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Improved the Anti trust laws to address lack of competition in all areas of the market, ones that I find very compelling. Eyeglasses contact, lenses, beer- these are all deeply concentrated industries that speak real people mean cell phones is another one airlines you can go basically across the economy and we don't see that many truly competitive markets, and that is a big systemic problems. That's Rebecca Kelly Slaughter should serve as commissioner in the Federal Trade Commission may two thousand and eighteen and for the first half of this year she was the acting chair. She previously served as chief counsel to Senator Chuck Schumer on the Senate Judiciary Committee, the same job that I held before becoming US attorney

She also happens to be a good friend of mine. After nearly a decade working for Senator Shimmer Becker was appointed to the empty sea, which was established by President Woodrow Wilson in nineteen. Fourteen with the mission to protect consumers. and to promote competition. Becker joins me today, as the agency makes headlines for its aggressive enforcement of antitrust laws under the leadership of New chair, Lena Con, an outspoken critic of the Tec. Just last week the FCC revive a lawsuit against Facebook, in that the companies acquisition of Instagram and what's up created them around its monopoly in social networking Becker and I D that losses. The role of the empty see generally

bite administrations. Recent executive order intended to promote competition. That's coming up statement! Now, let's get to your questions. They folks in the last few weeks have gone a number of questions about issues relating to antitrust. In particular, there been questions about the suit that the empty see the Federal Trade Commission filed against Facebook and then reviled after it was dismissed a few weeks ago. List Jason can, for example, tweeted quote thoughts on the revised facebook lawsuit filed by the IPCC last week and whether you see it moving forward and have also written questions about the

negative order designed to increase competition. The President Biden issued a few weeks ago. Well, it turns out that my guess this week, Rebecca Kelly Slaughter, is one of the nation's most impressive experts on both of those issues and we go into those topics in a good bit of depth, but also my to share with you folks the fact that when I tweet out a request for questions for this portion of the show every week, usually I answer very soon, questions and usually there about issues of law or policy or democracy or politics. But I do get a number in this week is no exception and you get a number of kind of outlandish questions. I guess are designed to be fun

and then I ignore. I wasn't going to couple of these again this week, but I thought I mentioned it to you, because I will confess they were a little bit funny. This question, for example, came from twitter user at salted Josh, who wanted to know? How can I build a teleportation machine that allows me to bypass airports, but doesn't turn me into a fly hashtag ass? So I'm going to pass on that one another one, this from twitter user. Darth, exasperated slash, nasty woman, Hashtag justice for reality and with a name like that in the handle like that, we're not gonna be disappointed. The ask is coat describe of a sector me in detail and how much money it can. Potentially, sir I'm gonna pass on that one too here's another. You know not so outlandish, but random question that I I think I will answer, although its very tough this comes from

sizzling sports on twitter sizzling with a sea. Not an s and sizzle asks me. The following. Please rank the following three Nicholas cage movies from one to three, with one paying the high and these are the films that are offered from my consideration and ranking- face off the rock and honeymoon in Vegas thanks in advance? So you know, aside from being someone who focuses on issues of law and policy, I'm a huge movie above. I watch a lot of movies. I watch each of these Nicholas Cage movies, multiple times,

probably more than single digits. With respect to a couple of them. There is a lot to recommend each of these movies face offers ample, has a great director in the form of John will it's a low but nutty suffer everybody, but I think the combined performances of Nicholas Cage and his nemesis John Travolta, who literally as the name implies trade faces, makes for a lot of fun. I've seen that movie a lot of times the rock is direct by Michael Bay, quintessential Michael Bay Movie, and feel an cinematography Sean country in the movie that that relates to an escape off about the tragedy in a fine fine performance at Harris to kind of hard, not to love that movie and then, of course, completely different kind of will be a comedy honeymoon in Vegas, with a tremendous performance by James Con in a quite affecting surgical, Parker. There's a scene in that movie and I will give it away if you haven't seen it we're Nicholas Cage, loses a hand and poker and

and at times I've got back and rewound the movie just to see the expression on Nicholls Cages face when he loses that poker hand so hard to rank. But I think I would put the rock at number three: it's pretty good, but there are other movies, no Connor and some others. The Nicholas cages start in that I think, are very good as well face off for the sheer fun. I. I put it number two, but its very close with honeymoon in Vegas and because, because honeymoon in Vegas, I think, stands out and in as a comedy, combined with a great performance of James Con but that a number one, but I will say that

sure why sizzle picked these particular Nicholas Cage movies, with a lot of movies that were not presented to me for ranking among them. What I probably would rank is the best Nicholas Cage movie overall, gives the cone brothers film and funnier then honeymoon in Vegas, and that, of course, the great classic raising Arizona which I think I've seen dozens of times and then, of course, you can't leave off a different Vegas movie leading LAS Vegas, for which Nicholas Cage one, the Oscar, robust actor. Through other great movies to Lord of WAR was based a little bit on a case that my office oversaw and then as a dark horse. Canada, not everyone likes, but I have a particular fondness for doesn't rise to the level of somebody's other films. But I leave you with this. That Nicholas Cage in guarding tests is pretty good. Thank you for the question sizzle

I hope that I will gain more followers and I will lose by acknowledging here. Then I happened to be a gigantic Nicholas Catchment, a fact which, by the way, shock some members of the cafe team. Statute, there's more coming up after this?

