The Antitrust Advocate

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Emma Varvaloucas: Matt, please tell us the story of how monopolies have taken over everything.

Matt Stoller: Prior to the 19, late 1970s, the way we regulated business was in two ways. We said, you shouldn’t be too big and powerful and you shouldn’t have conflicts of interest. We changed our minds. A bunch of economists and philosophers said, Hey, actually, conflicts of interest are fine. And you know what? If you’re big, that just means you’re good.

And so we changed the way we enforce our laws to prioritize bigness and efficiency. 40 years later, we’re in a society dominated by monopolies.

Zachary Karabell: What Could go Right? I’m Zachary Karabell, founder of the Progress Network, joined as always by Emma Varvaloucas, the executive director of the Progress Network. So today we’re gonna talk to somebody who has focused for many, many years on the perils and problems of tech and big company concentration. So who are we gonna talk to today, Emma?

Emma Varvaloucas: Today we’re talking to the antitrust guy. He’s Matt Stoller. He’s the director of research at the American Economic Liberties Project. He runs a Substack that’s called BIG. And he also co-hosts a podcast called Organized Money. And he has written a book because of course he has, which is called Goliath: The 100-Year War Between Monopoly Power and Democracy. And he was also a former policy advisor to the Senate Budget Committee. So interested to see what he asked to say about Biden and Trump and everything in between when it comes to antitrust. You ready?

Zachary Karabell: Let’s talk to Matt.

Emma Varvaloucas: How we start with, why have you devoted the past however many years of your life to the goal of breaking up monopolies?

Matt Stoller: I believe monopoly power is very, very important. Foundational to how we live our lives. I could see other problems at various points being more important. But right now, I would say I think consolidated economic power is probably the most, I think it’s the most significant political problem that we face.

I’m not gonna say it would always be the thing, but right now it is. Why do I think that? I think most people interact with a thousand companies a day. They don’t really interact with their government. The main way that most people interact with their government is actually through state lotteries.

That’s the most common interaction with seeing ads and things like that. Like there are, you know, obviously you go on roads and stuff like that. You, you consume government infrastructure. When you look at your iPhone or Android phone, you’re using, you know, for your map, for maps, it’s, you’re using GPS, there’s a, you know, government functions surround you, but the interactions we have every day with institutions are mostly corporate institutions. What you buy, what you sell, who you work for, who you employ, the ideas that you know, the the, the ideas you get. I mean, right now we’re talking, and this is through a corporate structure. It’s going into distribution, which is mediating through corporate institutions.

People are listening to it through an app which is put out by a corporation. All of these markets are defined by rules and by power. And when you think about are we living in a free society, you have to think about how people actually live their lives and how people actually live their lives is through these markets.

And so if these markets are consolidated, you’re talking about an unfree society because every monopolized market or market that is run by an oligopoly, which is a small number of entities, is a market that is run by a dictator or a small set of dictators who did, who’d structure the terms of trade, the prices.

You create enough monopolized markets and you have a society that might be nominally democratic in terms of who you vote for in terms of parades at election time. In terms of some things like can you do flag burning or, or whatnot, and they’re important questions. But in the lives that people are living their commercial lives, those interactions they’re having every day, they’re really powerless.

And so I think we need to attack those problems because right now we have a monopoly crisis in the US and it really is a political crisis as well, although it’s not commonly seen as such.

Emma Varvaloucas: Do you think you just give us a real world example of something that people are touching every day in their lives of, you know, what you just described.

Matt Stoller: Let’s take an issue like of censorship, right? Which I think a lot of conservatives were very concerned about over social media companies not allowing their voices to be heard. They also say this about the banking system. Banks will not allow them to have bank accounts if they have certain views. On the, the liberal side, you’ll see people who, you know, their, their content is taken down or blurred out. I know Instagram did, you know, did this to some group that was talking about abortion. You know, you see this all the time, right, where when Mark Zuckerberg comes out and says, here’s a thing that we’re doing about content moderation, whether it’s, you know, something you like or you don’t, it’s covered as major news and it’s not covered as major business news.

It’s covered as major political news because people understand that he’s making political choices using his highly important and impactful corporation. He’s actually agreed with me, although he wouldn’t say that now. 15 years ago, he was explaining why he hired Sheryl Sandberg to be his deputy at Facebook, and he talked about her experience working at the Treasury Department, and he said, I hired her because she has government experience and Facebook quote, in many ways is more like a government than a business. Really we’re setting policies. End quote. 

That’s what he said, right? And I think you see that with every consolidated market. If you’re a farmer, John Deere dictates a lot of what you do, or you’re, who you buy or sell from, dictates a lot of what you do. You know, if you’re in advertising, it’s Google, or it’s a small number of ad agencies that have rolled up power in the industry.

