Below, we have provided the full transcript of an interview with Colorado AG Phil Weiser from the second episode of our series, Antitrust In an Election Year: Challenges Ahead.
Leah NYLEN:
Thanks to CPI. I am Leah, Politico’s anti-trust reporter, and with me today is Colorado Attorney General Philip Weiser. Thanks for joining us.
Phil WEISER:
It’s great to be here, Leah.
NYLEN:
Great, so let’s get right to the news. The Justice Department filed it’s long-awaited antitrust suit against Google Research. You’ve been involved in a multi-state effort on behalf of the state attorneys general to look into similar antitrust concerns about Google. What can you tell us about why you opted not to join the DOJ suit?
WEISER:
We have an ongoing effort with a bipartisan group of state AGs that is alongside of the Department of Justice. We’re continuing that work. Because it’s ongoing, I can’t really get into the substance of it, but I can say as we said yesterday that we believe we are weeks away from being able to conclude our inquiry and that if we do indeed decide to bring a lawsuit, we can envision litigating alongside the Justice Department, similar to what happened in Microsoft.
NYLEN:
Great, so weeks away? This will be pretty soon?
WEISER:
We’re working hard at this. The important point that we have obviously in mind is that if we’re able to work with the Department of Justice, it is going to be more functional and effective, so if we decide we want to bring this lawsuit, it’s important that we bring it in a timely way that we could consolidate it with the Department of Justice’s action.
NYLEN:
Great. Over the past several years, Colorado and a lot of other states have played an increased role in antitrust enforcement, in some cases disagreeing with our federal counterparts as happened in the Sprint-T-Mobile case. What role do you think the states should play in antitrust enforcement?
WEISER:
I’ve thought a lot about this, Leah. It’s a very important point to know that our antitrust laws contemplate that the states have this independent role. Independence here means two functions. One is if the feds just aren’t able to get to it, we’re not precluded from doing it. We can act as a check or to pick up slack, and if you look, for example, here in Colorado, we had a case involving a healthcare merger, but the Federal Trade Commission decided either for resource issues or potentially because they just didn’t have the competitive concerns that we did to do anything about it. That doesn’t stop us from having the authority, indeed, I’d say the obligation to protect Colorado consumers.
This was a merger where UnitedHealth Plans, which is a dominant provider of Medicare Advantage, was going to buy a health clinic or set of clinics, DaVita, and that was going to potentially cut off access to a rival. We needed to make sure that we protected rivalry, protected competition, and protected consumers, so we acted in that case even though the Federal Trade Commission declined to act.
NYLEN:
You mentioned this. What do you think should happen in cases where the states and the federal agencies disagree? In the Sprint-T-Mobile case, there was a lot of discussion about whether the feds should sort of automatically win because they’re the expert federal agency.
WEISER:
For people who want to geek out on this topic, I’ve written about it. You can look up the article and go deeper on it, but the short version is is states have an independent right to argue what the antitrust laws require. The statements made by the antitrust chief in that case were wrong. It is not the case that the federal government has the only say on the antitrust laws, and if the states and the feds disagree, it’s up to the courts to decide.
That’s part of the way our system is designed. It is a check on absolute power. The Department of Justice or the Federal Trade Commission don’t have the ability to preclusively occupy the field. The states have independent authority to enforce the antitrust laws if we see a harm that the feds don’t see. We have the right to litigate it, and if we’re wrong, then the courts can tell us. If we’re right, the courts can say that we’re right and the feds got it wrong.
NYLEN:
Were you happy with how Sprint-T-Mobile came out?
WEISER:
Colorado did it’s own thing in that case and I was actually personally recused on it, so it wasn’t me acting, but what happened was Colorado initially joined the action. Then, the DOJ settled its case and then once the DOJ settlement happened, Colorado reached its own settlement. I know that our team worked really hard on it. It was a case that, obviously, was closely watched and contested. The district court ruled against the states who were litigating. That’s important that states be able to litigate cases and make law.
One of the concerns that I&Os have had is if we don’t get cases to the courts, don’t develop legal doctrine, then we’re not going to keep the antitrust laws up to date. This is an area of merger law that was litigated in this case and in this case the states that litigated didn’t end up winning. Colorado had a separate settlement. We recently because of that settlement were able to provide broadband access to people now doing online schooling and we’re also the home now to the new rival that came out of this. Dish is building their own wireless network.
NYLEN:
Great. It seems like it was a long time ago, but it was actually only two weeks that the House Judiciary Committee came out with its report on antitrust in the tech sector. I’m sure you’ve taken a look at the report. The staff recommended a variety of potential changes to the antitrust laws. What do you think of some of those recommendations?
WEISER:
The first and most important thought I have is let’s make antitrust cool again, which is to say antitrust is an important part of economic policy. Protecting competition, protecting innovation is something that our nation needs to take seriously. To have this level of discourse and awareness of the antitrust laws, that’s a good thing, so I welcome that. With respect to specific issues, I do want to point out the context we are in, which is over a 20-year period, and I’ve read something about this as well, we’ve seen the courts increasingly create artificial barriers to antitrust enforcement.
