Welcome to Tech Talk. Bye.

So I think the highlight was making the ten hour drive in a one no stop dash up the East Coast to Maine, with my kids in the back, and I didn't let them have any liquids so we wouldn't have to make any COVID scary bathroom stops. And we made it up there, and had two weeks in Maine, which has very little COVID and a beautiful coastline. So that was pretty great. But I'll say the other highlight is that my children have been watching the kids baking championship and been inspired to bake. So about three times a week, there are brownies and cookies and banana bread at my house, and that's pretty awesome.

Come over, and I'll I'll leave some on the doorstep for you. I'm gonna I might hold you to that, Avery.

Yeah. Sure. So if you step back from the craziness of the world today and kinda think about how do countries organize their economies, there really are two big ways. Right? One is the government decides everything. Who's gonna make what, where they're gonna sell it, and how much they're gonna price it at. And then you have what we have in The United States, which is more of a market driven economy, where companies compete to create products that people are gonna like and get them into the distribution chain and then offer them to consumers. And what that second system, our system is premised on is the notion that those competitors will fight tooth and nail to win the attention of customers. And that means that they're gonna try to create products that are high quality, that are innovative, and then they're gonna try to price them to move so that we vote with our dollars and buy them. What happens though sometimes is that some industries get incredibly concentrated, meaning there are only one or two or maybe three competitors offering a particular product or service for sale. And that's when we worry that that grand free market might not lead to the sorts of outcomes that we expect. It might not be competitive enough to serve consumers well. And that's when antitrust steps in and says, wait. We might need to do something here so that consumers get the benefits of market competition in a space where that competition has been stymied for some reason. So that's really what we try to do with antitrust laws is make sure that consumers get the benefits of competition and step in with remedies if something causes that to go off the rails.

The hearing was awesome. At my house, I called it the Super Bowl of antitrust, and I was just really, really sad that I couldn't have a viewing party here with all of my friends and snacks, with a big screen TV, and we would have had a great time. Because this hearing lasted longer than the typical Super Bowl. It was five and a half hours of testimony. And and more than that, it was the CEOs of Google, Apple, Facebook, and Amazon all in one hearing. That has never happened, and was incredibly fun for those of us who have made antitrust to our careers. So what was it about? Well, about a year and a half ago, the house's subcommittee on antitrust, which is chaired by congressman Cicilline from Rhode Island, launched an investigation into big tech. And the reason is that he's been concerned as many have been that in the tech space, consumers may not be getting that benefit from competition that we were just talking about a minute ago. And so he did what congress is supposed to do, acting in an oversight capacity. He started an investigation. And last week's Super Bowl hearing was the culmination of that investigation, bringing four of the most powerful CEOs in the world to answer questions under oath from members of congress for hours and hours and hours. It it was really fascinating. Now moving from the setup to what actually happened, I would say that about 20% of the hearing was actually about antitrust, and roughly 80% was about non antitrust stuff. There was a lot of fighting over alleged anti conservative bias. There were some allegations that maybe some of these tech companies are beholden to the Chinese government. I mean, there was some stuff that was just nuts, and then there were the fights about whether congressman Jordan should be wearing his mask or not in the hearing room. I mean, it was it was quite a show. But I I think that that some of this hearing was theater. Right? These are people running for reelection, and they wanna be able to show their constituents that they're standing up to big tech on their behalf. But some of it was actually pretty close to addressing real antitrust issues. They got they got close, but they did not get a first down,

