We’re sharing another episode in our WITHpod 2024: The Stakes series, in which we choose specific areas of policy and talk to an expert about Trump and Biden’s records on the topic. We couldn’t think of a better person than our guest this week to help unpack the two candidates’ stances on antitrust. Timothy Wu is the Julius Silver professor of law, science and technology at Columbia University. He’s known as the “architect” of the Biden administration’s competition and antitrust policies. Wu joins WITHpod to discuss Trump and Biden’s different views on corporate power, the current antitrust landscape, major mergers being challenged this year and more.
This is a rough transcript — please excuse any typos.
Timothy Wu: You know, in some ways, President Biden noticed and learned from the fact that Trump had noticed something. People were mad. But, you know, there’s some ways we disagreed with the Trump administration. We certainly disagreed with the corrupt way it was done. But we also noticed that they had their finger on something that the Democrats were kind of ignoring, which was the rise of corporate power was making a lot of Americans very angry.
Chris Hayes: Hello, welcome to “Why Is This Happening?” with me, your host, Chris Hayes. Well, we’re back for another edition of our recurring series this year “WITHpod 2024: The Stakes,” in which we take a look at the records of the two previous presidents, well, the current president, the previous president, Donald Trump and Joe Biden, who are running against each other. It’s the first time we’ve had this setup of two incumbents facing off in anyone’s lifetime. It’s a rare thing.
Usually in presidential elections, you’ve got to speculate about, you know, what’s this young senator from Illinois going to do as president of the United States or this former governor from Massachusetts? In this case, no speculation required. Obviously, the future is unwritten and things can change, but we do have solid records of both of these individuals as president and what they did. So we’re taking specific policy areas.
And this week, a policy area that is, I think, a little off the radar, although occasionally pops in the headlines. For instance, recently a headline in “The New York Times” and “Dealbook” that reads the following, “U.S. clears way for antitrust inquiries into NVIDIA, Microsoft and OpenAI. It’s news the Justice Department, the FTC are teaming up to investigate the AI industry, particularly those three companies, NVIDIA, Microsoft and OpenAI, to see whether they are in violation of antitrust law.”
The Federal Trade Commission and the Justice Department are the two main entities of the federal government that investigate antitrust. And you’ve seen more and more headlines about this in recent years because the Biden administration has been one of the most active antitrust administrations in recent memory, definitely in decades. You may have seen the news about Live Nation and Ticketmaster, which are the sort of huge concert venue enterprise of Live Nation and the ticket enterprise of Ticketmaster, which combined, which has led to a lot of headaches for consumers. That’s being challenged and investigated by the Biden administration.
And so I thought antitrust would be a fascinating place to turn our attention on “The Stakes,” partly because this is something that I’ve talked about a little bit over the course of this series. When you’re talking about domestic legislative policy, it’s contingent on Congress to a great degree, right. What kind of laws you pass and sign into law. And we’ve done stuff on that. We have definitely looked at, for instance, taxes was one of our “WITHpod: Stakes” conversations.
We looked at taxes and taxes are, you know, set by Congress and then the president signs it. There’s things you can do in the sort of administrative side with the IRS. Antitrust is really interesting because it’s really in the executive domain. You don’t really have to depend on Congress that much. And so it’s a place where presidential prerogatives are kind of at their height. And so I thought it would be great to compare the antitrust records of these two presidents.
And so I thought there’s no one better to have this conversation about antitrust with than Timothy Wu. Timothy Wu is the Julius Silver professor of Law, Science and Technology at Columbia University. He’s a public intellectual as well as a legal academic. He’s written on a variety of topics, including books that I think are some of the best books on sort of tech, monopoly, tech culture capitalism. I’ve read “The Attention Merchants” and “Master Switch,” which are particularly excellent.
Tim’s been on the program before, so he thinks about this. He’s been studying this and thinking about it for literally decades and also was a practitioner. He actually went into the Biden administration and in the Biden administration was known as one of the key architects of the competition antitrust policies. So he has a sort of inside outside perspective on this. Tim, it’s great to have you in the program.
Timothy Wu: It’s great to be back.
Chris Hayes: So when we’ve done other topics in this series where we compare the records of Donald Trump and President Biden in their time in office, I think the issue set itself has been a little more self-evident than competition policy and antitrust, which is slightly more obscure. So what I want to sort of just start out with is a kind of one on one about antitrust competition policy. Like, what is it? What are the major tools that a given president has to pursue it before we get into any type of sort of comparative look at the two?
Timothy Wu: Yeah, no, that’s a great question. Well, you know, just starting at the basics, it’s the antitrust progressive era policy that I kind of think is almost like the private version of constitutional law. It’s sort of ultimate checks on corporate power and monopoly. It’s a big economic lever. I think the president, in some sense, using antitrust is deciding how concentrated or unconcentrated the economy is going to be by who they appoint.