You could go through and just find every single industry, not, I mean not every one of them, but almost all of them have a boss at this point, and that’s really dangerous.

Zachary Karabell: So why is it democratically dangerous? I mean, what in, in what way does the convenience of Amazon, or for that matter, I suppose, you know, Walmart online, in what way does that degrade democracy, even though it’s, you know, our interaction with those things is predominantly some commercial transaction. They provide a platform for us to buy a range of goods. It provides a way for a lot of different stores from large to small businesses to sell their goods. How is that imperiling the fabric of democracy?

Matt Stoller: Well, you know, I think in a lot of ways, right? I mean, you know, Amazon has rolled up the book market and if they choose to not sell your book, which they have done, you’re not gonna sell your book, right? And books are the lifeblood of ideas. So you can say, oh, it’s, you know, it’s convenient. And I buy from books from Amazon and its experience has always been pretty good, although it’s, you know, it’s gotten worse over the last couple of years. But that’s dangerous. They have power to control what ideas are sold or transacted in America. So on a, on a basic level. 

On another level, you know, there was just a couple of lawsuits that were filed about price discrimination, which seems like a weird technical issue, right? And one of the cases was filed against Pepsi and the Federal Trade Commission said Pepsi is giving better prices to a large, unnamed big box retailer, a.k.a. Walmart, than anyone else in the country. You talk to any retailer, right? Anyone from an independent store to a really large chain store that’s not Walmart, and they will tell you Walmart gets better prices.

They can sell retail, must have items like milk, eggs, soda. They can sell retail better than these guys can buy at wholesale, which means if you want to start a grocery store or something that competes with Walmart, you can’t, because Walmart just has better bargaining power, not they’re, they’re not more efficient, they just have better bargaining power.

And what that means isn’t just that you can’t start a rival store. It’s that if you wanna make a product and put it for sale in front of the American public, you have to go to Bentonville, Arkansas, the headquarters of Walmart and negotiate with a hundred lawyers who will take all your margin. Or you have to go to Seattle and do it through Amazon.

And that means there aren’t new products getting into the market. There might be some from China, but it’s, we really have less and less and less diversity of products. Now we get back to the basic question of what is democracy? Is democracy the idea that, you know, you can get, that you can just buy stuff somewhat conveniently, although I think the convenience factor is we can disaggregate that from the market power. Is that democracy or is democracy being able to enter businesses, that lines of business that you want, make a go of it, build local businesses, have some power over your own community, or live in a community where you have power instead of someone in Bentonville or New York or Seattle?

I think these are the questions that I’m thinking about. And most people when they say, you know, two thirds of Americans think the government works for the rich, and it’s not just because of tax policy, it’s because they feel like they don’t have any power over their community. And the reason for that is because the distant masters that are running things are doing so from corporate offices in these very, very, very large firms with competitive advantages that are fundamentally unfair and are not based on being better operationally, but are based on essentially having more bargaining power or political favoritism. 

And so I think most people increasingly don’t feel like we’re living in a democracy, even though the forms of it are there. And it is because of companies like Walmart, Amazon, you know, the, the big guys that strip our livelihood and our, and our communities of, of power.

Emma Varvaloucas: Let’s talk about those distant masters who are running things. I love that phrasing. So historically, I believe that breaking up monopolies was a bipartisan issue, but doesn’t seem to be much appetite either on the right or the left these days. So how did we get here? What happened?

Matt Stoller: Well, I, so I would take issue with that. I do actually think there’s a tremendous appetite you’ve seen in Trump in 2020. He filed the Department of Justice under Trump, filed the first major monopolization cases in 20 years against Google and Facebook. The. Administration then continued those amplified, those filed additional cases against Apple, Amazon, Ticketmaster, United Health Group.

There’s a lot of corporations that are, that are now having to defend their monopolistic practices in court. Largely supported by Democrats, but some Republicans supported it, some Democrats opposed it. And so I think you, you have definitely seen tremendous policy, movement and political support for breaking up monopolies.

It takes way too long, but it is, it is there. What I do think is happening though, is that the political class, like if you talk to like nor to normal people and you ask them about Ticketmaster, they hate Ticketmaster and they want it broken up. Right? 

And I think that’s broadly true. Most people think that power corporations are too powerful and they want more investigations in regulation and, and antitrust. I don’t think they know that that stuff is happening because I think the political class in both parties doesn’t talk about it. And that is because, you know, this philosophical change that happened in the late seventies, early eighties, a move towards thinking about efficiency and consumerism as the essence of America and not thinking about things like the rights of people who do work, you know, who work for a living, whether they’re a, you know, a factory worker or a farmer, or an engineer or a business person.

