrust policies within that framework. And it’s really quite valid, but it’s separate from the law and it’s separate kind of from ordinary language. So that’s collusion.

The chief area of collusion cases and the easiest to prosecute in a way, but as a legal matter, are cartel cases. And I think it’s worth noting because some of the panelists have talked about this, there are many international price fixing cartels. And they often require a cross-jurisdictional coordination in order to figure out whether the cartel is taking place.

But from a lawyer’s perspective, these cases, there’s no interesting law in these cases. If you can prove that they fixed the prices, you have a criminal indictment, you’re going to win the case. The difficulty is the proof, because they’re going to try to hide it. So these cases, they don’t make the headlines very much. But they’re a very important part of domestic and international antitrust enforcement.

And I’ll note parenthetically, as a local matter, recently, the Trump administration has said they want to close the Chicago and San Francisco field offices of the DOJ for antitrust enforcement. And I don’t know much about the Chicago office, but the field office in San Francisco specializes in cartel cases. And they have prosecuted– if you go to their website, it’s pretty fun. Cartel cases are fun to read about because what’s going on is kind of interesting.

They have prosecuted dozens of cartel cases in the California economy in the past decade or so. And those cases require investigation. They require public enforcement because private parties can’t get the information in the same way that DOJ can. As anyone who saw the TV show The Wire knows, the feds can get wiretaps, and they can get information the way private parties can.

So collusion cases or cartel cases are very important. The collusion cases that get the most interest as far as the newspapers are concerned and online media is concerned are mergers. And I’ll have something to say about mergers following. OK, so that’s collusion.

Exclusion happens when one firm or a firm working in concert with other firms takes some action against its rivals. For example, cutting them off from a source of supply or cutting them off from a source of distribution, in a way that isn’t just about competition on the merits, but is done solely to harm that rival. So this is illegal.

Is it, for example, and is it described by consumer welfare standard? No, but the harm is to businesses rivals. The harm is to their competitors. Competitors are often the ones who are bringing these suits. Competitors are the ones who are getting damages. Competitors are the ones who are showing that there was a harm to them. So as a matter of ordinary language, you wouldn’t say that it’s consumers that are harmed.

And as a matter of legal language, we don’t. But the economists are still correct in their models that this is a harm for consumer welfare, because we’re not counting all harms. But if I, as a firm, make a better product or service than my competitor and they’re harmed, there’s no antitrust claim.

It’s only harms that will have some downstream effect, some downstream effect on other parties, which will mean some harm to consumption, some harm to welfare. And that’s what the economists are talking about when they say even exclusion follows a consumer welfare standard. They’re right, they’re right in their kind of conceptual worldview. But that’s not the worldview of the law and kind of public discussion.

And so let me talk about some exclusion cases. So we’ve got now, if you go to law school, just skip taking antitrust. You’ve got it all. You’ve got collusion. You’ve got exclusion. You can go to the cases. So let me talk about a few of the cases. I don’t think I’m going to get to talk about everything.

So one of the recent cases was against Google with respect to how it was prohibiting or other parties from getting their search engines onto Google’s commercial partner. So Google would say to Apple, we want you to place our search engine as the search engine in Safari, and of course, the search engine in Chrome as a default matter. And then consumers, they wouldn’t change that from that practice.

So Google, the claim by the DOJ against Google is that they were using these kind of paid tactics to cement their market control in search, like Google is clearly the leader in online search. So that would be considered an example of exclusion because Google is paying Apple and saying, here’s the money, and we want you to make it hard for our competitors to access your Apple interface. So you can make it out as a claim for exclusion.

But it also shows that exclusion cases are hard to win. It’s easy to win those cartel cases, but the exclusion cases are hard to win because Google has a defense. And Google’s defense is that we’re just paying for shelf space. When you go into the supermarket and you walk along the aisle, the aisle that is at your eye level costs a lot more to place the products than the aisle that’s near your feet. And companies are bidding for that.

When you click on something online, you see an advertisement, that advertisement is the result of a competing auction and simultaneous bids in a market clearing mechanism that allowed someone who wanted to give you an ad to pay money to show you that ad. So this is ubiquitous in the economy. And Google would say, why should it be illegal if we’re doing it?