You know, it’s the big difference between a merger friendly and non-merger friendly administration, and also basically how the big monopolists are treated, I think, differs. Is it like monopolies are our friends are going to solve all our problems or, you know, is it more like we’ve got to break these guys up or have some control over them? You know, that’s at the sort of the biggest 10,000 foot view.
Chris Hayes: And there’s sort of two places that this really comes into play, as my understanding, which is the Department of Justice, which can pursue lawsuits, right, backed by the U.S. government to break up companies or to stop mergers and the Federal Trade Commission, right. Is that fair to say those are the two main areas where this policy is enacted?
Timothy Wu: I’d say yes. But in my time in the White House, one of the things we made a major effort to do was to put the presidency a little more forward and central in the question of announcing what the policy should be. And also we tried to recruit. We created something called the White House Competition Council that tried to involve all the other agencies that have authority.
Chris Hayes: Interesting.
Timothy Wu: Yeah. And one of the good examples, Department of Transportation. So we got, you know, Secretary Pete involved and said, roughly, you know, you’ve got to be a little harder on the airplanes here and, you know, not just let them merge whenever they want and like shrink streets. You know, things have gone too far in the airline industry. We got the Pentagon, the Department of Defense got more involved in mergers. They ended up blocking a major missile merger that would have combined like the last two missile producers.
Yeah. So, more technically would have allowed the bigger (ph) producer to own the engine maker. But we tried very hard in the Biden administration to say, you know, it can’t just be about a bunch of lawyers sitting in Justice and FTC and their economists kind of making these huge decisions. The presidency, at some level, popular opinion has to play a little more of a role here.
Chris Hayes: So let’s also sketch a little bit. Let’s do a little bit of the history of antitrust, because I think you need that background in order to kind of appreciate where we are right now and particularly appreciate how much the Biden administration has done or attempted to do and even in some ways the break that Trump represented from his predecessors because I think there’s a real intellectual and ideological movement, political movement. So the birth of antitrust is industrial capitalism in the 19th century. Tell us a little bit about just the origins of the both intellectual and policy regimes of antitrust.
Timothy Wu: Yeah, the origins are sort of mixed very closely with the Gilded Age and the birth of a new form of business, the monopoly trust. So late 19th century, you see for the first time companies that have something like the power of countries or, you know, just an unrivaled level of power and wealth, much greater than anything that I’ve ever seen before in a private enterprise. You know, Standard Oil, U.S. Steel, men like J.P. Morgan, John Rockefeller and the public.
And during that time, particularly workers, farmers and some consumers, felt like, you know, this is terrifying. We’ve seen something new in the United States, inequality. This is kind of a much more, particularly in the north, obviously, much more even handed sort of small business kind of country, what’s going on here? And, you know, these have seemed to have no limits on their power and are really changing America in fundamental ways.
So the antitrust movement, late 19th and early 20th century, was an effort to change the structure of the U.S. economy, break up the monopolies and create much more limits on their power. Probably Louis Brandeis, one of the most famous figures involved during this period. Theodore Roosevelt brings the first big cases and they are successful. They do restructure the U.S. economy. We don’t accept monopolization of every sector.
There’s a big difference here between the course taken by the United States and other industrialized countries, particularly Japan and Germany, which were much more comfortable with the concentration of their industrial economies. So, yeah, that’s the origins. And it has a sort of progressive populist origin that I think matters because from the early days it was tied to public fear of giant monopolies.
Chris Hayes: And my understanding is that the logic as articulated by Brandeis and Teddy Roosevelt and the progressive crusaders for trust busting was sort of twofold. There was an economic logic and there was a political logic. So the economic logic was the basic idea that when competition goes away, prices for consumers go up and you get all sorts of inefficiencies. Monopolies can essentially exert total price control. And if you have vertical monopolies like Standard Oil, which owned railroads and distribution and oil, and they can basically charge whatever they want.
And then there’s a political argument that any private entity that gets big and concentrated enough is going to pose some kind of fundamental threat to liberty, as we understand it, which is akin to the constitutional structure argument you were making before, that this is a means of restraining private power in the same way that divided government and checks and balances restrains public power. Is that a fair way to talk about the two?
Timothy Wu: Yes, very fair. I think that Theodore Roosevelt and Louis Brandeis and Woodrow Wilson, those figures were very explicit about the sense that monopoly was a danger to democracy, and Brandeis said this a lot, sort of the American character. Brandeis once said, you know, the question is not whether U.S. Steel is efficient or not, it’s whether it’s consistent with a country in which people want to be free. And they had a very visceral sense that there was extraordinary incompatibility with companies that are as powerful, more powerful than political actors that have extraordinary influence over the political system, like who’s really in charge.
