Jonathan, thanks so much for joining me today. I appreciate it.
Sure, thank you for having me. It's a pleasure to be here, and it's wonderful to see everyone here watching in person, and of course everybody out in State of the Net land watching remotely.
Yes. So I thought I'd start off just with a high level. You know, when people think about tech and antitrust, they, you know, probably reach for historical precedent like Microsoft or the AT&T breakup. What makes, you know, today's moment the same or different compared to those areas?
Sure. So I think there are a number of important points here. First is, if you look at some of the most consequential moments in antitrust enforcement, they have come at the dawn of new technological innovations. And so if you think about AT&T, the breakup of AT&T and the historic antitrust case, it predated the hardware revolution, including the emergence of companies like IBM. If you think about the IBM investigation and settlement and antitrust matters, it predated the emergence of the software revolution like Microsoft. If you think about Microsoft, it predated the internet revolution. And so all of those historic inflection points can be tied back to meaningful and significant antitrust cases. Those are the similarities. I think there are some important differences as well, though. When you think about AT&T and Microsoft, for example, you think about cases where there was certainly a significant amount of public interest, but it was largely in the monopolies of those specific companies. If you look at today's moment, it really resembles more closely the early 1900s, the trust-busting era, when the concerns were not just with one particular company, but the concerns were with monopoly power broadly speaking. And so in my view, the policy environment today is really more about concerns regarding monopoly power in all corners of our economy.
And so how does the tech industry fit into that broader fabric, in your view?
Well, the tech industry is the equivalent of the oil industry around the time of Standard Oil. It is in many respects the lifeblood of our economy. It's the fuel that runs through almost everything we do. People often talk about a tech industry, but every industry is a tech industry, and we confront issues involving technology relating to healthcare and energy, industrials, consumer tech, enterprise tech, and everything in between.
So a big part of the U.S. enforcement system obviously involves the courts, and I guess could you talk a little bit about how, you know, courts now see these, you know, market realities and whether or not they've kept up with them, and if not, you know, where you see the biggest kind of task for you is in explaining how these, you know, market realities have shifted?
Sure. As the head of the antitrust division, I view my role as one of an enforcer, not as a regulator. And so our job is to enforce the law as written by Congress and bring issues before courts and allow courts the opportunity to confront new fact patterns, new ideas, new economic realities. One of the — we often internally at the Department of Justice and externally talk about the difference, and this will be something that I think resonates with this particular audience, the difference between poles and wires and ones and zeros. And so the economics of a market involving poles and wires, you know, the economics are dramatically different than ones and zeros in terms of platforms and networks and the cost of building out interconnections. And so it's really important that we evolve our understanding of those market realities, the understanding of the economics, the understanding of how competition presents itself in an industry with those dynamics relative to the past. And the only way the law in an area like antitrust can keep up is if we provide opportunities for courts to confront those economic realities to make sure that competition is being protected in those markets in a way that is relevant to the way that how those markets function.
How would you say the courts have been at recognizing, you know, those differences so far?
I'd say that we have an obligation to bring those fact patterns to courts, and overall I think, you know, if you look against the historical backdrop, courts have done a good job at keeping pace with antitrust, keeping pace of market developments when they're provided with sufficient opportunities to address them. I think our job is to make sure that we're not trying to fit facts into models, but instead using models or frameworks that fit the facts. And so when we've seen our economy transform in ways that are significant, if not more so than the industrial revolution, it's really important that we present those market realities and give courts the ability to update how they apply the antitrust laws in those markets.
So your agency has spent a lot of effort and time hiring up technologists, data scientists, AI experts. How are those people working to develop these new models, you know, for this job, and what do their days look like? How do they spend their time?
Sure. So one of the things that's really important to me is to make sure that we have not just legal and analytical frameworks that match a modern economy, but to make sure that we have the personnel and the expertise to enforce the law properly. And so the kind of expertise that matters today is exactly what we have in part: lawyers, economists, my favorite in the antitrust division are the paralegals — it's the best paralegal program in the world, I'm convinced — and our amazing support staff. But one of the gaps that I think we've confronted is the range of expertise beyond those typical categories. And so we have hired, and frankly we are continuing to hire, and we'll be posting some ads for data scientists and analysts. In many respects, what we are trying to build is something that more closely resembles a business school faculty that has the breadth and depth of expertise across many different areas. You asked about data scientists and what do our data scientists and analysts do. Well, it's everything. It's everything from helping us ingest data and helping us analyze and evaluate that data in a way that is rigorous and sophisticated. But they're also helping us understand the importance of data. How does data matter in a modern market? And I think one of the things that we're confronting, like I said, in any market that we address today, whether it's healthcare, energy, consumer tech, enterprise tech, again, everything in between, the importance of data is so significant, is so substantial, that we need to understand at an expert level how that data is used, how it affects the economics, how it affects the potential for tipping, moat building, and other competitive dynamics.
What kind of new technologies does antitrust need to start paying more attention to for, you know, potential competitive harms?
Sure. So we often talk at the antitrust division about the famous quote from Wayne Gretzky, which is, we don't just skate to where the puck is, we skate to where the puck is going. And so we are constantly evaluating not just the technologies that we confront and the innovations and the market realities we confront today, but we're always very actively thinking and learning about what's coming down the road. And so obviously there are many important dimensions relating to AI. These are very real, significant technological developments. And one of the things that I, going back to the beginning of our conversation about the importance of AT&T, IBM, and Microsoft antitrust cases, is making sure that we preserve the inflection points, preserve the disruptive capability that flow from new innovations and new key technological developments, at the same time making sure that those disruptions lead to healthy and competitive markets, and that either incumbent firms are not appropriating those innovations only for themselves necessarily or through anticompetitive conduct, but also making sure as those markets develop we are being thoughtful about the technological realities to ensure that those markets can be competitive.
Well, just drilling down on AI for a minute, you know, what kinds of indicators would you be looking at for, you know, potential concerns about whether it's being monopolized or used in anti-competitive ways?
Yeah, it's a great question. It's difficult to answer in the abstract because it's so fact-specific. And I think we have a tendency, whether it's something like a phrase as broad as the internet, to try to use one term to cover everything. And I think, in my view at least, AI is an important technological tool in development, the same way you might have a combustion engine or certain types of manufacturing technology that was vitally important 100 years ago, but deployed in a very broad and expansive way. I think a lot of the technologies that we're encountering are just as expansive, at least in terms of potential. And so it's really important we understand how those technologies work, but also how they work in the context of a particular market, a market merger, or a set of practices, or a set of use cases, or in conjunction with other technologies.
