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tv   The Communicators Antitrust Competition Policy and Consumer Rights  CSPAN  March 8, 2021 8:00am-8:32am EST

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booktv is television for serious readers all weekend were every weekend join us again next saturday beginning at 8 a.m. eastern, for the best in nonfiction books. >> for the policy issues getting a lot attention on capitol hill and in washington this year is the issue of antitrust, and competition particularly when it comes to telecommunication firms that's our topic this week on the communicators joined by two observers and long time activists on this issue. ... korup is with the mercator center out of george mason university. sally hubbard is with the open market institute. ms. hubbard, how do you do find antitrust and how do you view it? ms. hubbard: antitrust is about
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we all get the benefit of the best products and services that can be delivered to us in the most innovation and choice because we have an open market where the best innovators are rewarded instead of having dominant firms that rule the economy, the winners and losers, squash competitors and acquire competitive threats. it'sos really about preserving competition so we can have both economicno liberty and the american dream can thrive. >> host: mr. skorup? >> guest: antitrust laws give political officials tools to preserve competition with theof ultimate goal of allowing a lot of companies to thrivef so they can bring new benefits, , new services and low prices to consumers. as you said this has been a very
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active area of policymaking lately. these laws are fairly old and established, over centuries old, that we have new issues, new industries and they are putting stress these traditional tools of preserving competition. >> host: are the laws we have in place effective, and to use and need for them to be refined or eliminated, mr. skorup? >> guest: they are ineffective and there's this argument that i think underlying a lot of criticism of today's antitrust is really a feeling that date is bad, that necessarily large companies are abusing competition or consumers. i don't think that's true and most antitrust forces don't believe that is true. you need to discern large companies are abusing competitive process and large companies are large because they are efficient and bringing great services, , popular services to
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consumers. i think there are probably areas of under enforcement that the laws are broad, and we do have new challenges with the industries particularly in technology and especially in the area of what's called two-sided markets by economists. this requires new types of analysis and new types of enforcement that have been used but could be used in the future. >> host: what do you mean by two-sided markets? >> guest: that was a supreme court case a few years ago called the amex case. this was a credit card case brought by merchants of amex, american express, against american express is of the keys that credit card companies charge merchants. what the supreme court said in that case is that a plaintiff or antitrust officials can't just look at whether one side of the market in then so called two-sided markets are harmed. so credit card you have consumers, critic argues on onev
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side andse you have got merchan, stores on the. other side. you can't just show harm in once i pick it up to look at the other side to see if there are counterbalancingba benefits. in technology markets you have a lot of these two-sided markets. google search, for instance, consumers who use the product for free and it's funded by advertisements on the other side.t this is common in technology markets and it poses new challenges, new types of analysis for antitrust enforcers that only just begun. this is a recent supreme court case, the amexe case, and academics and lawyers are still figuringti out how to apply this in technology markets. what dido the original question -- are antitrust laws archaic, do they need to be refined, eliminated, improved? ms. hubbard: i am a former
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antitrust enforcer. i worked at the new york state attorney general's office enforcing the antitrust laws there for three different administrations. i have first-hand experienced how difficult it was too enforced antitrust laws on behalf of the people of the state of new york to preserve open markets. what has happened is that the law has completely gutted our antitrust statutes. we had these antitrust statutes passed. the sherman act in 1890, the clayton act in 1914. the sherman act makes it illegal to monopolize. the clayton act says that any merger that will substantially lessen competition or can create a monopoly is illegal, but meanwhile, we have watched while hundreds of these mergers would be illegal under the standards would be approved. what happened was in the early
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1980's, there was a new school of thought called the chicago school of economics that took over antitrust law and convinced the court time and time again to keep narrowing antitrust laws. as a result of this, it is very difficult for antitrust enforcers to prevail on cases. the court has been convinced that as long as there can be some sort of justification in favor of efficiency, that this anticompetitive behavior should be permitted. this is why we have got into our current monopoly moment where we have monopoly's ruling every sector of our economy, not just big tech. the statutes themselves are fine, but it is the interpretations in recent decades that needs to be reformed through congress. i can talk about the amex case, that as a whole different topic. i read it differently than brent
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does, and i think it only applies to financial transactions as the court indicated. we do need reforms so that we can have a d concentrated economy likely did 30 to 40 years ago. >> when you talk about some of these mergers, what is a tech merger that you are opposed to that has happened? ms. hubbard: facebook's acquisition of instagramming, for example. we have seen the internal documents of the facebook team where they saw that instagram was a competitive threat to their monopoly power, so they acquired instagram for the purpose of neutralizing a competitor. that type of merger is illegal under the clayton act. we have had many mergers that
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really consolidated entire control of the ad tech ecosystem including acquisition of doubleclick. there was an fcc commissioner who wrote a brilliant dissent when that deal was approved saying that it was going to completely change the way that digital advertising occurred going forward, and was going to make it impossible for anyone else to compete while also harming privacy rights. had these terrible tech mergers, it is not just that these companies have become the mammoths that they are by always offering the best service. they have also engaged in anticompetitive mergers and that is how we got to where we are today. >> do you agree with that? mr. skorup: i have a slightly different angle. one complaint is that there is this massive under enforcement of antitrust laws.