So I think that was much more of a factor then than now. You know, to go on a little bit, Theodore Roosevelt, when he launched his first big case against J.P. Morgan. In a letter, he wrote, he said, you know, the people want to know who runs this country and they want their, you know, their president and they want their government to stand up to powers greater than they are. So we have to bring this case.
You know, I think he’s an okay guy, JPMorgan, but, you know, the people want this done. So there was that. If I can add one more thing, I think it was less about prices back then and more about, you know, small businesses, farmers, sort of regular Americans, their opportunities to start a business. Brandeis was very concerned that if everybody was an employee of a giant company, we’d all sort of be like a new version of serfdom.
Chris Hayes: Right.
Timothy Wu: They were very worried more about that than like, oh, no, they’re going to raise the prices on milk or something. They’re worried about that. But I think they were more worried about these structural things.
Chris Hayes: Right. So the structural idea is that, like, if you have a country where there’s two grocery chains, that like no one can start their own mom and pop grocer and that actually starting your own mom and pop grocer and having mom and pop grocers has some like small d democratic value. It’s this sort of entrepreneurial spirit. The fact that people can have kind of a stake in their own community, like all this kind of localism, small business. This was all heavily part of the ethos that was driving this intellectual movement.
Timothy Wu: Yes, absolutely. And, you know, we should not neglect labor. Brandeis, to give him credit again, was very prescient in seeing these big businesses are just going to crush labor. I mean, actually, he saw it. He watched Carnegie Steel, you know, hire private armies and gunned down labor workers who were on strike.
Chris Hayes: Right.
Timothy Wu: And he’s like, it’s one thing when it’s a, you know, business. But these businesses are so powerful that there’s no way labor can stand up to them either, even organized in union form.
So, yeah, I think they’ve thought fundamentally about power and thought that you need the federal government as a countervailing power against entities of this size. I want to say those days, small business and unions were in much better terms. We can talk about that later, but, you know, they saw this as sort of everyone against the monopoly trust.
Chris Hayes: Right. That’s a good point. So, this vision, I think it’s fair to say, you know, it’s not like every administration is the same. There are huge variations in the level of concentration they allow, which mergers they allow, which they go after, which companies they try to break up. But that general antitrust consensus, let’s call it, held until around the ‘70s when this new thinking about antitrust emerges, particularly coming from the late Robert Bork and the law and economics movement that’s coming out of the University of Chicago associated with Richard Posner, among other others. Tell us about that sort of challenge to the old consensus of antitrust.
Timothy Wu: Yeah, there’s a big turn in the starts of the ‘60s, but becomes politically effective in the ‘70s and ‘80s, particularly after the election of Ronald Reagan. And the intellectual component suggests that the government’s gone too far, that we shouldn’t fear big business, but we should understand the efficiencies possible in big business. And the overriding presumption is Chicago, a very kind of laissez faire school that if business is doing something, it’s probably for a good reason.
That’s kind of the intellectual. We’ve been too suspicious. And so, you know, if they have this highly vertically integrated corporate structure, it’s probably for a reason that isn’t fully understood, but it’s probably efficient. And the kind of core of it was this new idea called the consumer welfare standard, which said, you know, the antitrust laws shouldn’t be concerned with democracy, shouldn’t be concerned about power or bigness or, you know, labor relations or unions.
They should be concerned just about the question of prices. It’s a very economic, microeconomic focus. Is this merger clearly going to make prices higher? Has this monopoly abused its power such to increase prices? And if you can’t prove that, you don’t have a case.
Chris Hayes: And that standard leads to a new regime of antitrust from Reagan. I think it’s fair to say through Obama, although I’m curious if you think so, where that’s the kind of default operating conditions, this sort of consumer welfare standard. We’re not worried about like, do we have enough small business mom and pop grocer entrepreneurs? Are we worried about bigness, qua-bigness and its role in the political economy of American democracy? We’re not interested necessarily in these labor questions.
Really, it’s a purely economic question, which is, A, let’s default to the economic logic of these firms that we are assuming making self-interested decisions in favor of efficiency. And two, we’re going to analyze whether we think there’s a likelihood of this ending up in price hikes for consumers. And if it’s not, then we’re basically not going to get involved.
Timothy Wu: Yes, I think that’s exactly the right summary. Chicago School of Antitrust is, one way or another, the dominant school of thought from the ‘80s, and I would date it to the end of the first Obama term. So, you know, there’s variations and the Democrats are a little more likely to bring cases than the Republicans. But, you know, a good example is a switch between the George W. Bush and the Obama administration, which, you know, in many ways seem like a watershed.
But in antitrust, nothing happened for the first four years, you know, that Obama appointed people who were, I guess, slightly more inclined to bring cases. But the ideology was more important than the personnel at that point. And, you know, jumping ahead a little bit, the Obama administration didn’t stop any mergers either.
