Hi everybody. Mr. Chairman, Mr. Assistant Attorney General, thank you for joining us today. I'm very excited about this discussion. I want to start with a big question which is that there's obviously been a lot of talk about lobbyists and their influence in the way that deals are getting approved. So much so that there's a sense that it's almost malpractice not to hire one if you're advising a client on a deal. And I guess I'd ask you both to just address this head-on. Start with Assistant General Sephi because I think that's where a lot of this has been focused at the DOJ.
Sure. I appreciate your question and thank you for hosting Andrew and I here. Just to sort of answer your question, I mean, there's a lot of commentary about lobbyists, and I think it's important to note that lobbyists weren't created in 2025. They've been around for a long time. And I think when you're... I think the position, I don't speak for Andrew, but the position we try to take is we'll meet with anybody. If you want to come and discuss your matter, deal on the criminal side, whatever it is, we'll always give you an audience, but that doesn't entitle you to anything and certainly not entitled to outcomes. I would just point out that I was the, you know, criminal deputy for over a year in the antitrust division and, you know, you would think that companies and cos are under the threat of indictment and prison time and, you know, the theme of the criminal program under my leadership was incarceration. Obviously all those people can go hire lobbyists and it wasn't a problem. We put, you know, we increased the days of incarceration by more than 1,200% compared to the prior year. We doubled the amount of convictions. So, I think it's a juicy headline, but it doesn't really comport with the reality on a day-to-day basis.
Chairman Ferguson, what does it look like from your seat?
There's lobbying. It's Washington. It doesn't affect my decision-making. The president appointed me here to apply the antitrust laws and the consumer protection laws to the facts, consistent with the agenda that tens and tens of millions of Americans voted for in November of 2024. And that's what I do. So yeah, there's lobbying. There are lawyers who have a pitch on why something is legal or illegal and I hear them out and then I make up my own mind based on the facts and law. And I just don't... I get that the press enjoys the salaciousness of it. I also am convinced that part of what's going on here is that the press enjoys writing stories about people who in the last administration and administration before that weren't lobbyists because all the lobbyists were Democrats on K Street and now it's some Republicans and it's really fun for the press to write about. I get it. Just doesn't affect my decision-making.
You know, at the FTC and at DOJ, we have this tradition that's really old and I think important when the commission is about to take some action. If I'm bringing a merger enforcement case or a conduct case or a consumer protection case, we invite the parties to come in often with the clients, with the executives of the firm. Sometimes executives that I'm prepared to name personally in the complaint as a defendant to come in and pitch us on why we ought not to do what the staff has recommended that they do. And I think that this practice is super important. That's part of what process in front of government is supposed to look like. That has been going on for decades and no one has ever cared about this. That is just part of the process. And so, yeah, there's lobbying. It's Washington. It doesn't affect decisions and it doesn't affect outcomes at the FTC. I brought three merger enforcement cases last year. Was going to bring another one last week and they abandoned a couple hours before we filed the complaint. I brought a major conduct case. We've continued litigating major conduct cases from the previous administration. I took Meta to trial. I'm taking them on appeal. And I would put my consumer protection... the aggressiveness of my consumer protection agenda up against any FTC chairman or chairwoman in history. We returned $3.3 billion to American consumers last year alone. That is more than the previous administration did in four. We have taken this very seriously and all of the Sturm und Drang about lobbying is just for the birds.
And I'll just show no effect on the outcomes of the FTC. And I'll just add, by the way, not only is all of that accurate, but the press just makes them seem much more powerful and stronger than they are. I mean, we sometimes read these articles and you just laugh like, 'Oh, really?' So...
You think we're building up Mike Davis as a boogeyman is what...
I don't think anything. You can look and see what you're writing and just and see what...
Someone sent me a quote from a story about me a couple weeks ago where a lobbyist said, 'Yeah, we call him and we give him our shot and he tells us to go to hell.' And like, you know, I think my job is to hear out the arguments and then make up my own damn mind and do it consistently with the law and the agenda that the American people voted for in November 2024. And that's what I do every day.
And if there were a situation, I'll ask both of you where you thought that a clean reading of the law and the resulting concentration in the industry really merited a close look and the president said, 'Actually, I want this thing to go through.' How would you handle it?