Our ability to build things right really just became unimportant in, and it was just about consumerism and efficiency. And so the, the minds of the political class in both parties, that’s how they think about the world. That’s how they talk about the world. They don’t see power in the commercial sector. That is changing though.

You know, you’re seeing, you know, you saw with Trump talk about tariffs a lot That isn’t, that is a market shaping policy. And so a lot of people are getting used to this language. You saw in the financial crisis, people sort of noticed, wait a second, these private institutions that are very large seem to have an impact on our lives.

So there’s been this kind of fumbling around an attempt to reclaim the language of power in our commerce, and I think it’s really getting there. It’s just still penetrating, I think the political class and it’s starting to really get into the Democratic party in a, in an important way. Especially because I think at the inauguration you saw those big tech guys sitting, all sitting there and that was an, that was, I think, a, an important moment. The Republicans saw the Hunter Biden laptop censorship. That was a radicalizing moment for them. They were like, wait a second. There are people running this society we didn’t think about, and I think the Democrats saw that with those guys sitting at the inauguration saying, wait, they have all the money and power in the world, and they’re sitting there celebrating Donald Trump’s inauguration as president.

So it’s, I think it is happening.

Zachary Karabell: There was also a lot of Republican state attorney generals who joined these suits. I mean, again, for different reasons than the Democrats. Some of them, because of censorship, were feeling like the social media and big tech companies had kind of colluded to silence voices. But nonetheless, you did have a lot of Republicans.

Matt Stoller: A hundred percent and it isn’t, wasn’t just censorship. You know, you have some of them just joining because they think there’s too much market power there. In advertising. You have, like Ken Paxton in Texas, very right wing. He’s not just leading a Google case on advertising technology. He’s doing stuff on privacy.

He’s doing stuff on seeds and chemicals with Lina Khan, who was the chair of the Federal Trade Commission. There’s a lot of really interesting, weird stuff when you get below the surface, I mean. Today, apparently, or yesterday, the Indiana House representatives passed a ban on non-competition agreements for doctors.

So there are these corporations that tell doc, you know, force doctors to sign provisions in their contracts saying they won’t go and work for a rival. There’s a movement to ban that practice. It’s not just doctors, it’s happening to, to everyone. But there’s a movement to ban that practice that just, that bill just passed in Indiana. This is a very conservative Republican state. 

A lot of these things are happening. I do think it’s, you know, a lot of what, you know, the Trump administration is kind of, I would say apply, way to put it, would be incoherent on these questions, right? They have people on both sides and I don’t think they have a firm view on, on market power.

But I don’t think that should obscure the fact that there is a lot of movement here almost. I mean, I think an intellectual revolution and political revolution that’s going on.

Zachary Karabell: So look, I, I mean, I have one serious question about the breaking them up part. You know, one is the legacy of the 20th century, two, the biggest challenges post US Steel, which was like the only real big trust thing before the Clayton Act, under the Rose Teddy Roosevelt administration. Then you had the breakup of Standard Oil and you had the breakup of AT&T which were two of the larger, you know, mid 20th century monopolies. One in obviously oil, the other in communications. 

And within 20 or 30 years, you essentially had, instead of one dominant player, you had five or six. And I just wonder about the breaking up part of the equation in that like let’s say you broke Facebook up into five components, you know, Instagram, WhatsApp, Facebook as a marketplace, maybe their AI stuff.

I mean, I don’t know, you could figure out what, what those units would be. Let’s say there were six and Facebook’s a $2 trillion company and then you’d have six, each of them would pro, would probably get bigger than they are now. So let’s say you had six, $750 billion companies. You did the same with Google, with search and with advertising, and you did the same with Amazon.

You broke up Amazon web services from their marketplace, from all these things. So instead of seven dominant tech companies, you’d have, I dunno, 55. Would that really at the, at the, you know, the kind of questions that you’re talking about make a meaningful difference when they would still have a lot of collective interest in their businesses being intertwined, given what the business models are, data sharing, you know, data mining, data selling. So, I mean, as appealing as the break them up is from the perspective of if you believe these companies have too much market power in a way that’s inimical to democracy, I’m much more skeptical that it would be any less inimical to democracy to have like 55 $500 billion companies rather than seven $3 trillion companies. 

Matt Stoller: I could address that specifically, but just the idea of breaking up, breaking up. But it’s important to understand that anti-monopoly policy is not just about disassembling large firms. There are a lot of, it’s all, it’s about putting rules in place to make sure that new firms can get into the market, right?