Larry Summers was in the White House, very critical of antitrust, didn’t really believe in it at all. So there’s some of that. But, you know, ideologically, I think things only really started to shift at all late in the Obama administration and then only slightly.
Chris Hayes: Okay. I mean, I don’t think you can overstate this. Like, it’s almost a Copernican revolution that takes place intellectually, like the degree to which the Bork-Posner law and economics use Chicago view of this, which was a challenge to the old consensus becomes a new consensus. You almost can’t overstate it. I mean, it is what antitrust law is. It’s what is taught in schools. It’s like you learn the consumer welfare standard. It is the corpus of antitrust law that people learn as the as what we do now, right?
Timothy Wu: Yes. You know, maybe not in my class as much.
Chris Hayes: Right. Yes.
Timothy Wu: But it’s no question it became absolutely ideologically dominant. The older concerns about power, democracy, workers, farmers, small business were seen and almost targeted as out of date, obsolete, backward looking. I want to say a thought crime. And many of this, even the statutes were kind of excised from the collective memory. You know, there are entire statutes designed to protect small business like the Robinson-Patman Act.
And so strong is the ideological hold that no one will enforce them. It was a famous conference where someone showed up at a discussion of the Robinson-Patman Act in a clown outfit. He just showed up and he said in a clown outfit, you know, this statute is like an imaginary creature and doesn’t work.
And if you read the antitrust case books from the ‘90s and onwards, they have a little brief section on the early days, but then they skipped the price theory pretty quick.
Chris Hayes: More of our conversation after this quick break.
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Chris Hayes: So there’s a kind of counterrevolution represented by this school, Bork et al. And then a challenge to that really starts to form. You’re at the center of one of the people who I think is thinking in these new ways that’s kind of revived and furthered a vision of antitrust far more broad in its concerns and vision of what it’s there to do, right?
Timothy Wu: Yeah, I think, you know, my myself, I was in the Obama administration first term in the Federal Trade Commission working on enforcement, and I think that was a radicalizing experience. Great people, very hardworking, but there was not a merger that we could find a problem with. You know, they would work really hard. They would do the numbers. It was incredibly, you know, this weird way you can be inside an institution and everyone inside is working hard, so you’re satisfied. You’re not lazy, but you’re not actually doing anything.
And we didn’t stop. I mean, it’s egregious some of the things we let go. That’s when Facebook bought Instagram and we let Google buy Waze. We let Zillow buy Trulia, and before me, we had just let Ticketmaster buy Live Nation. You know, this stuff was pretty much merger to monopoly. Like, it’s hard to know how we got to this position. But even the Democratic administration, that was a very radicalizing period for myself.
Chris Hayes: And one of the things that’s also happening during this period, and there are different empirical metrics by which this might be measured, but a lot of concentration happens during the period in which the antitrust consensus shifts to letting mergers happen, to allowing concentration, except in totally extreme circumstances. I mean, it’s striking to me the other day, it is amazing to me, you know, Barry Lynn, who wrote this book, “Cornered,” opens with this amazing anecdote about the pet food when there was like, I think about a decade ago or so where there was a pet food factory in China that was producing pet food that was making pets sick and had to be recalled.
And the recall was across like every single brand of pet food, more or less, because it turned out that like the amount of concentration of pet food is like there were very few actual distinct companies making pet food. There were a bunch of brands that are all been integrated into the same company. You find this out.
The other day I walked over to get to my local Walgreens, which is now Dwayne Reed Walgreens. And I was like, wait, I thought those were like the last two, I mean, CVS, but the last two left now. Now they’re the same? You know, Zillow, Trulia, like there has been an enormous amount of concentration, right? We’re not imagining that over the last several decades.
Timothy Wu: No, not at all. I think that, you know, across industries, you see this pattern of everything going down to, you know, two or three big guys, maybe four big guys. Some of the industry is very dramatically affected. Our hospitals is a very good example where you across the country, you see and maybe listeners experience this, like what used to be three or four hospitals in a town become like one hospital.
Chris Hayes: Yep.
Timothy Wu: Airlines merged down. I already talked about Live Nation, Ticketmaster. Ticketing becomes a monopoly. Broadband, the cable companies merged together. There’s a few little challenges here or there, but basically it was what called the green light era for antitrust or conversely the, you know, the winter for antitrust law enforcement. And, you know, a bunch of us started to wonder, you know, what was going on.
There were always a number of people who were questioning of the Reagan view, but they’d been pushed to the side and treated as like weirdos and ostracized and not given government positions. Guys like Bert Foer, Frank Foer’s father, he kind of was carrying the flame. But, you know, took some Barry Lynn. I give him a lot of credit. You know, he wrote this book in, I guess, ‘08t or so, “Cornered” saying, like, what’s going on here? He wasn’t even a lawyer. He just like had noticed everything.