Well, I mean, that's a hypothetical that neither of us have experienced. And I can tell you dating back from 2017, having served in his administration, people love to conjure up hypotheticals to say, 'What would you do in that scenario?' And those scenarios have never happened. What I would say is the same way Andrew did. I'm in this job to protect the division, to secure justice, and to promote the work of the Justice Department and my exceedingly talented staff. And if I think that a merger should be blocked or a conduct case should be brought, I'm going to bring it. And if people don't like that, then they don't like that.
But as you mentioned, you came from the criminal division. I had thought that I'd seen that 1200% number somewhere as I was prepping and thought it must have been a typo. It is in fact... What are some obvious places that you would be looking for antitrust crimes that should send people to prison?
You know, I think it's a great question. First of all, I didn't come from the criminal division. I came from the criminal program within the antitrust division. But I would just note that the issues we focus on are really like we said the kitchen table issues, agriculture, housing, healthcare. We just filed a case this morning. We're really laser focused on the types of conduct and mergers and other stuff that have a direct impact on everyday consumers. So you look at healthcare, it's like I told my staff today when I wrote, you know, I write a division-wide email to say this is a really great achievement and it's just a filing of a lawsuit. We obviously are intending to do a lot more than that. But what I explained to them is you are impacting the lives of everyday people, right? And so my trial lawyers, economists, paralegal support staff with respect to Andrew and the FTC are the most talented people I've ever worked with. And they have this awesome responsibility that they can change and impact the lives of everyday people depending on what they do, right? And so that's what they're focused on. They're focused on what's the, you know, biggest impact we can have and how often can we do it in all these different sectors. And so, I'm very proud of them and the job that they do. And they really, you know, do it with the utmost professionalism. I have sped up some of their timelines because I like things done, you know, maybe more quickly than they're used to. But, they've acclimated very well to my tempo.
And, you know, the criminal team does a lot of work on procurement fraud. They just secured in January a 34-count guilty verdict against someone, Jason Butler, who was submitting fraudulent invoices to the federal government. I think most impressive there is not just that the defendant was stepped back pending sentencing, meaning he was incarcerated before sentencing, which is pretty amazing for just a mere antitrust offense. But what was most important to me was the development of my staff. The three trial attorneys on that case got their first jury trial. You know, we had Eddie Lopez, our wage fixing conviction from earlier this year or last year, I should say. He was sentenced to 40 months of prison time. 40 months for a white collar offense. And, you know, my trial attorney there got his first opening in front of a jury. So there's just so much development going on that I'm so proud of. Even in Live Nation, that's for a lot of those trial attorneys, those are... that's the first jury trial they've ever had. And as I said to them, you're going to have that for the rest of your life. Nobody can ever take that away from you. So I'm exceedingly proud of all of them.
Well, let's talk about the Live Nation of it all. Not that antitrust enforcement should be reflexively responsive to public opinion. People really don't like this company and the problems in this market have been resistant in the past to structural remedies. O for two, I think. Why is this settlement good for the American people?
So, I would just stop you there respectfully. It's not that they're 0 for two on structural remedies. They're 0 for two on behavioral remedies and prior consent decrees. The reason that people should be excited about the settlement is because we are opening up markets in a purposefully opaque industry and allowing competitors to enter and having those competitors enter and engage in competition is going to have a downstream effect for the average consumer and artist of affordability, of being able to sort of explore creatively in a space that was previously blocked to them. You know, the primary ticketing structural relief that they got, I think you'd say it's quasi-structural. That's going to allow people to say go on an app like Spotify and book tickets for concerts in a way that they previously weren't able to using Ticketmaster's backend technology. I think on the amphitheater divestitures that were controlled and owned and operated by Live Nation, I think that's another great win, right? Like we are opening up their control. I thought of all places, it was really fascinating. Slate.com had a piece titled about our settlement, 'Ticketmaster's grip on the market is now weakening.' So I think it's a great outcome. I said the other day, I think I told my staff, you were able to get more relief than anyone in history ever has against Live Nation. And the three sorts of commentary that I've heard criticizing the deal are from three groups. One, people who have never got relief from Live Nation ever. Two, people who got relief that's much worse than the relief my team got. And then three, the people who blessed the Ticketmaster-Live Nation merger who are now upset that we didn't undo the merger they approved. And so from that group, the general message is you didn't clean up our mess, you know, efficiently enough. And so but I tell them I say look you as a trial attorney as an economist as a paralegal here you have an awesome responsibility and you the American people rely on you every day and you don't have the vacuous luxury of a consequence-free profession. We have to get it right. We don't have the luxury to get it as wrong as often as a lot of our critics do.