So if you take, say, you know, AT&T’s been broken up three times in the 20th century, and you know, the first time was in, I think it was like 1913, 1914, and they said you have to allow interconnection. You have to, you know, do a bunch of different things. The second time was in the 1950s when they said, you know, you have to spin off your Canadian entities, but you also have to license your patents on a non-discriminatory basis to all comers. Right? 

That wasn’t a breakup in that, that particular part of it, but they had to license, you know, one of their patents was the electronic transistor. And so they had to teach a bunch of different companies how to build transistors, including, you know, a small company like Texas Instruments, Motorola. Ultimately, you know, Fairchild Semiconductor started, I mean, the basis of Silicon Valley started out of that consent decree.

I think you saw something similar in the 19, in 1960s and seventies with case against IBM, which ultimately was dropped, but IBM unbundled its software from its hardware, which created the American software industry. IBM had a much more open approach to the personal computer ’cause they were afraid of, of antitrust.

So there’s, there’s this, Microsoft wasn’t broken up in the late 1990s, but they were afraid of antitrust so they didn’t squeeze a young company called Google, even though they had control of browsers, they didn’t squeeze Amazon, they didn’t squeeze Facebook. So what you see is that, you know, at inflection points, technological inflection points, which always, you know, come along, we, right now with AI is one of them, you know, new companies come in and, and shake up markets unless. You allow monopolization to happen. So the shift to mobile in 2000 teens when we weren’t enforcing antitrust law, we didn’t see a great new mobile search engine. Google was a good desktop engine and they leveraged that into dominance in the mobile.

Same thing with Facebook. It was a good desktop social network. They then bought Instagram. They bought WhatsApp. So, you know, competition happens. It’s not just about breaking up, but to your question. When Standard Oil was broken up, they broke up into about 30 pieces and it really never reassembled. But these were all very important and powerful companies in their own right.

Indiana Standard Oil had this idea of cracking oil to produce gasoline more efficiently. And they appealed to New York before the breakup and said, Hey, can we just invest money into this new technique? And New York said, no, we’re a kerosene company. We don’t need to get into this space. Then the breakup happened.

Indiana Standard of Oil, invested the money, built this thermal cracking method, you know, then the automobile industry just blew up. It was really important. They licensed it to everyone. The whole industry became much more efficient, right? So what you see is that, you know, these companies kill tons of innovation inside their own walls, right?

Talk about Microsoft, like they just, just, people come up with great ideas there all the time, and. Just those ideas are killed in the crib by ri, you know, corporate rivals within Microsoft. It’s true over and over and over and over. If you split these companies up, then you will just have lots more innovation that will come out, even if it’s still going, only going from like one company to two. Right?

If you do one company to five, or if you do one company to two and you make it interoperable so new companies can come to the market, it’s even better. But I think the idea that, well, you know, they’re just really powerful companies and I guess if you make them a little less powerful or a little smaller, it’s not a big deal ’cause they’re still big companies. I mean, whatever. A little bit of progress is better than nothing. Right? 

I think essence of it, I guess, I guess we’ll talk about social media because this is a common thing. Like people say, oh, well Facebook has, if you break it up, there’ll just be more surveillance. Right? But actually what you see is that when Facebook had to compete with MySpace, they competed with MySpace by saying, MySpace is dirty. It’s full of people surveilling you and trying to prey on you. We are safe. Right? Once they killed MySpace and they bought WhatsApp, and they bought Instagram, WhatsApp, same thing. We’re privacy safe. Right? Then they started engaging in aggressive surveillance. 

So what might happen if they broke themselves up is you might see them compete on quality grounds and say, look, you know, I use Instagram. We’re not like those weirdos over at Facebook. We’ll actually keep your data safe, right?

That’s like what I think you could see, and you probably would see, because competition does drive quality improvements, it does drive innovation and it drives lower prices. Yeah I mean, I think what generally the idea that competition doesn’t matter is really a, I think a misunderstanding of how business people make decisions.

So, you know, it’s, they focus on their competition unless they don’t have to, and then they just focus on politics.

Emma Varvaloucas: Speaking of politics, I know you said earlier that you know the Trump administration as a whole, how they see antitrust is a little bit incoherent, but is there any potential for progress that you see in the next four years? Like are there certain things that you’re watching for or hoping for, or looking at?

Matt Stoller: They appointed an antitrust assistant Attorney General named Gail Slater, and she’s generally well respected in antitrust world, she’s not, you know, what we call a Brandeisian, right, which would be my philosophy. But she’s enforcement minded, right? She’s not a libertarian. The chair of the Federal Trade Commission, this guy named Andrew Ferguson, he’s, he’s a former Mitch McConnell staffer, so he’s kind of more in the old world, but he’s still trying to maybe do, figure out some new ways to, to use antitrust authority.