to use to frame this debate? Yeah. So one of the big miss misunderstandings, I would say, out there in the world is that antitrust law is about big companies. It is only partly about that. It's perfectly legal in The US to be a big company. It's perfectly legal in The US to be a big company with market power. What you're not allowed to do is abuse market power. And so the hard part is trying to identify where might those abuses of power occur. How do we identify them? How do we figure out how bad they are? And then how do we remedy them? And it's really really hard in tech, for a couple of reasons. One, many of us don't really understand the way these companies operate nearly as well as we understand simpler industries of yesteryear. Right? Like shoes. I kind of understand how shoes are made and then put in boxes shipped across the country, and then I go try them on. Right? Like, I I get how shoes work. I get how beer works. Right? How it's made, how it's marketed, where it's sold. These companies do so many things so quickly, and their business models evolve so fast that it can be really difficult for the typical consumer or or frankly, even the policy expert to understand what they do and how they make money doing it. And and you really have to understand those things to figure out whether there are any abuses going on. So I try to do a couple of things when I think about CDTs competition efforts and how to get it right. One is we put the user first in everything we do as an organization, and from a competition policy and antitrust law perspective, that means we put the consumer first. So we are laser focused on what is happening to consumers, and are they being harmed in any way by the conduct related to digital environments. So very much a focus on the consumer. Next, I try very very hard to be fact based and law based. So you sometimes hear politicians calling to break up big tech. That's not really the way our law works. The way our system works is you identify problematic conduct, you file a lawsuit, you take it before the judge, and then if the judge agrees that there's a problem you remedy that. You can't just skip to the end of break up big tech, you've gotta go through those steps. So that makes it tricky because we have a pretty significant burden that we put on government enforcers, when it comes to dealing with antitrust issues, and it really does require you to do the hard work of identifying what's happening to consumers. So can I give you a couple of examples of the kinds of things that keep me up at night? Of course. Of course. I'll I'll give you one that I think is coming to get us in the future, and that is, smart homes. I look forward to the day when my home is totally connected and wired. Right? I wanna be able to change the thermostat when I'm, coming home from the airport. Well, if I ever travel again. I would love to be able to open my front door remotely when my mom comes to visit, and I'm stuck in traffic. Right? Like there are a ton of things I would love to be able to do. I would love for my hot water heater to talk to the electric company and figure out how to optimize things for me. All of these things would be great. And the thing I want the most, Jamal, what I really, really want is a refrigerator that knows when I'm running out of milk. Right? Like, I never ever want to have to think about milk again. I just want it to be in my fridge. It should always be there. And when it gets down to a quarter of a gallon, more should come to my house, and I'll put it in the same spot. Spot. Right? This is not hard, and it's something that is coming in the future. We're gonna have these smart homes for those of us who want them, and they're gonna make our lives simpler and great, and that's fantastic. But today, what stops one of the, digital assistants like an Alexa or a Siri or a Hey Google from making an exclusive deal with that refrigerator manufacturer? Maybe it's Samsung saying let's make a smart refrigerator but let's make it only compatible with me. Right? So that that would be a concern for me about trying to lock in the consumers to a particular voice assistant if they wanna get a smart refrigerator. Or what if it's that your hub system that runs your home, your your digital assistant only lets you use the products and services offered by its parent company? So that if you want to use a Nest thermostat, maybe you can't do it with an Apple oriented home. Right? Because Nest is owned by Google. How do you how do you sort that out? How do you figure out how to make sure that the benefits of competition come to our smart homes by making sure that we've got interoperability. So that's one part of smart homes that worry me, and then there's the other part just using the smart refrigerator example. Let's say that I have that smart refrigerator and it's interoperable with seven different digital Competition is flourishing. This is great. Right? Yeah. But how does that system decide where to buy the milk from? Is it set as the default that it always buys milk from Walmart, or it always buys milk from Whole Foods, or that it always buys milk from the store that paid the highest bounty to Samsung and Alexa last week. Right? And is that is that disclosed to the customer? Does the customer know that when the customer is signing up? And then when you decide to move, can you port all of that information with you to your next home? Do we have data portability figured out so that you're not starting from scratch when you move someplace else? So that's like 14 different antitrust issues all bound up into one example. But I really try to to focus what we're trying to do at CDT on the problems that are are coming at us in the next few years. We try to be future oriented. And then how do all of those things affect consumers as a way of informing our policymakers about what they ought to be doing today to avoid catastrophe in those kinds of environments in the future?

antitrust lawyers like to talk about those two different kinds of remedies, structural and conduct. Structural is about what is the structure of the company itself. So that's where you hear conversations about breaking them up. Should we separate Facebook into three separate companies so that Instagram and Facebook are not under common management, right? Or you hear it sometimes in the Amazon context that you should have Amazon as a retailer separate from Amazon as a cloud service provider. Right? So those are the kinds of things people are talking about breaking them up. They mean actually separate these companies into individual companies. One thing I'll note that a lot of people forget is that in the past, we've done that very rarely in The United States, but in the past when we've done it, we've usually increased the amount that those companies are collectively worth and made their owners significantly richer by forcing the breakup on them. So but that's a structural remedy. It's you have to make a divestiture and your company can't look like what you wanted it to look like anymore. The other kind is a conduct remedy. That's where we say, look you can keep all of your component parts, but you can no longer, for example, bundle these two products together. In the case of Microsoft, people were worried about browsers and operating systems, right? So they said you can't bundle them together anymore. Or another one that people have started talking about recently is you can't use data about third party sellers on your platform for your folks who are deciding what you should sell yourself on the platform. Those are the kinds of things people are talking about when they talk about conduct remedies. We're going to regulate the way you do business. So so those are kind of the two separate ways that we've looked at it in the past. I will say that structural remedies are kind of a a last resort in antitrust law. It's only if there's no other way to remedy the harm. But but, really, Jamal, it's that harm I should have started with. You can't say what the remedy should be until you've identified what's the harm to consumers. That's that's where the inquiry has to start. So if the harm that's being alleged, and proven, is because companies are under the same roof, then the right answer might be a structural remedy. But if the conduct is that they're trying to use power they gained legitimately in one market to leverage it into power in an adjacent market, then you can use a conduct remedy that says no, you have to do that separately from now on. One of the challenges with conduct remedies is they usually require monitoring, and I hear a lot of people say, oh, can't be done. Monitoring never works. And I'm not sure I agree with that. When I was at the Department of Justice in the antitrust division, we sometimes required monitors. And, we usually chose somebody who was incredibly sophisticated, who would make regular, reports under oath to us about what was happening at the company and who was given access to every file and every person there. So I I do think that kind of monitoring for a conduct remedy can work just fine if it's designed right. You know, it doesn't always work perfectly, but I think it really can.