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another angle is that we are fairly clear -- have fairly clear antitrust standards. don't become a cartel. don't collude with competitors. if you are dominant, don't raise prices or restrict output. these are clear policies. that is one reason why we don't see big antitrust cases because these firms know what the general rules are, they know what courts will condemn, and they act accordingly. that is a good thing. as far as the many mergers of the tech companies, there has been hundreds of acquisitions and mergers the past few years. this is a good thing. this is an engine of the start up sector. many companies start their own companies in order to get acquired by a larger company. many don't want to go public. the success to go public, it
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requires a lot of skill that startups might not have. and some of the proposals out there to make mergers acquisitios harder, i would add , there are sometimes mergers that are successful. the vast majority are neutral or have mixed results or disasters for the companies that emerge. aol time warner was the largest corporate merger ever and it famously was a disaster for shareholders. google acquired motorola mobility, and operating system -- a dominant operating system acquiring, and again, underwhelming effect. at&t acquired, again. you cannot have a policy of
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shooting the winners every time a merger is successful. >> brent skorup, sally hubbard is the author of a book. do you agree that monopolies inherently suck? mr. skorup: monopolies don't inherently suck. i need to read sally's book. monopolies sometimes arise because they have the best product, the lowest-cost product, so it is not illegal to be a monopoly. it is illegal to use that dominant power to undermine the competitive process or harm consumers. monopolies can suck, but not always. ms. hubbard: i explain in my book "monopolies suck," that
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being a monopoly on its own is not illegal. the title was to get regular people to feel that this is a topic that is accessible to them. helping people who are not lawyers understand what monopolies me into their daily lives, and how they actually concentrate corporate power and underlie a lot of the pain points that we experience. i do explain in the book that being a monopoly on its own is not illegal. in order to violate, a monopoly has to use its power to exclude competition. unfortunately, once corporations are in a position to use their power to exclude competition, they usually do. we have seen this mlo out of the tech giants that is exactly what microsoft did. when brent says the antichrist
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laws have not been enforced because -- or the problem is that the corporations know the rules and follow them, the reality is, corporations know there are no rules because the sherman act has not been enforced. the last major section ii sherman act case was microsoft in the 1990's. a very long time ago. if we had not brought that case against microsoft, google may not exist today. what microsoft was doing was taking in monopoly and operating system with 95% of desktop computers. using that to exclude competition in the browser market and say, in that case it does not matter if you have a better product or better innovations, you will not be able to compete based on merit. we are going to use our muscle
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to make sure you are not preinstalled in any computer that is on the market. that is exactly what the google is now doing with the android operating system. ramming its own apps and all of the suite of services down everyone's throats because it has such market power in the android system. if we had not brought that case against microsoft, what would have stopped microsoft from saying we took over the browser market, now we are going to take over the search engine market? really what we want is to allow competition on the merit and the idea that every company is innovating with the goal of being acquired by a monopoly is also not good for the economy and not good for innovation. i recommend a paper called "exit strategy" which calls this model pathological because we do not get the next big innovation, we do not get the maximum amount of
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choice and dynamism in our economy when every company is just being acquired by a handful of monopolies. >> you are watching "the communicators" on c-span. our guests, sally hubbard of the open markets institute and brent score -- skorup of george mason university. what do you study at the mercator center? mr. skorup: technology law, internet law, antitrust, and transportation technology. there is a lot going on in these areas, i have been at the mercator center for seven and a half years. >> what is your background i got you there? mr. skorup: in law school, i developed an interest in telecommunications law. i became a legal clerk at the sec. i was there in 2011 when the at&t-t-mobile merger came down
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and got to be on the front lines at an entry-level position of that merger. got hooked on telecom and antitrust after that, and i've been doing it ever since. >> sally hubbard, what is the open markets institute and when did you create it? mr. skorup: the open -- ms. hubbard: the open markets institute is a nonprofit ink tank that is working on solutions for america's monopoly problem. i joined, it was created by someone else and i joined a couple of years ago. before that, i was an enforcer at the new york state ag's office and forcing the antitrust laws under three different administrations. i was also an investigative journalist digging into monopolization by the big tech platforms for years. my background and antitrust goes way back through the microsoft today is where i was learning about in law school. this is a topic that i have been