I got into this. Zephyr Teachout and I ran a political campaign. We ran for lieutenant governor against Andrew Cuomo and Kathy Hochul, and we made antitrust a big part of our campaign. And, you know, on the campaign trail, people were like, yeah, why the hell is our hospital merged? You know, what’s going on here? Why is my broadband provider, you know, hiking my rates? There’s no competition. So we got a lot of traction for that. Lina Khan was part of that campaign. She was our advisor.
So there’s this like small group of people. There’s other names I probably should mention, but relatively small kind of dissenting groups who start to think like we have gone terribly wrong here somewhere.
Chris Hayes: And we should say Lina Khan is the head of the FTC now under the Biden administration, had been at Yale Law and was also one of the people writing in this space about this sort of reviving this view of antitrust, this broader view of what it was there to do and why it was important to enforce existing statutes.
So all this set up now to talk about characterizing the Trump administration. Part of the reason I wanted to do this, this topic on “The Stakes,” which is this series we’re doing, “WITHpod 2024: The Stakes,” is I’m really trying not to like make this a hackish enterprise in which we tell you why Donald Trump is bad and Joe Biden is good, but we genuinely try to be like pretty clear eyed about like what the different priorities are.
And I do think antitrust is a place where Donald Trump’s legacy is interesting and kind of complicated for the Trump administration. How would you describe it? What would be your top lines to characterize the Trump administration’s antitrust policy?
Timothy Wu: If you don’t mind going personal to being in the Obama, I was in the Obama White House the very end of it. And, you know, the campaign was ongoing and we started to realize we had a problem. You know, the economy was consolidated. The White House had done all these own studies about inequality and there was a little like, what the hell happened here over eight years? We let the economy get a little too unfair here.
And in its own way, I think Trump has, whatever you want to say about the guy, he has political instincts. And, you know, he noticed that a lot of Americans were also angry about the economy and the sense that, you know, a couple of big companies on the east and west coast seem to have more power than seem fair. So I would characterize him. I’ll say two or three things.
I think he is a populist and I think he has, to his credit, an instinct for what the public fears and is concerned about when it comes to big business. It’s often expressed in very strange ways, you know, like somehow immigrants are running these companies or whatever or —
Chris Hayes: Right, globalist elite.
Timothy Wu: Yeah. Or sometimes again, anti-Semitic in weird ways, although now that’s gotten more complicated, but whatever. So, he has his finger on that. And one thing that Trump did is he broke the sort of total freeze on antitrust cases. He refused to hire people who would just sit there and do nothing. So it was a break from the George W. Bush administration, which did almost nothing, very close to nothing. But on the other hand —
Chris Hayes: Yes, what’s on the other hand?
Timothy Wu: — like many Trump things, the whole enterprise was idiosyncratic and personal and seemed to have a lot to do with who his enemies were and who his friends were. So, you know, during the Trump administration, it started to feel like, well, you go in to see Trump to see if your merger is going to get approved or not.
Chris Hayes: Yes.
Timothy Wu: You know, this was the impression. And some of the mergers that seemed obviously illegal were nonetheless approved. A good example is a Sprint T-Mobile, you know, two phone companies who have merged and since then raised prices.
Chris Hayes: Shocker.
Timothy Wu: You know (ph), it’s shocking. It was obvious to anyone that that would happen. But, you know, they seem somehow to have special regard for them. In fact, his head of the Justice Department negotiated a deal. He got involved in negotiating the deal between them. He got involved —
Chris Hayes: The attorney general?
Timothy Wu: No, not the attorney general, the head of the antitrust division. All this stuff came out about his texts as he was like trying to broker a deal. Very inappropriate to like try to make —
Chris Hayes: While being the head of the antitrust?
Timothy Wu: Yeah. He used his position of examining the merger to set merger conditions and broker a deal and have them give assets to another company. The whole thing was terrible. Yeah, the whole thing was terrible.
Chris Hayes: Wow.
Timothy Wu: Yes.
Chris Hayes: And there was some reporting to suggest that I think, I forget which of those companies was held at large part held by SoftBank, right?
Timothy Wu: Yeah, that’s right. Sprint.
Chris Hayes: Sprint was held by SoftBank and the owner of SoftBank, I believe, was a Trump supporter. And there was some reporting to suggest that they were looked upon favorably for that reason.
Timothy Wu: Yeah, I think that there was a lot of smoke, how much fire there was. But, you know, I think there’s a lot of evidence. There was very much the question of favorites, you know, what’s this going to do for me and enemies? One of the first things that the Trump administration did was attack an AT&T Time Warner merger. You know, no one’s fully, completely proved that Trump ordered that merger. But of course, he hated Zucker, hated CNN, hated everything about Time Warner.