So these exclusion cases always have that character, because the conduct that they’re being accused of is conduct that if the firm didn’t have market power, it would be just fine. It would be just fine. It’s only that we’re potentially calling the action illegal because of their power.

If there are any sports fans and you listen to– and you’re following the NBA playoffs, you might watch TNT, and Shaquille O’Neal is one of the commentators. And Shaq will always say, they’re calling all these fouls on me and I’m just touching people up. Now Shaq is enormous. He’s like 7 feet tall and 300 pounds.

So when Shaq touches someone, they go flying across the court. And the refs are calling a foul. And he says, but yet all these little guards, they’ll throw a punch at me and the ref won’t even call it. So that’s antitrust. Shaquille O’Neal understands antitrust very well. We have different rules for companies that have market power. We don’t just let Google touch up. DOJ won the case. So we don’t just let Google touch up its competitors.

A similar case for exclusion involved Google and the online ad space where Google controls firms that help– if you’re a publisher of a website, how do you place your ads? And then there’s an exchange that matches the ads. And so there’s a whole ecosystem of online ads.

Another case against Google that was recently decided, last week, was that Google monopolized in that ad by tying together its services. Again, ties happen all the time. And if you go to a burger place and they tell you we’re giving you a burger and fries, you’re not going to turn around and sue them for antitrust violation. But if a firm has substantial market power, then its ties can potentially be illegal.

I’m not going to be able to do all my exclusion cases, but that’s a take on some of the exclusion. Let me say a little bit about mergers. How much– how much time is it?

SARAH HARRINGTON: Five more minutes.

PRASAD KRISHNAMURTHY: OK, perfect, perfect. So collusion cases, we’ve got cartel cases. Not that interesting legally. Collusion cases are also merger cases because the idea is that two firms are merging, so we’re losing the competition between them. They’re in a way colluding by having the merger.

We also worry about whether after the merger, the market is now less competitive because more players have been kind of taken off the field. So that’s the major concern with mergers. But it’s important to get a sense of what is and is not possible as far as merger enforcement.

So I’m going to focus on 2022, where we have the full regulatory report of all the numbers. So mergers have to get reported to the federal government, the FTC and the DOJ, if they’re above a certain size. That size is about $120 million as far as the size of the transaction.

From 2013 to 2020, so in that seven-year span, the highest number of reported transactions was 2,111. And that was in 2018. So that means, more or less the last decade of 2010 to 2020, the highest number of mergers in a year was about 2,000

In 2021, there were 3,520 transactions reported. So that’s more than had ever been– you have to go back to 2000, you have to go back to the beginning of the century to find a higher number. And yet whenever I would open the Business Press, I would read articles about how the Biden administration and Lina Khan was suppressing US mergers.

Now, how is that possible when there are 3,520 transactions? Now, they might have been deterring specific transactions. That could very well be the case. But could merger policy have been substantially dampening mergers during that period of the Biden administration? I would say no. And so it’s important to keep that limitation in mind.

So when these 3,152 HSR like these filings came in, what did the Feds do? 47 times, they offered what’s called a second request. That’s where the FTC, DOJ say, we’ve looked at your initial filing. We think there could be some problem. We’d like some more information. So the 47 out of 3,152, that’s 1.5%. So 1.5% of transactions get a second look.

What did the DOJ do with the 47 transactions? They brought six lawsuits, 10 of the mergers were abandoned. They just didn’t want to deal with it after the second request. And then [INAUDIBLE] lawsuit. And in those lawsuits, there was some abandonment. They won a couple. They lost a couple.

So four suits litigated right by the DOJ essentially for mergers for that entire year. So this is not going to have a substantial deterrent effect on mergers. What it can do is it can affect the mergers that took take place. And some of those mergers involve firms that are very substantial from the standpoint of their injuries or standpoint of their industry.

So it still has a big impact on the industry [INAUDIBLE] down that really takes place and the limited way in which the mergers can happen. So I’ll talk about one merger and then conclude.

So it’s a case that wasn’t really litigated as a merger. And this is Meta’s acquisition of WhatsApp and Instagram. And so that acquisition took place 10 years ago. It wasn’t challenged by the DOJ at the time, but it is being challenged now and they’re going to trial. And Mark Zuckerberg testified last week. So it’s a hot topic in contemporary antitrust.