Chairman Ferguson, you know, the FTC was long considered an independent agency. I think your view pretty clearly, they're telling me if I'm getting it wrong, is that it is answerable to the executive branch. The Tunney Act is getting a lot of renewed attention. And it applies to the DOJ and not the FTC for exactly that reason. There's a bill from Senator Klobuchar to change that. Should the FTC be subject to the Tunney Act?
Look, let me back up to the first part of your question. We are answerable to the president because we are a part of the executive branch. There's been an incredible amount of talk about the independence of the FTC. There's just two things I want to say about that. The first is the idea that the FTC was in fact independent of the president has not been true for an exceedingly long time. I just did an event with Tim Muris who was the first chairman of the FTC in the George W. Bush administration and he began by asking about a similar topic and he said, you know, it was sort of a poorly kept secret in Washington that the FTC of course was answerable to the president. I was at the White House meeting with people all the time. My predecessor in the Biden administration went to EO signings and got pins at them and those EOs were express instructions to her to do particular things, issue particular rules and bring particular types of cases. If we're independent, that's crazy. It's not crazy because we aren't independent. And the second point is no one should want me or the FTC to be independent from the president because that means that I am a little king in my tiny little... If I don't answer to the only elected person in the executive branch I answer to no one including none of the people.
And you know, when President Trump took office in 2017 and the word deep state started to take off, when I worked on the Hill, I heard a fair amount of skepticism from sort of older Republican senators about the existence of the deep state. And I can tell you that if an agency believes it is independent from the political system at all and that it answers to no elected person in its decision-making, it is the deep state because it's just going to do what it wants. And what it wants has nothing to do with what the American people need. No one should want a group of lawyers, economists, staffers, etc. to sit in Washington and make up their mind about what's best for America without having to answer to anyone who actually goes to the American people and has to win an election. It's not Democratic. It's not Republican. This is just getting the FTC to where it is supposed to be. And I have zero doubt about how the Slaughter decision is going to come down in the next couple months. What was the second half of your question?
I had it all loaded up and blew it out. No, if that's the case, then should it be subject to the Tunney Act and ensuring that settlements get a... you know, it's easier for states to challenge as you know there obviously are on a couple of fronts now and there's a little more independent review.
So I don't think so at all. When we do an administrative settlement, we have to put it out for notice and comment. People get to weigh in on it and I consistent with the APA have to take comments into account before finalizing the settlement. So it's the same process by which agencies would issue gargantuan rules that affect the lives of tens of millions of people. And then on the consent decree side, judges don't have to approve consent decrees, Tunney Act or no Tunney Act at all. They often do to be clear. I mean I've litigated plenty of consent decrees outside of the antitrust context, but they don't have to. And more importantly, the Tunney Act was part of the sort of anti-Nixon witch hunt that followed Watergate. Sort of the extreme fervor of we got to separate the whole government from the presidency. It led to the Independent Counsel Act, which now both parties, thank God, agree was one of the stupidest, least constitutional ideas Congress has ever contrived. There's no issue at the FTC that the Tunney Act would address. We have legitimate settlements that are going through because they are good and defensible. All of which have been subject to a lengthy notice and comment period. And we're bringing and winning cases. So, I think applying the Tunney Act to the FTC is a solution in search of a problem.
Assistant Attorney General, when you, you know, did settle Live Nation, I think there's 12 states that are pushing there, maybe even more.
It's more. I would also say Acting Attorney General, but yes.
They just sued the other day on another big deal. I guess how do you think about the relationship between the state and I should say they are not all blue states, right? Tennessee is very mad about this for obvious reasons with who they have in Nashville. How do you think about where the states pick up when the federal government decides not to do something? And if they end up litigating and get to some more dramatic outcome than you got with your settlement, what does that mean for the DOJ's credibility?