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working on my whole career, and it is fun to see it now in the news and getting the attention it deserves. >> speaking of the news, representative dave seuss illini of rhode island -- dave cuc cillini of rhode island said recently on cnn, two thirds of americans get their news from facebook and google. these two platforms control digital advertising online. we are seeing real newspapers close regularly, layoffs throughout the industry, and a real decline of local journalism. we have to do something about this. what is your reaction to that? ms. hubbard: i was asked by representative cuccillini on this topic, and i did endorse the bill he had proposed which was to allow media companies to
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collectively bargain against the tech giants for a limited time and purpose without worrying about them being sued for antitrust violations by linking together with competitors. that is a temporary measure to help deal with the crisis, but i think in the long term is stop the monopolization of the digital advertising markets by forcing our antitrust laws, and structurally separating some of the parts of the ad tech ecosystem, and really opening back up so that we can start having a market for news that functions again, and is supported by advertising. advertising is not hyper targeted at individuals based on tracking, which is the model that facebook and google has put forward, and it is very hard for any news publisher to compete against facebook and google
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because they do not have the wide tracking and surveillance networks that facebook and google have. going back to advertising that is based on context instead of identity. if you are reading an article about golf, you can see an ad for a golf bag, but you are not seeing an ad because you are spied on on your golf trip. that is the idea. that's ultimately where i think we need to go. mr. skorup: as you mentioned, the antitrust reform especially intact has become a priority for democrats. it has become a party for republicans as well. the quote you read, i think it is revealing. revealing about the motivation for a lot of this. i a lot of the attention on tech from democrats and republicans is because of the growing power of social media companies in the media landscape and this is always of interest and has been
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of interest to politicians for decades. that is where a lot of the motivation comes from. congress cannot really regulate social media because of the first amendment. they are getting it to be a antitrust. a republican member of the house the other day was at cpac and said that republicans and conservatives are at war with tech companies. and many democrats view themselves of at war with tech companies because of their media power. antitrust is not really the best tool for that. i am puzzled and many americans are puzzled why the best antitrust minds in america are focused on tech companies and the antitrust committees in the house and senate. when you survey people about tech companies, they generally have a favorable view. even twitter and facebook which
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are controversial, people generally have a favorable view. where people are concerned, where costs are rising are things like health care and health care premiums, housing, and childcare. these are driving a lot of costs for american families. i would love to have a 450 page report from the house authority about these markets instead of the tech sector which has it's problems, but it is not the priority for american households , and it is not where they are seeing the cost. peter: it is interesting that both the left and the right politically are throwing some heat at big tech. so-called called, big tech. mr. skorup: both parties view social media and big tech as a reason why they lost close elections recently. democrats, 2016 is viewed as a mistake driven by social media and not taking down
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misinformation online, and republicans, many believe that the recent election was because social media took down too many conservatives and right wing personalities in the run-up to the elections. both parties have their complaints with tech companies and social media, and with these antitrust earrings, it is these things that come up again and again. i does not always -- mostly the antitrust concerns. it is the social media, moderation, and growing tide of social media. ms. hubbard: there is a lot to respond to. i do agree that these monopoly problems plaguing our entire economy. in my book, i have the entire monopolies of agriculture, and health care. i would love to see congress
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replicate what they did with the big tech report and investigation and now do agriculture, and now do health care. that would be fantastic and that is definitely the next steps that congress should be taking. we do have monopolies and oligopolies, that is when you have a few firms ruling and industry, dominating our entire economy which is leading to us all be being squeezed financially, and a less competitive labor market which is why wages have been stagnating. it underlines so many of the pain points we all experience, so i am fully on board with that suggestion. however, i don't think the fact that people like tech products means that the tech companies are not violating the antitrust laws. i think a company can offer some benefits and some services that people enjoy and still be missing the antitrust laws and should not be allowed to violate
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them with impunity because they offer some benefits. the other thing in terms of whether the problem with speech are in antitrust issue, i think that's republicans and democrats are coming at the issue from different angles, but what unite stem is the concern about the concentrated control over the flow of information and speech. that these tech platforms have. throughout american history, we have always had rules in place to make sure we have a vibrant marketplace of ideas. that's why we had rules, like ftc had crossownership rules. you could not have one company control the tv station and newspaper in the same town. there has been widespread recognition that this is critical for democracy, that we do not have a few companies
