`Hipsters' Aim to Turn Back Antitrust Policy 100 Years (Audio)

It has to do with their views on antitrust. They're a small group of policy wonks critical of the increasing consolidation of corporation. You can probably name many of those corporate giants. They not only want a toughen antitrust enforcement, but also to return antitrust policy to its early twentieth century roots. Bloomberg News legal reporter David McLaughlin has written about their mission in this week's Bloomberg Business Week, and he joins us now, David, tell us about these competition

policy wonks as you describe them in your story. Yeah, So, there are a group of folks here in Washington, mostly UM, that have been speaking out a lot about UM big companies UM, warning about the threat from UH monopolies, especially in in in technology and UM they were basically spun out of a think tank uh here in in DC called New America, and they they formed this uh new organization called Open Markets and they've been gaining a lot of attention because UM, you know, there's been a long

debate in the world of any trust about UM how tough to be on mergers and in big companies for many years and and and the pendulum is sort of swung back and forth on that during different administrations. But you know, essentially, the the basic playbook for how to evaluate mergers and monopolies has always been the same. And these guys are saying that whole playbook just needs to be thrown out. So tell us about the old playbook, which is based on the notion of consumer welfare. Right.

So that was a notion that UM came to be really in the early nineteen eighties. UM. It was Uh. It was brought up by Robert Bourke UM in a in a book he called in a book he wrote called the antitrust paradox. UM. Essentially, the ideas that when we think about whether a merger should be should be blocked or should be allowed, and when we think about dominant companies in their in their market power. That the question is are you know, is the deal or is

the company harming consumers? And and and for the most part that has meant has meant price. So in anti trust enforcers um investigate a merger, they're primarily focused on on price and will the combined company gain the power from from combining to be able to raise prices on you know, their their customers, um and UM. That's been basically the framework and so UM the but there's been

these these swings. So like you know, typically, like you know, in the Embroment administration, they were seen as somewhat more aggressive on merger enforcements. During the Bush administration the sort of conventional thinking as they were slightly more hands off. But but the kind of the way to evaluate the deals is thinking about consumer welfare. That's always been sort of the the agreed upon framework. So what is the main criticism of the theories of these competition policy walks.

What's the opposition saying about them? Yeah, so they say that that this this whole notion is sort of um, you know, corrupted. UM the uh, the the reason for the reason why any trust laws were um brought into place A hundred years ago. UM. This was the time of you know, standard oil, et cetera, in the in the in the the trusts, so a hundred years ago UM.

And so they say that basically this, you know, pursuing this framework has got us not has basically harm consumers because it's led to these gigantic companies UM like technology like in technology or very consolidated UM airline industry, UH, A very consolidated banking industry. So you can look at a number of different industries that UM that have consolidated over the years, UH, and they say this has UM.

This may be in some cases led to lower prices for consumers, but there have been other harms that the framework or the consumer welfare standard has has sore, have missed, and that those are harms that have affected UM workers and other elements of supply chains in different industries. So, David, are we seeing some shift in antitrust enforcement policies? For example with the Justice Department going to court to stop the merger of A T and T and Time Warner,

where they're not just looking at vertical versus horizontal. UM. You know that that deal in particular was definitely a shift UM. I don't think though, that it was because of this hipster any trust movement, although they certainly supported the challenge UM that that was certainly a shift in that um because it was not a horizontal deal as

a vertical deal. Vertical deals had tended to be tended to be approved with with conditions on how companies operated, and that surprised a lot that the A T and T lawsuit surprised a lot of people because, uh, um, the government is going to court to block it and basically saying there are no behavioral or conduct conditions that

that can fix um, that can fix the deal. So, you know, I think it's still kind of early in this administration to know whether their approach is going to be significantly different UM or whether the you know, the A T and T cases is sort of a one off, but it has certainly that that case certainly has a lot of people asking that question. Let's turn for a few moments to Broadcom, which is one of the world's largest chip makers through a string of acquisitions over the

past few years. It said it's under investigation by US anti trust officials for potentially anti competitive conduct. Can you explain what's happening with Broadcom. So the Broadcom Broadcom said yesterday they put out a statement saying that the UM at the Federal Trade Commission UM, which is the other anti trust enforcement agency in the US, is investigating anti competiti of conduct by the company. It didn't elaborate on exactly what conduct that is, although it said that it's

not UM it's not related to their wireless business. This is about I think UM. If it's not their wireless, would be a sort of network UM network business UM. So we don't know exactly what the FTC is concerned

about UM. I think the news of that investigation spooked the market briefly because Broadcom is in the process of trying to buy its rival, rival shipmaker call Calm, So I think some investors were concerned that, well, if the FDC is worried about broad coons con Broadcom's conduct, then that might affect the merger review UM with the Call Calm merger of view. So we'll have to see, we will, and I'm sure there's a lot more antitrust at coming up.