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was free when you sign up for interactive monitoring service. Just visit, simply saved our com, slash priest to customize your system and start protecting your home and family today, again that simply saved outcome, slash preach my guess. This week is Rebecca Kelly, Slaughter she's, a commissioner and the federal the commission and an expert on antitrust issues, Rebecca Kelly Slaughter. Welcome to the show thanks it's great to be here, How are you I'm good? I'm good. You know I feel like in the pandemic. We always have to say considering the circumstance I'm exceptionally good, you're, exceptionally good working from home working from home, everyone in my family as healthy in DC area in DC area. Yes, so the little backward. Do we have a lot of stuff to talk about in connection

you're very important job on the Federal Trade Commission explain to people what the hell that is for why we should care about antitrust regulation and some law suits you folks abroad and I'm anger to call you gonna call you back like I've, always known you, and so my first question. Is there any particular mentor, in your life, who has not helped. You would have been a particularly significant way in your career. Just random question amassed oh gee. That adds a hard won. I mean I had some teachers who I really liked, but there was, one guy, just read. The thing I gave you, I was going to say, Is this one guy who got me to drop out of law school and, though, are usually the people that you think of as the best mentor is in your life, and I would put him right up there for exactly that reason who

who would who would gain a drop by wars that or the circumstances of that who would tell someone dont go back the law school keep working for me not for good. My understanding about this person was was just four year well it, wasn't clear what the plan was at the beginning. It was just for a couple weeks, and it was first semester and then it turned into a year that was you preach. You got me to drive out of law school. That was me. I thought the story sound familiar. Our six point of oaks are put on the record. If I have a prior working Patients should put the guest, and this is kind of unique I've never had some one who met years ago, not to focus on long? We ve been alive on the planet. I have been considerably longer than you fully. Sixteen years ago, my first year working in the Senate on the Judiciary Committee senator humor. I in January and in turn had been hired by my predecessor, in turn, showed up in the summer of two thousand fibre,

way at a very opportune moment, because it was in summer of two thousand and five sandy Oconnor retired, and it would be up to the Judiciary Committee to that and approve or not approve whoever George Bush was going to appoint next and it turned out to be, John Robert, you show up as an intern and I will say, and then we'll put aside the flattery for little bit performed so, while even after only one year at law school, where I understand intimately teach you much law that that year law school place that you were your deem so instrumental to the committee to my work to the senators work that yeah true, we, pull some strings or the central some strings to to get Yale to? Allow you to now come back for a year

as you can continue to work on a committee both on that hearing and then, of course there is a second. They can see the Supreme Court right before Labour Day when chief justice rank was passed away, and so those are some interesting times. Guy haven't ask you this question, although obviously a captain with captain, Four for the entire time is: is there any memory of those times, that still sears you that you can talk about, they won't get you in trouble or me in trouble was under sure I mean I many many memories of those times, most of which would not get us in trouble. But I do frequently tell people the story, and I hope you will allow me to tell the story here of when Justice Chief Justice rank was died, and it became clear that the we had thought that the confirmation process for Justice Roberts to fill justice, Oconnor seat would take like the first week of September, the second week of September. The plan was for me to go back

Moscow just a little bit late and am, I think something we made on. Maybe don't appreciate now, because we ve seen so many Supreme Court nominees in the last few years is that at the time like the world stopped for the Supreme Court nomination cause, it is the first Supreme Court, You can see in eleven year eleven years. Ninety nine before it had been the most constant court and generations right here. So it was just anyways justice. Oconnor swill is totally game. Changing so is already big deal, and then I remember it was labour day weekend and I was not very cool, so I came home from whatever I was doing on that Saturday night is like a twenty something in D C and turned on the news, because this was also before We all had mobile news and our pockets all the time, and I ve been. watching the news for like fifteen twenty minutes when all of a sudden

incidentally the ban or comes across that says the chief justice has died, and I thought oh man and are you hold me and it was? I think I think it was in the eleven p M, our you. What is it was like a Levin thirty at night and your first reaction Saturday night folks, first reaction. Oh, why are you calling me at an end have it. I'm sorry for bothering you so late, but I have to tell you. I just saw the news. The chief justice just died, and then you used a lot of words that I won't repeat rate powerful and you said okay, I have to call the senator I'll call you right back, but Also, please don't back to law, school or you're, not going back to law school or something like that. Did I make you the offer right then I think I think I'm as you said, you have do not go back to law school and I said we can have a conversation in the morning that involves salary. how I'm gonna pay rent and where

can a lamp. Clearly I was very persuasive and at what I remember is he It was a Saturday Liberty weekend we had worked around the clock of studying, reading a pin, in preparing a statement for the senator preparing questions, and there's a lot of gruelling. Work and whole world was focused on this one event, and I have two vacancies which have to be dealt with consecutively and It was precisely on Saturday night and I called who I think was away and tell me, could also told you Contemporary uneasily in and tell me if my memory is matched by what I told you. I thought the very groggy chuck humor and I can hear in the background his wife IRA, getting sort of annoyed and exclaiming you know. Who the hell it might have been a stronger than hell, is calling at this hour and- and I said to the senator.

Yeah there's been a major development. Obviously he was import member, the Judiciary Committee and I told him what you told me that renquist had passed. And I was waiting for what he would say and do not Duma. When I told you he said his reaction was simply oh boy Oh boy is one thing now and then, and began. Actually we had two and a half Supreme Court confirmation battles. There was roberts, but in between Robertson Alito people forget George Bush little faded, nomination, Harriet, Myers, go very well and was, and was withdrawn. Yes, but it went far enough that we spend a lot of time reviewing our board of documents. So we we invested a lot of time and that even if it didn't actually make it to the hearing, which was probably find-

rapid and I mean ensuring for that process, and we could spend the whole time touchy about the Supreme Court and the confirmation process. And he knows it was quite a different Joe Biden during that process. Then We see as president of the United States now, but you wish a considerable amount of time with within armies with Roberts than with Harry Irish and then with semele dough and the senator asked a lot of questions in this preliminary meetings, which gave a sense of how they would be there raising the hearings himself very brutal. Do you have, remember from that time with you and or in the subsequent confirmation, of which there have been many now in the succeeding decade and change. Do you think about the modern hearings in a way that different? Because- had that experience yet well, I mean I actually also worked on well, yes, you know I should, as people will have her to the end Oh, you came back and you and you took my job at a much younger age. So yeah you worked on multiple Supreme Court hearings as well

So I worked on every Supreme Court hearing between Roberts, an gorse Ich, so I saw the entire evolution of them, and also the evolution of the sort of climate on the hill over that period of time, between two thousand and five and twenty thousand and eighteen, and I think the Supreme Court hearings. the tenor of them changed the way, the tenor of a lot of things on the hill changed over that period of time, and they were considered to be pretty bad back. No five and you're saying it's gotten worse. Yet I think it has gotten dramatically worse much more vitriolic, much more vicious really was sort of the feeling I think when we went through the robber tearing the resort. Sense of good faith inquiry into a nominees views and then had an o. My cynical view is that it became clear quite quickly that no nominee risks.

