Hello, and welcome to the Votes in Verdicts podcast hosted by Bloomberg Intelligence, the investment research platform of Bloomberg LP. In this podcast series, we talk about the intersection of business policy and law. My name is Jennifer Ree and I'm a senior analyst with Bloomberg Intelligence covering United States anti trust litigation and policy. So this isn't the first of the Votes in Verdicts podcast series, but it is the first focus on anti trust issues. So I'm going
to call it the inaugural anti trust episode. And I'm really excited because I'm joined by Bill Alsayed, who not only has a really impressive career and wide variety of anti trust experience, but it is also a good friend. Currently, Bill All is the Senior Competition Fellow for Tech Freedom, which is a nonprofit, nonpartisan technology think tank launched in twenty twenty one that focuses on issues of internet freedom
and technological progress. But before joining tech Freedom, Bill All was with the Federal Trade Commission, where he was the director of the Office of Policy Planning. That was during the Trump administration while the chairman was Joe Simons, and it was Bill All's second stint at the FTC, after having been an attorney advisor for Chairman Tim Murris from
two thousand and one to two thousand and four. Now, on top of all that, he's also a practice law and is an adjunct professor for anti trust at George Mason University's Law School. Bill All, that is really impressive and it's a lot, and I really appreciate you being here. Thanks so much.
Oh, I'm excited ecstatic here.
Well, we'll have fun and I'm enough to try to slow down how much high talk, and Bill All's gonna have to speed it up so that we meet in the middle, right, all right, you know, before we jump into our anti trust topics, it would just be interesting to hear a little bit about your career path and how you got there and which role of all of those you liked the most. So tell us a little bit about yourself.
So first, you know, I grew up in New York. And the only relevance of that is after college, where we both were at the same college down at Case Western and Cleveland, I came back to New York to work on PhD in economic and I found that I liked law and economics more so than you know, sort of microeconomic or financial economics. And this was in the late eighties early nineties, and.
Giving away our age, I decided, I decided I wanted to do lawn economics as sort of a career path and thought, well, maybe I'll go to law school.
And at the time, George Mason was the only school and I think still is the only school with a sort of an emphasis on lawn economics as sort of the framing of teaching and thinking about law. Now, many of the law schools now have a lawn economic scholar or two or three. But Mason, you know, now, the Anthon in Scalia law school at George Mason University, you know, has just many right and then and it was the it was the place to do law in economics. UH. And so I left graduate school to go to UH
Law to learn the law and learn this framework. And when I was there, I discovered that I also liked the practical application of economics the law UH and and the field you do that in a sort of the regulatory fields or and I trust. And I had the great benefit to hook up with a great professor at
at you know, the law school, Timururus UH. And then while a student worked at two great law firms, uh what was then Kylier Shannon, Rill and Scott with Jim Rill uh and then Morgan Lewis with guys like John shann Field and Kas Hobbs uh. And so I stayed in the field. UH. And you know, I had gone down to Washington with the idea of doing public service. UH. And so when when mrs became chair of the FDC,
I went with him. We left, you know, more or less together, practiced together with not only with Tim, but with Christine Wilson, who's who's still a commissioner at the FTC for a few more days. You know, had the had the had the ability to work on, you know, projects that were not just you know, sort of deal work, but that were sort of interesting policy projects. When Joe, Joe Simons went back, I went went to the Commissioner's chair.
I'd worked with Joe starting at Kalia Shannon and then worked with Joe in the in the Mrrors Uh commission. And and you know, Joe was kind enough to bring
me back in the policy shop. And the policy shop was the most at least potentially the most fun job to have because I participated in the cases and the tough cases and the interesting cases, but didn't have any management responsibility for them, and spent most of my time with with my group and others at the Commission, you know, thinking trying to think forward about you know, how did we want the law to develop in certain areas, you know,
thinking about policy, the policy statements that you know would impact how the Commission, how hopefully how the courts you know, thought about anti trust or thought about privacy. Now, we were handicapped a bit by you know, COVID. It knocked us out for a year, and you know, the like every agency, I think, you know, you're scrambling in that
last year. You got people spread out, you'd manage, you know, trying to manage how to how to how to get things done that you have to get done, you know, and the policy stuff took a little bit of a back seat. So I regret that. But but that was the best, the best job because you were in the mix of interesting cases but also thinking about you know, policy, So that that was the best the best job.