So, it's a great question, I think, and I'm just preparing you for a lengthy answer. So, as a beginning point, well, there's a lot of time on that clock, but as I said that to a judge once, he did not like that. I'll tell you initially, it's very pro-enforcement to have states eager to enforce the law. That's great. And I have a great relationship with the state AGs. They can call, they can say whatever they want publicly. I'm not going to respond. I don't really care. Any state AG, even the ones who criticize me or my settlement that I'm very proud of. If they call me tomorrow, I'll answer because our job is too important to get into some public back and forth. And if they want to say something, they can come say it to me and I'm happy to discuss it with them.
On Live Nation, I said this, you know, we were picking the jury. My team was in New York and I was meeting with my staff and the staff of the settlement committee that the states are a part of and we were discussing the different options and whatnot. And as I said to them and nobody disagreed with me, I won't get into the specific details of our conversation. I'll keep that private. It's unclear to me how if the federal government has vindicated its interests via settlement and the states continue some select some portion of the states continue to litigate their case how does everyone but Live Nation not win in that scenario and it's a really fascinating dynamic because if you look at and you know Andrew was talking about the history of the FTC the history that some people are trying to sort of recreate is completely at odds with how the Justice Department operates.
So look at every US attorney's office look at other components in the federal government if there's a case right if there's an incident that happens a white collar blue collar whatever states get involved and they first they go first they investigate they go to trial they get a conviction if the federal government decides as it does at times that there's an overriding interest that they would like vindicated they then get a waiver it's called the Petite policy and then they get an express waiver within the building to show that there's still an overriding interest necessitating the federal government to bring its own case despite the fact that the states have already tried it. So that's the way the rest of the department operates. And it's funny to hear these remarks of well if the feds don't get involved we will. My reaction is great. I mean, if Andrew's staff told my staff, if Omid's not going to get involved, Andrew will, the first call I would make is to Andrew and say, 'Please get involved so I can focus my resources on something else.'
And I think what's lost in the sauce on enforcement is the easiest thing to do is just file a complaint. File a complaint, file a press release, congratulate yourself, and not think about the rest. But when you approach the job as an actual litigator and an enforcer, you don't end at the complaint. You focus on going all the way to trial and to settlement and that's very labor intensive. You have to work on motions and lemonade. You have to do depositions. You have to go through a whole discovery process. It's a lot of work to it, right? And if you want to be prepared and show up and win at trial, if that's your goal, there's a lot that goes into it. And so I am very hopeful for the states. I think, you know, they're going to seek to get the remedies that they want. I think some are attainable and some may not be. I'm not privy to that process anymore. But look, the states have very talented staff. I mean, I work with their staff a lot and I told you earlier, right, like I really believe in staff development. I always want my team getting as many trials as they can, as many court appearances and many depositions. And my heart bleeds for the state staff because in Live Nation, the state staff are not being permitted to try that case. That's been contracted out to a law firm and the law firm is trying it. So, my heart bleeds for their staff because their staff should have the ability to develop and they're not being given that chance. So, I hope they...
You chose not to give your staff the opportunity to take that one to trial.
That's not true. Actually, they did try the case. See, but I'm so glad you asked that because that's a reflexive answer that kind of betrays any sort of understanding about trying a case. Respectfully...
I am the only non-lawyer.
I just... I'll just say we picked a jury. We started a case. We did opening statements. We examined witnesses for a week, but this and this is what happens in litigation, right? You've now moved the goalpost. So it went from they're never going to try that case to we got a week of trial and we got a settlement on terms that were previously unavailable to us. But for you, and I mean you in the global sense, it's not enough. I now needed to try it for two weeks or three weeks to satisfy sort of this amorphous standard that you've created for what constitutes a trial. I'll tell you, I had so many trials where the judge was picking the jury. He put on the husher and he said to the lawyers on both sides, I want you to hammer out a deal. And so in front of the jury with the husher on, we'd have to go and figure it out. And any lawyer knows the trial, the stat begins when the jury is sat and the openings begin. And that's what we got a week of it. So there's this idea that some, and this is why I have to tell my staff, don't listen to comments like that. Nobody can ever take this away from you and I just don't hear those comments from real litigators.
If I can just poke it one more and then I promise you we'll move on.
You really want to? Okay.
