FTC Chief Andrew Ferguson on the Trump Vision for Antitrust

the new era of deal making activity. Incidentally, the new chair, Andrew Ferguson, kept the merger guidelines that were put in place under his predecessor, but they're clearly going to be differences. There are areas of alignment, There are areas of differences, and so we talked to Andrew about sort of what a conservative or what a maga vision of antitrust might look like.

we can't pay for transcripts. Like, oh, this is an amazing first question for Andrew, and then he walked away. Is there a constraint though, between this impulse and we'll get into it, you know, in terms of headcount and your desire for what you know looks like going to be a sort of vigorous new antitrust uh enforcement approach.

that big tech pose to American consumers very seriously. There, I will throw every re resource the agency has at prosecuting cases against big tech that we've got going. So unequivocally, No, there are no resource constraints on protecting Americans from monopolies and fraud.

When they send their money off to Washington, they expect their government to do a lot with that money, and that the government shouldn't be any bigger than is necessary to do those tasks. And so at the FTC, we've got the resources we need to protect Americans from fraudam monopoly. And look, you know, no government official in history has ever said, no, I want fewer resources. Which is why the President's efficiency agenda is so important, because government will

always keep sucking up resources. The goal here is to maximize the return on investment for American taxpayers, and that's what we're doing the FTC. Okay, So what.

infected with collusion, that are infected with foreclosure. These are not free. They move value from consumers from innovative businesses to giant monopolies, who then are focused mostly on protecting those monopolies rather than innovating, rather than growing, rather than coming up with the next great idea that changes americans lives. So, you know, I think President Trump up his pro American markets. He's pro business, but that is easily reconcilable with favoring

vigorous anti trust enforcement. And President Trump, you know, he's been president for four years before this, we sort of have seen what President Trump's anti trust agenda looks like. And he favors vigorous enforcement. He favors following the law, and he favors clarity and certainty for people who have to participate in these markets.

member agencies with people from both parties. I mean, look, if you have an agency that is exceeding the law, abusing the companies that are purports to regulate, it's helpful for markets, for courts, for litigants, for government transparency to have people in the other party pointing this out and saying it in dissents. Like you know, I wrote four hundred plus pages of descents during my time as a

Minority commissioner. I think that that adds value. But I think that the FTC's particular value add is you combine the two missions, consumer protection and antitrust in a single house, and they both sort of like help reinforce the other.

or continuity. Walk us through the thinking there. Why did you commit to those particular guidelines, especially given the you know, they got a lot of criticism from multiple sides of the aisle.

But the general principle has been presidents of one party maintain the guidelines from the previous They may add here and there. They provide commentaries on those guidelines to sort of explain to business how you know that current administration understands the guidelines. But a complete read vamp is rare. And if we get into this process where every single time a new administration comes in they jettison the guidelines, two things happen. First, the agencies spend all their time

writing the guidelines. I mean, the previous administration of jettison the twenty ten guidelines and spent like two years having to write this one. They were only effective for barely a year of the last administration. If we get into this process where every four years were yanking and rewriting, it's all the agency you're going to do. Number one. Number two, the guidelines will become basically meaningless if they just are like one party's statement of its view of

anti trust policy. Courts won't follow them anymore if they think that they're just openly partisan. Regulated entities won't rely on them to plan. You know, businesses can't just plan into your cycles. They have to plan longer than that. And if the year of the view that every election runs the risk of the guidelines being yanked, the guidelines

just become meaningless. And third, you know, there definitely were parts of the guidelines that were you know, departures from the twenty ten guidelines, but they generally are relatively well aligned. They're built on case law, they preserve a lot of the PC from previous guidelines, and I think just throwing them all out all at once means A the agencies are going to devote tremendous resources to rewriting them, and b everyone will remain very uncertain about how the agencies

feel about it. And finally, you know, a lot has been written about the sort of effects of the guidelines. They're guidelines at the end of the day. They aren't law. They're supposed to be explanations to the public about how the agencies generally understand the merger program going forward. But the most important feature of anti trust enforcement in the United States isn't the guidelines. It's the commitment of particular anti trust enforcers to following the laws is written, providing

certainty and clarity about how they understand the law. And then when you go to court bringing the cases that you think that you can win, and when you can't win the cases, get the hell out of the way and let the mergers close.