To tell you his or her chief who is at a hearing, and so then it became it shifted into more. Moreover, you know opposing party tried to expose a nominee rather than probe for abuse. There is a very good metaphor if I recall correctly, of good metaphors in senators humours, opening speeches from the Roberts hearings about icebergs and how much you see versus what underneath and also when you ask a nominee if they like a movie, you Know- and they just answer I like comedies, but won't tell you what comedies and that it just becomes an elaborate dance. That is a little bit, exhausting and very frustrating. So it was not my favorite thing to work on. I will be honest with you, on either side of the nominations process in either supporting or opposing a nominee, because it was lot of hard work that felt very theatrical babies

the right word and where the outcome was almost always entirely predetermined, and that was the part that was frustrating to me. So you know it was hard. And I really admire the good work of the people who put the time and effort into those confirmation hearings again on also so you're, not a one off that Trade commission. I am what the heck is that what is the Federal Trade Commission? The federal Trade Commission is an independent federal agency, I'm so it's pause and what that means. That means it is technically part of the executive branch, but it operates its independently, and it is governed instead, instead of being governed by a single had like a secretary of the Cabinet department.

It is governed by five commissioners and by statute. Are five commissioners come three from a majority party and two from the minority party by tradition, although not by statute. The majority is the party of the President and the minority is the opposing party. So I was appointed in twenty eighteen as a minority, commissioner is one of the democratic appointees, and there were three Republicans at the time. We currently have three Democrats, and there are two Republicans: that's how what constituted put about prison appointed by the President nominated by the President, confirmed by the Senate and then, as you serve answer this question provokes. Does each commissioner then serve the pleasure of the president? Can the president fired

sinners or fire. The chair at his will complicated question not recently testify, as only the question not recently passed at you finish, Yale right, so you should know the answers. You know, I'm not we discuss them. We didn't actually learn a lot of law at Yale. I study for the bar, but this was not on the barracks and I think the ambitious people of eel spend some time thinking about presidential appointments. That is very true. They can. General wisdom in the historical precedent is that no commissioners can only be fired for cause during the duration of vera ten year. But there are some folks under a unitary negative theory of government who have challenge that notion and suggested that any executive appointee must necessarily serve at the pleasure of the president, and so I expect we will see more challenges to that. But for now the legal precedent and our understanding is that commissioners, during

duration of their Senate. Confirmed term can only be fired for cause. What's hope that goes into tested in the immediate future. So we're gonna talk a bunch about, and I trust and competition policy and another that's in a part of the remit of You see for first talk about the step that does not relate, and I trust that is part of the work of your agency. Will that's what I'm going to say. I got to what how the agency is constituted, but not what we do and people ask me. time O the Federal Trade Commission, you do all that international trade stuff no weakens value. We do not do international trade, all trade in the term of in the name of the Federal Trade Commission refers more commerce, generally domestic Commerce and Sudan Federal Trade Commission was formed in nineteen fourteen with the passage of the Federal Trade Commission ACT and the Federal Trade Commission ACT sets up to

two main prohibitions in law that the Federal Trade Commission enforces. The first is a prohibition against unfair and deceptive acts and practices, and that's what we think of as our core consumer protect. and mission- and the second is a prohibition against unfair methods of competition and that's what we think of as our core anti trust mission. To generally, the F Dc is divided into two mission areas: consumer protection and competition, and consumer protection is enforcement against, like I said, unfair and deceptive acts. Practices. That is a very broad term that encompasses all manner of basically volley illegal conduct, some of which may also be criminally illegal. What's what's an exit? What's a good example of that, so it is everything from fraud. So our name some cases we brought a case against the university. A phoenix afford,

Fate university for defrauding students by misrepresenting the opportunities that they would get. We ve brought cases against multi level marketers for misrepresenting income opera unity. Is we bring cases so we have fried? We have basically the entirety of the nation's privacy enforcement agenda is housed in the F tc right now. So you may have heard about that time. the after see got five billion dollars from Facebook about was over a privacy violation brought under section. Five of the FCC Act We also enforce him sector specific laws like the children's online Privacy Protection ACT. Copper, and we use that to bring a case against Google it. youtube for violating children's privacy should that also operates within consumer protection. It's a huge economy wide

range of conduct that we deal with, which is its massive mission just on the consumer protection sign. So what'd, you know, like thirty forty five The staff members at about every need much you how much you got free for all that work. Not that many oh, is something that is, I think, a really important thing to understand about the F p c is that it has been said semantically under funded for the last four decades we had about fifty percent more staff at the beach king of the Reagan administration than we do today and when you think about the scope of the economy, the kinds of activity that we enforce against in nineteen eighty verses? Now you can imagine how much it is grown online privacy is not a thing,

in nineteen, eighty, for example. So it's a huge mission. We have about one thousand one hundred employees now maybe closer to one thousand. Two hundred. That's not that many. By contrast in the UK, the data protection already in the UK, has seven hundred people just doing data privacy and the UK is a much smaller jurisdiction and Arias's. So I think we are substantially, underfunded and outmatched, and that's without even touching the anti trust settings and also with the other drawside the mission of the activity with respect to that area. So this Short version of the mission is to protect against unfair methods of competition and we sort of that down into two different buckets illegal, mergers and acquisitions and illegal anti competitive conduct. So there's some confusion here and I was used to pay for years and for the deployment of justice for Lahti years and delight

work with the empty see, sometimes get referrals. The one area that we did not engage in use traced her not to engage in his, and I trust so the question I haven't confusion. I've had for many years, which you promised you'd like to explain to me and to the audience. There is another government agency that deals with anti competitive issues and antitrust, and that is the aptly named antitrust division of the Department of Justice and you'll read in the paper. There's a proposal and sometimes the empty sea will be examining an investigating and come to the conclusion over the merger and sometimes it's antitrust division of the Department of Justice who does which and why well There are a couple of hard rules about who does which show the F p C has excluded from its jurisdiction, a couple of particular areas of the law also. Banks are excluded from after you see

restriction, common carriers so think, like railroad our airlines, things like that. Add those we'll go, d, o J and that's pretty easy to figure out the rest of them Isn t a hard line rule about who does it? We have to decide between the two agencies. Is Iraq paper scissors or is it flip of Sometimes I think rock paper scissors might be more efficient more as a push up. It's definitely bookshops one hundred percent, the the principle It should and does govern, is supposed to govern. That decision making is which agency has more expertise in a particular area, and you want the agency with the most expertise in the market to be doing the investigation, but there's no arbiter right. Here's your server! As you point out separate independent agencies, there is no arbiter, and this is something that bog

