By Mark Jamison

On November 30, AEI hosted a web event on how, if at all, Congress should change the way it handles antitrust issues — including through a number of bills put forward this year. For the discussion, I was joined by Michael Kades, Andrea Agathoklis Murino, Maureen K. Ohlhausen, Nancy L. Rose, and Scott J. Wallsten.

Below is an edited and abridged transcript of key highlights from our discussion. You can view the full event on AEI.org and read the full transcript here.

Mark Jamison: What appear to be Congress’ concerns about competition in
tech, and how do these concerns differ between Democrats and Republicans?

Michael
Kades:I think it’s hard to
know whether there’s a difference. There’s clearly bipartisan interest in tech
industry competition. Yet there are some who want to tell this very simple
story that the Democrats are worried because they just don’t like big companies,
while Republicans are just mad at Google and Facebook because they’re big and
seem to discriminate against conservatives.

But I think this is overly simplistic. You can’t say that
about Rep. Ken Buck (R-CO), ranking member of the House Subcommittee on
Antitrust, Commercial, and Administrative law, who is clearly very concerned
about competition issues. Rep. Jim Jordan (R-OH) is likewise very angry at the
platforms but opposes the types of antitrust bills coming out of Congress. On
the Senate side, the people who started as only focused on tech like Sen.
Marsha Blackburn (R-TN) have started to show more general interest in monopoly
power in the economy.

Talk a bit about the
consumer welfare standard in antitrust, and whether Congress is aiming to
change that standard’s central role in enforcement.

Maureen K. Ohlhausen: For the past 40 or so years, consumer
welfare has been considered the underlying goal of antitrust — namely, whether something
impacts the consumers who are paying the final price in the marketplace. At
least in the courts, this has been widely accepted as the appropriate goal of
antitrust.

This goal is now being questioned, certainly by some on the
left and some on the right. However, on the right, it tends to be a much
smaller group of entities who are questioning the platform companies. So we’re
seeing this idea that we need a new set of rules. The proposals that are being
considered seem to focus much more on competitors having access to these
platforms rather than on consumers.

I think a lot of these proposals have a fundamentally different
aim than what antitrust law has widely accepted as its goal since the early
1980s.

Nancy L. Rose: There’s a lot of ground where Maureen and I
would agree, but I would say the goal of antitrust is competition — preserving and
promoting competition.

The consumer welfare standard as a buzzword or phrase was
meant to distinguish between different types of thinking about economy-wide
effects of conduct. I don’t think final consumer price effects was ever meant
to be a literal interpretation of end use, although I think there are some
people who are condemning antitrust because they think that’s what it means and
others who are trying to preserve that kind of narrowness. I think that’s a
mistake, as it’s inconsistent with both the way we’ve enforced antitrust laws
and case law.

We’ve got a very limited amount of time to consider what the
implication of a merger will be, both for the companies that want to get the
deal done if it’s not anticompetitive as well as for the government enforcers
who have to decide whether it’s anticompetitive, and then for the courts. And I
think perhaps greater reliance on some simpler structural presumptions and
clearer bright-line rules could be helpful for everybody — including consumers.
It could make it more clear to the companies what enforcement environment
they’re likely to face, and it could make it simpler for the judges to decide
these cases.

I frankly think that one of the greatest mistakes of the last several decades in antitrust enforcement has been this thought that we face much more danger from blocking mergers that are otherwise fine, or from blocking conduct that is either competitively beneficial or neutral.

What should Congress be trying to accomplish
on antitrust?

Maureen K. Ohlhausen: I think one of the best things
Congress could do is not an antitrust fix. It should pass a federal privacy law,
because a lot of the concerns we hear involving tech platforms stem from concerns
about the collection, use, and sharing of personal data. Antitrust is not the
right tool to address those problems, but people are trying to use antitrust out
of frustration since Congress hasn’t yet passed a federal privacy law. So I
would put that on the list.

Moreover, more funding for enforcement agencies is certainly
important, but one of the things I think the agencies could use that funding
for is to look at and conduct additional studies to better forecast what’s
going to happen in a market. I would be concerned about doing something through
legislation that just puts a bar on mergers by certain companies, and that’s
one of the things that we’re seeing.

Andrea Agathoklis Murino: What you’ve just heard from
Maureen is at the policy level. As someone who does this day in and day out in
the weeds, I actually think there are internal changes that agencies should be
thinking about and that Congress should be considering in some of its statutory
reforms that are very unlikely to have any kind of pushback. This includes
reforms to merger filing processes, waiting periods, etc.

I think there are a host of not just policy ideas that
Congress should be thinking about, but procedural things that are too easily
overlooked that could end up benefiting both sides.

Scott J. Wallsten: Everyone on the panel has offered some
very thoughtful ways that Congress could intervene and legislate, but we don’t
see that kind of thoughtfulness in the actual proposed legislation.

In Congress’ mind, if anything can ever lead to a bad
outcome, it should never be allowed, thereby making it almost impossible to perform
any acquisitions. This idea is based on real concerns that you might anticompetitively
favor your own product or buy companies to prevent them from being competitors —
and those are certainly possible bad outcomes. However, we know that good
outcomes from these things are also possible. Stores offer their own products
all the time, and being acquired is an important reason for anybody to build a
company in the first place. If it’s impossible to be acquired, we are likely to
see less innovation.

Some of the proposed legislation is billed as antitrust
legislation, but it seems to turn the Federal Trade Commission (FTC) into more
of a regulatory agency. Some bills would require the FTC to create these
technical committees that would have to approve changes to interfaces, and
that’s most definitely a regulatory action, not an antitrust action.

As we’ve mentioned several times, there are lots of
different issues that people are concerned about. If people believe those are
things that need to be regulated, we need much more thoughtful conversation on
how to do regulation. You can’t just put it into three lines of a bill and turn
the FTC into a regulatory agency.

Maureen noted earlier
that antitrust is not the ideal tool for solving the underlying issues
lawmakers have with tech platforms. So what is the right approach?

Nancy L. Rose: I think it’s probably a combination of
approaches. It’s important that we have a competitive landscape that
facilitates competition. I think it comes back to whether we have an effective
antitrust regime that allows us to relatively quickly and credibly bring those
cases.

If we don’t, because antitrust is fundamentally a
deterrence-based system, we could get this hypothetical in which Google pays
Apple $1 billion a year to make Google the default search engine as a way of
keeping Apple from having an interest in developing a competing search platform.
Even if somebody gets wind of that, it’s going to take them several years to
investigate. If they file a complaint, it’ll take several years to litigate,
and Google would get to appeal. So why not go ahead and gamble?

For antitrust enforcers, having some credible enforcement combined
with a clear ability to act on anticompetitive conduct is important. That said,
some of the concerns in the tech space, as has been alluded to, are really not
antitrust concerns at all. To the extent that those concerns are outside
antitrust, we definitely do not want to be broadening the antitrust laws to
pull them in — as has been suggested by some people.

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