some economist model. I don't know if those models actually work or not, but theoretically spit out some answer where we get lower prices, and then it's like, okay, this is this is good or bad? When you start broadly defining consumer welf welfare, rethinking that like, first of all, what is that term? What do you when you hear the consumer welfare standard? What does that mean to you? Does it mean more than prices for one thing?

not changed effectively since then. Then, in nineteen fourteen, they passed the FTC Act, which both creates my Agency and also creates a new antitrust provision that prohibits unfair methods of competition, and then a couple months later it passes the Clayton Act. And the Clayton Act is really important because that's the law that prohibits mergers that promote tend

to create a monopoly or injured competition. So by nineteen fourteen, and then with an important amendment called the Robinson Patman Act in the nineteen thirties, our anti reslaws are basically set like the operative provisions for merger purposes of Section seven of the Clayton Act and sections one and two of the Sherman Act are basically unchanged. They were originally adopted. For decades, courts kind of cast about for a theory

about how to apply the anti trust laws. So we know that the anta trust laws are about competition and protecting competition, but that doesn't tell you a whole lot. Does that mean like making sure that there are a particular number of competitors in the marketplace. Does it mean competitors have to do particular things and we don't care how many there are. Does it mean that we care about the economic effects of monopoly. Doesn't mean we care

about the political effects of monopoly? And this can matter because you can imagine, you know, the existence of some monopoly somewhere that ends up keeping prices low, or of a duopoly but wield unbelievable economic power. Or you can imagine businesses that aren't true monopolists, but they have tons

of economic power, or of political power. I'm sorry. And so courts up through the nineteen fifties and sixties were just sort of casting about, looking for some standard they could articulate about when the anti trust laws are violated. And by the fifties or sixties, it was very difficult for anyone to predict what any given court was going

to say about any given transaction or conduct. You had his you know, you could have premised it on what the judges were having for breakfast when they were deciding the cases, and that was as likely a predictor of outcomes as anything else. Then this guy who you you know, a lot of people in this audience, if you know it's as sort of wonky as you say it is,

have probably heard of for other reasons. Who's a professor at Yal's name was Robert Bork, and he writes a book called The Anti Trust Paradox and the the you know, the subheading of the book is a policy at war with itself, And the position he articulates is the courts are using anti trust to accomplish all sorts of things that don't have anything to do with economic injuries, politics, labor unions, all sorts of stuff that just don't have anything to do with it. It's basically a choose your own

adventure legal regime. It makes no sense, and it's actually injuring economic growth. Growth. The only thing the anti trust laws should care about, Judge Borck said, are the welfare is the welfare of consumers. So he articulates this few in the seventies, and by nineteen seventy five, in this famous case called Writer, the Supreme Court is citing Judge Bork and saying the antitrust laws are a prescription for

consumer welfare. Okay, when Judge Bork writes about consumer welfare, he says, look, low prices, that's important for consumer welfare. High output, that's important. Other things are important too, like the promotion of future competition, the protection of innovation, product quality. All sorts of things sort of fit within consumer welfare. But what we care about are economic injuries inflicted on participants in marketplaces, not about stuff that isn't related to

sort of economic welfare of market participants. At the same time this is happening, something else is happening in our system. We have this sort of like economic libertarianism on the right that sort of attaches itself to the consumer welfare standard, and it has certain supposition like ideological suppositions about markets.