To my mind, when I got to the FDA, see my the poor staff in our Bureau of Competition, I must have had them sit down with me. at times, and I would have the following conversation with them, but the decision over who which agency gets to review, which matter is called clearance? That's just the term about that used for it, which agency, as a matter cleared seed Duke it out, you do get outright yeah. We want a matter, so it is pushing the deal. J wants a matter who gets it? Well, we negotiate. Ok, let's imagine we can't decide who gets it, what we have to decide? Ok, but then who gets it you're a clarifying this in a tremendous way, so little match. Example this before your time so Facebook we can talk about Facebook, as you guys have a lawsuit and now an amended lawsuit against Facebook. Facebook chooses to buy Instagram. Do you have an understanding- and I was before your time at you. standing as to how

it was decided who would examine them that acquisition yet so in an eminent tread carefully around a particular case, because, as you mentioned, there is litigation in general in any acquisition. Both agencies issue with mergers, over certain dollar value, that parties file what's called their herds, got ready now notification to tell the agencies that they are intending to merge, and then the agencies thirty days to say we want to look into this more or we're, not gonna. Look into this more and as an aside, I have a big pet peeve about people saying that agency clear mergers. We do not ever clear a merger, we never say affirmatively. This merger is good to go,

We can choose to challenge a merger or choose not to challenge a merger, but we never give an affirmative green light and that's important because of the resource constraints that I mentioned earlier. We don't have the resources to investigate and challenge nearly a fraction of the mergers that I would want to it. So it's important to note that we're not doing ok but a merger. a filing comes in, and both agencies get the filing and look at it, and each can decide. Is this something we want to look at further and if it's in a market, let me use hospitals is an example, because hospitals is one where the F Dc has very substantial expertise when hospital murders are filed,

the activity is likely to say Haiti OJ. We want to take a look at this, and do your J is likely to say cool. You have a lot of experience and hospitals, you go for it. It becomes more complicated if what if an insurance company is buying a hospital network and d o J has substantial experience with insurance companies, but the F p C has substantial experience with hospitals. Then, who should get it and that's where you get into this

stupid discussion and negotiation. Now I will say: clearance usually works itself out well with mergers, because if someone doesn't open an investigation within thirty days, the merger can close, and so the government is incentivize to get to a conclusion quickly, where I have real concern about the Clarence processes in conduct matters, which is where we are investigating, not a merger but anti competitive conduct by a company. If an investigation doesn't open, then there is no deadline, there's no organic deadline. We can sit in a clearance debate with the OJ for a year and no one will be investigating that and I think that is a really big problem. That seems bad now know how you propose to fix that it is very bad. I would propose to fix a buy it now. You will have us. So what's that, what's the fix and why why can it be accomplished, I think in a conduct manner. It will. Let me give you an analogy. We all

have overlapping jurisdiction with the consumer Financial Protection Bureau. In a lot of our financial practices, matters, fraud, consumer protection, fraud, cases that are in the financial space. Some of them could be enforced by sea. If he be, some of them could be enforced by did, he see and the way it generally worked. There is basically an dibs system, whichever age she sees the conduct first and wants to investigate it. Sort of gets to call dibs on it, and the other agency doesn't tend to stand in their way, when there is a good faith reason say they have to see if he be wants to investigate something in the after sea already has a related investigation going on, we might say hasty Phoebe you mind if we take this case visits related to what we already have, and they generally say. Ok, I think the Debs model is not bad for

and I think that the big it's not a bad idea incurred to speed missile, but how it's done a deal drain and with the respective near the bearers, was trees officers. Yeah now I will say this process has a different times in history, worked very well and works poorly over the last administration. I think it is not a secret that the relationship between the OJ and after you see what's not stellar. There was a lot or conflict a lot, more divergence of approach and a lot more fight about clearance. I know that this deal J and this administration is pretty committed to working well with us out eating resources efficiently, acting like the enforcement partners that we both should be. are and so right now. I think there is working generally pretty well in this isn't really a big issue. It's only a problem when you are The space where you dont, have agency

that are getting along well, and it's only really a problem if you are sort of pro enforcement, as I am, if that lack of cooperation leads to a sort of a deadlock and a dead end and enforcement, and that's what's really concerning to me, My conversation with Rebecca Kelly Slaughter continues after this. So, let's argument the essence of- and at present judgment and the philosophy of the people hundred will understand that if a bunch of retailers or other businesses got together included as to price, so they go We will maintain a certain degree of revenue, unprofitability that violates or net a truss provisions, and that seems like something that everybody would be against, probably on on all sides of the eye

There has been in recent times debate over enforcement actions, but when it comes to big tech. And the question arises? Is is the first is consumer welfare is the focus. Competitiveness is the focus price because, depending on the focus, is the enforcement decisions will change right and into what should be the proper focus and should not be changed. Over time. So I think the answer that question you wanna go back to. What is the focus of the statutes that you are enforcing? What is the core purpose of the statute? The enforcing cause? You could talk about this as a philosophical manner. What should be the focus, and then you can talk about it as a statutory After what did the statutes tell us, are the prohibitions, and then you can talk about it as a jurist traditional matter have of the court sip list without women and also to set the outset remind people. We are they me closure in the short term, but who really good, can somebody's subjects, they started requite all they're, not recent statute rank attract thereof

No at one thousand. Eight hundred and ninety was the Sherman ACT, so it is, you know, hundred and thirty one years old, but there are reasons that old statutes can endure if they are applied in a way that continues to make sense. So sometime, The problem that people have with Anti trust law isn't necessarily the statutes themselves, but how courts have interpreted them over time they can get away from the original purpose. It can also be the case. These are not mutually who's, the things that the original purpose is too narrow or in opposite for markets that couldn't have been conceived of in eighteen. Ninety so so you can. You can answer the question: either they sent on jurisprudence for common sense or the statutes themselves. What is it focus. What what is it? What is the harm that is trying to be prevented, and what is the good that is trying to be done, so I think it starts. I think the best way to enter this question certain.