So he’s not necessarily bought into that old 1970s philosophy, although, we’ll see. But I think the question really for the Trump administration is, to what extent do they see consolidated economic power as a problem versus an opportunity, right? So there’s always this temptation for politicians on both sides of the aisle, and they use different flavors, but you know, they are like, oh, that’s a really big company that’s very powerful. I can use that company to instrumentalize the things I care about. You know what? Walmart sells most of the light bulbs in America. I can get them to sell energy efficient light bulbs, and I don’t have to call 10,000 stores, I just call Walmart. Right? Versus what I say is like, Walmart is too powerful. They are doing all these bad things to communities. They should be broken up, or they should be, you know, their power should be mitigated in some way. And I think the Trump administration, like all administrations, has a lot of different people in it with different views and I think they haven’t made that decision.

I also think that like, you know what you saw the Biden administration is that he appointed people and then they just did what they did. Whether it was good or bad, they kind of had their own, they didn’t really have a boss, and Trump is going to negotiate stuff, right? He’s gonna, there’s a Google case, Google lost it.

Now there’s a, you know, the DOJ is asking a judge to do a bunch of stuff to Google. I believe Trump is much more likely to say, I’m gonna sit down with the the CEO of Google and I’m gonna negotiate stuff with him. And one of the things that I will get, I’ll get a bunch of stuff and then what I’ll give is a settlement to this antitrust case.

So it is a little bit not in the hands of the antitrust enforcers. And I think that’s where I am thinking, that’s where I suspect this stuff could go. But I, yeah, I mean there, he’s not a libertarian, right? He’s not gonna go back to this old model of we can’t enforce antitrust laws aggressively because monopolies either don’t exist, which is what a lot of people used to think, or if they do exist, they’re good. That, I don’t think is like their view. They’re just sort of more real politic about it.

Zachary Karabell: There’s also been a pushback, certainly to Lina Khan and the Federal Trade Commission over the past four years of the Biden administration, that it’s essentially administrative agencies innovating law ahead of whatever Congress has done to bring Antitrust law into the social media tech age, right? You’ve certainly indicated that, that there have been updates to the antitrust legal framework that was set 120, 130 years ago, but there hasn’t been a really coherent rethinking. In fact, Lina Khan came to some prominence as the congressional report that actually recommended congressional action to bring antitrust law into the digital social media tech age, which of course didn’t happen because Congress has not been able to come to some sort of consensus about what that is, and there was a lot of pushback against the way in which the FTC under her leadership pushed the boundaries of, of enforcement law. Now, you might argue that she didn’t actually push the boundaries at all, that it was the failure of antitrust officials over the prior four decades to actually enforce the law as it should been enforced and we can elaborate on that. But there was that pushback of these things should be legislated. There should be a, there should be a clear framework as there was at various points in the 20th century, and not executive agencies determining what the parameters of that are.

Matt Stoller: Yeah I think that’s a view that’s really divorced from the legal conversation. So if you just look at the cases that they’ve brought, they’ve won most of them because judges have looked at the claims and said, yeah, this is correct. The, this business behavior or, or merger is unlawful, right, according to precedent.

And the reason is it’s, it’s a little bit weird to be in a situation where you, you say these laws haven’t been enforced for 40 years. And we’re gonna start enforcing them. It feels like a big change. It is a big change, but it’s actually not a radical thing to enforce the laws that are on the books. It was a radical thing not to enforce them, and that’s what enforcers started doing in the early eighties and going forward, and they were explicit about it.

I mean, there’s a law against price discrimination of commodities. It’s called the Robinson-Patman Act. It says you can’t do that. And the FTC and DJ. Department of Justice in 1977 just said, we are not gonna enforce this ’cause we don’t believe in it. And the Federal Trade Commission said, basically said the same thing.

That’s kind of a crisis. That’s almost a constitutional level crisis when they just decide not to enforce laws they don’t like. It’s a little bit weird, right? We’re having a big debate over the Impoundment Act right now. Can the president just say, I’m not gonna spend money, even if Congress says they have to.

It is very weird to be in a situation where they didn’t enforce the law, but that’s what happened. And I think the way you know that is you just look at a lot of the mergers that, that merger cases that the administration won, you see the Google case, you know, a couple years ago they said, oh, there’s no way that Google, they’re great. How could they ever, how could what they’re doing be illegal? And you know, two courts have found that they have engaged in unlawful monopolization. One in 2023, one in 2024. There will probably be another one relatively soon. 