Yeah, I can imagine, and I do think I do feel like that Commission really got going and then COVID kind of just you know, slowed everything. Put the brakes on and there was just a lot less happening. And you know, I think that happened for all of us, but in particular You're right for you for the kind of work you were doing. It it sort of slowed what you were able to do and what you wanted to.
Yeah, we had you know, you have to bring the cases because you can get a second chance, but policy you can do it. You know, when things settled down, and you know, I just I mean everybody this this was it wasn't clear at the time, but this was the beginning of this shift to you know, working from home, not having a central location, and the agency was managing it. And the agency, like everyone else, was managing you know,
people who were sick. You know, you were losing people luckily just almost entirely just you know, sick, but you lost resources that people had to learn to manage people that they didn't see, you know for sure some months. So you know, it was a great job. A little bit of popes unfulfilled, but it was a great job.
And you know, well, I think things have taken quite a different turn.
Now.
We're going to get into that a little bit. In a little bit. The turn that policy has now taken at the FTC since we have a new administration. But I want to first talk about this paper that you just published for Tech Freedom. I read it. I think it's a great paper. This is called Actual Potential Entrance, Emerging Competitors and the Merger Guidelines, And I think particularly for any antitrust geek, but anyone just interested in the topic,
it's a great read. For me. I'm going to keep this as a resource because it's just such a great compendium of the history of the way this topic has been treated. So and we're going to talk about this because it's kind of a new focus for the current FTC. So talk to me a little bit about the paper. You know, what you've said in this paper and why you decided to write it.
So the paper really is an outgrowth, excuse me, of
work we were doing at the agency. So you know, when when we got there, there was this focus on perceived failures by the previous administrations, both democratic and Republican, you know, to to protect competition, and one concern was you'll have too many mergers and you didn't think hard about future competition, right, the acquisition of let's say, small firms that if allowed to develop outside of the context of an acquisition, would have been you know, the the
new Titans to take on you know at the time and even you know, Google and Facebook. So there was this belief, not a part that people forgot about it, and also that the law was not favorable or you know, useful enough to bring these types of cases, you know, to stop acquisitions of small firms that might develop into larger innovative competitors. And I thought that was a mistake. I mean a number of I think anyone who's practiced, I think realizes that's a mistake that the law is there.
These are difficult matters to bring because they're factual, and the facts are tough. You know, you have a you have an Instagram that has thirteen employees. You Facebook's acquiring them. Instagram is going to be a challenge to Facebook in a few years.
Ye have to predict. Nobody can predict the future when it comes to these.
So the ideas was to just go back and look at the law and look at the cases that we were bringing in this case, the FTC and and just say, okay, here's what we've done right outside of litigation, but through you know, the consent process, mostly what theories have we used, what theories maybe are missing? You know what, what what is there law out there that can be further developed?
What you know it was It was really just intended at the time, you know, to inform both policymakers and practitioner both of the tools that were in a sense were available and the tools that had been used, and maybe identify areas where Okay, maybe that's an area that we don't that we haven't been able to capture, we haven't thought about, or the law isn't clear. Whatever, you know,
what do we what do we do next? And so you know, we again we we didn't I didn't have a chance to sort of finish it as a as a commission project, but just sort of redid it, revised it, extended it, h and issued it just as a as a standalone paper. You know, there's there's no there's no confidential information in it. It just says, look, let's put things all in one place and use this as a resource to say, what are we doing, what are we missing?
How can we think about this going forward? And and of course you know, also recognize that acquisitions of small firms maybe you know, beneficial products get to maybe products get to market faster or get the market at all, get impolved, yeah, get improved. So you know, let's not let's not stop things that are potentially beneficial. You know, let's let's in a sense balance what's the harm, what's
the benefit? You know. So it was just it was almost as you said, it's a compendium, right, it really is. There's a lot of stuff and a lot of theories, and hopefully, you know, when they do merger guidelines, maybe they highlight some some things that could have been clearer
in earlier guidelines. But but you know this, it's hard now, I think for people to say, you know, we have to do something new, totally new, right, because this I think includes somewhere near one hundred cases of potential competition Nason competition or something similar where the you know, the Commission just you know, protective future competition. Uh, you know, and it's it's a it's this constant part of the Antichrist, you.
