(Un)Civil War: The Future of Conservative Antitrust

On April 22, 2021, the Federalist Society’s George Mason Student Chapter, the Regulatory Transparency Project, and the Global Antitrust Institute cosponsored an event featuring professors Joshua D. Wright and John Yun discussing the future of the conservative approach to antitrust law.


Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

[Music and Narration]


Sydney Dominguez:  Good afternoon, everyone, and welcome to the Antonin Scalia Law School Federalist Society’s final event of the semester. My name is Sydney Dominguez. I’m the chair, and I’m very excited to welcome you all to this event which is entitled “(Un)Civil War: The Future of Conservative Antitrust” with Professor John Yun and Professor Josh Wright. 


I do want to make one quick announcement. I did see a question and answer of unfortunately can we sue DMU for not having Judd Stone here. He had an emergency meeting, Texas stuff, and we’re really thankful for Professor Yun for stepping in at that last moment — literally just a few hours ago to speak for this event. We really appreciate both him and Professor Wright for joining us today. 


Just before we get started, a couple housekeeping notes. If you’re interested in joining The Federalist Society, please go to fedsoc.org/join. When you do that, make sure to include Scalia Law as your law school if you’re a student here. That will give you access to events such as this one, and you’ll be able to attend national events such as the student leadership conference, the National Lawyers Convention, which we have been told is going to be in person this year, as well as being able to participate in our student elections just finished up — just finished up these past ones. And also, you’d be able to run for offices if you’re a returning student in the spring. 


Additionally, if you would like to ask a question during this event, please use the question and answer function. That’s the easiest way we bring everyone in in an orderly manner. Other than that, thank you all for joining us again today. I’m going to pass the microphone off to Chris, one of our own representatives, who’s going to introduce Professor Yun. And then I’ll pass it off to Evelyn, who will be introducing Professor Wright. Thank you all again for joining us.


Chris:  Thank you, Sydney. John M. Yun is an Associate Professor of Law and the Director of Economic Education at the Global Antitrust Institute. Prior to joining the GAI, he was the Acting Deputy Assistant Director in the Bureau of Economics, Antitrust Division, at the U.S. Federal Trade Commission. Also at the FTC, he has served as the economic advisor to Commissioner Joshua D. Wright, as well as a staff economist. His experience includes that analysis of horizontal mergers, vertical restraints, and exclusionary conduct. 


Over an 18 year career at the FTC, he has presided over a number of high profile matters and investigations in various industries, including consumer products, retail, intermediate goods, and technology. His research interests include law and economics, antitrust, regulatory policy, and industrial organization. And he has published in academic journals, including the International Journal of Industrial Organization, Economic Inquiry, International Review of Law and Economics, and Review of Industrial Organization. He has also taught economics at Georgetown University, Emory University, and Georgia Tech. He received his BA in Economics at UCLA and his PhD in economics at Emory University. 


Evelyn:  Professor Wright is a university professor and the Executive Director of Global Antitrust Institute at Scalia Law School at George Mason University. Professor Wright also holds a courtesy appoint at the Department of Economics. In 2013, the Senate unanimously confirmed Professor Wright as a member of the Federal Trade Commission following his nomination by President Obama. 


He rejoined Scalia Law School as full time faculty member in fall 2015. Professor Wright is a leading scholar in antitrust law, economics, intellectual property, and consumer protection and has published more than 100 articles and book chapters, co-authored a leading antitrust case book, and edited several book volumes. Professor Wright’s teaching interests include antitrust, contract, administrative law, intellectual property and antitrust, and quantitative methods. He was awarded the Paul M. Bator award by The Federalist Society in 2014 to an academic who demonstrated excellence in legal scholarship, a commitment to teaching, a concern for students, and someone who has made a significant public impact. 


Wright previously served the FTC, the Bureau of Competition, as inaugural scholar in residence. Wright’s return to the FTC as a commissioner marked his fourth stint at the Agency after having served as an intern in both the Bureau of Economics and Bureau of Competition. Wright received his JD and his PhD in Economics from UCLA and graduated with honors from the University of California. He is a member of the California and D.C. bar.


Joshua D. Wright:  All right. So I think that means I start. So what I thought I would do is — I’m sorry Judd’s not here to have a different sort of discussion and debate than I think John and I will have. And I also want to open up for sort of Q&A and talk to all of you. 


Judd had an emergency meeting and promised he would come back and make up for it. For those of you who are Scalia Law students, Judd was a Scalia Law 1L who transferred and graduated elsewhere before going on to clerk for Scalia and now is the Solicitor General in Texas and is in a unique position because he learned antitrust from me and I think now is in — and co-authored some papers and is now wanting to come in here and fight me a little bit. So we’ll get him back, and we’ll do that. 


But I thought what I would spend some time doing is setting a little bit of the stage for what I think is — this is — you know, I’ve been doing antitrust for a very long time, and this is,  I think, one of the most interesting moments in antitrust’s history. I think it’s sort of often gets played as antitrust big tech moment. And I think that’s true. It’s a big part of it, and it’s certainly the part that has driven a wedge in sort of conservative and libertarian conversation of antitrust. And so we’ll end up, I think — I hope, talking a lot about that. 


But I think the antitrust moment that’s happening is bigger than just big tech. And so I thought what I would do at least to set the stage so that you understand where I’m coming from on this stuff is spend maybe five or ten minutes setting the stage for what’s happening in the antitrust debate right now because there are a number of different fronts to those ongoing battles. And I think sort of getting a sense of the whole landscape is useful for having the larger discussion. And then I’ll sort of shift into what I think are the big moments — the big issues in the conservative side of that debate or at least how the terms of that debate have been changing for conservatives. 


So let me do a little bit of table setting, especially for those who may be less familiar with the entire antitrust landscape. So a couple of things, you’ve got part of the ongoing battle — I’ll start with the tech cases, really. But you’ve got part of the ongoing battle in the courts. So you’ve got courts. You’ve got Congress. You’ve got the agencies sort of as the three big dimensions — some other interesting things happening, but we’ll sort of start there. 


So there’s a lot of litigation pending right now. So most of you I know because I can see the attendee list — some antitrust students. But if you were to sort of peruse the cases that are already filed and going through the Article III system right now, you’ve got — I don’t know. Open your phone and look at the apps, and you’ll find the defendants. So you’ve got the DOJ has sued Google, and some states are a part of that suit. Those suits for those of you sort of not familiar — the DOJ’s suit is mostly about your phone. 


The DOJ suit’s mostly about payments that Google has made to either Apple or Android phone makers to take position as the default search engine on the phone. There are some advertising components of those cases, but sort of the big ticket item in the Google cases are about search distribution.


 The states are a player here, too. I don’t want to skip too much over the states because the states are playing a more active role in antitrust than they have in recent years. For example, Colorado has taken the lead in some of the Google cases. Texas has taken the lead in some of the other cases that involve the ad tech market. And they also involve not search distribution, not sort of preferencing to be the default search but how Google actually structures the results on search engines. So these are complaints like, goodness, when I search for pizza in Arlington and I get a Google Map. And MapQuest is mad and complains and says that the way Google has structured its search engine makes it difficult for rivals to compete in spaces where Google is also present. 