A bunch of courts have found on a preliminary basis that Amazon’s behavior was unlawful. They’ve said if they prove the case, like if they prove the fact pattern, then it’s a violation of the antitrust laws. They haven’t proved the fact pattern that has to happen at trial, but if the story they’ve told is yes, this is a violation of the law, and that’s true in a number of different areas, so I think it is weird to be like, yeah, we haven’t enforced this law for a really long time, and we’re gonna start enforcing it because it indicts a whole bunch of enforcers for 20 years or, or more. But that is in fact, the situation that we’re in. The rage at Lina Khan is a result of the fact that she’s just enforcing the law.

So another way to understand it is that in 2023, the Department of Justice and the Federal Trade Commission came out with new merger guidelines. So they said, look, the Clayton Act, which was last updated in 1950, the merger provisions has a bunch of precedent. And we’re gonna take that precedent and we’re gonna explain to business people and courts how we think the precedent works. Right? 

And we we’re gonna put some economics in there to show how we think, you know, competition, the what the law means, and you know, how we understand whether competition is being reduced by mergers or not. So those merger guidelines came out and the question is, are courts going to accept those merger guidelines? Right? 

Or are they just gonna be like, oh, these are some crazy left enforcers, we don’t care what they say, and 10 different courts, including very conservative courts have cited the guidelines and said, we do, you know, these are authoritative sources. So the argument you hear in the political sector from in some places is, oh, this, they’re lawless. They don’t know what they’re doing. They keep losing whatever the actual legal con, those are just lies. It’s not true. The legal conversation is just, this is pretty orthodox meat and potatoes. Clayton X stuff, or Robinson-Patman X stuff, or Sherman X stuff.

Emma Varvaloucas: I’m trying to get, like, I’m trying to visualize. As the scope of the issue in your mind, right? Like let’s say if you had your druthers and all of the companies that you think should be broken up or broken up tomorrow, like what would that look like? How many companies are we talking about?

Matt Stoller: Let’s understand. I think it’s important to conceptualize the situation, right? So, I don’t know, 25 years ago there were, I think a lot of people who thought America really does things great, right? Look at all of our awesome companies. We’re leading the world in all of these different areas. I think today two companies epitomize the concern that people have, and that would be Boeing, which cannot make quality aircraft, and Ticketmaster, which, you know, basically preys on people and screws up at important moments in selling tickets, which is, should be a relatively easy thing to do considering it’s just sales technology. Right?

Emma Varvaloucas: Not rocket science.

Matt Stoller: Not rocket science. Right? And so I think what we see is that, and they epitomize the problem, right?

Because I think what we’ve noticed is Ticketmaster is everywhere. You go in your healthcare system and it’s like, it’s all Ticketmaster. Random fees, opaque stuff, scary. Like what you notice is like you go to the movies and there’s now an administrative fee. You, you know, you, it’s like there’s all stuff is just a hassle, right?

This digital technology, which we were promised would be so liberating and should have been really liberating, has in fact become a set of digital leashes. All over us, right? When I think about the economy and not economy, but society, right? When I think about what kind of society we wanna live in, it really is about promoting liberty and getting rid of the ability of these distant masters to impose these leashes on us.

So it’s, it’s not so much about, you know, how many companies we need to break up. It’s more we need to change the business behavior. If there’s one thing I would like to do, one thing I would say that we need to do in our economy, one practice to outlaw it would be price discrimination, right? It would be, and this goes back to the 1870s, 1880s, they set with railroads, which were picking winners and losers and helped build the Standard Oil monopoly, helped build a bunch of monopolies. All customers who want the same class of service should pay the same freight. If you did that, right, you’d see like 70% of the garbage monopolization and fraud and scams that we have to deal with in hassles would just go away. A lot of the unfair competitive advantages that we have would go away. A lot of the incentives to merge to get bigger so you have more bargaining power would go away.

Right now in business, I think business leaders will tell you this. Their goal is to build power, right? Build pricing power, build bargaining power over suppliers, over workers, over rivals, because if they don’t, someone else will build it over them. And I think you, that’s a, that’s a legal problem, right? And you can break up a bunch of companies if you don’t address that legal problem, there will still be the incentive for them to re-form. So we have to pull the incentive of acquiring bargaining power out of our, our commerce so that they compete with one another to make better products and services, to make more products and services to sell them at a better price. That’s how people should be making money and getting rich.

Zachary Karabell: This is like abstract question. If you were called by the Trump administration and said, look, Matt, we want you to help bring some coherence to both the Department of Justice Antitrust Division to the FTC, to our overall approach to competition monopolies. What are the three things you would say we should do at a federal level?