Know, it is, and I think there's a lot of focus on it today by the FTC and the Department of Justice too, when they're looking at these new mergers that are getting proposed because I think there's a little bit of trying to make up or the lost time right past regrets. You know, you mentioned Google and Facebook.
You know, I think there are these regrets about having cleared Facebook, Instagram, and Facebook WhatsApp and having cleared Google Double Click, maybe Google YouTube, and so you know, obviously we saw this kind of in play recently because the Federal Trade Mission did try to block well, they at least sought a preliminary injunction right to block Meta from acquiring a small virtual reality company called Within that makes this fitness app. And Meta wanted this fitness app, and
it was one of these potential competition theories. I mean, honestly, the first complaint it started as just a plain old horizontal deal. They said the two companies already competed. I they sort of pulled back on that, which I think was a difficult thing to try to to try to prove and show. But they did say that Meta would have been potential competition had they not bought the entity. Now they lost, but it was a failure on proof.
It wasn't a failure on the legal theory, right, And I think the FTC kind of seeing that as a little bit of having lost the battle, but maybe won the war. I mean, what do you think about that decision?
So, you know, as it all things yes and no, right, right, I mean, I agree they lost on the facts, and that's I think it actually was unfortunate they went forward on what appeared to me such weak facts because it could have affected and I think it did affect, you know, whether they sort of won or lost on the on
the law. So here's you know, my sense is they're claiming victory or some sort of victory because the court accepted the idea of a you know, potential competition doctrine as as a standard part of sort of Section seven merger law. You know, I don't think that was ever
in doubt, understand anybody who practices in this area. They also got the court to except that, you know, the the evidentiary showing of future entry by in this case meta you know, only had to meet sort of a reasonable probability standard, which is the standard of Section seven cases.
But some cases in the late seventies early eighties adopted a higher standard of proof, something like clear proof, which I might uh aligned with, you know, beyond a reasonable doubt type type of thing, and and that that type of standard you know, clear uh, clear probability, clear likelihood. That's pretty high, right, because whether you enter a market or not uh as a as a business, you know, is often not so clear, right, you know, you have
counter countervailing influence. So in that sense, the agency won. But but and here's where I think they really did hurt themselves, and hurt in a sense of the cause. If you're interested in this as an agency, reasonable probability, the court said, is well north of fifty percent. And
that's pretty damn high it is. And the agency itself, I think does not actually use that standard when they're bringing their own consent order right when I would my goal, you know, in a as a as an agency person, was to get some case law or even guidelines clarification that said reasonable probability was in fact well south of fifty percent. And I you know how you measure these things. Who knows, but that you know that that we would
accept significant uncertainty. And the court, both in this metal within challenge and in the most prior recent challenge that the FBC brought, you know, accepted, you know, more likely than not or well north of fifty percent, and that that is going to be a problem.
Yeah, I think so, And I think.
If they had better facts, the court might have thought harder about, you know, the potential magnitude of future harm or even you know, just does it really need to be above fifty percent? You know, you struggle with the facts. You know, you you make rough cutts, and you know, well, north of fifty percent is pretty high. I think in anti trust.
Well, I think so too. I mean, I think that would be a very difficult thing to prove, especially if you think about the kinds of documents that are probably coming out in the evidence. Businesses talk about ideas all the time, they throw ideas around, they share them, they think about them, they develop them, and they go away all the time. And how to prove that, no, this was really going to happen. You have to be well down the road in introducing a product to be above
that fifty percent. But let's talk about one where maybe I mean, I don't know because I only can see what's publicly available, but maybe the evidence is actually a little bit stronger. And that's a pending deal before the Department of Justice. I asked you about this earlier and whether you wanted to talk about it, and it's the Adobe Pigma deal. Again. I've researched this deal, and what struck me is the second I started to Google and
look for information about it. The first thing I kept seeing was that Bigma was this new, scrappy company that was cutting into Adobe's market share, right. And if you see that, it's just jumping out at the page at you. And then you see that people say Adobe way over paid Pigma. You add that to it, which looks a little bit like the whole Facebook Instagram situation way back when,
or WhatsApp. I wonder, now, we don't know what the evidence is really going to look like that will be before a judge, or that the d o J is looking at, But in my mind, it seems like that might be a stronger case.