Thanks so much. That's Bloomberg News legal reporter David mclauch Bucklin, and you can read his article in the latest Bloomberg Business Week. It's entitled Hipsters Versus Chicago, The Fight to

rewrite the Antitrust Playbook. Claims of executive privilege during Steve Bannon's testimony at the House Intelligence Panel have thrown a glaring spotlight on the potential conflicts of interest of White House counsel Don McGan McGann has not only been interviewed by investigators for the Special Counsel in the Russia probe, Bannon's lawyer is also his lawyer, and McGann's office was involved in instructing ban and on which questions from the

House panel he should answer he shouldn't answer, according to a person familiar with the matter. Walter Shab, former director of the Department of Government Ethics, spoke about McGann's position with CNN earlier this month. He can try to hide behind the I was only following orders. But that didn't work at Nuremberg and it's not going to work here because as an attorney, the president is not his client. The Office of the President is is his client, and

he's ultimately answerable to the American people. Joining me is Tom Schoenberg, Bloomberg News Financial Crime reporter Tom describe what happened when these areas of concern to the White House came up during Bannon's testimony. Sure, so, over the course of about uh you know, about nine hours or so

that Steve Bannon was on the on Capitol Hill. Um, a question would be asked, they would pause while his attorney, Bill Burke would uh place a phone call to the White House to get an answer as to whether or not he can answer the question. And this went on, and uh, you know they uh he refused then to answer a number of questions about his time both in the White House and even uh during the transition. Uh, you know, the given the advice from the White House

being that they may want to assert executive privilege. So McGann is supposed to defend the office of the president, not the president himself. But he's also a witness to controversial events under investigation by Muller and Congress and reportedly took part in some of them. So he could be a witness or possibly a defendant. What kind of potential

conflicts do you see there? Well, here, you know, at the moment, it's it's kind of this, uh, this appearance of possible conflict as far as we know Don McGann hasn't recused himself from decisions on whether to assert executive privilege, uh in questioning over the Russia the Russia matter, and um, you know he's been someone who also has had this

front row seat. So uh, you know, it's it's sort of looks a little strange when you potentially have kind of one witness calling another witness, you know, for advice on how to answer questions. And with lawyers, it is the appearance of improprietor a that is also supposed to be avoided. What is the line? Do we know what the line is between defending the office and defending the

man in the office. Right, Well, well, defending the office, I mean asserting executive privilege, um is kind of one of your one of your jobs assessing whether that needs to happen, because again, as White House counsel, you do not necessarily want Congress, um and others to be able to kind of pull in and get into the sort of business and decision making of the White House. It's one of the protections for the you know, for the

White House to be able to do its job. It gets a little tricky in situations where you have investigations that reach into the White House and reach into that sort of role of the White House counsel where the person's a potential witness, and this has come up, Uh, you know, questions about that role has come up in past administrations Nixon, Clinton, Uh, and those investigations, court rulings that kind of came out of their kind of really sort of limited, Uh, the protections of that sort of

that White House Council really asserted that they're there not to protect the person in the office, but the office of the presidency itself. Mcgan's lawyer not only represents Bannon, but also Ryan's previous and there's nothing ethically wrong with that at this point. But you spoke to Nicholas Allardin of brook And Law School. Tell us what he said

about the difficulty of representing three people in the same matter. Sure, Um, you know again you have three you have three sort of key players here in this in this investigation, and um, to just try and get your arms around what each each one of those knows and their various sort of rights and uh, you know, how they're gonna, how they're answering questions or where they are and you know where they kind of fit into the probe is a is

a pretty big job. You know. Bill Burke, the lawyer for all three UM, He's a prominent defense lawyer in Washington. He's handled uh, you know, big political cases in the past. He represented UM Virginia Governor Bob McDonald's wife in a corruption case there a few years ago. So he's a very experienced individual and he knows how to do big Also in corporate cases, where it's it's not that unusual for a lawyer to handle uh, you know, represent kind

of multiple employees and a probe. I think the difference is, uh, you know, it's it would be unusual for a single lawyer to handle representation for a CEO CFO and the CEO definitely now. And it comes up in criminal cases where sometimes a lawyer at the beginning will represent two defendants, but then if their interests diverge at all, the judge will tell them that, you know, you need to get

a separate lawyer to protect your own interests. This hasn't reached that point, but if it does, I take it that Mueller will be there to say something, because he's already challenged some of the lawyers who have uh to interest tell me about that. Yeah, he Uh. So with regards to the uh, the the cases, the case brought

against Paul Manafort and UH and Rick Gates. Um in that matter, there was you know, a lawyer that Rick Gates had had hired who uh, a New York lawyer happened to also be involved in a current case that Mueller's team felt, uh Gates could possibly be a witness in that matter. So you had the lawyer kind of representing a defendant in the case in New York as well as Rick Gates who could potentially be a witness

in that case. And so the judge in the in the Manafort Gates matter here in Washington, UH, she kind of you know, had the party sort of explained to her the situation, and at the end of the day, you know, Gates was allowed to kind of keep his lawyer, I think once all sort of the you know, everything was kind of explained in terms of what he would be giving up, you know, the the potential for harm there.

Something that has has come up in the news is that though Bannon asserted, well, he kind assert executive PRIs but though he refused to answer some questions based on the president's claim of executive privilege when he goes to talk to Mueller's investigators whenever that time is set up. Um, people familiar say that he is not going to assert executive privilege at that point. So does that put his lawyer in a strange position? Yeah, it's uh, you know,

in these big investigations like this, He's Washington investigations. Um, obviously the Hill, the Hill's probe isn't a criminal probe, right, so you want to make sure that you're going to be as open as possible when you do talk to

the sort of criminal investigators. And so you know, if they were to assert executive privilege, and then we may be in a situation like we have in past investigations where uh M, there's team could challenge it next thing and nowhere, and you know, we're creating some new uh some new precedent um the type of which we haven't seen in some years. Could it get any more complicated? That's a rhetorical question. It will. Thanks for being here.

That's Tom Schoenberg, Bloomberg News Financial crime Reporter. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts. SoundCloud and on bloomberg dot com slash Podcast. I'm June Brosso. This is Bloomberg