This is something that is of grave concern. I point specifically to this recent 9th Circuit case involving Qualcomm where the 9th Circuit opinion bent over backwards to make it hard for antitrust enforcers to bring cases, and this leveraged off of a previous case involving American Express where the court said if there’s a market that has two sides, you have to show harm across both markets, not simply that there’s clear harm on one side of the market. That’s an additional burden for antitrust plaintiffs that’s going to be hard to meet.
Part of what this House report is reacting to is what I would call the overreading of the Chicago School of Critique, so to take us back to the 1960s, back then the Antitrust Plaintiffs Bar and the federal enforcers pretty much had a field day because they almost always won. There was a famous dissent from one Supreme Court Justice who said, “I don’t know what the principle here is other than the government always wins.” That was a point where the government could challenge any merger and they automatically won. The Chicago School said, “We shouldn’t be always having the government win. We have to be worried that you can have such a thing as too much antitrust enforcement.”
Well, we’ve now seen that pendulum swing all the way to the other side where any concerns of antitrust getting anything wrong is leading to creating more and more burdens and difficulties, so I would say the high-level message of the House report is we need to do a serious reckoning with that. Ideally, the courts will self-correct. It is a challenge for Congress to specifically amend the antitrust laws to fix the overreaching of the courts, but if that’s necessary, then I think we’re going to see Congressional action.
NYLEN:
There’s a lot of discussion in the report about mergers involving promising startups or conduct that seems problematic but it might not be a violation of the antitrust law. Do you think the answer is just tougher antitrust enforcement? Or do we need some other kinds of regulatory processes to deal with tech platforms?
WEISER:
This is an important point and if you look back at critical infrastructure, railroads, telephones, airlines, you’ve often seen specific regulatory strategies. Tom Wheeler, former Chair of the Federal Communications Commissions, wrote a paper on this point that we need an internet platform commission. One of the questions that would come up in a Google case, for example, is, who would oversee a remedy? Would it happen by a court, which is what happened in the Microsoft case? Or, would there be a regulatory body, for example, this happened in the AT&T case, who could help oversee a remedy? That’s part of the rationale for looking at this agency.
I’m looking at that suggestion very intensely. I do think there’s a very powerful argument for it. We are going to need to see in the next Congress as these issues get joined which of them start really getting traction. This conversation at a minimum is one we absolutely have to be having because the question is, if you only leave it to antitrust enforcement as you know it, do you have enough tools to address the issue? Tom Wheeler’s argument is no, and this House report pretty much takes his side of that argument.
NYLEN:
One other thing. I know that you have worked with the DOJ, but you’ve written quite a bit about the FTC. Do you think the FTC’s current powers are enough? Or do you think they need additional beefed up things like rulemaking authority?
WEISER:
First off, and one thing the House report also says, which is important, is given how important antitrust competition is to our economy, we are not investing in enough resources at the FTC. The FTC has the ability, and this is something that is used only on limited occasions, to do retrospectives. One of the questions that is coming out of a study is, you mentioned earlier, is acquisitions. Have there been acquisitions of small tech firms that went under the radar screen that should have been taken more seriously? We absolutely have to ask these questions. We’ve got to learn from past experience, and investing in FTC retrospectives can pay great dividends.
A quick example on this is Tim Muris. When he was Chair of the Commission in the early 2000s, invested in a retrospective of hospital mergers and he was able to identify hospital mergers where clearly prices went up as a result of the merger. That retrospective turned around the law because before that case, the antitrust enforcers were losing all of these merger cases on hospitals. Once he did the retrospective and was able to show prices actually went up, he then challenged an already consummated merger and was able to make an impact on the law. The FTC’s ability to move the law on issues like, for example, acquiring small companies when they’re really in infancy is something that I believe should be invested in.
Now, the question you asked is about should regulation be another tool. Antitrust law tends not to operate with broad prophylactic rules. There are per se rules against price fixing which say you can never ever do it, but I do think we have to ask the question, are we using all of the possible tools? Scott Hemphill wrote a great piece, for those who want to geek out again, about the value of regulations on pay-for-delay in delaying generic drugs. That’s an area where, again, Scott has an argument that’s quite thoughtful about what a rule could do.
In general, I share the antitrust learning received wisdom that we try not to adopt broad prophylactic rules, that we instead operate in the world based on specific empirical realities. I do believe, however, that if there are cases like the one that Scott identified, we could see an appropriate and effective use of rulemaking. The FTC arguably, Scott says, has that authority right now. It is not easy to use, but the broader point is, again, as the House report makes, the FTC can and should be more of an active effort to understand and to address anticompetitive conduct and it needs more tools, particularly more resources, to do that.
NYLEN:
Okay. Well, thank you so much for joining us today.
WEISER:
Such a pleasure. Thanks for having me.