Well, I I I'll also say, Jamal, that one of the things that, makes competition policy harder in the digital space is that it moves so fast. So we have this weird approach. Well, it's not that weird. It it makes sense, in The US where we first identify the harm, and then solution if the problem is proven. In the tech space, by the time you've gotten through that three or four or five year process, the company's probably already changed its business. Right? Like, can you think of a company that has the same business model today it had five years ago when it comes to tech? No. And and so a real challenge here is how do we speed these things up? How do we, where we have concerns about harm, how do we speed up the process so that it's not five years later, but maybe it's only five months later? And and I I promise I'll shut up in a second, but that that's part of why I'm trying so hard to get, policy folks to emphasize what are the problems we see coming at us in the future, and let's get ahead of them. Because we know if the process is to sue somebody, go to court, and wait five years, that we're very far behind it. And that that is not optimal from a consumer's perspective.

Thank you for letting me have a soapbox for this for just a moment, Jamal, because I hate it. I will say my first pet peeve is when people hyphenate antitrust. It's one word folks, there's no hyphen in the middle, but my second is when I hear talk people talk about antitrust regulators. We don't have antitrust regulators in The United States. There is no department of antitrust regulatory affairs that says how somebody can structure their business, what products they can offer, and what they charge for them. We don't have a regulatory system that does that. The way you think of regulatory systems in other spaces like in public utilities, where they approve what rates the electric company or the gas company can charge. We don't have that for antitrust, and we don't have a big tech regulatory system that operates that way. Instead, we have this system that is based on an enforcement approach. So there is a law. If you break the law, you get taken to court in an enforcement action. That's not regulatory, and that's why I want people to call it what it is. By the way, that's different in Europe. Europe actually has a regulatory system. If they find that you, breached the antitrust laws of the European Union, they can fine you without having to take you to court first. So that is just a a big difference in the way our systems work. Work. We say you have to go to court and prove the harm first and then address it. In Europe, they can assume the harm, impose the remedy as a regulator, and then go to court and sort it out later. Just a difference in approach.

So I see at least one and probably two lawsuits being filed against, Google, Apple, Amazon, and Facebook. Prop so probably one or two of them will get sued for antitrust conduct by the federal government. The Department of Justice is looking to sue Google. That's been widely reported on antitrust grounds, and I I would think they would bring that fairly soon. And the other three companies, Amazon, Facebook, and Apple are also it's been reported being investigated by the FTC and the Department of Justice and, by the way, all of the state's attorneys general who are, hard at work in this area as well. So I do think we'll see some actual litigation. I think next, beyond that, we will see a report out of that subcommittee at the house that, congressman Cicilline has been chairing, and that report will probably be pretty damning about big tech. And I'm hopeful that it might actually include its thoughts on remedies, possible legislation that the congress could consider, in the next congress. So that's also something I'm watching for. The part though of your question that's most interesting to me is what is CDT's role in all of that and how are we trying to move the needle? And I I will say very simply it's this. We should be looking at Google, Apple, Amazon, and Facebook very closely. They are large companies with power and they affect many of us in our daily lives. However, they should not be the sole focus of the antitrust inquiry. We have massive levels of concentration throughout the entire American economy, and that's particularly so in the digital space. Right? Most people have one choice or maybe two for who provides the Internet service at their house. And particularly in the middle of a pandemic, when everybody's working and learning from home, broadband access is more important than it ever was. So how do we push for increased competition and a renewed emphasis on broadband access as part of a competition agenda? Then I can also think about wireless carriers. We used to have four. We're down to three wireless providers in The United States. Again, that's something that's incredibly important to most of us in our daily lives. How do we make sure that competition in the wireless space remains vibrant? When you think about, operating systems for phones, we've got two of those. How do we make sure we're watching carefully for competitive problems in the operating system space? And also in hardware, the guts inside those devices, how many chipsets or the guts inside those devices. How many chipset makers we've got? It's usually one or two or three. Sometimes we get as many as four, but one or two or three is usually not enough to have the kind of robust competition that brings that wonderful benefit of the free market to consumers. So how do we work with policy makers and with antitrust enforcers, to make sure that they're not just focused on the four companies that have been in the headlines for the last year and a half. They should continue that. Don't don't misunderstand me. But we've we've got to work with them to broaden their aperture there and to expand what they're looking at so that we can figure out how competition problems may be hurting us in other spaces and move fast to fix it. And that's that's really one of my priorities for us in the next year.