So you have sort of three different buckets of complaint: peer search, if you will; search distribution; and then sort of the ad tech allegations. Google’s not the only sort of big tech defendant in those cases. Facebook, you’ve got the FTC with a 3-2 vote at the Commission sued Facebook with really sort of two claims. The less talked about claim is a monopolization claim that says that Facebook has monopoly power and something they describe as the personal/social network services market and that they ought to be sharing their data. They have a policy not to share the social graph data with companies that are rivals and compete against them— think Twitter— whereas they will share with third party apps and the like. So that’s one of the claims. 


The more commonly talked about claim in the Facebook case is probably the one that everyone listening here has heard, which is the attempt to revisit the mergers of Facebook, the acquisitions of WhatsApp and Instagram. So those are acquisitions that the FTC reviewed, ultimately decided not to challenge roughly a decade ago. Relatively rare but not unheard of for the FTC to challenge consummated transaction sort of after the fact. 


90 something percent of merger review is done for proposed mergers before the merger closes. Occasionally, they bring consummated merger cases, not very often ten years after the fact. Usually, these are like in rural hospital systems or something like that where the merger wasn’t every notified to the FTC in the first place. So not unprecedented but relatively rare, and we can talk about any of the individual cases you want later. 


But just to sort of keep moving on the landscape — and there’s also, I don’t know, as many states as exist in the Union, there are that many state agents also suing Facebook. I think there might have been one or two holds outs. So I did Facebook and Google. Amazon has a pending investigation at at least one of the federal agencies. Apple gets to play, too. So Apple had it’s own congressional hearing the other day, but also there’s some private litigation. 


So we’ve got the feds who can sue, the states who can sue, and then private plaintiffs. And there’s the Epic v. Apple suit, sort of an app store allegation over Apple’s app store rule. So you’ve got private plaintiffs, state AGs enforcing the federal antitrust laws, and federal agencies sort of all plaintiffs in these cases covering Facebook, Google, Amazon and Apple. 


So lots of litigation going on, but most of the conversation I think that’s happening at the policy level isn’t really as interesting as those individual cases are. And I’m happy to talk about all of them that you’d like. You’ve got a lot of action happening at sort of a broader level, be it rulemaking at the agencies or sort of legislative. 


Big political wins on the left to do more antitrust really common. I think there’s been a change on the left, so on the sort of left-hand side of antitrust politics you’ve got what I’ll describe as sort of mainstream progressives that say, “Keep the existing standard. But the Agency should bring more cases, right? It should litigate more cases. It should be more aggressive.” That’s always been around. 


The sort of further left side of the antitrust debate I’ll sort of single out Liz Warren and Lena Khan just had her hearing. Tim Wu, I think, just went into the White House — has taken a more aggressive posture. And the claim is generally something like the existing antitrust institutions — and I don’t just mean the consumer welfare standard but sort of all of it, including the legal standards — are broken. And they’re broken in a way that means sort of a transformational fix rather than bringing more cases, giving more money to the agency, sort of tweaking around the margins. And maybe in Congress Liz Warren is the most popular, well-known proponent of that position. In academia, no doubt Lena and Tim Wu. And you might notice that out of that group I named a senator, an academic who’s gone into the White House, and another one who’s probably going to be confirmed into a seat at the Federal Trade Commission. 


I think that’s relatively new on the left hand side of the debate that the sort of more populist side of the antitrust debate is sort of been put into positions of power. And I think that’s important but not a huge change. That group’s always been there. 


I think the bigger change has been on the right. Since that’s what we’re here to talk about — that debate, I’ll spend a little bit of time there, too, and then sort of touch on some of the legislative proposals, some of what the antitrust debate looks like in light of the rift that’s happening. Let me sort of try to identify that rift a little bit first. 


So I think what’s new— and certainly new for me— is on the righthand side, if you will, of the competition policy debate, I think Lena’s hearing reminded me of my own. I think I was given a little bit rougher of a treatment, but I had a senator describe me as the — I think it was the “most right winged thing that had ever walked inside the FTC building on Pennsylvania Street,” or some such. And I think now in the sort of modern antitrust debate I feel like I look a lot more moderate than I used to. 


I think there’s been the creation of sort of a populist right that while probably there in antitrust is sort of taking a lot of oxygen in the room. And you are familiar and hear this on the right through Senator Hawley, Senator Cruz in Congress. But you get this sort of increasing angst that goes something like large tech companies overwhelmingly favor the political left in political donations, in the way they structure and design products, in how they market to consumers and sort of all of it. 


They walk and talk, so goes the complaint, like a member of the political left. They try to influence the government on behalf of the political left. Hey, let’s just treat them like the government — or like part of the political left. And I think one important — we can talk about this as much as you guys want in conversation. 


But I think an important rift that’s happened that’s relatively new in antitrust debates on the right is sort of a blurring of the private-public distinction. And that debate happens in other areas of law. But it’s not been an important part of the antitrust fight for a very long time and certainly not at the federal level. I think that’s an important part. 


You’ve also got a rise of this same sort of populist right that walks and talks exactly like the populist left. So one of the fundamental claims of the new sort of populist left in antitrust is the consumer welfare standard in antitrust institutions have failed. They’re the reasons we have big tech, and they’re the reasons that we have large successful corporations. 


That, I think — that sort of joining of the — if you think about the sort of politics in a straight line, this is the joining of the circle of the two ends. Those arguments sort of walk and talk a lot of the same language in some of those claims. So you’ve got some of that in Lena Khan’s hearing today, a lot of agreement between — at least for the purpose of the hearing. And that raises important questions about whether some of the attempts at antitrust reform have a real chance at success because you’ve got — you never attracted folks on the right with things like do away with the consumer welfare standard or whatnot. 


So let me identify before sort of letting John have at me with questions or letting you guys have at me with questions. A couple of kind of key points of debate that I think are the most important to watch here — and I’ll talk some about what I think of them. So one, the consumer welfare standard itself, there’s a lot of debate over it and not a lot of understanding of where it came from in the U.S. antitrust system. So the consumer welfare standard, if you look at antitrust cases sort of 1890 to 1977 — I don’t even make — there’s plenty of my Antitrust 1 students in the Zoom. I don’t even make you guys do a lot of this. 


But if you look at those cases and sort of try to identify the goals of the antitrust system, we had an antitrust system that did six things at once. You want to address income inequality, use antitrust. You want to protect small businesses, you want to do consumer welfare, you want to protect national security, agriculture, antitrust can do all your things. By the time we got to the ‘60s, the academic consensus on the left and the right was antitrust’s not doing a great job of doing anything, made it a little bit of an incoherent intellectual backwater. 


It happens to be sitting right next to me. I swear this isn’t a planned prop. But Antitrust Paradox came out in 1978. It’s really a collection of Bork’s articles from the early ‘70s through ’78 — sort of pointing out most of what antitrust is doing is more harm than good to consumers. The Supreme Court gets a hold of the law in the ‘70s and says antitrust is going to do one thing now. We’re just going to do economic welfare. That’s it. You can care about income inequality and agriculture and small business, but we’re going to do those through different vehicles. And antitrust is just going to be about competition. 