thinking about what do we want our markets to look like? We want our markets to be competitive. What does that mean? We want markets to be ones in which firms when they get ahead. Winning customers recruiting employees by providing the best value for their products or they recruit employees by providing the best conditions of employment and that's value either risen labour matter or as a product manner is not. just a matter of price. It's a matter of price. It's a matter of quality, it's a matter of innovation to matter of opportunity, so in a market that has perfect competitive conditions, if you have a firm producing some good and it starts raising the price beyond its costs, to produce or degrading the quality of the product. You would imagine that another firm would see an opportunity and say: hey, I'm gonna come in and when you,

customers away by providing a better value proposition frameworks the free market, yea free market that are, you want the free market to our great show, then customers which shifted the competitors, the original farm, would be incentivize. Take keep the value proposition high, improving the quality, innovative, lowering the price. When you have a firm, they can lower that value proposition either raise prices. Degree. quality, lemon innovation without a competitor interfering. That is an indication of what we call market power, the power to basically harm customers without competitive interference and anti trust laws made illegal to wealthy, acquire or maintain monopoly power through methods other than competition on the merits. We want to see, is firms competing on the merits and where we,

concerned if there are not competing on the merits and are instead able to increase their profits at the expense of their consumers, or also at the expense of employees near we hear a lot of talk about companies getting too big, especially big tech, and so I feel like in the common debate that happened. down the internet? Interestingly, ironically enough and in other places, people too size and size itself as bad face, because two big Amazon is too big. These other companies are too big, episodical this exercise itself is not the issue at my right, a sort of, and I think there is sort of a maxim that big is not bad, but I think that discounts the fact that size can lead to the ability to exercise market power to the detriment of either consumers.

employers or other input producers because of barriers to entry for a potential compared coming in and creating similar oil, and that's where you see digital markets becoming a really keep her to the conversation and because of this term, that everybody throws round network of facts, but network affects chick, basically just means that sort of more. You have the more you get the more users you have. The more people want to be on your network and its very, very hard to replicate that scale as a competitor, so that is a way to create an environment where you dont have to compete as much on the merits, as you do, by building up a moat, our yourself, so I think I think the term. The concept that just big is bad is is a little bit anew wants it's not wrong, but I think we have to be really careful to understand both how accompany got big and how it staying big, because those too

since are the things that we need to be concerned about how we think about consumer welfare, and these issues you raised when it comes to a company like Look and we'll get to the loss in a moment. I know that you need to be careful about how you talk about so obviously, only what's in the public record you should address, but Facebook company that, in of depending on who you are as depending on what you you make of it. There are probably hundreds of millions of people who think that their welfare is increased by the service. They didn't have it before you, and I am, I think, that people not well served by it and you and I might not be frequenters of facebook, but a lot of people are, and we want a number two dimly charge a price for anything so as not to national kind of your price collusion, type of antitrust matter that people think about. Historically, what's the consumer welfare issue when it comes to Facebook generally and then can describe why

is it. The activity has said that company. So I think everybody we all in the Anti trust universe, sort of get twisted and not talking about and debating about consumer welfare. Is it the right standard? What is it actually mean? People have different views of it about it, both historically and as implemented. Where did even come from its not in the statute. So I tried to just not get into that, because I don't think it's the right question. I think the question goes act here, not because you don't care about using its, not the request. I don't think it's the right question, because I think it it's it using a term that means very different things to very different people and just people. It really means a single minded focus on price and I dont think the dot at all what the law should be concerned with, I think the point that I was making earlier about value proposition means not just price and me:

quality, innovation access, and so, when you see digital markets that are- and I am doing, airports that you can't see here, free to consumers soldier my those are my favorite kind, one would think ethically and digital markets better. I will usual an actual word nominal, you're free to consumers. There are folks, you say You can't even have an anti trust conversation cause, there's no price here. The way I think praise plays a role in this is that price makes things easier to measure so antitrust cases that involve the raising of it is. We can be easier to show because you can measure price its quantifiable image, because it's I'm sorry that some. Other things you talk about, like whether innovation is being stifled. Well, how energy measure that right? I think, that's ethic, that's exactly why prices and attractive metric if it's available

that the fact that it's not always available doesn't mean that there is a problem there, and so the other things about which we as Anti trust, enforcers, are concerned in, good quality innovation access choice, and so one of the things that the amended complained that the F Tc filed against Facebook last week, pox about is an example, of direct evidence of facebooks market power being that, after the Cambridge Analytical, a scandal which parent ethically was led to that five billion dollar settlement with Facebook on the consumer protection side of the F P users where did widespread dissatisfaction and disappointment with the service, and yet they didn't switch away and the fact that user more switching away or stopping. It shows an inelastic

city of demand that suggest that Facebook has market power. Now someone else might aid that just shows they don't care that most people don't care that much about privacy, but- and this is what some folks refer to as the privacy paradox- that people report not being happy with privacy metrics, but they don't do anything to change their behavior. I have a lot of scepticism that that reflects the fact that people don't act, care about their privacy. I think it reflects the fact that they don't have a lot of other choices, and so what we want is a unit Here's where companies are competing on quality metrics like, for example, privacy and where, if folks were dissatisfied with facebooks privacy offerings. They could switch to a more privacy protective service, such as the hypothetical example, but one that sort of comes from.