Lo and behold, his enemies end up having their mergers challenged. His friends get their mergers appealed. So we kind of went from this do nothing kind of law, which was bad, to something which arguably is worse, which is the antitrust law is the cat’s paw of the king kind of situation. Yeah.
Chris Hayes: Right. I want to stay on this for a second because I think people don’t quite appreciate how much this was the case, that there was a break with the ideological antecedents of conservative antitrust policy under Trump. No question.
Timothy Wu: Yeah.
Chris Hayes: It was far more activist. And yet it remains to be definitively determined how much this was the case. But there were indications, genuine bits of evidence, indications and a widespread perception amongst, I think, Fortune 500 corporate elite, that this was essentially if you were with Trump, if you were his friend, you can get the merger approved. And if you were his enemy, you’re going to have a problem.
And that this became this kind of incredibly powerful, almost unilateral lever for Trump to wield against people he didn’t like. And in the most notorious case being, and I think it was somewhat surprising when the DOJ announced it would be blocking a proposed AT&T-Time Warner merger. There is some evidence to suggest that at least partly it was born of the animus Donald Trump had towards Jeff Zucker and CNN’s coverage of him. And to the extent that’s true. That’s pretty bad, right.
Timothy Wu: Yeah, I used think it’s one of these things where Trump didn’t think there was any problem with it.
Chris Hayes: No.
Timothy Wu: I mean, I think —
Chris Hayes: He’s just like, oh, I can do that? Yeah.
Timothy Wu: I think he thought it was fully within his rights to, you know, order breakup of any company he didn’t like. And I think his White House counsel sort of restrained or slightly done that. But there’s so much circumstantial evidence that the White House, the presidency were involved in antitrust decisions that it’s hard to sort of deny it.
And, you know, over drinks, over beers in ways that can’t fully be reported that I hear it even more about it. You know, a good example, a good evidence came from a whistleblower at the DOJ, a guy named John Elias, who’s a friend. And, you know, he witnessed the attorney general, Bill Barr, asking or ordering that the antitrust officials to take a hard look at the marijuana industry and investigate their mergers.
And anything else was going on, I guess, based on a personal animus against marijuana industry, cannabis industry. So, you know, it was it was up and down like this. And I think it became understood, as you said, that corporate executives understood that the antitrust law was something where you went to plead your case in the White House and to the president, if possible, you know, which is the opposite of what you would hope would happen in a real democracy.
Chris Hayes: And we should be clear, too, that because we did recently a podcast on Project 2025, I think you said Trump didn’t see a problem with this. I think there are people around him, if we think about an ex-Trump administration, who basically think there’s no problem here. In fact, they think the problem is these bureaucrats as intermediaries that the executive is vested in the president.
If the president wants to block an antitrust, he’s been empowered by the people to do that. And we don’t need all these civil servant bureaucrat nerds like Tim Wu and Lina Khan, all these people running these analyses to come up with some kind of even handed notion of the president could do what he wants. He wants to block mergers, he blocks mergers. He wants to say okay, it’s okay. He’s elected. Ultimately, he’s accountable to people. So I think there’s a view that like what we’re describing as like appalling and corrupt, you know, if confirmed, I think there are people on the other side who say that’s fine.
Timothy Wu: Yeah, there are people who say it’s fine. There are people who see the Justice Department as a group of lawyers who are supposed to work directly for the president.
Chris Hayes: Right.
Timothy Wu: You know, this is kind of a pre-Nixon view —
Chris Hayes: Yes.
Timothy Wu: — that they are the government, the president’s lawyers, and he can fire them if they don’t do what he says. So, you know, if he hates Jeff Bezos and wants to order his department to break up Amazon, well, you know, he was elected by the people and they know he’s a little bit hot-tempered.
Chris Hayes: Right.
Timothy Wu: But that’s what they voted for.
Chris Hayes: Right.
Timothy Wu: There is that position. I think, you know, maybe the risks are stating the obvious. It’s dangerous. I do think the president should have a role in staying policy, like maybe say big tech is a problem. But the idea that, you know, whoever donates more money to the presidency, you know, is safe seems to me obviously pretty dangerous to democracy, too.
Chris Hayes: We’ll be right back after we take this quick break.
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Chris Hayes: Just in terms of the Trump record, there’s the Sprint T-Mobile, which they allow, DOJ blocks the AT&T-Time Warner, which ends up having huge ramifications because then there’s subsequently another merger that does go through and has changed the media landscape in important ways. In the last year, there’s actions against Google and Facebook, and again, I think both of those. kind of like the AT&T-Time Warner. could be justified in the merits as good antitrust enforcement and also were colored by a perception that this was part of a broader animus against big tech, which he felt had betrayed him.