Markets always correct themselves as one of the suppositions. Professor at NYU, Daniel Francis Bright Young anti trust scholars written a lot about this, highly recommend him that government intervention is almost always worse than anything happening in markets, even monopolies, and so we should always preference against government intervention, even

if it's to correct market failures and monopolies. And a strong deference to c suite decision making on the view that they understand what should work best in a marketplace, and government ought to be hands off and deferential to c suite decision making. These two things right alongside each other, and so by the nineteen nineties, consumer welfare has basically been reduced to two questions. Is the transaction or conducted issue likely to increase price in the shorter intermediate term

or reduce outcome in the shorter intermediate term. But that isn't really what consumer welfare is about. Consumers can suffer all sorts of injuries that aren't just about short term prices or short term output. A loss of innovation is a huge injury to consumers. A loss of product quality huge injury consumers. But a lot of courts that started to shift away and focus on the extremely qualitative question about price and output, which also led to a deference

to econometrics and to economists and anti trust cases. Sorry

you make quantitative quantitative? Sorry, thank you, thank you. That's right quantitative, which also ends up making anti trust cases very expensive because everyone has to hire an army of economists to talk about the case, makes it very difficult for judges to decide these cases because the way these often go is each side has their own army of economists, identically trained, identical schools, fancy credentials on both sides, making

exactly opposite arguments about the same number, often predictive arguments, and a judge untrained in any of this. I mean, you know, I don't know how much how many lawyers are on the room, but the average federal district judge in the United States was like a local prosecutor or a local defense attorney or a member of the local bar has probably never dealt with anti trust in his

or her life before that case. And now you've got MIT and Stanford trained economists having a really vicious dispute about identical facts, and the judge is supposed to decid The judge kind of goes, I don't know, it seems like a wash, but it makes these cases long and expensive, and so that is. You know, in my view, the consumer welfare standard encompasses injuries to participant economic injuries to participants in marketplaces. It includes consumers, obviously, it also includes laborers.

The Supreme Court has understood the antitrust laws to protect laborers as sellers of labor to the same extent it protects purchasers of goods. You know, the sort of fixation on short and intermediate term price and output effects isn't actually what consumer welfare was ever understood to me. And it was supposed to encompass a broader range of injuries to marketplace participants, but it got shrunk largely because of ideological views about markets.

And then I went and clerked on the Supreme Court for Justice Thomas during the twenty sixteen election, and I would bike into work from Old Town and listen to the news or podcast on the way in, and was doing this as sort of a like lawyer who had thought a lot about anti trust as a practitioner, but very little about anti trust as a policy. You know,

when you're a practicing lawyer, you think about doctrines. How can I help my client with these doctrines, you don't go one step up and sort of think about the policy. And if I'm driving into work, I'm listening to President Trump calling for more vigorous anti trust enforcement, you know, pretty vocifically on the campaign trail, and I'm writing in I'm going, what's happening? Like A We're talking about anti

trust in a presidential campaign? This is very strange. And two a Republican calling for more vigorous anti trust enforcement. And so when President Trump takes office, he's not calling for a revolution in the consumer welfare standard like some of his successors did. He wasn't saying, you know, get rid of the consumer welfare standard. But he hires anti trust enforcers who take seriously the idea that consumer welfare isn't just about price and output and what a bunch

of economists say. It's about consumers participation in marketplaces and protecting them from short term and long term injuries and laborers as marketplace participants. And so, you know, a lot of folks have talked, not incorrectly about the Biden administration bringing lots of lawsuits against big tech. A lot of people have talked about the Google search suit, which is in the remedy phase right now, where the United States is asking to split Chrome off for the rest of Google.

President Trump brought that case. President Trump brought that case in twenty twenty, and it was litigated during the Biden administration. But President Trump brought that case. The biggest attempted block of a vertical merger in American history up to that point was brought by President Trump and the AT and T Time Warner case, and the Meta case that's going to trial in my agency in just a month that says that Meta's acquisition of Instagram and WhatsApp violated the

anti trust laws was brought by President Trump's administration. So sort of the reconsideration of consumer welfare to encompass a broader range of consumer injuries than just price and output

starts with President Trump. Now President Biden comes in and picks my successor, who is an extremely talented anti trust thinker, but was of the view that the consumer welfare standard ought to be discarded entirely and ought to be replaced with a far more open ended understanding of the anti trust laws that protect which she calls the competitive process,

but is more than just economic injuries to laborers and consumer. It's, you know, the political effects of consolidation, all sorts of downstream non economic effects, and that consolidation itself is the enemy, even irrespective of the relationship of that consolidation to sort of economic injuries on market participants. And that was basically a proposed revolution. A lot of people call this neo Brandisianism.