The complaint. The other thing we want to be able to see is new entrants coming in differentiating their products, creating innovative tools for the market and part of what after you see his alleged in its complaint against Facebook. Is that facebooking age in a concerted strategy to keep that from happening? I buying all pretend our competitors and either absorbing them into Facebook itself, as in the case of Instagram and what's up or bearing, them by shutting down the services and the gates. A whole bunch of smaller companies that are documented in the complainant. So the reason this is a concern for enforcers is As I said earlier, we want markets. Where some can come in and offer a better value proposition a new idea and we don't want markets that are controlled by a large company that keeps that access

quality and innovation and choice from users, because good impression is the purchase. The you described, the purchases of what's up in Instagram. Is that part of the complaint, the current complaint against Facebook? Those are the current complaints, but can ask how can that be like? What's what's the problem, I believe that for lay people understand, what's the propriety of that, given that the activity just at the time the toes acquisitions took place, didn't take action had you sure those things into account complaint when, prior later sincere problem, so I dont think that dumb question all and also I will tell you one of the things, I will put in an aside lessons learned from my time with Senator humor and working for you. One of the best lessons I learned in that time was to always ask the most basic questions and never per ten one understand something

that one doesn't because, because my experience as many times, people can enter the basic question yet exactly so it is a good question and what you're referring to is the fact that both the Instagram and what's up acquisitions were filed with the F p c. They that process that I talked about earlier about Hs. Our notification were filed with the FCC at the time, and the empty seats chose not to bring enforcement actions. against them. This is in part why I made that point earlier about after you see, doesn't blast mergers or clear them. It chooses not should accompany. You have to have some repose once that's happened, yet it certainly an argument that people may, but that's not what the law says and, in fact, in his original motion to dismiss decisions, for procedural history. The ftp file, this complaint, originally in December of twenty twenty honour by

person basis interesting Lee. The republican chair at the time voted with myself and the other democratic commissioner to file a complaint and Facebook filed. Emotion dismiss and the judge in late June, Did that motion to dismiss and gave them he say: leave to ratify or between right, more words right right, more and you guys did tell us it was. It was very show your work and not on this point that, because, on this point the judge said the ftp was totally within its rights, that the law prohibits illegal, combinations in restraint of trade, and it doesn't put a time limit on in a dozen end that, after a period of time, one of my republican colleagues has written as a prudential matter. She doesn't think it's a good idea for the Fdic to go back after a merger has been reviewed and challenging, but I dont actually agree with that. because of all of the

sourcing issues that I talk about and also evidentiary issues. We may No, at the time of a merger, just how anti competitive it is. Nor may we be able to develop the evidence that we would need to make it worth while to go into court and challenge. Should we be doing that more absolutely. Do I wish we had at the time in these mergers sure, but just because we didn't doesn't mean we shouldn't go back and fix a problem now I mean- and I think that that is just a really important core principle for enforcers civil criminal across the board. We should ways be willing to fix problems that we see whether they are of our own making or not for the prom. It seems to me and clearly seem to the judge. Is it the way antitrust law is written. You don't you say: discoveries being in a competitive. You know there are some rigour that has to be applied, That kind of an allegation the areas where you have to be rigorous is you have to

what the actual market is. So if you make shoes, is it the shoe market? Is it the sub category of sneaker market? What's the place in which someone is being monopolistic or engaging and anti competitive behaviour, as I understand antitrust, law right and with these new companies, tech companies tell me this is correct. It's not as easy as with a shoe company that puts stuffy wearing your feet to figure out what is the proper definition of the market. I take it from the empty complaint defines the market in which Facebook has engaged in bad conduct? According to the complaint, the market is personal. Social networking services can explain what that is and in who else is in that market, because, as I learn, I'm doing actress work very very long time ago in the early stages of my legal career. The question of whether not someone has under market share or not sometimes hinges. Almost completely on how you define the market right? Yeah does exactly that

most antitrust cases rise and fall on market definition. So it's a huge, extensive, expensive, complicated process to wriggle through In this case, the way the F has defined the market for personal social networking services is that they have three main fees their built on a social graph that maps the connections between users and their family, friends and other personal connections. It has features that users employed to interact with those connection, such as like one too many broadcasts and sharing of news photos and videos, and third, it has features to find and act with other users in order to build and expand those personal connections so the way facebook I mean the way the F, p C talks about the market today is that it basically includes Facebook, Instagram and snap

and we talk about a lot of other sort of potential competitors that could have come up, that we're stifled over the course of what we alleged to be facebooks illegal course of dealing and say that the market, include other services like linked in which is just for professional connections or twitter, which is about personal connections as much in is more about broadcasting to the world. A more read it, which is more about finding users with shared interests so issue. That is how the to see, has laid out the market definition, and I will note that the judge didn't reject our market definition. He said that it was a plausible market. Just wanted us to show evidence of facebooks market power within that market, and you alleged that within that market, it's about. Sixty percent is correct. That Wednesday way. The allegation was constituted in the original complaint and with the judge said, is just saying: sixty percent isn't enough: you need to show us how you got to that, and so in the revised complaint,

Fifty c users are a whole variety of metrics, including pie, we spend daily ACT of Users Monthly ACT of users and shows how from facebooks own in ordinary course document that this was the market that they understood themselves to be in, and so that's that's. An important part of the calculus two people are always going to quibble over mark definition whether its external commentators were defendants and, as you indicated it is, it is where a huge amount of anti trust litigation is fought, but I think that the agency has done a good job, about lining wide. This definition of a market makes sense based on the actual facts in the investigation that Israel, but my again, my my recollection of an interest law goes back many many years, so it's.

Foggy. Is there a little bit of a catch twenty two, because it occurs to me that that one way that you can fairly figure out what the market is, whether it said sneaker market within a larger shoe market or footwear market verses, whatever the market, as you declare that Facebook as a part of how the company itself in what would be an admission against interest, I guess how the company itself thinks of its market and in companies are very shrewd prickly ones that are worth a trillion dollars would argue, are very keen and understand, with our competitors are never be documents and communications within the coming that indicate their own understanding of what kind of market therein and how you define it into the competitors are, but you can't get that stuff until you proceeded along far enough with the complaint without getting dismissed the my asking a coherent question yeah. I think it is a really good question. I dont think its one needs particularly apropos for this

these figures. In the asked he sees case, we did a very extensive investigation or we got a lot of those documents. Those internal documents from Facebook before we filed a complaint and a lot of more cited in the complaint, but this a really big problem for, for example, private, anti trust plaintiffs or where you have come these that are really not cooperative. With your investigations and honestly companies don't have a lot of incentive to be cooperative for investigations should this is. I think this becomes a real problem, and this is true not just an antitrust law. This is true in lots of civil litigation, where you have the problem. in a universe of particularised pleading requirements where, in order to plead a case, to survive. A motion to dismiss a plaintiff needs to have information that it can't get until it survives a motion to dismiss that's a question that you were asking and I think it is absolutely a problem in a lot of cases, although not this particular case