One of the features of the conservative, I think, appeal to antitrust — that big shift was viewed as a success of the conservative legal movement. It was Bork, but it wasn’t just Bork. It was our own Judge Ginsburg. It was Posner and Easterbrook at the time. But it was also much broader than that. The theories of decisions that sort of shifted the consumer welfare standard to the consumer welfare standard were, you know, 7-2, 8-1, 9-0 decisions. 


I think a success of law and economics and a success of the conservative legal movement in the sense that not only were they lead by conservative academics in sort of bringing the rule of law to antitrust that had lacked it. It was a powerful set of ideas that persuaded a lot of people across the political spectrum and I think sort of saved antitrust from itself in a variety of ways. We can have lots of debates over the right contours of the edges of the doctrine. But there was lots of agreement in the middle. And I think there still is, at least in academia and certainly among antitrust practitioners that, if you compare the state of the law in the ‘50s and ‘60s to now, the doctrine is sort of much more coherent because it sort of brought in economics to discipline wildly disparate interpretations. 


That sort of brings us to today’s debate. The consumer welfare standard compared to what? Right? And I think that this is an important part of the debate on the conservative side in particular. I do lots of these debates on the left. I do some of them on the right. 


But I think for conservatives in particular the idea that of course the appeal to getting rid of the consumer welfare standard and the rule of law in antitrust are two edges of the sort of same sword. I think the appeal for conservatives who are angry at big tech is antitrust is a big hammer with big important remedies. And if what you’re looking to do is take a pound of flesh, antitrust can do that. 


The thing that is stopping antitrust from use that way — and this sort of brings me to another, I think, key point on the debate for conservatives — the thing that stops the ability of — I named all those suits, the DOJ, the FTC, the states—and I’m charactering for the sake of debate—but conservatives who feel like tech companies have participated on behalf of the political left and want to take their pound of flesh — the constraint on that is judicial review. The constraint on that is Article III courts. 


And I think a signature feature of American antitrust law compared to Europe, compared to China, is that for plaintiffs to win cases in the U.S. antitrust system they’ve got to go to court and show evidence that the harm was bad. As simple as that sounds, that is a relatively unique feature of antitrust in the United States compared to the rest of the world. More presumptions than the rest of the world, presumptions that conduct is unlawful, more bright line rules, by which I mean if you have a market share above X what you’re doing is unlawful — and far more power for regulatory agencies without judicial review. 


FTC wants to bring a crazy case to punish Google politically, Google can go to court. Same for Facebook, same for a brick and mortar store.  Judicial review with the consumer welfare standard are a very important sort of central part of the conservative legal win in antitrust. Part of it was convincing the rest of the world it was a good idea, but bringing the rule of law to antitrust meant constraining agencies against those sorts of applications of the law. 


So the heart of, I think, the big reforms in antitrust, whether they’re — conservatives certainly view them as victories. It’s bringing the rule of law. It’s bringing law an economics to antitrust. It’s constraint on the administrative state, the sort of things that conservatives sort of put on the win list usually. 


So do progressives in some instances and in lots of areas. It’s one of the reasons why I think antitrust sort of until now has been viewed pretty broadly as an area that had dramatic success from, say, the ‘60s to current. But each of those sort of key features is under attack in the modern debate. Do away with the consumer welfare standard. Lots of proposals and most of the proposals are something either like a vague public interest standard that gives the agencies lots of control or something like bright line rules of illegality that take judicial review sort of out of — either out of the equation or sort of more and more out of the equation. 


In either event, a giant shift of the locus of control in antitrust from Article III courts to federal agencies. That is not a standard on the conservative side of the debate. I think at least when I talk to conservatives who are struck by the idea that they ought to do something about big tech. My normal response is, well, if you think they’ve done something anticompetitive, sue them. Sue them and go try to win. 


The agencies win 80, 85 percent of their cases. When they have good evidence, they win. When they don’t — I mean, that’s a win rate a lot of federal agencies are jealous of. It’s certainly the current standard’s not stopping them from bringing cases now. But if the alternative is a public interest standard or a standard that gives giant power to a regulatory body, I think that that’s something that ought to give everybody some reason for concern. 


The other pieces of the modern debate that I think are important parts of the conversations that conservatives ought to have with themselves about the direction of antitrust is there’s this courts versus agency question that I highlighted. But then there’s another important part, and then I’ll sort of stop and we can just talk. 


The other important part that I think is critically important for the direction of the discussion — in U.S. antitrust law — I’m in my office at Scalia Law School. There’s a famous Justice Scalia opinion in Trinko that I joke with my students — this is the duty to deal opinion in Trinko for those of you who aren’t antitrust people or haven’t taken it yet that provides the legal authority in the United States — you may have heard sort of the slogan antitrust law doesn’t punish competition or competitors. It punishes competition. 


The idea is if I compete with you, if I earn monopoly power through building a better mousetrap or a cup of coffee or — it’s late enough — bourbon, if I become the monopolist because I out-compete you and I charge the monopoly price, that is lawful in the U.S. antitrust system. I am allowed to compete and win, even if what I do is compete, win, and earn a monopoly. 


Black letter law, 101 principle of American antitrust law, fairly unique around the world. There are prohibitions of earning monopoly power even by outcompeting in other jurisdictions. Here, Justice Scalia in Trinko — there is what I joke with my students sort of an ode, love poem to monopoly pricing in that opinion, and not just any monopoly pricing but monopoly pricing that is earned throughout competing rivals. 


That kind of fundamental part of U.S. antitrust system — we say if you innovate, if you build something better, as a return you charge a monopoly price until entry comes. That’s a feature, not a bug in my view of the U.S. antitrust system, and I think this is an important part of the current debate is how everybody, but conservatives included, think about that feature of U.S. antitrust institutions. They are unique. 


So is the fact that all of those big tech companies, an overwhelming proportion of them that folks would like to sue or are being sued or what have you are in the United States. Causation is messy and complicated, and the world is chaotic. And I certainly wouldn’t advance the claim that the structure of our U.S. system is the only reason why we have those firms here and not there. But these firms do respond to incentives. 


And I think that it is, again, a feature and not a bug of the American economy that most of the innovation and these and related markets — not just big tech markets. A lot of it happens here. And I think a regulatory system that embraces the idea that winning a competition is okay— might even be encouraged— is really a key signature feature along with judicial review of the U.S. antitrust laws. And those are features that conservatives have traditionally been attracted to in this area. And I think a sort of temptation to take a pound of flesh out of large tech companies in particular is driving a debate to change some of those long term features. I think I’ve made it clear that I feel like most of those changes are misguided. I view a sort of short term gratification versus really important long term costs to the American antitrust system and thus to the American economy. 


I’ll stop there. I talked a little longer than I wanted to, and I see there’s a bunch of questions in the queue. And so I meant most of that to sort of tee up areas I thought were important to discuss so we can sort of keep talking from there. But John, why don’t I let you take first crack at either yelling at me or asking me questions, or we can start working through the queue. Whatever you want to do. 