And the issue is that, at least according to the plaintiff, according to the government, that Meta bought these two companies and they bought them with the intention of actually shelving them. And so that’s problematic. And after having consolidated them into one company, they are now using the combined platform to deter other rivals from entering into the social media space.

So that’s an exclusion claim. What they’re doing is they’re using their control over a particular ecosystem to try to prevent other rivals. That’s the exclusion part of it. And the purchase of the two competitors is a kind of collusion claim. So they’ve got two of them mixed together.

Parenthetically, I think, so in a case like this, you have to prove that Meta is a monopolist, that they have substantial market power. And you have to prove that the harm was exclusionary. I think the government may succeed that Meta has the requisite market power. But trying to prove that the harm was exclusionary is going to be difficult because WhatsApp and Instagram have thrived.

But keep your eye out on it and understand the nature of the claims there. So in conclusion, I have sought to advance three arguments. Admittedly, I haven’t said much about the third, but I’ll say a little more about it.

The first is that all of the high profile cases we are reading about what Lina Khan did as head of the FTC, the cases brought by the Biden administration, the cases that are being continued by the Trump administration, these fit into the collusion exclusion paradigm. In that way, antitrust is a fairly mature body of law. I don’t see that much legal innovation that’s kind of taking place at that broader level.

But this is not to say that the cases are not innovative and new. They’re innovative in that they are being brought against these major companies. And the cases were not brought against these major companies in the past. Investigations took place and the investigations ferreted out activity that was potentially problematic. And all of that is a kind of a new situation where these companies are now on notice that they’re not going to get potentially a free pass for things that are potentially exclusive and are tilting the playing field in their favor. So those aspects of these cases are quite new.

Consumer welfare standard, I told you it doesn’t describe the law, but it does describe what economists do and the way in which economists analyze different antitrust laws and their implications is very useful for antitrust law and policy. So we just have to keep the languages distinct.

I had said this collusion and exclusion is all we’ve got in antitrust. We’re in an academic institution. And so I don’t want to discourage innovation. So where can there be new conceptual thinking in antitrust? I’ll offer one possibility. Hopefully, one of you will take me up on it.

In the early 20th century, there was a lot of discussion in antitrust cases of harm to small businesses. And it was thought of as being a discrete harm. And that has completely disappeared from the case law. And the question is why? And that’s the kind of historical question. And then I think a normative question is, well, how could it be reintroduced? And how could you create legal standards or a policy framework that takes into account small business harm as well?

Because the public clearly cares about it. And they clearly expect antitrust to do something about it. But in its current guise, it doesn’t do so directly. I mean, there’s still exclusion, which there can be exclusion of a small business, and then you’ve got a case.

But there’s nothing like, in some of these early merger cases, it was said, look, these are mergers. Bigger companies are taking place. Smaller companies are no longer able to compete. And so we’re going to consider that a harm. We don’t do that anymore. And the interesting question is why. And if not– and if we were going to do it, how we were going to– how would we do it?

And then lastly, I mentioned, and I’ll try to be brief, on the limits of antitrust. In my view, when you read what the public is concerned about with respect to Google and with respect to Apple or Meta and WhatsApp and Instagram and so on, they’re concerned about the general information ecosystem of our society, where we get our information, where we get our news, how we create our political ideologies and alignments and so on.

And I just don’t think antitrust is ultimately capable of solving policy and political problems in those areas, that it requires legislation and requires rulemaking by agencies, that’s just different from what we have seen in the past. In many ways, antitrust is going in the opposite direction to some of these concerns, because antitrust is a one-way competition ratchet. All you can do is make the economy more competitive Under antitrust law.

Do we want the Facebook, WhatsApp, Instagram sphere to be more competitive? If it’s more competitive, that means people spend more time watching it, because they are more addicted and more glued to it. But is that what people’s concern is? It’s like Instagram is not good enough. We need it to be even better, so that it can be the Instagram of our dreams, at least as the parent of a nine-year-old kid. That’s not what I’m thinking about with respect to– similarly, with respect to Amazon.