Timothy Wu: Yes, I think that’s right. And that’s the problem with having a personality driven antitrust law.
Chris Hayes: Right.
Timothy Wu: Yeah. You know, you want people to trust in the rule of law, not in the rule of men. Let’s put it that way.
Chris Hayes: And one more thing about the Trump administration seems important to me is that all the things we’re talking about are coming out of the Department of Justice. There’s an antitrust division at the Department of Justice. There’s also the Federal Trade Commission, FTC. That’s where you worked in the first Obama administration. They also have tasked competition policy. They can bring actions on mergers and things like that.
My understanding is that the FTC, unlike the DOJ, which was more activist than its predecessors, although arguably in ways that raise suspicion, the FTC was pretty silent during the Trump years and didn’t do a ton.
Timothy Wu: Yes, that’s right, other than the Facebook case. The FTC did break up Facebook. So they didn’t do nothing. Sorry to —
Chris Hayes: All right, that. Good point.
Timothy Wu: Can I say another thing about the Trump years? Many, you know, experience in the White House is when you look carefully at most things the Trump administration did, there was a big difference between the facade and then like what was behind the scenes. You know, it was often like going to a Hollywood film set where you notice that just the front is there.
Chris Hayes: Right.
Timothy Wu: And the front in the in the Trump antitrust enforcement was the big case against Google, the big case against AT&T-Time Warner, and the big case against Facebook, sort of big celebrity defendants. But behind the scenes, there was a lot not happening. Like it was sort of —
Chris Hayes: Interesting.
Timothy Wu: Yeah. And a good example, really one of the most troubling was a great reduction in the criminal investigation of cartels. So, you know, price fixing cartels are criminally enforced. And this is when people get together in smoke filled room, old school style and say, all right, let’s raise the price of wheat or something or, you know, this component you never heard of. And it’s not famous companies or anything like that.
Well, for whatever reasons, during the Trump administration, behind the scenes, criminal enforcement cartels went way down. And, you know, maybe the guys he appointed just like were kind of like him. On the one hand, wanted to say and make a big splash. But the other hand, were quietly like letting business have what they want. A lot of much lower profile mergers were passed on, even troubling ones and they’re including a bunch of Defense Department stuff, you know, all the kind of slightly less visible kind of corrupt feeling industries.
They seem to get all their mergers through. So, you know, telecom and defense, those kind of things. So I just want to say at the core was this highly lax attitude, which was sort of masked by a high profile side to it. It didn’t go deep. It did not go deep is what I want to say.
Chris Hayes: That’s a great summary. So that brings us to the Biden administration —
Timothy Wu: Yeah.
Chris Hayes: — which I think is really quite a break with its predecessor and with predecessors in Democratic administrations and you have first person account. You were brought into the White House, right, in a White House position to sort of oversee and advise on anti-competition policy. He appointed Lina Khan, who is, you know, one of the most outspoken intellectuals, writers, theorists of this kind of new antitrust in the country, arguably, which is a huge deal, and business hated it and fought it. So, what is the Biden administration’s antitrust vision and implementation been like?
Timothy Wu: Yeah, I think there was a conscious explicit decision by the president to go back to FDR and Theodore Roosevelt and Brandeis style antitrust to revive progressive era antitrust, new deal antitrust, and make it as it once was, oriented less towards prices, more towards small business workers, and this question of corporate power. So there was there was a major turn. The president himself blessed this. He gave a speech announcing that we are going back to the FDR style doing things.
You know, we pitched the president on this. The president said, you know, what are we going to do to make the economy fair again? But, you know, in some ways, President Biden noticed and learned from the fact that that Trump had noticed something. People were mad. But, you know, there’s some ways we disagreed with the Trump administration. We certainly disagree with the corrupt way it was done. But we also noticed that they had they had their finger on something that the Democrats were kind of ignoring, which was the rise of corporate power was making a lot of Americans very angry.
And so, you know, Biden comes in, gives this big speech, writes an executive order, creates the White House Competition Council. He then appoints Lina and also Jonathan Cantor, who is a figure, very pro enforcement figure. And, you know, we wanted to make not a little adjustment like the Obama administration or Clinton, but to turn the ship 90 degrees. And, you know, I think we’ve had some success.
Chris Hayes: Yeah. Tell me about some of the cases and some of the areas where you can point to that success.
Timothy Wu: Yeah, I think a big one, not always in the headlines, is this merger and consolidation policy. Jonathan Cantor, Lina Kahn have blocked over 40 mergers already.
Chris Hayes: Wow.
Timothy Wu: They’ve challenged some big ones. Stuff that happened during Trump or during Obama is not happening. I think it’s a totally different atmosphere if you talk to people on Wall Street about what it, you know, trying to get them trying to merge the monopoly looks like. You know, it’s not like Facebook’s trying to buy TikTok or anything like that. It’s a totally different story.