John Yun:  Okay.  Yeah.  My video’s not working, which is probably better for everyone. Social welfare, that’s it right there.


Sydney Dominguez:  Professor Yun, if you want to make — I can make you the host again. You can turn on the camera, and then just after if you’ll just turn on your camera for the remainder of the event. It’ll be all set. Let me go ahead and do that. 


John Yun: Okay. Let’s do that. 


Sydney Dominguez:  Okay. There we go. You are now the host. You should be able to turn on your camera now. 


John Yun:  Great. Thanks, Sydney. 


Sydney Dominguez:  And can you transfer it back to me so that way —


John Yun:  Yes, that’s happening. 


Sydney Dominguez:  — if this crashes, that will not be bad. Awesome. Thank you. 


John Yun:  Uh-huh.  All right. First of all, I apologize for not being Judd Stone. This is kind of like the Captain America versus Iron Man. We do have Iron Man with Josh, but now you have Ant Man or someone significantly less important. Okay. Point being, I’m going to get out of the way because these student questions are really good, and we’re getting closer to time. So I just have one question. And this question is you mentioned, obviously, all this litigation happening. I think somewhat unprecedented. 


In terms of the digital platform space we have Amazon. We have Apple. We have Google. We have Facebook. All of them are facing to some degree or another litigation. In a way, this could be quite good for the industry in that they finally get to prove their pro-competitive arguments. And the agencies will have their day, as you said, to argue for the anticompetitive arguments. Although, arguably they’re under heavy pressure to bring cases. So it’s not clear that on their merits they would do it but for the political pressure. But that’s certainly a different discussion. 


So my question to you is let’s suppose by way of Amex the digital platforms win, and they route the agencies and the states. They prove their case, and under the consumer welfare standard they’re doing quite well. Isn’t it a kind of they can’t win situation in the sense that what that’s going to do is just raise calls that this proves that the consumer welfare standard is broken? Is there any way this comes out where the agencies, if they lose, everyone just says, “You know what? Maybe we’re wrong about these markets”? Or is it really just going to ultimately, asymptotically lead to more regulation? 


Joshua D. Wright:  So that’s a great question, John, and I’m not sorry you’re not Judd Stone. So it’s an interesting shift in the — so I left the Commission in 2015. And I voted against more cases than anybody else, but even I cared about whether we won or lost. I think the way I viewed winning and losing in court was the Agency had a stock of reputational, political capital. And losses diminished it, and it hurt our ability to do things I thought were productive. 


So there were a handful of cases where I really thought we should lose in federal court, and I rooted against my team. But not a lot. I think the politics have changed a little bit. Commissioner Chopra, who will leave and go to the CFPB, spoke about this is sort of relatively, recently, and in fairly frank terms. I heard him say publicly — so I don’t mind sharing — “Hey, look, let’s bring a ton of cases, and if we lose, we’ll go to the Hill and have a stronger case for legislative reform.” 


I think for practicing antitrust lawyers in particular that’s — it sounds like someone came down from another planet and sort of came into the field. That’s new. Not to say there’s not been politics around antitrust. Of course there has been, but it’s been very Article III centric. 


And I think one of the interesting parts and quite frankly productive parts of this new antitrust debate is hey, everything is on the table, legislative reform, consumer welfare standard. We’ll go from two agencies to one. Who knows? Anything can happen. It’s the Wild West. 


And so there’s a lot of revisiting kind of first order antitrust questions. I think that’s important for any field, and antitrust is having that as you know. And I think that’s a good feature of this kind of conversation. I don’t care if we win or lose cases. If we lose, we go to Congress and try to make our case. So that, I think, is relatively new. 


To answer your question about whether it’s sort of damned if you do, damned if you don’t— which my words, not yours— but there’s certainly an element of that. But let me sort of — I’ll cut to the chase on where I think the politics on this are going. I think for the conservatives in Congress you’ve heard there’s a lot of angry talk oriented at large tech firms. 


But if you wanted to change the consumer welfare standard, shift the burden of proof to defendants in merger cases, give civil penalty authority to the FTC— for those of you who don’t know or don’t follow, I’m naming stuff that’s been proposed—you can’t do that in a way that limits to large tech firms. Liz Warren’s proposal, you know, you can’t be the referee and a player or a player and an umpire or something — this is like her Amazon speech for Amazon who runs the platform and then sells stuff. 


You can’t do that without banning Walmart’s private label socks or Apple from running an app store or, you know, sort of pick — Netflix from having its original content. I like Netflix shows. You like Netflix shows, right? 


It’s really hard when you have to actually legislate and not talk about your feelings to do it in a way where there aren’t just collateral consequences you and I would care about as an economist or an antitrust person but they’ll care about politically too because the politics of hurting Facebook are different than the politics of hurting a Walmart consumer. And so I think we’re at the part of the game now where we’re past yelling about who Twitter lets on their platform and doesn’t. We’re still going to have that yelling, but it won’t just be that. I think we’re sort of at the part of the game where if you want to legislate something, if you want to do something more than talk about how angry you are, doing that in a way that’s surgical in this are — surgical and constitutional is pretty darn hard. 


So my own view is — you take the House Antitrust Subcommittee as an example. The House Antitrust Subcommittee, they did a report. And the report said we should overturn every single antitrust case that’s been decided since 1977, every single one, the 9-0 , the 8-1s. You’ve got RBG and Scalia to agree. We’re overturning that for sure. 


In a footnote, 1024 or something ridiculous, they tried to overturn a law review articles, which is wild. I’m jealous. I would like my law review articles overturned by Congress. That’s a life goal. But when it came to voting out that report — and during you had— you go back and watch those hearings— Ken Buck and Jim Jordan and legitimately sincerely, genuinely angry at tech companies for what they perceived to either be conservative bias or what have you. I think those feelings are legitimate whether or not they’re well-founded. They are concerned about the way those companies are using whatever power that they have. 


But when it came to actually not talking about that in the abstract but voting for proposals that are legislative and would change the way the American economy worked, that thing was strictly partisan. And strictly partisan with the Senate structured the way it is and not being sure you’ll get all the Dems on all of these things, I don’t think strictly partisan gets you there. 


So my own sense of this — and I wouldn’t bet you more than a beer — but my own sense of this is the transformational antitrust change desired by sort of the left corner and the right corner I don’t think is coming. I think what’s coming instead is give the agencies more money to bring some more cases, tweaks around the margin of burdens and agency structure, notify more mergers so that sneaky anticompetitive ones don’t get through. I think that’s going to be a lot more of process and minor substance tweaks. 714 blue ribbon panels will be commissioned. 


But I’d bet the under on transformational antitrust reform on the politics, no matter if the agencies win or lose those cases, though I certainly agree with the premise that they will be used if they agencies use to make the case for more reform. Mind you on the timing of this, the agencies lose all those cases we’re in 2024. And politics change. There’s a whole new Olympics that have happened. Anyway, that’s my answer. John, you want to take me through these questions, or what do you want to do?