Well, I look, I think that's right. I think that's right. I don't you know, I won't be careful about talking about specific facts when neither of us have the underline record, But I agree that looks it looks stronger, it looks more poor. You know, to Adobe, you see of actual or there appears to be some actual effect you know, of of their of their entry. You just didn't see that in Metal Within, you know, in in Meta within it was a little bit of a you know, Meta
Meta has these resources, they can enter any market. Mark Zuckerberg is interested, you know.
In a lot of things they can do right.
But but you know, so here I think it's a little different, and maybe I'd align it with uh, you know the visa plaid case DOJ brought in the Trump administration. You know, there was just it looked like there was more evidence of a focus on on the newcomer, the upstart, uh, the business model and seeing you know, some takeaway of of share or customers. You just you just didn't have that in the better and you know, it was it
was just too speculative. It was you know, I don't I don't like to be critical of the agency, even when you know you could be critical because you know, you're when you're there, you're you're trying to put you know, develop the laws. Sometimes you know, you take a risk. But but that that seemed almost preordained. You know, Facebook wants to do a deal. Well, we don't like Facebook. Uh,
this is the one in front of us. We better we better attack it, and you know, because otherwise we're gonna have some you know, some explaining to us to why. But I you know, I think it was a mistake just you just didn't see the evidence that you see in that. Potentially you've see in these other deals where products are further along or they're more in the fourth folcus, we see that, so I you know, they they may get a better result. This is still going to be a.
Hard case, A hard case, absolutely. I mean, as you said that over fifty percent standard is really tough, and it is. I think that is going to be a hard case. We'll have to see what happened. I mean, there isn't a suit yet. It's still an investigation, so we don't even know that the Department of Justice will The news has suggested that there's been speculation, but we'll
we'll have to see what happens there. I want to move on to another topic because I know that it's something you want to talk about, and I think it's really interesting, and I also think it's something that investors are not paying enough attention to. And that is Section
five of the FTC Act. And so you know, we have a lot we have non anti trust folks probably listening to this, and so why don't we at least start by why don't you talk about what Section five is, what it does, and what's going on here?
Sure, so, you know, we've been talking a lot about the FDC, and the FDC in fact, is not enforce the Sherman Act, but it enforces Section five of the Act, which prohibits unfair methods of competition. It also enforces the
Clayton Act. But but Section five is believe, correctly, given what the courts have said, you know, to be broader than the Sherman Act prohibitions and arguably broader than the prohibitions of the Clayton Act, including the anti merger provisions, and so to the you know, some people believe the law has developed over the past forty years in a way unhelpful to plaintiffs, and the agency under new leadership has decided, I think, to reinvigorate Section five law as
a way around the development of the law in the development of Shermanac law and Clatenact law. Right, So, for roughly forty years, the FDC enforced Section five in a manner generally consistent with the other anti trust laws. But that was a choice, right, It was a policy choice because of concern that too aggressive enforcement would chill pro
competitive conduct. Well, you know, the new folks differ with respect to what conduct should be legal, what conduct should be benefit should be viewed as beneficial, and have decided to instance, reinvigorate Section five law. They've adopted a view, a policy statement of Section five that makes clear that it is distinct and separate from the Sherman Act or the Clayton Act, that it allows them to attack and prohibit conduct that does not meet the requirements of Sherman
Act or even Play Act type cases. So this is a to me, this is a end run around. You know, the development of the case law in the last roughly forty years that has focused, I think appropriately on not only the harm right but harm to competitors. But you know, let's say, where's the harm to competition? You know, what
are the benefits of this conduct? And they just through this policy statement, you know, arguably throw all that development out and return to what I believe is you know, nineteen sixties, you know competition law, you know broadly defined and say all these things that you know, the course have decided we're not harm full under the Sherman Act. Well, we don't need to meet those standards. We're going to show you they're harmful under some other process that turns on in a sense, exploitation.
