Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
And I'm Tracy Alloway. We got a special episode for listeners today.
We do, a very special episode. We had a live event over in Washington, DC. It was a very cool event.
It was really fun. It's been a while, you know, we do live events, we do live recordings from time to time. It's been a while since we like put out a full evening of programming, a full show if you will. Also our first show in DC and our first live public show in DC. We've been wanting to do one for a while. We had a bunch of great guests. I actually really like going down into DC.
Yeah, and it was a great crowd as well. I think we have the only audience that would devote two and a half hours on a Wednesday night to listening about the Jones Act and antitrust policy.
Yeah, that's right. It was sort of a late night too. It was sort of awkward timing because it was sort of dinner, so people had to skip, but there was popcorn included with the tickets. It was popcorn. Anyway, so we're going to release all of the conversations that we had on that evening as episodes, but to start, we had a conversation about antitrust. We spoke to Andrew Ferguson, he's the new chair of the FTC for the Trump Administration. Obviously there's a lot of curiosity about how much continuity there may or may not be between antitrust under the Biden Administration, under Lina Khan who we've also spoken to on the podcast, and what this new era might look like. So it was really interesting to sit down with him and get a better sense of it.
That's right, and it's got pretty interesting implications really for multiple reasons. I mean, if you recall, one of the themes sort of when the election happened was a lot of excitement on Wall Street because of a perception that there would be a lot of mergers and deals would get a green light, that they would be going forward, the new era of dealmaking activity. Incidentally, the new chair Andrew Ferguson kept the merger guidelines that were put in place under his predecessor, but there 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. MAGA M&A was my suggestion, I think, and he took it. So all right, here it is, our live conversation with the new FTC Chief Andrew Ferguson.
Thank you so much for coming in. I'm really annoyed actually because one of your lawyers gave me like the perfect first question for the podcast today. I was like, oh this is amazing, and then you sort of walked it back. I don't exactly know what happened, so that dinged it a little bit. But anyway, apparently in court today, one of your lawyers said we need a pause for this case against Amazon because we don't have the resources and we can't pay for transcripts. I was like, oh this is an amazing first question for Andrew, and then you walked it back. 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 looks like going to be a sort of vigorous new antitrust enforcement approach?
Thank you for having me. A lot to unwrap there. Yeah, first on constraints, no. I've got the people I need to protect Americans from monopolies, to protect them from fraud. And you know, no, I don't think anyone in Washington has taken sort of the threat that big tech poses to American consumers more seriously than I have. When President Trump announced my appointment, this is one of the things he said he really cared about, was taking the threats that big tech posed to American consumers very seriously. There, I will throw every 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.
Can you explain what happened today?
I think a lawyer had a bad day in court. He was wrong. He filed a letter almost immediately after saying I was wrong, we don't have resource constraints, and we are ready to prosecute this case on whatever timeline the court wants for us. So we're ready to go.
Okay, but presumably there is this broader drive to streamline some agencies, yours included, at the same time that you have these really lofty targets that you're trying to reach. I just saw the very good Bloomberg story out today about the Microsoft probe. This is a huge company that's going to take a lot of effort, a lot of resources. Again, presumably you're doing this with less resources than you had say a year ago at the FTC.
I would not presume that. Look, the Americans voted for major reform. President Trump ran on major reform and he's giving it to them. And government should not be bigger than is necessary to deliver the services that Americans need, to protect Americans from the problems that Americans have. The FTC, we are engaged in the streamlining process. The goal is to maximize Americans' returns on their taxpayer dollars. 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 fraud and 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 with the FTC.
Okay, so what does Trump actually think about antitrust? Because he has a lot of opinions, sometimes it's hard to get a handle on what exactly those opinions are. Sometimes he seems to contradict himself. You know, a lot of people think he's pro-business, but at the same time he has talked about antitrust and competition and the power of the big tech platforms, as you just mentioned. What did he tell you about how he thinks of all of this?