John Yun:  Sure. Yeah. Let’s start with Alex. Alex has a question about the recent case I think today, FTC v. AMG Capital, on 13(b) reform. What do you think will happen? Obviously, I think the next move is FTC goes up to Congress directly and asks for some more authority, and what do you think we’ll likely see?


Joshua D. Wright:  I think the FTC was going to Congress before the case. I think most commentators had this thing sort of pegged to go 8-1, 7-2, 9-0. And so I think they’ve been gearing up for a while. 


The 13(b) issues just for those not familiar, I think the 13(b) is — FTC has authority. It lets it get permanent injunctions for conduct that is ongoing. And FTC over the past 20 something years has expanded that authority to go to court and argue that their ability to get permanent injunctions includes equitable monetary relief. So it includes the ability to get money in some subset of cases. 


We won’t do the whole history there, but the short version goes something like the FTC expanded that into a bunch of cases other than sort of straight fraud where they first tested the authority. Circuit split with some circuits questioning whether that permanent injunction authority meant they could get money, and the Supreme Court coming out 9-0 and saying— you should read the 18 page opinion by Justice Breyer— but saying “Injunctions don’t mean money.” 


And I think it’s fair to say that on the Commission— and this was certainly my view when I was at the FTC— the ability to get money in straight fraud cases is a good thing for the Agency to have. And I think they’ll get it. They’ll get it back from Congress with some fix. 


There’s important things to talk about to actually write this thing down — the legislative fix so that they’re using that authority in the right set of cases. Where you don’t want them using the authority to get ill-gotten gains from the defendant is there’s a data security case or a privacy case. The hotel you stay at has some date security breach, and I paid $400 to stay in the room. And they had some breach, but the measure of damages is the $400 I paid instead of the sort of damage exposure to me from the data breach. I actually got the value. I stayed at the hotel. And the FTC has sort of famously gone into court and gone for all the revenue from these companies and had some courts fight back. 


So I think there’s going to be some debate over how to cabinet what kinds of cases, whether they apply it forward looking or retroactively. They’re going to want to do it retroactively. If that doesn’t give conservatives pause, I don’t know what will — and how to measure the damages. Those are important and difficult. I think we’ll see a bunch of hearings, and I think they’ll get the authority in a relatively cabined way. 


John Yun:  I’m going to move to Kevin Beck’s question, and I’ll just read it straight. Is there a chance that conservatives, at least the right-leaning politicians, moving in a more populist direction is in some cases better from a consumer welfare perspective in that it overcomes some reflective support for big business? I think that can go a couple ways, but I’ll just let you interpret it the way you see it. 


Joshua D. Wright:  Yeah. So let me say this. I am in terms of — so when I read “is it better,” what I care about is the actual impact in the world of those cases on people. I could care less whether the right leaning politicians are happy, sad, or indifferent to the consumer welfare standard or to big tech or anything else. But in terms of consequences for — of a more populist direction, when I think about consequences for that in the real world, all I can do is look at the actual populist proposals that have been made and predict their impact in things like shifting the burden of proof to defendants for voluntary transactions between two parties. It’s illegal unless the administrative state says it’s okay. That I don’t really — you know, I can’t think of a good consequence of that. 


And in terms of the reflexive support for big business, mind you — and Kevin, this is a good question, and you should come take antitrust in the fall. But in terms of this idea — and I get where the question’s coming from, the sort of are the conservatives reflexively support big business, big business is on both sides of every antitrust dispute you can think of. The Google cases, Microsoft’s the complainant. The Qualcomm case, Apple’s the complainant. The Amazon cases, Walmart’s the complainant. All the other Google cases, Oracle is the complainant. I don’t know. 


That’s a couple hundred billion dollars of market value. There’s big money on all of these sides, and what we don’t want — and I think a point that conservatives largely agree with is the idea that weaponizing the antitrust system so that it is a way that firms can — I would rather Microsoft and Google compete by making better products that are more attractive to me or Apple and Qualcomm or Walmart and Amazon than spending their resources convincing regulators, be they in the United States or somewhere else, to handicap the rival.


John Yun:  So we have a question from an anonymous attendee. They should have revealed themselves. It’s a great question, or maybe you just typed it in yourself, Josh. I know that you have a sort of history of that. 


Question, is it better for the agencies to have very strong sort of policy statements, for example, what’s nascent or potential competition — by the way, I have a paper on that, I’m just saying, coming out in a law review soon. Just letting you know it’s out there.  Okay. Is it better for them to be very explicit about what type of behavior’s anticompetitive or not or define things, or is it better to leave that flexibility to the agencies so they can clearly move in certain directions based on it?


Joshua D. Wright:  That’s a really good question. So here’s my short answer is that — and I’ll try to be faster so we can get to more of these. But my short answer is the agency’s better off writing policy statements and being transparent about its views of its authority. I think what the agency gets out of that is — and we did this with the unfair methods of competition authority where we sort of wrote a statement down where the agency hadn’t defined it’s sort of vague superpower for 100 years — because what the agency can do  — you remember, you know, we’ve got Article III courts as sort of the backstop against all of this. And for most federal judges when they get an antitrust case, it’s their first antitrust case, their second antitrust case. 


The agencies get a chance to educate the judiciary about sort of the antitrust framework. And I think if you write — like the merger guidelines. If you write down guidelines that interpret your authority in a credible way, it disciplines the agency to be credible and intellectually consistent, and I think it also increases the agency capital like we were talking about before, which really matters when you go to Article III courts. They believe you. 


I think the agencies have done that with the horizontal merger guidelines. And I think they’ve been pretty darn successful in horizontal mergers because of it. I think going the other way puts you in a pretty difficult position in front of a skeptical Article III judge.


John Yun:  So Christopher asks a really sort of broad questions but really a nice policy based one. Perhaps really a 30 minute discussion almost. But are there positives and negatives for the U.S. to have this system where you can extract your monopoly rents, if you will, rather than extend it, which we don’t allow? I think that’s the basis of Christopher’s question and if you had any thoughts on that. 


Joshua D. Wright:  Right. So I think what the positives and negatives are are pretty clear and agreed upon, and how much magnitude each one gets, there’s lots of disagreement. And the answer might be different in different countries. So this ended up being a big important discussion for international antitrust. So let me just sort of highlight the cost and benefits, Christopher, and I won’t talk a lot about the evidence on the magnitudes. 


But there’s sort of big literature here on people trying to think about this more rigorously and provide evidence. But the idea is not too dissimilar from the IP system. The idea is, look, everyone agrees that monopolist reduces the output and raises the price, and we get deadweight loss. And that’s bad. That’s a real consumer loss. 


But if I’m competing, how did I get the monopoly power? Well, if what I did is burn down the rival’s factory, convince the government regulator to give me the monopoly power — something that we think reduces social resources, well, all of that’s bad. We don’t worry about it. We prosecute it. But what if I get the monopoly by sort of innovating? Well, now the monopoly rents are the return on innovation. And innovation has giant positive spill overs and is really important for economic growth, probably more important than static welfare gains. 