I mean, obviously some of the stuff you alluded to, Ken Paxton is being done at a state level or collectively by states’ Attorney Generals, and that has a lot of power and effect, and is important as well. But just at a federal level, like what would you, what would you do?

Matt Stoller: One of the things that Reagan did, which set the tone for his administration, was he fired the air traffic controllers. And another thing he did is he changed the merger guidelines. And those two things were really fundamental because they said the air traffic controller thing said to corporate America, you can change your labor relationships. And the merger guideline thing that was not well understood, but it was understood in the antitrust world, said, go free for all mergers, right? Wall Street, have a party. 

And I think what you need is something similar to say consolidation is a problem. So I think, you know when I said Boeing is the epitome of the problem, Ticketmaster, the epitome of a problem. I think we all saw that with baby formula, right? When America could not feed its babies. The shortages. And those shortages were pervasive. We all remember what happened with covid, and then we all pretended like it’s, oh, it’s fine, right? But all those same problems exist or they’ve worsened. 

So what I would do is a really high profile attempt to get more companies into the baby formula space, something like that. Or I would just try to pass a law to break up UnitedHealth Group, you know, that’s the biggest insurance company in the country. It employs most doctors in the country. It owns big payment networks. It’s a huge, huge, huge monstrosity. Do something aggressive to say, look, these methods of business are not methods that, that we tolerate anymore.

And the thing about, you know, corporate Americas is that if you have 10,000 lawyers, what their job is in corporate America, it’s a sort of governance system. They explain to their, to the people they work for. Like a lawyer explains to the CEO, here’s what you can do and here’s what you can’t do. And if something happens where they say, we are gonna force competition in this market and we are gonna break up that company for this bad behavior, every CEO in the country is gonna get a memo saying, here are the things you can’t do anymore. Right? 

And so what you need is a very high profile, you know, hammer to come down on some bad actor, followed up with like a, a legal argument and a political argument saying this is what corporations can do and this is what corporations can’t do anymore. He’s kind of doing that with tariffs, right? You sort of see that somewhat, although he hasn’t been totally clear and you see like companies are like, should we reshore our supply chain? What should we do? You know, they’re trying to figure it out and they’re all trying to figure it out. 

I think you could see that with, I mean, there’s lots of different tools, right? You could do it in, you could do it through any agency. You could do it through the antitrust division, you could do it through the White House directly.

But that’s what I would do.

Zachary Karabell: Given the fluidity and the unusualness of how the Trump administration has been staffing itself, maybe you’ll in fact have that opportunity.

Matt Stoller: Who knows?

Zachary Karabell: Thank you for the conversation and the work. I encourage all of you to listen to Matt’s podcast, follow his Substack. If you want to keep up with an area of, so the convergence of law, society, and technology that has been particularly in focus over the past four years, and I think is going to remain front and center for a lot of us over the, you know, next four to 10 to 20 years. So thank you for your time and we’ll see how it goes.

Matt Stoller: Great. Thanks.

Zachary Karabell: It’s always thought provoking to me to think about are we enforcing the laws the way we should or is the framework we have about, you know, bigness and corporate consolidation, the right framework? We didn’t get into as much this question that I’ve had ongoingly for years of, does it in fact lead to something dramatically different? If we were to have, you know, again, the 50 companies versus the seven, I thought Matt had a really good answer to that, which is some competitions better than, more competition’s better than less.

And you gotta, you gotta start somewhere and the little progress is better than no progress. Obviously something as a statement, which we would absolutely agree with, given that we say it all the time. You know, whether or not the way in which we construe monopoly and bigness is as much of a Democratic threat, I think it is an unresolved one.

Matt clearly has his perspective on that, as do a lot of people. But this issue of like, is size alone inimical to democracy, you know, we could have this question about his wealth concentration per se. You know, the fact that you have an Elon Musk, there are a lot of people who believe that that in and of itself is a threat to democracy, right?

You shouldn’t have a, someone worth $500 billion or whatever the absurd number is. That may be a trillion by the time our season’s over, is that in fact a threat? And a lot of people would say yes, but I think the question of, okay, why and how does that actually imperil whatever it’s, we call democracy. And I do think there are some unspoken, or at least un fully teased out threads of, you know, antitrust law was meant to be, these companies are harming consumers by charging more money or offering less choice. That was the framework we’re. They’re competition, they’re controlling too much of our lives and they are, you know, sort of imperiling our ability to control our fates, in a way that, in democracy, we should be able to.

Emma Varvaloucas: Yeah I think that your question about is just size per se, a threat to democracy, I think intertwines with Matt’s answer about banning price discrimination. Like I don’t know, I really don’t know if you can make the argument about, it’s the size. I think the issue is it’s the way that they’re behaving, which is tied into the size. Right? 