Yeah, and I want to emphasize why that's really important to big business because in my mind, so I've been writing for two years. You know, a company like Amazon that's had all sorts of criticism right about its conduct, Well, you know, I think it's pretty safe. I think it's pretty safe because under the Sherman Act. Well, it's just not clear that self preferencing is an anti thread, that that's a theory that that's an anti trust harm. Hey,
it's really hard to challenge. Let's say, most Favored Nation's clause are predatory pricing, the things you hear critics talk about. And I keep saying that. But then all of a sudden, here comes this policy statement on section five. And you know what, that changes everything because I see the lawsuit against Amazon being under section five, and now all of a sudden, the FTCs made it a lot easier to actually find liability in these different actions that Amazon allegedly
has undertaken that the FTC doesn't like. And and merger. It affects mergers too, right because you can say, well, the merger may not violate the Clayton Act. But you know it's unfair under Section five. And now all of a sudden, the FDC can really go after anything it doesn't like.
No, I think that's exactly right. And you know we've both we've both read about lawsuits, you know, in the pipeline against Amazon. Sure, and I agree with you. They're gonna you know, they're not going to be monopolization case. They're not right, They're going to be Section five, you know, exploitive coorse unfair.
You know what did Christine Wilson say? It was just a string of adjectives exactly.
I mean it's always been a string. It's always been right, which is why they got away from it. So that's what that's what you're going to see. And uh, you know it's going to be interesting. I assume they're going to bring in their administrative system so the Commission can write an opinion about you know, its interpretation of its governance Statute and then and then you know, try to get that adopted, you know, buy an appellate court. Right.
But you see, that's that's the lynch pin. I mean, that's you know, I look at this and I think it's so long as it's a defendant like Amazon that has the time and the money maybe in the wherewithal to stick it out. Because I want to lay out again the way the system works is if they sue internally in their administrative system, it's their own administrative law judge that makes sort of the trial court decision, and
the first appeal goes to the commissioners. And that's where the commissioners get to do what Bill I'll just describe. They can write their own they can do whatever they want, whether the alj goes against them or not. They can reverse, they can write the opinion they want. But now the defendant can go to federal court. And you know, that's where I think things could change a little bit.
Well, I agree, I think. I mean, look, that's what did happen in the as you know, in the late seventies, early eighties. So it brought some expansive Section five cases, and the appellate courts said, you know, too too far, you know, not enough evidence, too far of a legal theory. And that's in fact, you know why why the agency sort of pulled back, you know, because it didn't have a clear principle of what what what's going to fly and what's not going to fly?
And I think there still isn't a clear and there is, Yeah, there just isn't exactly. I mean, it's the whole. I'll know it when I see it, right.
And the interesting thing is, so you know, look, in the ordinary course, they get some different they get some difference in interpreting their own statute. But over the last forty years we've seen the courts be less willing to grant deference to agency interpretations of their own statutes. So I think the combination of that development or administrative west side and the you know, now clear divergence between sort
of Sherman Act or anti trust law. From this view of unfair methods, the competition is going to hurt them, right, I mean, you know, it's just too different for basically, you know, it's a different analysis for the same conduct in part depending on which agency pursues, right, And that's that can't be good.
It doesn't, it doesn't, It isn't good, And it provides no guidance to businesses as to what they should and shouldn't do, what what conduct is or isn't legal going forward.
You know, there are some other things we want to talk about too, and I want to move on because, you know, I feel like we're there's so much to talk about, and there's a lot of stuff that's kind of under the radar, and I feel like that's what we're talking about, and I'm glad we are, because these under the radar things that are happening will impact publicly traded companies and so generally, just as a general matter, both the Department of Justice and Federal Trade Commission are
just erecting a lot of hurdles to completing deals. You know, included in those I think is no early terminations, which you're going to talk about in a second. I think there's sudden distaste for private equity buyers, which I know you've got some opinions on. So let's move into that and what's going on there.
So let me let me say one thing just to tie off what you said. Sure, if they're successful with this approach on section five, and in some of these cases, you know, you're looking at a turnback to an m and a environment that looks like the nineteen sixties and
not the nineteen nineties. Right, we're turning the clock back not a few years, but decades, And you know, other people, deal, lawyers, you know, investors, They're going to have a better sense of what the nineteen sixties look like than me and you. But that's the kind of change we're looking at.