Brandeis was a very famous Supreme Court justice who articulated a sort of anti consolidation view of the anti trust laws in the first half of the twentieth century, and they proposed sort of ripping the anti trust laws out of the consumer welfare standard and opening up a much broader range of interests. I think sort of two things to think about there. The first is this is basically go back to the fifties and sixties before Bork's book.

The rationale was that price and out part are too narrow a consideration on which to base an anti trust regime. And the answer to that is it's true. But Bor didn't actually say just limited to price and output. He understood consumer welfare standard to encompass consumers in all of their aspects of participating in markets, including how things will happen. Further,

in the future with innovation and product quality. And you know, I think if you measure the previous anti trust regime by whether it achieved its neo Brandisian revolution, the answer is it definitely did not. Every court in the country still applies the consumer welfare standard.

participate in markets. We take laborers as they actually are, and we take very seriously that you know, consumers and laborers suffer in markets short of things that just affect short term price and output. And that the loss of innovation even if you can't measure it the way, or the loss of choice or product quality, even if you can't measure it the way that an economist would measure price and output still matter to consumers and still matter

to antitrust. And I think the second is, you know, I really do see my view as just like a cop on the beat, you know. I think the other thing that was unusual about the previous administration was that it had a really hardcore focus on x ANTI regulation. You know, the FTC under my predecessor passed a record shattering number of x anti rules for an agency that doesn't pass very many x anty rules, including competition rules, which it had not done in a long time, arguably

had in my view, had never lawfully done. And you know, the only one that we passed has been vacated by the courts. But you know, it was not just a sort of neo Brandisian revolution. It was an emphasis on x ANTI regulation. And my view is, as a cop on the beat, if we really vigorously enforce the anti trust laws, we avoid the need for regulation, because regulation is what you have to do when monopolies have totally consumed a market. I mean, all of us live in

some form of a utility monopoly. Grew up in Virginia. We have a giant electric utility monopoly, it is heavily, heavily, heavily regulated directly by the state legislature. But if you vigorously enforce your and you know, utility monopolies, they're a little different because of the sort of space constraints on

wires and cables and things like that. But if you take the anti trust laws very seriously and you really vigorously enforce them, and you don't pull your punches because of ideological suppositions about markets, you can avoid the need for ex anti regulation because vigorous market competition ensures monopolies do not rise. Anti trust enforcement ensures vigorous market competition. If you have market competition, you don't need heavy regulation because you don't have giant monopoly problems.

that's a joke. I never troll. Sorry I slipped. I slipped there, Tracy, I slip for a second. I do not troll on Twitter?

to measure a loss of competition. So like, you know, I'll just use an example, the position that the commission is articulated in meta, which is, you know, purely, purely public. But one of the ways you can measure a loss of competition is if product quality is degraded without a

meaningful competitive impact to the company that's degrading product quality. So, for example, the FTC has alleged, and you know, we've got a trial coming up on this, but the FTC has alleged in meta, for example, that Facebook was able to massively increase the ad load on Facebook without losing any consumers, which meant that they were able to degrade the quality of their product, and consumers didn't have anywhere else to go, and so they just sort of stayed.

And that you know, the anti trust laws and a sort of fully formed understanding.