Like all these cases are presumably going to do is create more competition in online retail because that’s Amazon’s market. But with Amazon, we’re concerned about mom-and-pop businesses that are being pushed away by Amazon. If there are five Amazons that are even better than Amazon, that’s not good for a brick-and-mortar bookstore here in Berkeley.

So I think it’s important to keep in mind, competition only goes in one direction. And often society is concerned about something different than competition or things, even too much competition may not be a good thing. Lastly– and I’m done. I’ve talked over my time.

RYAN BRUTGER: All right. Well, thank you all for giving us a really good primer for our conversation today. And I want to pick up on one of the– or some of the points that Prasad were raising and connect them to some other ideas. So I’ll start by asking or thinking about how the technological change that has led to some of these companies that you were just mentioning might have changed the politics and incentives for stronger antitrust.

And so I’ll start with this being posed to the whole panel. But when we have now companies that use social networks as part of their product and social networks are more effective when they are larger, not fragmented. , how has that changed things? Or that many of these provide free products, you mentioned Google search. You mentioned you can engage with these and the consumer isn’t paying for it necessarily.

They pay for it through advertising and things that happens. But it’s a very different marketplace than perhaps when we think of the first Gilded Age and what led to some of the antitrust. So I’m curious if any of you would like to comment on how that might shape the push for antitrust or the lack of push for it politically for our political scientists.

Or potentially, how that also maybe has altered, if at all, the cases that are being brought on those dimensions, even if we’re not using a strict or using a consumer welfare standpoint, but whether that has even changed the motivation to bring those types of cases. So I’ll open that up to the panelists if you’d like to jump in, anyone.

PRASAD KRISHNAMURTHY: Maybe we’ll just move this way.

AMY POND: I don’t know. Go ahead.

MICHAEL ALLEN: Oh, sure, I can– yeah, I think there’s definitely a connection between technological change and these demand for changes in antitrust. So maybe because of my interest in the history of this stuff, it’s not an accident that you saw the initial push for antitrust in the United States happened in the late 19th century, when there were these big technological shocks that had, for the first time, created getting closer to a real national market within the United States, like prior to these communication technologies and transit through railroads and stuff, that type of national market wasn’t really didn’t really exist.

And that led to a lot of adjustments by local markets and exploitation, maybe through these kind of new monopolies that had controlled the railroads and so on. And so I think there’s definitely a sense that when you have these big shocks, and there’s clear winners and losers, antitrust is part of the political response that comes out of that kind of political mix.

And I think also getting at the point about whether or not antitrust is the right way to do it, one of the things that I think gets discounted in the history of the US history is that three years before the passage of the Sherman Act, they passed a law creating this thing called the Interstate Commerce Commission, which was that we say antitrust started in 1890, but that was really kind of a law to deal with railroads and how they set their prices and who’s allowed to use them and so on.

And so that’s kind of like a bill that was designed to resolve a very specific problem to that came out of this kind of big technological change and the economic concentration that resulted from it. And so I think if you look at also in the United States, but elsewhere, there’s this other side of the not the antitrust tradition, but how do we deal with economic concentration, very specific sectors, that is another key part of how to think about the politics of antitrust or concentration.

PRASAD KRISHNAMURTHY: Yeah. I agree with what you said. I think there are a lot of historical parallels in the sense that there was tremendous industrial concentration around economies of scale in the early part of the 20th century. So in that way, yes, the economies of scale are different now in many of these industries, it’s network effects and things of that nature. But I think antitrust was built around that idea. And we’re not– shouldn’t be shocked by the newness of that one.

One thing I think has changed on the consumer side is that I think many more of the consumer issues that we see, and you mentioned the free goods and so on, that we see that are of concern in these dominated markets are involved the behavioral economics of consumers, as opposed to in the early 20th century, was the milk rotten or not?

It’s fairly straightforward kind of question. And you don’t want the cartels to rot in the milk– rot the milk. So I think we, in that way, face more difficult questions of paternalism and freedom and the like, around regulating in these spaces where many of the big tech firms operate.

On this issue of when this choice between antitrust and kind of direct regulation, I think one interesting current area where the EU and the US have differed, for example, is around search. And I’m not a deep expert in this area. But as I understand it, the Europeans have more or less promulgated regulations around what any search engine has to do so as to be kind of fair and transparent and so on. We don’t have anything like that.