You know, you know, blal in so many ways, our countries moving back to the nineteen sixties, not just anti trust.
Yes, so honest, yeah, let's.
Talk about let's talk about what's happening on.
This other stuff. Right. First, the agency not only are they in particular the FDC, but this is true of both agencies. Right, Not only are they trying to make changes on the substance of the law, right, they are trying to make changes in the process or procedures they follow right as a means, I think right of just throwing up hurdles to in particular transact. Right. And that's
this idea of you know, heart Scott. Right, most of us doing this and listening here, know that you know, most deals used to that require a heart Scott filing notifications of the government would get cleared in about two weeks. They were quickly. They see there was no issue. Well, the truth is that that's still true today. Right, most deals don't have issues. You don't see a lot of
cases coming out of the agencies. But but they've decided just to stop, particularly the FDC decided to stop granting early termination of transaction. And part of that, you know, they justified that we don't have enough people, We're so busy, we just can't do it. Part of it is I think, well, let's see, maybe someone will knock on the door on day twenty nine in the waiting period and tell us something we didn't know, So we want to just use that whole period well, or.
Walk away from the deal because they don't want to wait the thirty days, yeah.
Yeah, or just let's put some hurdles in the way of things, you know. And some of this too extends to you know, hedge funds and private equity funds who really are doing often doing acquisitions, whether partial or full, you know, for reasons not at all related to competitive overlap, but but you know, sort of good investment opportunities if they if they get in there, and and you know, instance,
fix up companies who have gone astray. Right, Most private equity firms my recollection, are not buying highly successful businesses, looking at businesses who have hit some kind of rough spot maybe who needs some capital, maybe who needs to get out of the public markets maybe who needs some new management, you know, to turn them around. And the agency uh doesn't have that perspective.
They not at all.
They think these guys are you know, vultures, laying off people, lowing companies up with debt, you know. And and they, yeah, they don't they don't think about the Okay, what was the butt for world, right, It wasn't that. You know, these companies continue as you know, titans of industry, they fail, you know, and and private equity, you know, sort of turns around some percentage of them, right, and has the incentive to do that. Uh. And they're just you know,
they're just uh slamming the door on these guys. You know, they're they basically don't want to use them as rescuers of divested assets. They you know, they they just have they just have a different perspective private ACA.
Yeah, you know. And the crazy thing, it's not just different, it's a complete one eighty because if you go back five or six years, you'll find articles by FTC folks talking about how great private equity is as a buyer because oftentimes it represents new entrant. Yeah, right, And that's a good thing.
New entrance, new entrants.
New money, new investment, new management. Then that's a good thing. And so they talk about how they're happy, and they prefer that. I know, when I was a lawyer, I think most of our divestiture buyers when I worked on deals were private equity and the agency was perfectly happy. And now all of a sudden, absolutely not. So it's just and that puts up hurdles because sometimes the only buyer out there is private equity because the act that the strategic buyers have their own interest problems.
I mean, it's a very strange thing. I mean we I think, as you know, we want to see active management of companies. And I got to tell you from my experience, there is nobody more active than you know, Apollo or Blackstone. I mean right right, you know, you know they get in there and they want results and it's you know, it is it is what you want
to see in in companies that have grown stagnant. You want people who you know, we're going to turn this company around, We're going to make a profit, We're going to put it back on them.
And which is which is supposed to be good for inchant?
I mean you think about the the statism of you know, Japanese companies for example. You know, again not the data, but you know remember the fear in the eighties about Japanese company as well. You know, they're they have a different model there. You know, it's not this dynamic innovative approach.
You know, creative destruction. And where's the PANM been in the last forty years, right, you know Europe, Right, you know, the economy is dynamic here because of this idea of you know, getting in, you know, letting go of assets that aren't working, but but but also fixing up the ones that you can and taking a risk. And you know this is this is just a horrible, horrible chain. You know, it's protective. It is literally protect the weaker, protect the less innovative company.
Yeah, it's a very European approach, I think. You know, now we're running out of time, but there's just one last talk, a big topic because we're talking about private equity. You know, we do have the Department of Justice coming down on some private equity entities under Section eight. We're now we're talking about another law, but I'll talk about what's going on there.