You know, if someone is just really good at something and way better than everyone else, they sort of will naturally develop monopoly in that because people will prefer that product or service. What you can't do is maintain your monopoly from things unrelated to your skill or the quality of your product, or sort of dumb luck. And you know, in terms of like you know, failures of previous antitrust regimes. Let me just touch on that a minute. Sure, let's

just take Google Search for example. A lot of the Google Search case is a very traditional Section two case. It's tying, it's ordinary monopolization conduct. It doesn't propose breaking sort of our standards. It is a very normal thing. And this case, the idea for this case is sort of sat around for a long time. But there are political decisions made by antitrust inform for serves in previous

administrations not to do it. But those are political decision, those are political economy decisions driven either by some combination of ideology or a prudential you know, preference against government intervention, even if you think you can win the case, because you know, you don't want to be the guy that kills the goose laying the golden egg. But you know,

I think we need to be realistic about it. There there were moments during the creation of the Internet and during the sort of rise of these platforms where they made decisions that even under ordinary anti trust theories would have said, hey, this is potentially a problem. I mean, for example, the FTC's theory and meta was that the acquisition of Instagram was an anti trust violation, but the FTC,

you know, did not block the merger. My own view is, I don't think that we should say if a monopoly arose in any market, in any market, Internet platforms or any of the other goods and services we use every day, we shouldn't. Let you know, enforcement declinations in the past that led to the creation of monopoly be a reason not to conf front the monopoly today, because that's basically just the sunk cost fallacies like oh, well, we already did this once, Like you know, if they have the

monopoly now, it is what it is. My view is, no, if we have monopolies and they're being maintained illegally, no matter how they were formed, no matter who was asleep at the wheel when their formation came about. My job is an interest enforcers to do something about that if I think I can win in court, and if I don't think I can win in court, I need to leave them alone.

not the speech police. I do care about market power, and if market power enables a business to mistreat its consumers or to degrade the quality of its product by, for example, throwing people off of their platform and suffering no competitive consequences whatsoever, that antitrust cares about not the censorship itself, the market power that makes it possible to mistreat consumers without suffering competitive consequences. I just give you

some background this twenty twenty. I am Mitch McConnell's lawyer. I'm sitting in my Senate office. The George Floyd protests are sort of at their peak, and I start getting calls from the gcs of Giant Fortune one hundred businesses and business groups, and I pick up the phone and they say, hey, cops are really racist. We the business community want you to pass a bunch of police reform bills.

And you know, I was a sort of like conservative that had relatively strong deference for markets and for market actors and people making decisions in those markets. And I was shocked by this. And my response was, why are you calling me about this. You're supposed to make widgets at low prices for Americans. Why are you calling me about police reform? What the hell does this have to do with you? Leave the political debates to Americans and to voters. Stop calling me about this. If anything, don't

you want more police to protect your businesses? And they're like, no, this is it's really important to us, Like we want this done. And I remember sitting in my office and going, it's weird that these big businesses with all this economic power are leveraging that economic power to accomplish social and political objectives. And then in twenty twenty we have this censorship crisis. People want to question the efficacy of masks,

You're not going to be on a platform. You want to question the safety of vaccines, you're not going to be on the platform. You want to question whether it's like fair to change voting laws in the middle of the election, you're not going to be on the platform. You want to question whether there's something at Hunter Biden's laptop that we should know about, you're not going to be on the platform, and we're not going to let

you publish it. But it wasn't just censorship. Like any consumer in twenty twenty, you couldn't watch TV, you couldn't go online, you couldn't shop in a store without having nakedly political messages, almost exclusively the platform of one party being thrown in your face. And as a consumer, I said, how can it be that there are all these businesses who are willing to alienate huge swaths of their consumer base with these messages that they throw on our face

and suffer no economic or competitive consequences at all. And I started to understand sort of the critique of the very narrow understanding the consumer welfare standard and the libertarianism that had sort of clommed onto it, which is, large businesses with market power will sometimes leverage that market power to injure consumers, and sometimes do it in politically motivated ways, and we should really care about the market power that

makes that sort of mistreatment possible. But that's the thing I care about, is the market power that makes the treatment possible. I don't want to police people's speech, but I do want a police market power. But do Okay, I.

A market isn't free if monopolists get to charge you higher prices, degrade your product quality, deprive you of innovation because of their market power.

this perspective versus that perspective. Do you have a way of measuring whether, outside of like say, emails, whether companies are degrading their consumer experience with respect to those consumers' ability to speak freely? Is there like, do you feel confident in your way, in your ability to know whether the company is serving their customers while in.