And the cases that have tried to be litigated against Google, claiming that Google favors its own content in its search have not gone anywhere. And so I think an important area. And it’s one where it’s directly at that kind of antitrust regulation interface.

And even if we were to win a suit against Google, it would only apply to Google, because it’s an antitrust case. Whereas if you have a regulation for search engines, it applies to any search engine, whether it has monopoly power or not. So I think we’re going to grapple with these issues.

RYAN BRUTGER: So one question I want to pick up on then is thinking about whether it’s grappling with these issues through specifically antitrust policy or potential legislation in other areas of what might lead to a political moment and political will to get to that point.

So you mentioned that there was a time when thinking about antitrust as being protecting small businesses or the harm to small businesses as being unique. That’s actually something that came up in Amy and I’s research, is looking at public attitudes towards protecting small businesses versus other things. And as Amy mentioned in her opening remarks, one of the findings we found was that Americans were very concerned about the competitiveness of US firms in international markets, and that seemed to move them much more than concern for protecting domestic small businesses.

Admittedly, that surprised us. We thought that protecting small businesses would be really important. So, Amy, since you and I have done some of the work, I might put you on the spot and say, do you have any thoughts on what’s most likely to lead toward a political will potentially coming from constituents, but maybe other actors as well, since I know your work crosses many spaces?

AMY POND: I mean, when I think about small businesses and antitrust, I think this is another one of the big differences between US antitrust law and European antitrust law, where I am not an expert in this area. If you’re not, I’m really not.

But my impression from reading some of this literature is that there’s been more of a tolerance for allowing small businesses to coordinate their behaviors in Europe, whereas in the United States, we apply this kind of same standard of no collusion across firms of all sizes. And this is what allowed small businesses in Europe to remain to be able to compete with these larger firms. And so maybe antitrust law is not the right– I don’t– maybe, yeah, I mean, it’s just not the right tool for this.

One area where I think there is a lot of political pressure to do something right now, and again, maybe antitrust law is not the right tool for considering this, but in terms of information provision. So if we think about a lot of people are getting their news and information from these social networking sites, it’s not clear that it should be one company that’s allowed to continue to do that.

And maybe that’s regulation. But I think historically, regulators haven’t been separate from antitrust law breaking up large firms. That’s just how we’ve been thinking about it, I think. So maybe we need a bigger departure.

RYAN BRUTGER: Great. So I have lots more thoughts to guide the conversation, but I realize with only 20 minutes left and a room full of interested people, I’d like to start a list as well. So we’ve got lots of people. We’ll start here in the front. And Sarah is going to help us make sure we have microphones.

And so please begin. And please introduce yourself if you don’t mind just.

AUDIENCE MEMBER: Yeah. My name is Clayton. And I’ve worked in Asia as an expatriate. So one question I have is on a global basis, what is the remedy for all this? And does the remedy involve ensuring our US companies are very competitive on a global basis?

Because if you look at China, they’re entrepreneurial, but they have state-run, they have large companies. We have to– in my opinion, we have to make sure our companies are competitive across that. The old rule of [INAUDIBLE], they’re not going to be effective. I think China is a different game than Japan was, that’s not necessarily a good model. How does that work onto it?

And then quickly, you indicated, when you look at some of the harms at the same time when large companies buy smaller companies, they bring resources to the smaller companies. You get national distribution or global distribution. And then the question also is on the number of acquisitions that was done. Was that a lot because of PE and venture capital? They may have not existed 50 years ago. There’s a lot of VCPE, et cetera there. So a series of questions there.

RYAN BRUTGER: Great. So you want to jump in on the global component first?

AMY POND: I can if nobody has burning– I mean, I was thinking about this from the perspective of antitrust regulation. And there’s just some really interesting challenges when we start comparing regulators across contexts. There’s lots of challenges in terms of how they write the laws, but then also the capacity to enforce the laws and the ability to collect all this information and other countries, and the potential for regulators to be more politicized.

I mean, this is something that’s talked about in the US context, but I don’t think politicized to the same degree that antitrust regulators might be in other places.