The price of my cup of coffee goes from $5 to $4.90, I get 10 cents in surplus. That’s a real 10 cents. I like my 10 cents. But when there is innovation to change the quality of the coffee so I’d get really big consumer gains that spread across the economy and disseminated sometimes to even other industries—coffee was a bad example for that— but for other innovations you get the point. There are these spill overs. And so we’ve made a conscious choice that the innovation benefits are worth anything we get in terms of the sort of static increase in price. 


I think there’s a consensus view in economics that those dynamic effects are bigger than the static ones. Notice that that can cut the other way. If the antitrust allegation is hey, you engaged in harm that diminishes innovation, well, we should care about that two. Antitrust has to struggle with that and take Professor Yun’s antitrust and IP class. 


John Yun:  I know we’re right at time, but these questions are so good. So I think if we have time for one more —


Joshua D. Wright:  I’ll stay until people log off. I don’t care. Sydney can tell me the rules. 


Sydney Dominguez:  We can definitely do as many as you guys are up for. We don’t have to — the Zoom room will close at like 11:30 at night. Before that, you guys are free to go as long as you’d like. 


Joshua D. Wright:  Well, I’m not coming back in at 11:00, so let’s do the questions now.


Sydney Dominguez:  Sounds good. 


John Yun:  So I know Christian’s is actually — has a flavor as Michael’s, so I’ll roll them into one. And it’s a really good question. What’s sort of the antitrust endgame here— there we go with that title—in terms of the U.S. perhaps diverging from the rest of the world—let’s say Europe—in terms of how it administers it’s antitrust system? And what’s the ultimate equilibrium if companies obviously have to satisfy all these various jurisdictions? And if they are increasingly becoming more interventionist, what does that mean for the U.S., and what’s the ultimate result — endgame if you think?


Joshua D. Wright:  And I see in Michael’s question part of this — which is is all this discussion the U.S. is having politically and sort of inside the antitrust circles about kicking the consumer welfare standard — is it likely to render the U.S. less influential in discussions about the sort of international antitrust standard? For people — there are 130 something jurisdictions with antitrust laws, and probably 20 or 30 that are really important economically that have antitrust laws that all have sort of different flavors. 


And the U.S. — other countries, too — but the U.S. has played an important role for the past 20 or 30 years. It goes around the world and says things like, “We should have an economics based system. The plaintiff should bear the burden of showing harm. You can do an economic welfare system, consumer welfare, totals welfare, whatever you want. But we want an economic welfare-based system, pro-rule of law and pro-consumer welfare standard relative to sort of other alternatives.”


In the U.S. has been — you can think of the European antitrust system as sort of playing the foil in those debates internationally. And sometimes the U.S. isn’t more influential than Europe, and sometimes it’s the other way around. And if a country wants a short term political gain, you adopt a really aggressive antitrust system, and you tell a company “Give me a billion dollars if you want to do business here.” And that happens. 


And antitrust and international trade run together. President Obama sort of wagged his finger at Europe over Apple fines back in the day. You see sort of some of that in every jurisdiction. President Trump’s response sort of oddly, at least to me, was “Wait a minute. You guys can’t sue our tech companies. We can,” which was fine, I guess. So you get some of that. 


So that sort of dovetails with those issues of international convergence. I think to the question I think the U.S. has already lost some standing in international circles because of the inability or the sort of unwillingness to continue to take strong stands in those areas. I think that’s already happening. There are parts of the antitrust systems all around the world. It’s sort of too much to do a lot of examples here. But I think the influence of the U.S. in those jurisdictions is still significant. It is less than it was. I think it will continue to decline for the time being, so it’s a long yes. 


John Yun:  Chris has another good question, but let me skip to those who haven’t had a chance. I’m going to go to John, and John asks a really nice question about antitrust cases just taking too darn long. He mentions the IBM case taking 13 years. I think we’re doing better now, but is there a fix? And is that a reasonable argument against throwing it to the courts and the consumer welfare standard and your big rule of reason and your war machine of benefits versus costs, Josh, right? You just want to enrich economic consultants. That’s your — no, I’ve gone too far. So what’s your reaction. 


Joshua D. Wright:  Yeah. So it’s a great question, John. And look, I’m glad you brought it up because I think the time that antitrust institutions take to adjudicate disputes is, while not as politically sexy as are we going to take a pound of flesh out of big tech or not and who wins and who loses and do we get to break them up or whatever, inside antitrust debates I think this is an important question. And it’s one that’s getting some attention. 


So for example, that Google suit. So you’re seeing in political debates people saying, well, wait a minute. Why are we going to overhaul the whole system while everybody’s getting sued? Let’s see what happens, right? That Google suit is planned for trial in the end of 2023. They were sued a year ago. These are cases that take — that’s an extreme example of how long to get to the sort of off the ground. And presumably, there’ll be some motion practice and so forth in between now and then. But it takes a long time. Getting faster — certainly getting faster. 


Those are outlier examples. The FTC suit to block a vertical merger, Illumina-Grail, recently – trial’s set for this summer. Merger cases in particular are going sort of much faster. But I think the speed of antitrust institutions are an important part of the debate. So there are proposals around. Hal Singer has a proposal to do an administrative tribunal for self-preferencing, sort of very cabined type of complainant. 


He has a standard he wants. He has a way he wants to do it. I think it’s a bad idea for reasons we’re not going to get into. But I think it’s safe to say that there is some thinking going on, I think, inside antitrust institutions and by antitrust academics — you know, would a specialized court help? Is there something we can do to streamline the litigation process so that we can adjudicate these disputes faster to take some pressure off of Congress to do something or rulemaking or something else? So I think we’re in the early stages of that John, but it is an important debate. 


John Yun:  Yeah. You know, your answer really brings up that point that this macro policy debate about the antitrust institution as a whole is really — sort of as a casualty of that is these more, I think, really important debates about how to make the current system more efficient and the resources that scholars and various academics and practitioners use to put into this, which they’re now being diverted to other areas. So let me move to Kevin’s question. So do you think the agencies will continue to bring Section 2 claims against big tech companies to unravel consummated mergers? Is this going to be a trend that’s just going to keep going, or will the Facebook thing give us some answers there? 


Joshua D. Wright:  I think the answer’s no. I mean, I’ll highlight a couple of things. One, I think they’re going to lose the Facebook case. They brought it as a course of conduct claim, and the states have it as Section 7 and A of Section 2. But I think they lose that case on the merits. 


And losing cases don’t start trends. I think they’ll do retrospectives and study them and make claims about them, which I think is great. If you want to go back and look at those deals and say was there stuff we missed, that’s great because it can inform your sort of future efforts. But I do not think that more consummated deals are going to be a trend. 


I think it is very difficult to go in front of an Article III judge and say, “We looked at this transaction. For all intents and purposes, we approved it. Legally, we didn’t prosecute, but we reviewed it. We did not prosecute. We waited a decade, and then we sued. We waited until you really integrated the assets that we said you could integrate, and then we sued. Can we win, please, now?” 