I think it was clear in the 2010s, particularly in tech, they felt they could just buy any competitor and that would be the answer. So I think merger environment has changed. If you talk to anyone on Wall Street, they’ll agree with that. And another big thing, very visible, is we have broadened the attack on big tech and the effort to sort of, you know, have a reckoning with the power of big tech.
So there’s a lawsuit against Facebook seeking dissolution, which we restarted. We have had a trial against Google. The verdict will be coming out soon.
Chris Hayes: And that’s on its ad pricing?
Timothy Wu: No, this is on the deal with Apple to prevent Apple from going into search.
Chris Hayes: All right.
Timothy Wu: And in exchange, take $20 billion a year. That’s a short form of it. So this kind of, you know, deal to keep Apple and other competitors of a search in exchange for money. Lawsuit against Amazon. Lawsuit against Apple. That’s basically almost every company in big tech. And those are, you know, big old style, you know, Theodore Roosevelt style antitrust suits.
Chris Hayes: And those are coming out of DOJ?
Timothy Wu: And Federal Trade Commission, a mix.
Chris Hayes: Okay. Cool.
Timothy Wu: They kind of divide them up. You know, in the federal government itself, I mentioned earlier we founded the Competition Council. So every six months, all of the secretaries or heads of agencies who have something to do with competition policy come in front of the president and like, what have you done lately? What are you doing to kind of move the economy?
And I think it’s had some big results. If you haven’t noticed, the Department of Transportation is finally being a little harder on the airline industry after essentially being in some version of their bedroom for the last 40 years. The Defense Department has finally started to think that it might need more than one person building some of our most important defense equipment, including missiles and airplanes and other things.
Chris Hayes: That’s such an interesting area, too, right? Because you’re talking to go back to Trump about the sort of these kind of celebrity defendants, right? So the idea of like, if you bring some big actions against companies, everyone knows and their faces with every day. And that’s, you know, that’s true in Biden as well. Amazon, Apple. But a huge part of the economy is happening within companies that you’re not necessarily thinking about or interfacing with every day.
Timothy Wu: Yeah.
Chris Hayes: And that’s particularly true about weapons and the provision of like no consumer buys missiles. There’s only one entity that’s going to buy missiles here in the United States.
And that’s the Department of Defense. It is the sole purchaser.
Timothy Wu: Yes.
Chris Hayes: And so the question of how diversified do you want this sort of military industrial base to be? Do we need more than one company providing our missiles? Should there be three or four? It just exists in a totally different universe than consumer goods.
Timothy Wu: That’s right. And it’s pretty dangerous, I guess, should say to have just one company for anything truly essential. And also, then they charge whatever they want.
Chris Hayes: Right. Yeah.
Timothy Wu: I mean, the cost of American taxpayers, hundreds of billions of dollars when you have single source contracts. I mean, the numbers are crazy in defense. The difference in the Biden administration is we went deep. We spent a lot of attention on the little stuff that doesn’t make the headlines, but, frankly, has billion dollar price tags, whether it’s in defense, whether transportation, the shipping industry. We got very concerned with trains, blocked train merger.
A lot of stuff is, as I said, not going to make a lot of headlines. The effort to break up Ticketmaster, Live Nation, which launched just a few weeks ago, is high profile, but we didn’t just want to make this a show and a dance.
Chris Hayes: Tim Wu is a Julius Silver professor of Law, Science and Technology at Columbia University. He’s the author of a bunch of books, all of which I’ve read that I’ve recommend. And he’s known as one of the chief architects of the Biden administration’s competition antitrust policies. Tim, it’s great having the program.
Timothy Wu: Pleasure. It’s great. Thanks a lot.
Chris Hayes: Once again, great thanks to Timothy Wu. He really is one of my favorite public intellectuals. I think he’s just an incredible writer and thinker. And his books are great. I really highly recommend them. You can e-mail us at withpod@gmail.com. Get in touch with us using the #WITHpod. Search for us on TikTok by searching WITHpod. You can follow me on Threads, X, and Blue Sky. At all places I’m @chrislhayes.
“Why Is This Happening?” is presented by MSNBC and NBC News, produced by Doni Holloway and Brendan O’Melia, engineered by Bob Mallory and features music by Eddie Cooper. Aisha Turner is the executive producer of MSNBC Audio. You can see more of our work, including links to things we mentioned here, by going to nbcnews.com/whyisthishappening.
“Why Is This Happening?” is presented by MSNBC and NBC News, produced by Doni Holloway and Brendan O’Melia, engineered by Bob Mallory and featuring music by Eddie Cooper. Aisha Turner is the executive producer of MSNBC Audio. You can see more of our work, including links to things we mentioned here by going to NBCNews.com/whyisthishappening?