AUDIENCE MEMBER: I think the political issues will be global, like ensuring our global capability goes beyond politics or policy. What is the right policy to ensure that our companies are competitive on a global basis, not just in the domestic side?

RYAN BRUTGER: And one thing that comes to mind here is, I mean, there’s the competition, but then what creates the landscape for competition is also the interaction of our own antitrust policy with others. So for example, when China decided to put in place a new antitrust policy that was viewed as being more stringent, at least my reading on it was that this was really led to divisive reactions amongst businesses, some of whom thought, oh, if this is applied apolitically, this might actually allow us to compete better. And others saw it as a potential tool for hidden protectionism that if it is applied in a biased manner, that could disadvantage foreign firms even more in the Chinese market, for example.

And so I think, I mean, a question that I had hidden here, but we haven’t gotten to yet, was sort of, is there space for coordination on this? Because I think what we do in any one country certainly doesn’t function in a vacuum anymore. And it affects our competitiveness, both firms domestically against each other, but internationally.

In the long run, I’m of the mindset that there is much more room for international coordination and cooperation on that, but it’s a really hard area to bring jurisdictions into a level of harmony that I’m not optimistic that we’re going to make much progress on. Do you want to touch on this?

PRASAD KRISHNAMURTHY: Yeah, I wouldn’t mind jumping in on this as well. Vinny is here. He knows a lot about these issues.

I think you have to separate out antitrust policies that try to create new businesses and the innovation side of things, where I think, in general, there is an alignment between antitrust policy and of national policy. But when you get how to think about the antitrust practices with respect to large firms, I do think some trade-offs come into place, where, in the ’80s, for example, after the ’70s stagflation, ’80s merger policy was very open and policymakers were quite clear. We would need to allow mergers so that we can get let the biggest ones survive, and they will be our national champions because we have to be competitive in a global marketplace. So merger enforcement was relaxed with the idea of creating national champions.

You might think are the same way about monopolization practices. Even if firms are exercising monopoly power to inhibit competition, it might have a domestic cost, but it might have– if it leads them to conquer foreign markets, then it has foreign benefits and things would have to be traded off now.

Actually, courts don’t do this right. There is no court that’s going to sit and balance those things. But policymakers who think about enforcement and things like that probably do.

RYAN BRUTGER: So next, we have Vinny and then Steve on the list. And I’m happy to take more as well.

AUDIENCE MEMBER: So I really enjoyed the presentations. The more current discussion seems more international than your presentations, but I understand you’re presenting. But different countries, as Ryan just said, have a very different perspective on competition policy, and as Prasad just pointed out.

I mean, I have a good friend who is in the Justice Department doing foreign antitrust, and he was helping the Japanese, quote, “develop antitrust law,” and the Chinese developed antitrust law. And he went to Japan for a year. I said, so what’s it like? He said, it’s really different than Washington. Here, they’re trying to make trusts. There, we were doing antitrust.

So it’s a very different environment for me. And by the way, no one wants to talk to me because the Japanese are terrified that I might spill the beans on something. So his experience was interesting.

But when we think of the politicization of antitrust– and you could argue the Chinese have politicized antitrust in the current Trump campaign against with tariffs and so on. And they’re using antitrust as a potential weapon against large American corporations.

But they’re not the only ones. I mean, we can think of the Europeans have done it for a long time. I was speaking to an antitrust regulator in Europe, DG Competition. And they said, well, I said, you’re pretty anti-American. Oh, no, no, we’re just going after Americans because they happen to be big. I said, really? And you’re not worried about the fact that you can’t compete in the AI, you can’t compete in all these industries, and you have really no search engine? Oh, no. No, of course not. That’s not the way we operate.

But following on that, there’s also now, as we all know, a great deal of politicization of antitrust in the United States. So I would like any of you, whoever, would like to take up this question, to think about the politicization of antitrust and getting away just from what we would hope would be a legal policy that’s kind of indifferent to the politics, but that’s clearly not happening in many countries or in the United States. Thank you.

RYAN BRUTGER: Who wants to jump in? That Pitofsky quote, so I think–

MICHAEL ALLEN: Yeah, no, I think– yeah. On the point that the different, yeah, different regimes have very different goals that they’re trying to accomplish with their antitrust rules. And I think that’s part of the thing that also would limit– is what are the limits on a deeper cooperation around antitrust.