Did you have the ability to you had the ability to get information in advance or finding the complaint, and part of that is because we are a government agency, but subpoena power. We have what a lot of in a private let against do not have. Those fears are the dumb question so probably through lay person you here to pick on Facebook alone, be here the bigger companies but since retirement. I'll mention it again. They get attack from the right and the left, both with respective whether viewpoints are being suppressed or not whether there too big or not whether there dealing probably with private people's data, were not and so it seems like a bipartisan gang up on on Google on Facebook and various platforms and yet another not the same thing and yet the vote. with respect to proceeding with enforcement action against Facebook on your commission was three to two along partisan lines So again here I wanna be careful just reflect what's in the public record and my,

colleague, Commissioner Wilson shared her policy view that we shouldn't go back after we had already reviewed a merger, challenge it. I think in general you are taking a step away from this particular case and thinking about it, press law more generally. While you are absolutely correct that there is an enormous amount of hue and cry on both sides of the Isle, about the power of big pack, I don't think that necessarily extends to a shared by partisan or over, up in the by partisan concern about market power and the particular role of antitrust law with respect to big pact, and it doesn't necessarily apply to shared views of solutions. Now counterpoint the house The dictionary committee has been involved in a very extensive, investigation into

the market power of big tack and has proposed a number of bills to change the Anti trust laws to make them better suited to address these kinds of market power issue is an anti trust issues that are eighteen. Ninety statute may be isn't reaching at least as interpreted by courts recently, when those had at least a bipartisan patina, and that is an important thing, but you still saw a lot of partisan breakdown about it I mean, I think, at the end of the day, there is a lot of antitrust law from a partisan perspective comes back to some real basic differences in philosophy between the parties, which is how much government interference in markets. Should there be an Republicans tend to want less government interference in an interference in markets and Democrats tend to be comfortable with more unless it's about mass through vaccines des. But then the government should be telling us exactly what to do, but not to you

the maximum masks or vaccines only to not use them. There was a big deal announcement made by the White House, not that long ago, big executive order waiting to issues of competition to keep our country movie will take another step as well and I know you're all tired of hearing me during the campaign, and since I am elected president talk about it and that's bringing fair competition back to the economy, That's why you down beside is surely an executive order promoting competition. I would trust, you had some some involvement in that my collection from the old days back. When we work in the Senate, was it to try to accomplish major is by executive order was something that we criticised the Bush administration for, explain why this was okay and if it actually has any teeth. accomplishing things by executive order that our illegal, it is obvious lately such a good answer, an appropriate subject of criticism using

the power of the executive to appropriately gum and sat worth policy and describe it illustration philosophy is a great thing to do and an important thing to do. I was My fox news and impersonator to try to ask it got your question will handled at you. I don't think you got me am I so. This executive order is so important and so a major accomplishment for this administration, and I think it tell a really compelling narrative about why we should care about competition, and why petitions seeps into all aspects of the government and the economy. I mean. I really think that the White House to move the folks you work, on. It deserve enormous credit for it, and one of the things that I really love about it is it focuses particularly on workers.

Americans. Experience competition questions from multiple angles: they experience it as consumers of goods that are produced by consolidated markets, but they also experience it as Employees, who may not have the ability to be Oregon fairly for their wages, compensation because they don't have as much mobility as we would like, either because of a lack of competition among employers or because of anti competitive terms like Noncom p clauses in employment agreements, so they eel puts a lot of focus on the worker side, which is what we think of as the monarch. Many side of the equation, and I think that that is

really really important and really admirable? You asked whether it has any teeth. I did get absolutely has teeth in a number of different ways, so the EU directs a bunch of different things. It directs executive branch agencies to take specific action like, for example, I think it directs the FDA to pass a rule making to make hearing aids more accessible. And cheaper over the counter. That's a huge deal to real people very specific. Yet it has a lot of really specific stuff, but that specific stuff really matter. So the present an absolutely has the power to do that, and that's great going back to the point that we were discussing earlier about the Federal Trade Commission being an independent agency. It doesn't actually direct the Federal Trade Commission to do many particular things, but it asks us to consider doing things all of which I think, are a stellar,

idea and we ve already started acting and you will do them and you will do those things. Ok, I hope that we will do them. We ve already started acting in line with the executive order, for example by Publishing on. I will note a unanimous by partisan basis, a policy statement with respect to prepare restrictions said these are, rules that say your fancy device or your tractor or your car can only be serviced by the manufacturer and there are no technological and mechanical limitations put into devices to make that so and the justification for that has been sometimes safety. or product quality, but what it leads to is increased, expands lack of choice in markets, lack of opportunity for people to have control over the goods that they buy, and this is something that Federal Trade Commission has been looking at. Higher prices too, and higher prices, exactly alike

the board. You know it's something: that's really important of farmers who want to be able to repair their own farm equipment in our policy. and we are committed to addressing these repair restrictions from both a consumer protection and a competition perspective and pursue In these cases, which we haven't done far wider, but the EU doesn't doesn't ban that practice of exclusivity right. It does not ban that practice. They the ito. It really is so it directs the executive branch agencies to do specific things, and it suggests that the F p c should exercise its statutory authority to do so, in this case, to address unfair anticompetitive restrictions on third party repair or self repair of items such as the restrictions imposed by powerful manufacturers to prevent farmers from repairing their own equipment and do

provisions like that sections, like that of the executive order, have bipartisan support. Well that when did I mean that one got a five hour vote when we passed our policy statement and I think that there are some glimmers of bipartisan hope here I think it depends on how the authority is exercised. This was a policy statement, not rulemaking. I think the Republicans are a little bit more reticent when it comes to rule making anything say that, but I think there certainly areas of common ground and the idea that we should have competitive markets is actually also an area of bipartisan agreement mean, I think everybody shares view- and you know I don't know