It’s difficult in any case. I can imagine fact patterns where you could win. A acquires B, that’s going to be a competitor, and then buries B never to be heard of again. You guys all have Instagram and WhatsApp on your phones. It’s not buried. It’s grown substantially. That does not mean that the FTC can’t win. I think it’s a difficult case to win, and I think they’ll lose it. And I don’t think that we’ll see much more of that. There’ll be — I think mergers will still be lawful at the end of all of this politically, so I think there’ll be new cases. 


John Yun:  So Baron’s taking us in a slightly different direction. Obviously, Republicans have this concern of being I’ll use the word censored— although, I was scolded for using that term one time— on these various platforms. But if a website refused to carry someone else’s speech because of its content, how’s that an antitrust problem? What about the First Amendment? And so what are your thoughts on that?


Joshua D. Wright:  So Baron, I think, know that he and I are in agreement on this point, so I take it broadly as an invitation to talk about sort of speech and content moderation and antitrust. I think the law is very clear. A lot of time this discussion happens in the context of consumer protection decisions by the agency, but that’s sort of antitrust, too. 


Content moderation decisions that folks are unhappy with or speech related decisions that platforms make that folks are unhappy with I think are — if people are upset with them, they’re upset with the First Amendment, not the antitrust laws. Or they’re upset with the First Amendment, not Section 230 or what have you. And I think this is sort of a fact of life that conservatives are having a difficult time coming to grips with, and I think it’s important because it does drive a lot of the — the premise of the question is they’re angry, and they want to do something. 


And a lot of the reason they’re angry are what they perceive to be sort of speech related decisions by the platforms. And so there’s a lot of sort of heat and smoke politically around those decisions, and, man, antitrust is a shiny tool. The rule of law’s pretty shiny, too, isn’t it? Being intellectually consistent is nice and shiny. So is the First Amendment, or at least I think it sort of still is in some conservative circles. 


So look, I don’t think that any — Baron asked about antitrust and the First Amendment. I don’t think any of those cases actually get off the ground. I think they’re all sort of 12(b)(6) sort of right off the bat cases that actually alleged content moderation related decisions or someone kicking somebody of their platform for speech. I think those cases don’t go anywhere. They mostly, I think, foment discontent that gets manifested into, well, fine, we’re going to make mergers hard for you and everybody else. 


John Yun:  So there’s another anonymous question, and I hope I’m reading this right. And if I am reading it wrong, I apologize. But it seems to be why is antitrust not more libertarian? This is refreshing in that this debate used to happen more often than the current one, but the question here is is antitrust really having a significant impact on businesses in a negative way? Perhaps some of these arbitrary market definitions, a lot of hyphens involved, innovation that’s condemned as predatory rather than actually helping consumers — so were these claims — did they have more currency before the current consumer welfare standard, or are there still larger problems with antitrust as such?


Joshua D. Wright:  So that’s a good question, too. Let me think about how I want to answer that. I don’t think a lot — here’s what I think is new. What I think is new is that antitrust has been successfully turned political for a whole bunch of reasons that would take us a whole bunch — maybe I would have to stay on until 11:30, which you’re just not going to make me do, to answer. 


But I think the success at sort of turning antitrust more — both sides I think have had some success at attracting more sort of populist interests than they did before, and I think it’s a complicated story why. I think in some ways — I mean, you have — I collect these because I need a better hobby, but there are political candidates, not just federal — like local congressmen and state AGs who run saying they’re going to sue big tech, or they’re going to do antitrust things even if it’s not big tech related. 


I think on the political left antitrust has been connected firmly to the sort of — the same kind of space that Occupy Wall Street held, sort of a general anticorporate populist movement. The right is trickier. I think it is much more big tech specific. I think if you ask some of these questions about the tension between those populist proposals and other values that conservatives proport to hold near and dear, I think at least from the real conservatives you have actual consternation about it. 


And I think the most charitable interpretation I can give to that consternation is something like in some cases where people are persuaded that large platforms have participated in or influenced government behavior, they sort of see the line between public and private in a more blurry way. And they’re tempted to do something about it because they’re political beings who like winning because they want to govern and make the rules. And I think that that is understandable. Winning’s a pretty base instinct. 


I think that’s the most charitable interpretation I can give. I think there are people who have sort of good faith reasons to want to adopt populist antitrust views. But I do think the consternation — I take the consternation over it as a positive sign. Politically it’s a huge winning move right now to say you want to sue big tech or yell at them. 


You can see how many areas we’re getting. We’re not getting that because there’s no political demand for it. But you’re not getting votes on proposals. And maybe that changes, and maybe I’m overoptimistic that that doesn’t go anywhere. And these moments change fast politically. 


I think you have this in other countries. You have this in places like Europe and China. When you start making decisions that have negative consequences, people start not getting the innovations that they were promised or that are available or are available somewhere else. You have to internalize the cost of — know how you feel about it sometimes. And I think we’re — I’m hoping we can be lucky enough to avoid that here. 


John Yun:  So Ian asks do we need specialized antitrust courts like in the IP world? I mean, the FTC has its own judges, but do we need to make this an institution?


Joshua D. Wright:  Yeah. Hi, Ian. This has been subject of lots of debate. Judge Ginsburg and I have a paper where I would say we stop short of recommending a specialized court, but we kind of discuss the options and talk about some of the appeal to it. I think folks on the left and right have discussed it at various stages. And the case that’s generally made is antitrust is complicated. Who wants to give it to those silly generalist judges who are going to have an antitrust case for the first time? 


I’ve got some skepticism over the benefits of specialized courts. I’ll just sort of name them without talking about them. One, we’ve had a specialized court, the FTC tribunal full of expert commissioners. I think if you look at it historically, it’s both been not impactful and probably a — it’s been bad. I’ve got papers on this you can go find. It’s not outperformed generalist judges. 


Most of the positive evolution in antitrust laws from the ‘40s to sort of now have been private antitrust disputes in front of generalist Article III judges. And I like that system, and I don’t like all the individual decisions that come out of this system. But it is a common law feature of antitrust that I think — where we sort of make incremental gains over time. And you don’t have to like every decision to like the system. But I think it’s much better than the alternative of sort of administrative, regulatory fiat. 


And specialized courts aren’t that, but they’re a little closer if you do it through any sort of tribunal or agency. However, I think the idea of encouraging, facilitating, subsidizing expertise in the courts or doing something to concentrate cases in front of a subset of federal judges or the like — I think those are interesting ideas. Places we’ve done that like the federal circuit, most of the kind of strictly patent person, but there’s a big literature — most patent scholars when they look at the literature and what the federal circuit does, it’s not a great story. 


John Yun:  So we’ve got two more left. We’re closing in, and thank you to all the attendees. Wow. You guys are sticking around, not to my — Josh is here, but maybe if it was just me, it’d be down to me. But we’re closing in. So Jacob asked about this NCAA case about amateurism and not paying the student athletes, etc. Let me just kind of rephrase it. Josh, if you had to defend NCAA and make the most vigorous pro-competitive argument about amateurism, is there anything you could do there, or it’s a losing cause? 