So you have some countries that have these kind of national champions and the competition laws are really about managing these large conglomerates to promote some level of competition between them and also their smaller domestic suppliers versus maybe the more traditional– not traditional, but the way it had done historically in the United States, where it wasn’t about inculcating these big national champions in export markets. And these kind of domestic little agreements over how antitrust operates in the country can create big disagreements on how different countries pursue different goals that will limit that cooperation.

But the other side of it is I think as an idea like antitrust is– it’s s of like a black box, and you could put all sorts of demands into it, and it kind of makes sense. So you have Jim Jordan on the right, who sees antitrust trying to make antitrust claims against the social media companies for, in their view, censoring conservative speech or now against the Ivy League schools for DEI and so on.

And so there’s lots of different ways that they’re capacious enough to allow for political actors to exploit them rhetorically to make all sorts of demands. And then whether or not, though, they work as a different question, I guess, but you can imagine that those are actually part of the coalition that might lead to explain certain kinds of political outcomes. And it could sway how judges will rule, depending on who gets appointed and things like that. But it definitely, at least at the rhetorical level, antitrust allows for that kind of politicization in the United States.

RYAN BRUTGER: [INAUDIBLE]

PRASAD KRISHNAMURTHY: I would agree with that. I would say, I think the system works well when the political views around antitrust are kind of channeled in a coherent way. And so the Trump administration backing the case against Meta, because they think social media is suppressing conservative voices, like that’s not within the traditional set of values and things that we ask antitrust to do.

But that framework, the frame– the existing framework can be quite broad. And in 1946, ’44, there was a famous case against Alcoa. And in that Alcoa case, the judge whose name was Learned Hand, and that’s not by accident. That’s a badass name for a judge, Learned Hand.

He gets very close to saying that Alcoa has violated the antitrust laws because it is a monopoly in the sense that it’s simply its status and size mean that it’s violated the law. He gets very close to saying that, and then he backs away from it and says, no, you’ve got to be a monopolist, and you have to have done something unfair. And so we have both of those prongs.

But you could have an antitrust law that says status size enough is a violation. You can’t have a framework like that. And many– some academics have advocated for it in the ’70s and so on, distinguished academics, even some at the University of Chicago.

And even if you didn’t go with that, you could have that conduct standard be very light. So that you’d be very close to status. Pretty much anyone with monopoly power who even trips over their shoes in the wrong way is violating the Sherman law.

You could have a law that we don’t have that, but you could have that. So those are the permissible boundaries of where the law can exist are very broad. And people have to contest them by electing– petitioning the legislatures and making rules and the like, so as to figure out where we’re going to fit in that spectrum.

AMY POND: Ryan, can I–

RYAN BRUTGER: Oh, yes, please.

AMY POND: I don’t think this adds– I think you already know this, Vinny, but maybe I’ll say it anyway. I mean, we talked about two different sources of politicization. We’ve talked about international for sure, like targeting antitrust towards international firms. You talked about a number of really recent examples, but also domestic targeting of antitrust.

This is something that the Chinese government has– people have said that they’re targeting specific firms domestically with antitrust law. And this happens in Russia as well. And so typically, the institutional design that we point out in response to this sort of challenge of politicization is that we’re going to make antitrust regulators independent from political oversight.

And so that’s– so then that independence becomes very important and maintaining that. But the ability to do so I think really relies on people making sure that politicians don’t intervene with these independent agencies.

RYAN BRUTGER: And we’re seeing some challenges and concerns with that in various ways, that was the part that was left unsaid. You turned the microphone off. OK. Steve.

AUDIENCE MEMBER: Fantastic panel. I’m Steven Vogel, political science and political economy. My question is for Professor Krishnamurthy. So you kind of suggested that the Biden administration represented not a change in paradigm, but a change in practice in the sense that they took more cases.

So I guess my question is, does the difference between paradigm or principle and practice get a lot muddier than maybe you suggested, in the sense that they’re taking those cases because– or they’re pursuing them more aggressively because they have a different evaluation of the economic analysis, and also they have a different view on what the breadth or narrowness of antitrust should be.