That that was Matt’s point about, like it’s not just about breaking up. The companies, it’s also about changing the way that they do things. I think I would need somebody else to answer the question for me of like, does size then automatically mean that they’ll behave in a certain way? I’m not sure. I can’t answer that right in this moment. 

I do feel pretty sold on the, you know, I think that it’s really smart of him to bring up the examples that really touch people every day. Like Ticketmaster, Boeing, he has a good Substack article about how monopolies messed up the LAPD’s response to the fires that happened back in January. I’m not sure about the jump into like that imperils us as a democracy, but it, it certainly brings harmful effects to us as people in the United States, and I would want the government to step in and control that the way that historically they have in the past. I mean, that’s pretty, that’s a straight answer for me.

Zachary Karabell: It’s interesting, you know, the, the Boeing example, which we could spend a long time on, like there is nowhere in the world where aircraft manufacturer, both commercial, particularly commercial aircraft manufacturer, has a competitive marketplace. You know, it’s Airbus in the European Union, it’s Boeing in the United States, in the Western Hemisphere, and now there’s a Chinese national company that’s also making a commercial aircraft. There’s actually more competition in military aircraft because people don’t wanna share their, you know, technologies, which is a problem of interoperability. So there’s more people make fighter jets in the world than make commercial airliners. I don’t know if that’s a problem of antitrust law per se, given that it’s a global phenomenon.

As much as these are incredibly expensive and frankly, you know, we, we do want our planes not to crash, like that seems to be a human, a human inclination, not just an American one. And of course, spacecraft, right? I mean, I guess we, we’ve got Virgin and we’ve got SpaceX and we’ve got Blue Origin, and then we’ve got a bunch of national ones.

I don’t know, just it, it feels to me like once you start looking at the specifics, then a lot of the devil’s in the details and I am not at all skeptical of the danger of corporate concentration, particularly to innovation. Matt had a great piece when DeepSeek, which is the Chinese sort of cheaper, large language model AI company. One of the things that, you know, he made the point of, and others have made the point of, and we did not get into in our conversation is that this shows the way in which the Open AI, Microsoft, Nvidia, you know, we’re just gonna spend trillions of dollars, uh, became its own self-fulfilling prophecy that prevented cheaper nimbler alternatives, i.e. Bigness precluded innovation. And, and I think there’s a lot to be said for that, but whether or not, you know, government is better at trying to figure that out, that’s also something where. Like these are, these are problems that to me, do not have quite the simple solutions that I guess I wish they did and I, I think some people believe they do.

Emma Varvaloucas: Well, two things I would say to that. The first one is, are there not other people anywhere in the world in the aircraft manufacturer space, just because it’s a really expensive business to get into, or are there other reasons for that in which an antitrust would come into play? So that’s, I, I don’t know the answer to that.

Zachary Karabell: Fair question. And you know, the regulatory regimes that kind of capture the regulatory regimes are captured by the companies. And that precludes competition too, like there’s a whole web of this in every country.

Emma Varvaloucas: Yeah. But the question about government stepping in. I agree with you. It might not be so cut and dried about, like this will solve things, period. But I’m not sure what the other levers are. Right? Like if government doesn’t step in, what’s, what’s the other choice? Right? What’s the other alternative? 

Zachary Karabell: They, will not magically disassemble themselves. I mean, they may over time become so sclerotic and anti-competitive that they fall apart, right? But that’s a multi-decade thing. That’s not usually a here and now sort of thing.

Emma Varvaloucas: With a lot of harm, I imagine. Or a lot of risk of harm, so.

Zachary Karabell: A lot of damage along the way. Anyway, good discussion. I think, you know, one of the, the many peculiarities of Trumplandia is that, you know, none of this cuts exactly as you would’ve thought in a Republican, Democrat, like pro-business, anti-business fashion. You know, interestingly enough, someone like Matt, who I think traditionally would’ve been very clearly more in the Democratic camp and kind of anti-Republican, you know, you’re finding a lot of people who see in aspects of Trumplandia, certainly not the allies you would choose, but in some sense, the allies that you actually end up with.

Emma Varvaloucas: So it goes, sometimes you find people in your, your bed you would never expect.

Zachary Karabell: There you go. That’s, that’s, we’ll, we’ll do that one. We’ll do that one next episode, Emma. Uh, so I wanna thank you all for listening. Please send us your thoughts, sign up for What Could Go Right?, our newsletter, which you can do at our progressnetwork.org website. Thank you to the Podglomerate for producing, and Emma for co-hosting, and all of you for listening, and we’ll be back with you next week. 

Emma Varvaloucas: Thanks everyone.