we have done nearly enough anti trust enforcement over the last several decades, not even close, but I will point out that the Republican lied after see over the last several years brought more enforcement actions. Then several of its predecessors and, as I said, the original face A complaint was filed a bipartisan bases. So with some of the issues you talk about, I think, if I think of them, it's very important at the same time, its import to talk about Facebook. and some of the things that are hard to get a handle on and hard markets define some basic principles like fixing your tractor in a way that's cheap and efficient. And doesn't overly enriching and anti competitive way, the manufacturer of the tractor, something very concrete. As we said, the people can get their arms rent is another area that that's important in an I voiced and compelling that affects ordinary people. Often is the

compete. Clause is over for a company to respond quickly without is, and what the order says about it yes offers I very much so you're saying nothing. He caused not negotiate agreements, because I do not think that these are actually agreements cause. I don't think most people fairly bargain for them not compete causes are turned. Was an employment agreements that say after you stop working for me. You can't work for any of my competitors for some period of time for some period of time, so they can apply, everyone from high level executive at a company to you, know, paralegal to We hear a lot about their application in, for example, the fast food industry and people offered different justifications for them. Usually the justification is along the lines of companies

invest in training their workers. If the worker can take that training to then go and work for a competitor, I will tell you. I have never found that argument particularly compelling, because I think companies have to invest in. Training their workers that they can do the job. You can't have workers who are untrained and if they don't want their employees to go work for a competitor, they could perhaps cans offering better wages or working conditions to retain employee rather than a constructive employment contract terms. So I think it's something that is in a focus of attention for, while I think it's a subject of real bipartisan can

and look as it's silly, because it's really an end as the executive order bandits practice outright in all corners of America. It does not. It says, as now it does not act because again, you know, I know I'm giving agree from giving some very well, because what we don't want is executive orders, the dew illegal thing. So what it says instead is to address the agreements that may unduly limit workers ability to change jobs. The chair of the effort he sees encouraged to consider working with the rest of the commission to exercise the F Dc statutory rulemaking authority under the Federal Trade Commission ACT to curtail the unfair use Noncom he clauses and other clauses or agreements that may unfairly limit worker mobility and so the refugees, actually collecting comments about unfair clauses like this. I think it's that we did a workshop on a couple years ago. I think it's a really important topic for attention, and one of those things that hits real people in

every material ways, it's actually goes, exactly why I love the empty seats work, which is that it isn't always headline grabbing in a politically I mean it has been recently, but it has historically been had rabby in a politically attractive way the waste Some of the things that we worked on the hill are in a more hot button, political topics, but its work that really matters to real people in their everyday lives and affects their ability to pay dissipate in society in the workforce, in the economy and- and that is really satisfying to be able to do that work and help people there. I think part of it is a matter of of messaging and communication,

that it, it seems very esoteric- and I trust, has re complicating- is whether more complicated areas of the law of iraqi practising in it. But the more you can make a concrete and specific, and then we can make it about results and fairness in the more you can make it clear. In my view, an issue. Mrs your view to that anti trust enforcement is pro competition, yes, but also broke up and was in the way it was meant to be fair. That's exactly right, and I think it is. I think it is on your part castle heard Senator club, which are talking about how we need to say, competition, not anti trust, because people understand that a little bit better endless

miss remembering that I know she had said that. No, I think I think of you may have been, and I think deporting people understand the concept of free markets in some aspects of this work. People understand, I think, more than others like predatory pricing stuff, like that collusion overdrive prices, having people understand that, but allow this ever talk about, becomes complicated unduly. When you talk about the statutes- and you talk about how the agency's work so what're. You know to be fair. I muttered the statutes are all that complicated. I think the jurisprudence and the way antitrust law has developed around to make this very convoluted, complicated. quantifying measuring quantifying balancing of costs and benefits and harms and which kind of econ Phd is going to testify about what aspect of the market at that does make it very inaccessible, but the

mere concept that we should have fair competition on the merits, which is basically what the statute say. I don't think that's a complicated for people to take it into. This was something I will confess. I think that questions about big tack and market power, a really important, and we should be devoting of energy to address them. But I also sometimes worried that they may optic focus on big tech leads us to forget all the other areas of the economy, where concentration and collusion and lack of competitive free market conditions are huge problem, you mentioned a couple of them: drug prices, health care. We talked about Europe, restrictions, but but it is really a enemy wide. When I worked for Senator Shimmer in the Senate, in twenty seventeen I want to say in the summer of twenty seventeen the first piece of the Democrats: economic, agenda that they rolled out was in

He trust agenda, they called it the better deal and it was about competition, and we talked a lot about ways. We need to improve the Anti trust laws to address lack of competition in all areas of the market. One that I find very compelling eyeglasses contact lenses, beer. These are all deeply concentrated industries that speak real people. I mean cell phones is another one airlines. You can go basic across the economy, and we don't see that many truly competitive markets, and that is a big systemic problem. So it's important to talk about big tack, but is also important to talk about the other pocketbook issues that people feel in a real way. Agriculture is another one, food prices are no. I agree are beginning to stir up thinking in think he needs a more folks. I think we need to step up to. I would love. I think that that is a great idea, Rebecca case LAW,

thanks for being on the show its real tree to talk to you and congratulations and all your success thanks so much for having me My conversation with Rebecca Kelly Slaughter continues for members of the they insider community, to try out the membership free for two weeks had to cap, dot com, slash insider again, that's cafe dot com, slash insider. Without said for this episode of statehood, thanks again to my guest, Rebecca Kelly Slaughter, if you what we do rate and review the show, an apple pie outcasts or wherever you listen. Every positive review helps new listeners, find the show send me your questions about news, politics and justice tweet them to me at Pre Ferrara, with the hash

or you can call and leave me a message at six hundred and sixty nine, two hundred and forty seven, seven thousand three hundred and thirty, eight at six, six thousand nine hundred and twenty four preet or you can send an email to stay tuned of cafe, dot com state owned is presented by CAFE studios and the VOX media podcast network. Your host is Preet Bharara, the executive producer is Tamara, separate, the senior producer is Adam Waller. The technical director is David Tadich for the cafe team is Matthew. Billy David Kurlander, SAM Ozark State, not Weiner, Jake Kaplan, Chris Borland and Sean Walsh. Music is by Andrew Dost. I'm Preet Bharara stay tuned.