Joshua D. Wright:  I’m on the record saying they’re going to lose, so this is hard. But I’ll tell you what I think that would look like so I can at least try to do Jacob’s question in the spirit it was asked. So here’s the argument that I don’t think you can make. I don’t think you can say amateurism is an antirust ends that we care about. 


And so a restraint to promote amateurism. And some old Supreme Court case says amateurism is good, ergo, we, the defendant, win. NCAA didn’t quite do that, but they did something close to that. And they’ve essentially said the Supreme Court has held amateurism is good, so we should get deference to decisions where we say we’re promoting amateurism. I think that you have to win or lose an antitrust case on antitrust terms. And antitrust terms are about economic welfare and price and output and innovation and the like. 


So the burden on the NCAA is to show that restraints to promote amateurism create demand. They create output. People care about watching because of the set of rules that the NCAA has opted that maintain amateurism relative to a world where they don’t have those rules. That’s how we would think about any antitrust case and who bears what burden. 


If I said — I tell my Antitrust 1 kids when they — students when they come up with efficiencies arguments and justifications for restraints, in their head when they’re coming up with those arguments, they should end the sentence with “increases output because.” And it’s a good mental discipline to make sure that you’re not just saying something you think is good. It’s different to say, “My merger’s going to reduce my costs.” 


My merger could reduce my costs because I’m going to anticompetitively reduce output. I don’t have to compete anymore, and that let’s me reduce costs. That’s awesome. But it’s not an antitrust defense. And it’s got to be that I’m going to increase output. So I think that’s what they need to do. I think where they fail is that the evidence doesn’t let them do it. I think the real world disagrees with their theory, and when that happens, you lose Section 1 cases. 


John Yun: Fair enough. Last question, this is from Christopher again. There are corporations that are taking political stance now, such as Major League baseball for Georgia’s election law reforms. In the long term, is it more important to limit corporate power or state power? And I’ll just let you close with that. 


Joshua D. Wright:  Well, we didn’t end with a narrow question, did we? All right. That’s a good question, Christopher — an important one. So let me say the following. So my view is there’s a — for those of you interested, there’s a famous article — famous in antitrust anyway. And since John and I are both UCLA Bruins, it’s famous in UCLA circles, too. An economist named Harold Demsetz who wrote an article called “Two Systems of Belief About Monopoly.” And the fundamental point of the article — you should go read it, and it was written in the late ‘60s, early ‘70s. 


But I think a lot of the debates we’re having in antitrust now are exactly the debates that we had in the ‘60s and ‘70s. It’s sort of — a lot of the ideas that were in vogue in the ‘40s, ‘50s and ‘60s are sort of coming back to the antitrust debate now. In any event, that’s sort of the ball game. And I think one of the most important ideas then and Demsetz wrote about this sort of most famously was the economic idea that public restraints of trade that government power was anywhere and everywhere more dangerous than private power, including corporate power. 


That’s my view. That remains my view. From an economic perspective, we just sort of all answer in the antitrust sense first because that’s what we’re talking about. But in the antitrust sense, I build a better mousetrap, cup of coffee, blend of bourbon, and I succeed by — I get monopoly power because I outcompete all of your nasty tasting coffee and bourbons. And I get 100 percent of market share, and I start charging a monopoly price because the market will bear it. And I can. 


The costs are there’s real social cost imposed by the monopoly. But overtime, the monopoly price attracts entry. People compete. They substitute away. Innovation happens. There are constraints imposed on private power that simply have no analog in the world of government power. And we’ll sort of ignore all the big metaphysical stuff like the government has guns and stuff. Those are important metaphysical issues. But just — the government granted monopoly is more persistent. There’s no natural forces that tend to minimize it. And antitrust institutions are sort of consistent with that. 


One of the most interesting wrinkles in the current politics over antitrust — and somewhere in the GI discussion series you guys can go look this up. It’s on the YouTube page somewhere. I have a discussion with Matt Stoller, who is a leading voice in the more populist sort of lefty antitrust crowd. One of the places where there used to be very clear bipartisan consensus at the FTC and elsewhere was government supported monopoly was bad, and we should stop it. This gave conservatives some pause because it was federalism versus antitrust. It was when can we use the federal antitrust power to override a state decision to create monopoly? 


Frank Easterbrook wrote a lot about this in academic work. The answer was sort of, well, when the state does something either not accountable because you can’t vote to fix the decision or there’s spill over to another state. And so they’re sort of imposing negative externalities on sort of folks that are outside of the political regime that voted for the anticompetitive rule. But there used to be bipartisan consensus. 


Taxi cab commission passing rules to exclude Uber was bad, and we ought to sue the taxi cab commissioner — at least write them a nasty letter or something. That used to be 5-0 easy FTC vote, furthest left and furthest right sort of agree. And I think the FTC actually did a lot of good work along these lines. State rules that prevent a dental hygienist from practicing or whatever until the dental board is happy with her. So that’s changed in the current politics. 


So a lot of those populist progressive groups take the view that monopoly is bad everywhere, unless it’s created by the state or a local government. And that doesn’t get a lot of attention yet. They’re open about it. I don’t know why it doesn’t get much attention. I think sort of big tech takes all the air out of the room is the answer. But there’s a lot of state and local monopolies, occupational licensure and state permission to work is like 60 percent of the economy or something like that. 


But their view is largely keep antitrust out of state decisions to create monopoly, which is interesting. I think it’s wild and probably misguided. But I think the big debates that we’re having I sort of didn’t include on my original list sort of state versus private power as the main threat. It’s an analog to this point about sort of the public-private distinction. But it is a separate point, and I think I’m glad we ended on this one because I think it is important. I think you are seeing a whittling away of the consensus view, one place where you could get conservatives and sort of liberal  together on antitrust was a state law suppressing competition was a bad thing. And I think there’s been a whittling away of that in a way that I think is unfortunate. And it’s new. 


The Obama administration put out a report sort of one of the most aggressive antitrust reports about occupational licensing and wanting the feds to go after it and so forth. And that’s taken a really quick turn with the sort of populist wing on the left. And I think that I guess I’ll just say for now remains, I think, an important space to watch to see whether the FTC in particular under its new leadership will sort of continue to play there. My view, so I’m not ducking the question, is it sure should because state granted monopoly is an important and probably the most important source of monopoly power in the economy. 


John Yun:  With that, Josh, thanks so much for your time tonight. Thanks for The Federalist Society for hosting it. I’ll throw it back to Sydney, and thanks for all the attendees and great questions. 


Sydney Dominguez:  Of course. And I want to give a big thank you to Professor Wright and Professor Yun for making the last event of our semester really wonderful and really awesome. With that, if you guys didn’t have any final comments, I will go ahead and close out the events. 


Joshua D. Wright:  Take care. Thanks for having me. 


Sydney Dominguez:  Of course. Thank you both and thank you to everyone who attended tonight. Have a wonderful night. 


Joshua D. Wright

Executive Director

Global Antitrust Institute, Antonin Scalia Law School, George Mason University

John Yun

Associate Professor of Law

Antonin Scalia Law School

Antitrust & Consumer Protection

Federalist Society’s George Mason Student Chapter

Global Antitrust Institute

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].

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