I was the Solicitor General of Virginia. I'm not going to pretend like applying the anti trust laws to new context doesn't come with some difficulties, including potentially the difficulty you're describing what I'm saying is that for a long time, especially in the twenty tens, there was a strong preference before President Trump became preference for saying this is difficult, it's new, it's novel, let's not bring the anti trust

laws into these contexts. And my view is that that sort of ideologically driven, hands off, laissez faire approach created a system where we have super large, super powerful platforms that in my view, there are instances where they were quite obviously degrading their product quality in a way that would surprise me in the presence of real competition. And I also want to address the you know, in some instances there were emails where it was like, ohay, this

person off. Look. I mean, I was involved in the Murthy litigation, the Missouri against Biden litigation about alleged either coordination or collusion between the government and big tech platforms during twenty twenty. It's more than just a couple of emails. This was rampant. It was systematic, and it was terrifying the relationship between the big tech platforms and the government about who was going to get to speak about what.

And you know, I think this leads me to another important point and it's one I try to make to my libertarian friends who think some of what I'm saying sounds extreme, which is, if you are a libertarian and you care a lot about personal liberty, you ought to really care about monopoly because it is way easier for the government to control all of our lives if they

only have to coerce a small handful of suppliers. If you have a wide range of options for consumers, it's harder for the government to pick up the phone over and over and over and be calling executive after executive and say we need you to do this to that person and this to that person. But if it's just a handful, that gets real easy, real quick. And I think we saw that in the Murthy litigation. It's just

a couple platforms. You need a handful of government officials who call and brate platform people to kick consumers off. That's harder if there are more suppliers, if there are

more choices for consumers. And so even if you are sort of libertarian and you have this ideological sort of predisposition predispositional view that markets correct themselves and government intervention is always worse than monopoly, my response is you don't want a tiny number of suppliers because the government can course them real easily, and if the government can course them, they can course you.

thirty reform. I think this is something you're interested in, and that's always an interesting thought experiment to think what the world would look like if we never had Section two thirty. But I mean that exists that currently exempts Internet platforms from a lot of liability here, but if you were to reform it, surely that would come into conflict in one way or another with content and censorship.

Section two thirty, on its face, seems to care mostly about protecting tech platforms in the early nineteen nineties from the liability for torts committed by people who are speaking on their platforms, and it has over the course of years been interpreted basically to immunize tech platforms from anything relating to content moderation. In my view, that isn't what Section two thirty says, but that is what the courts

have done. My view about Section two thirty is that it's very difficult to justify immunizing the biggest companies in the history of the world from state and federal enforcement actions.

And the FTC has tried to enforce Section five, our pre eminent statute against online platform companies, and we have lost cases because of Section two thirty where private businesses, large private businesses are interposing Section two thirty between the government and trying to protect Americans through government enforcement actions. In my view, that just categorically cries out for reform, but I don't think that that runs into conflict with

censorship in the following sense. One of the some of the Section two thirty cases that have troubled me the most are people who were alleged that they were thrown off of a platform in violation of the platform's terms of service. It's just a contract claim, like, hey, I entered into this relationship with you, the platform, and I did so on the basis of what you had in your TOSS which governed, you know, the kind of things I'm allowed to say, the kind of conduct in which

I'm permitted to engage, et cetera. And you kicked me off in violation of your own TOS. And the platforms have been able to interpose Section two thirty between consumers and say it doesn't you know, it doesn't matter what our TOS said. You don't we kicked you off. That's a content decision. Therefore you don't get to bring the lawsuit. And my view is, you know, consumers can protect themselves better from censorship if they're able to at least hold

platforms to their terms of service. And one of the questions that we've asked consumers to provide us info on in our own tech platform investigation on this issue is give us examples if you have them, of times that you think that you were deplatformed or shadow band or whatever in violation of the terms you agreed to when you got on the platform and you know so on section two thirty, I do think it has been interpreted wildly, belong what anyone thought was going to say, and that

at the very least, you know, Trump administration proposed these changes in twenty twenty. It should not provide immunity from government enforcement actions that are designed to protect Americans.

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