The DOJ lawyer on that I think said something like your honor I saw the terms when you did and so...
So let me... that's another great question. So David Dalquist is fantastic. I talked to him every morning and for the week of trial that you say didn't happen, I talked to him every single morning and said, 'Here's what's going on. Here's how we're doing.' David was asked a very specific question about a specific aspect of the settlement. And I'll let that be what it is. But, you know, and I think Judge Subramanian was fantastic and has been, frankly. But I will tell you again a lot of the commentary betrays a lack of real understanding of what's going on. The Department of Justice for a very long time, especially in the antitrust division, bifurcates trial teams from negotiating teams. The firms we go against do that as well because you want your people focused on the trial so they can be ready no matter what happens. And you want your settlement team, you know, inside the building, they call it the war department and the state department. And so the State Department are people that negotiate and they're not the ones in court making those arguments. So I could see to an outside observer not familiar with actually practicing cases and trying cases that that seems odd, but that's just every day. And so I am very proud and my career staff would tell you that we had senior level career staff on the economist side, the section chiefs, the chief of the section, the different senior career members all plugged into this process. But again, the goalpost move, it's now not enough for my senior career level people to be at. I have to satisfy sort of all these different again amorphous targets.
All right, Mr. Chairman, let's... I'm sure equally spicy. We got to talk about the HSR form. What is the state of play there? What's your plan in the interim? And I suspect this room is like a fair amount number of in-house people who do not want to pay for a bunch of billable hours at law firms and then a bunch of people who would collect those billable hours. So how do you think about that?
So people in this room are probably familiar enough. We had roughly the same rule from 1978, the year after HSR Act's passage, until 2024. The previous administration put out an NPRM on HSR which was, you know, insane. There's no other one-word way to describe it. My former colleague, one of my favorite people in America, Melissa Holyoak, and I said, 'All right, well, you know, here's what our dissents will look like,' and then negotiated for some time, eliminated most of the worst stuff. And I wrote like an 18- or 19-page concurrence in the final rule defending it. As you all know, the rule was vacated by a district judge in Texas, and it is on appeal now, but because of the vacatur's operation, the pre-2025 rule is now in effect.
A couple things on that. One, I said in my concurrence that there are parts of this rule I did not like and would scrap if I had the chance. Two, I said that it is very unlikely that this rule in its current form will forever be the rule and that the commission ought to frequently assess whether the rule is achieving the balance we want to achieve, which is giving the commission enough information or the information necessary to determine whether a transaction is likely to be anti-competitive without imposing more burden than necessary to figure that out. But that as the rule went forward in operation, we would probably learn that some parts of it were not meeting the burden-to-benefit ratio and that those parts ought to be addressed and reformed.
And so before we got the judgment of vacatur in the district court, we had been planning and going over drafts of the RFI that we released earlier this week, which was supposed to invite the bar, industry, advocacy groups on both sides—I mean, I know what the libertarians think about everything, but you know, people who aren't from the Cato Institute, ideally—weighing in on how they think this thing has worked out in the real world. We have a view on it. It improved our merger review process. There's no doubt about that. But we wanted to hear whether the disagreement between the commission and the bar about anticipated costs had borne out in a particular way, whether there were parts of the HSR form that were causing incredible burden and we could assess whether they were producing a ton of benefits internally.
And then there were other things you probably noticed in the HSR RFI that I have been concerned about since I became chairman, unrelated to the current content of the rule but that are pretty relevant to merger review. One is the acqui-hires issue, and you see there's a fair amount of discussion in the preface to the RFI and then a series of questions that we're urging everyone here to weigh in on. But we have seen an uptick in large transactions that the parties contend are not HSR reportable because they don't involve the sale of assets or securities, but that involve the acquisition of interests that leave the firm from which the interests were acquired competitively nonviable, sort of like a husk or a shell.
And these so-called acqui-hires actually have been going on for a long time, but they tended to be very small transactions of startups sort of on the cusp of bankruptcy. Now they tend—not tend, but they now are—involving giant companies purchasing other giant companies and leaving the second giant company technically alive but not a meaningful participant in the market. And we want to figure out what is the right way for us to think about it. Do we need to amend the HSR rule and form in order to clarify when we think these so-called acqui-hires require a filing under HSR? And that was one of the main issues.