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controlling the information that reaches americans and controlling speech. while i think there are policy solutions needed to address this problem, i do think we need to get out the monopoly power, because that is what underlies this control of information. the gatekeeper power that happens when facebook and google have become the walled gardens that all information needs to pass through. it passes through a very dangerous business model that actually amplifies this information -- misinformation. i think trying to use antitrust enforcement to d concentrate the control over speech. neutrality, nondiscrimination rules, privacy enforcement, interoperability rules. there is a whole suite of tools that we need to use to get our information markets working again. host: what do you mean when you say interoperability? ms. hubbard: interoperability is
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allowing, you know, networks to connect with one another. it is basically when we look at what we did with at&t back in the 1980's and broke up at&t into several parts, and we also required it to interconnect with upstart telecommunications companies to allow them access to the network. for the tech platforms, that is one way of getting over the network effect, barriered entry that makes it hard for anything new to start up. or any new company to compete against google in search because it has such an advantage with all the data. allowing interconnection compatibility. but that is not on its own a solution. i am actually seeing the tech platforms now suggesting that as a remedy, because they are expecting that they are going to be able to control the way that is implemented.
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they also like to weaponize privacy laws to say that we cannot actually do interoperability in a way that will truly open up competition, because then we are going to be violating people's privacy. there is issues to make sure consumers are in control of how interoperability is rolled out, that they decide how their data is shared and who it is shared with. that is not the number one solution i would propose in any regard. it is like a third or fourth order solution that needs to come along with stronger antitrust enforcement and probably some structural separation. host: one more question to you and then we will let brent skorup close out. you mentioned gatekeepers. shed a social media company be allowed to event a former president -- prevent a former president in the united states from being on its site? ms. hubbard: so, at the time that the insurrection was happening, i did support the move for de-platforming because
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of the threat for imminent harm. but even though i am generally a progressive person, i was not cheering this the way others were. i am not comfortable with having one or two executives in silicon valley decide who speaks and who doesn't, what speech is ok, what's not ok. i really think the solution is to de-their control -- de-concentrate their control over speech. i am not comfortable with having these types of decisions about the boundaries of the first amendment. the first amendment always has some boundaries, but they need to be decided by the people through their democratically elected representatives, not by some unaccountable executive. so i think that is where we can have a bipartisan consensus. what we really need to do is ensure that speech is distributed and de-concentrated and that is a better solution
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than censorship. host: brent skorup, closing argument. mr. skorup: i would reiterate, i find it leslie white -- i find it puzzling why we have all this tension on antitrust in the tech markets, which if, you know, in monopoly markets, what you see is restricted output, degraded services, high costs. you do not see most of these elements in the tech sector. you do see this in other areas which i mentioned, health care, education, childcare, housing. so, i hope, i hope politicians will not use their issues with social media moderation in the first amendment protected activities of these companies as a way to change antitrust law in a radical way. it should be noted, regulation is not a panacea. the industries i mentioned, the industries i i mentioned, housing, health care, child care, these are highly regulated. the regulation doesn't
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necessarily bring about theoe lw cost and high quality we want, and so we need to be skeptical of claims that regulation and interoperability and these other things will be a a magic wandn tech market. >> host: brent skorup is with the mercatus center at george mason university. sally hubbard with open markets institute. thank you both for being on "the communicators." >> guest: thank you. >> transportation secretary pete buttigieg, dr. fauci and cdc director are among the featured speakers on the first day of the 2021 congressional city conference. watch live this afternoon at 1 p.m. eastern on c-span2, online c-span.org or listen with the free c-span radio app. >> you are watching c-span2, your unfiltered view of government. c-span2 was created by america's cable-television companies and today we're brought to you by
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these television companies who provide c-span2 to viewers as a public service. >> now the supreme court hears oral argument in lane versus california, a fourth amendment case and whether an officer without a warrant have probable cause to enter a home while in pursuit of a person believed to have committed a a misdemeano. this case originated in 2016 when a california highway patrol officer was investigating arthur lange for an alleged noise infraction while driving. when mr. lange came close to something officer put on his lights. mr. lange drove into his garage which he officer also entered. he was later charged with driving while intoxicated. his legal team wanted mr. lange blood-alcohol level results to be suppressed arguing the officer entered the garage without a warrant. the justices have three june 2021 to issue

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