So this is an interesting question and I haven't. I mean I have somewhat different views on this, I mean more aligned with the OJ. But but first of section eight, the klit NAK prohibits interlocking director so prohibits, by its terms, a person from serving as a director of two or more competing companies. Right, it's an old statute back from the nineteen.
Fourteen really dormant, the dorm but you know.
Created in response to the trust that developed, you know, back back then. Now my view, you know, I it comes comes from tim Uorris, comes from something Timuarrris told me. He said Bill Baxter, and Bill Baxter was a giant. And then I trust law, you know, fixing it in a sense in the Reagan administration, he says, Bill Baxter
said that section eight is the most important anti trust law. Right. Interesting, I said, okay, if Bill Baxter thinks this, then well I got to think part about it, and you know, and I agree, Right, why do you want a person sitting on the board of do competing companies where there is at least the temptation to share information or to share directors? Right now, the agency, the DJ has pursued this in its most broadest scope, right by looking at I think two things where the law is either not
clear or could use some improvement. First, because look, we don't see situations where the same person is sitting on the board, but we see situations where you know, the same entity of private equity. As an example, private equity entity has it's you know, partners sitting on the boards of competing companies, and so it's not you know John Smith on both but it's John Smith and you know Jane Smith, and look they work down the hall. We think this is the same person, right and you know,
there's some support for that idea. My experience is that private equity firms are very sensitive to this issue, you know, and aren't you know, directing companies through through their individuals. But at least it's you know, quasi sensible, I think,
or at least something to be sensitive to. The Other thing I noticed from the DJs actions, though, is they have a very potentially a very wide definition of what is a competitor, right sure, And and that I think is a problem because you know, you can be you know, pharmaceutical companies as an example, right is it? You know, is every pharmaceutical company a competitor because they do pharmaceuticals. No, right, they do.
Different certainly not purposes, they do.
Different things, right. So there, I think this potentially expansive definition of you know, who's a competitor is hurting right again again the same reason you want private equity. Look, private equity goes to investment companies. They put people on the board to manage that investment. And if you're cutting them out of managing their investment, you know, I think again that leads to the you know, some some loss of dynamoe right now, you know you can get around it.
You can. You can find someone like minded and sponsor them for the board, and you know, maybe you get eighty percent or seventy percent of what you would have got. But you know you want. The way I put it is, you know you want you want your mouth where your money. You want you want to be able to say what's going on here, move faster, you know, decide whether we're going forward or not with this product, you can serve resources. So I think the agency again, and you know they're
not bringing these cases. These are very simple cases to win if you're correct on the fact, right, you can you just cannot be on the board of.
To compete they're just pushing people off.
So they're just basically pushing people off boards, right because you know, I mean private equity doesn't want to get into litigation. Yeah, you know, and I think but again I think it's a it's a it's a problem. And now, you know, you saw it ten years ago, the ten fifteen years ago, the FTC did a little bit of this in the text space, right, and and it was
sort of legit. You know, you might have had somebody on the board of Google and Apple, well you know fifteen years ago or twenty years ago when they got on the board, they weren't sort of in the same space. Over time, it looked like they were moving into the same space. And so okay, you want to be sensitive to the same person on the board, but you also want to be sensitive to, you know, removing people who are going to you know, direct these companies, you know, to produce.
Where it does more bad than good, where it may be actually beneficial to have that person.
It's just the hostility in a in a way that I think is unwarranted. But you know, like I said, I agree, I agree, I do too that you know, if Bill Backs said it, I got a seriously, then me too. You know I got app right profile.
Well, you know the thing is, I think we're out of time, so you're really lucky you don't have to answer our silly, stupid question. But we'll do this again and I'll make sure next time you have to answer the silly stupid.
Oh answer it.
Well, no, we don't have time. We're done, so all I can stay stay tuned for Bill all to answer a silly stupid question down the road. And thank you very much. I think that was super interesting.
It was fun. I hope it was fun. But the antrest world may change, you know in two years. I think so too, and that's gonna you know, your investments today may be affected by that down the road, you know, bad or good or now yeah yeah, well you know, potentially.
Bad, potentially bad. All right, well, thanks so much.
All right, thank you, thank you everybody.
H