And then another one that is near and dear to me and that you'll be hearing more from the FTC about soon, involving a workshop on the issue, is the so-called 'litigate the fix' problem. And I'm not going to take as many shots at you for not being a lawyer as you did at me.
I'm a journalist. I'm impervious. Bounces right off.
Thought it was a very fairly nice. I didn't say anything you said was wrong, but you know, 'litigate the fix' describes this problem that has arisen a lot, largely because of the Biden administration's intense hostility toward mergers, where a party makes an HSR filing, the agency investigates, and then very late in the investigative process and sometimes after the filing of an enforcement complaint, the parties propose a divestiture. Sometimes they actually execute the divestiture in the midst of the investigation.
The problem is that the investigation has proceeded on the basis of a very particular transaction. That's what all the documents were filed on the basis of, that transaction. All of our investigation of the market has proceeded on the basis of that transaction. And so if it suddenly changes at the last second, it's like a pretty substantial complication. And that complication is sort of like an order of magnitude worse if that happens after litigation. And because then a judge has a transaction on which the commission or the department filed a complaint which is then followed by a transaction that looks very little and maybe competitively unrelated to the initial transaction. But the judge is sort of stuck with having to figure out what to do with this.
And so one of the things we are trying to figure out is do we need to make an amendment or any changes to the HSR rule, or do we need to provide guidance relating to the HSR rule about when a late-breaking transaction alteration should require a supplemental filing, a different filing, partly to protect the sort of process that the agencies follow for their investigations, but also to prevent litigation for mergers, which is already complicated and difficult, from becoming substantially more complicated and difficult when the judge is basically looking at two related but very competitively different transactions.
There are other things in there that matter. We're trying to figure out whether we need to provide guidance or a formal rule on the 'solely for the purposes of investment' exception. There's a provision of HSR and the HSR rule that allows you to make transactions that would otherwise trigger the HSR filing threshold but not file if the purpose of the transaction is just passive investment, more or less. And the department and the commission early on in the Trump administration filed an amicus brief in the Texas against BlackRock litigation that sort of addressed this issue of investors that otherwise are passive and that hold out their funds to be passive investment funds sort of calling the shots within some of these firms. And if they hold large stakes in firms across an entire industry, the risk of collusion is like pretty substantial.
And so we have been looking at this issue and have concluded it's probably a good idea for us to address seriously what it means to have made a transaction solely for the purposes of investment and whether we need to provide guidance or a formal rule on this. So this was in the offing, litigation or no litigation. I think obviously its importance is a little bit higher after the district court's decision, with which I disagree, in Texas. And in order for us to make sure we get any subsequent changes to the rule spot-on and correct, we need to hear from the public before we begin the full formal rulemaking.
Okay. You've both spoken about America First antitrust. It's what it looks like. And I'm curious how you'd handle a situation where a merger might harm domestic consumers or increase prices, but strengthens a national champion, particularly against a Chinese competitor. You know, Intel, to the extent it has a domestic chip manufacturing capability, they're almost certainly going to be more expensive and probably not as good as TSMC, but there's plenty of other reasons to do it here. So, I mean, you could start if you want. I'd be curious what you think. But does consumer welfare ultimately take a backseat in any situation to industrial policy?
So these two concepts are generally spoken of as either unrelated to each other or, in the even less charitable version, as sort of fundamentally at odds and incompatible with each other. I don't think that's true. I'm not a central planner, and adamantly not a central planner, but I do think that it would be a bit myopic for me in making enforcement decisions to pretend that effects on consumers related to de-industrialization or increased Chinese competition in the United States are irrelevant. And so I just don't see—I mean, look, maybe the hyper-libertarian, highly academic economist version of consumer welfare is at odds with the considerations about foreign competition and risks to our industrial base and to our national survival. I don't think about consumer welfare quite that narrowly.
I've said over and over that price and output are not the only considerations that we ought to account for when we are addressing consumer welfare. And so am I saying that in a case that was very likely to substantially raise prices, but you know, letting the merger go through might strengthen America's competitiveness against China, that would be like, well, the only question I care about is America's competitiveness against China? No. But am I going to turn a blind eye toward our national competitiveness against our principal economic and strategic adversary? No, I definitely am not going to turn a blind eye.