I think President Trump is pro-innovation, pro-growth, and in that sense he is pro-business. But I'm going to push back a little bit on the way you frame the question. I don't think that there's any inconsistency with being pro-business and favoring vigorous antitrust enforcement. Those two have to go hand in hand. And look, I, like most Republicans and I think like most Americans, am pro-free markets. Antitrust is how we keep our markets free. Markets that are infected with monopoly, that are 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 I, you know, I think President Trump is pro-American markets, he's pro-business, but that is easily reconcilable with favoring vigorous antitrust enforcement. And President Trump, you know, he's been president for four years before this, you sort of have seen what President Trump's antitrust 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.
This is a live recording, so let's hold on, hold on, hold on. No, it's a live recording. It's a live recording.
President Trump spent four years as the victim of endless lawfare. He's President of the United States.
Yeah, all right, it's a DC audience, I get it.
He has spent the last several months picking people to in his cabinet or in agencies like mine who are focused on enforcing the laws as they are written and carrying out this agenda.
All right, let me ask you. All right, you mentioned streamlining the FTC. One way that you could imagine streamlining from a government's perspective is that we don't need an FTC. And obviously you have your counterparts at the Department of Justice. You yourself have talked about the sort of philosophy of the sort of disputing the premise of sort of these independent agencies. Why do we need two separate antitrust enforcement agencies?
So I think we can get to independence in a minute, but I think the FTC sort of adds value to the enforcement regime because it combines the consumer protection and the antitrust enforcement program in a single agency. And those two can cross-pollinate and they protect consumers more fully than, you know, just a singular antitrust enforcement necessarily would. And the, you know, the two missions sort of like learn from each other. The antitrust people when they're doing investigations, they can find problems that violate the consumer protection laws, and then the FTC can continue those investigations with the other side of the house. So I think there's some benefit to that. But, you know, there's also I think some benefits in certain circumstances to having multi-member agencies with people from both parties. I mean, look, if you have an agency that is exceeding the law, abusing the companies that it purports to regulate, it's helpful for markets, for courts, for litigants, for government transparency to have people on the other party pointing this out and saying it in dissents. Like, you know, I wrote 400 plus pages of dissents 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.
I know it's early days, but one of the things you've done so far is you said you were going to maintain the merger guidelines from the Biden Administration, and some people were really surprised about that. You said that you thought stability is good for enforcement agencies. I think maybe some people are confused because this doesn't necessarily seem to be an administration that is obsessed with stability or continuity. Walk us through the thinking there. Why did you commit to those particular guidelines, especially given that, you know, they got a lot of criticism from multiple sides of the aisle?
Yeah, so we've had various iterations of the merger guidelines dating back to the 60s, and then when the FTC and DOJ started doing it together in the 1980s. You know, we tend to have guidelines for pretty long periods of time. Sometimes there are sort of iterative changes made to those guidelines over the course of time, but a complete rewrite of the guidelines is relatively rare. And it happens, you know, we had the guidelines rewritten in 2010. 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 revamp is rare. And if you 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 jettisoned the 2010 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 we're yanking and rewriting, it's all the agencies are going to do, number one. Number two, the guidelines will become basically meaningless if they just are like one party's view of antitrust 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 in two-year cycles, they have to plan longer than that. And if you're 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 2010 guidelines, but they generally are relatively well aligned. They're built on case law, they preserve a lot of the principles 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 antitrust enforcement in the United States isn't the guidelines, it's the commitment of particular antitrust enforcers to following the law as it's 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.
So one of the things that obviously came up during under the last FTC chair, this idea of like, okay, there's more than the consumer welfare standard that should be evaluated. One nice thing about conceiving of consumer welfare narrowly in terms of price, well, people like cheap things, but also, you know, it creates a certain, it eliminates a certain subjectivity. You can plug, okay, this is what's going to happen to market share, companies, you can plug them into some economist model, I don't know if those models actually work or not, but theoretically spit out some answer, we get lower prices, and then it's like, okay, this is good or bad. When you start broadly defining consumer welfare, rethinking that, like, first of all, what does 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?