And I guess, related to that question would be maybe a second part to that question, which is you ended by saying, that antitrust really should be limited in its remit, shouldn’t try to do all kinds of things. So I agree with you that it can’t necessarily solve those other problems. But I think that still filters back into whether other concerns should be part of the antitrust.

So you mentioned small business, but so for example labor, that you could worry about the effects of a merger on labor or you could not. So I guess, my point is that you still have the question of whether you should consider a broader range of things as you’re making those decisions or not. Just curious to get your thoughts.

PRASAD KRISHNAMURTHY: Yeah, I agree the world is muddier than I made it out to be. I think one way I would characterize the Biden administration is of having a much broader view of what antitrust should do than collusion and exclusion, but having to operate within the parameters of winning cases.

So it’s like you be a Marxist in the Biden administration and on the antitrust staff, but you’re not going to convince a federal judge win your case unless you put out a theory of collusion and exclusion. And so then there is, I think, an interesting translation game between a political, economic worldview that’s wider than current antitrust and how to translate that into the language of current antitrust.

And my guess is that I know Lina Khan and my guess– and she’s certainly not someone who thinks that the world should begin and end with collusion and exclusion. But yet she had to operate within that framework. So I think– so I would take what you said as a friendly amendment, and I would accept it.

But I think still within that you could still push the boundary, not just of facts, but of law. And there– I mean, certainly, some of that was done in their jurisprudence. But for example, they didn’t try to push the monopoly standard, so that– the monopoly standard of conduct is still wider in the 1950s than what the Biden administration was trying to push. So they didn’t even try to even go for New Deal antitrust in terms of their particular theories of case, maybe just because they thought they couldn’t win. But you do see that.

And I think it’s good that we are now paying much more attention to labor markets in antitrust. But I see it as very consistent with the paradigm. These are just harms to actors from a merger to through the collusion, through the potential collusion, and whether they’re workers or whether they’re suppliers or whether they’re customers, antitrust law, the traditional approach doesn’t militate against that.

RYAN BRUTGER: Next, we have in the back of the room, Juno.

AUDIENCE MEMBER: Hey. Thank you so much for the inspiring discussion. And I was quite interested to hear that about Professor Krishnamurthy’s question on whether more competition in social media is a good thing or a bad thing. And it really resonates that having more social media companies might not necessarily be a social good or a public good.

In that regard, I was wondering whether this idea contrasts with the traditional conceptualization towards innovation, which is that monopolized firms have lower incentives to innovate, and that is– that greater regulation of monopolies would stifle innovation. Because if we look at the cases of social media, these firms’ innovations sort of happened already in a previous stage where they were not big firms. So this led me to question whether the idea that monopolization stifles competition is really a valid thesis, or I may be mischaracterizing things, but I just wanted to hear your perspective.

RYAN BRUTGER: I think, Prasad, that was primarily directed to you, but– if you want to start, I don’t know.

PRASAD KRISHNAMURTHY: Sure. I think there are these competing theories in economics about when innovation takes place. Some suggest that more competitive circumstances, you’re likely to get innovation from new firms and the like. There are others that suggest that incumbent firms invest the most and produce the most innovation, and some of both of that is true. And it kind of depends on the circumstances.

I think the social media landscape is an interesting one because it raises the specter that potentially that not all innovation is good. If consumers are not necessarily always the captains of their own well-being, then firms can innovate in directions that make consumers worse off in the long run or worse off with respect to their better selves or something along these lines.

And in that case, innovation isn’t necessarily the thing that policy should aim for. Now, then, it also raises the question of whether antitrust law is the right framework to deal with that, or whether we would have more direct social media regulation, more direct to consumer laws.

The FTC would pass rules on what social media companies can and can’t do to us, and what types of situations, and show us what type of information and have what kind of data. But I think the policy tension in that area is like– the antitrust cases sometimes feel like all we want is uninhibited competition in this area, and that’s going to redound to the benefit of us all. And I think there’s a growing public skepticism with that view in many areas.

RYAN BRUTGER: Well, with only one minute left, I think that is going to be the last question we can take. So please join me in thanking our panelists. Thank you all very much for joining us.

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