Below, we have provided the full transcript of an interview with US Senator for Minnesota Amy Klobuchar from the third episode of our series, Antitrust In an Election Year: Challenges Ahead.
Leah NYLEN:
Thanks to CCI and Competition Policy International. I’m Leah Nylen Politicos Antitrust reporter. And with me today is Senator Amy Klobuchar from Minnesota. The top Democrat on the Senate judiciary’s Antitrust Subcommittee. Thank you for joining us.
Amy KLOBUCHAR:
Well, thanks, Leah. And this is very timely that we’re doing this interview. I think, you know what’s happening, not just before the pandemic, but with the pandemic, we’ve just seen so much more consolidation, slow up, where we call, “The startups slump” and this consolidation just is not good for anyone, whether it’s in tech or other industries as well.
NYLEN:
Well, thank you, let’s get right to it. The Justice Department filed its long awaited antitrust suit against Google over search last week. I know it is still early days, but do you have any immediate reaction to the suit and/or the statement by Democratic attorneys, general, including Minnesota AG Keith Ellison, that they are taking a wait and see approach right now?
KLOBUCHAR:
Well, this is a long overdue start to get this suit going, and I am glad that they have filed this suit. Do I like the timing, just a few weeks before the election? No, because I think that undercuts it, but that still doesn’t mean that it’s not an important suit. It is. And it’s a long time in coming. And having talked personally with Keith who actually started the Antitrust Caucus in the House, little trivia fact for you when he was in the House of Representatives, I know he cares a lot about this. Let’s do the other Democratic AGS. I mean, there’s issues that they’re looking at with the complaint, including whether there could be add-ons to a complaint, whether their complaint could be joined in, whether more should be done on the focus of the complaint on the search engine. So there’s other things, and I’d add to that, which is more the focus we had recently, Senator Lee and I, and our hearing some of the advertising issues where Google has dominated the advertising market, both as buyer and a seller and dominating the advertising exchange, which of course wasn’t a subject of that.
But my reaction is: a long overdue. I’m glad that it happened. And I also believe that the real work after the work of the civil servants and other people must be continued into what I believe and okay, for me hope, will be a new administration as well as by the AGS. And I think that they are realistically looking at the complaints, seeing if there would be add-ons or they can in, and those kinds of things. I think a lot of them believe a suit needs to be brought against Google.
NYLEN:
Yes. Great. So as you mentioned, the election is very soon, and if Democrats take the Senate, you would become chair of the Senate Judiciary’s Antitrust Subcommittee. Can you tell us about what some of your priorities would be, in terms of legislation for the next Congress?
KLOBUCHAR:
Well, as Justice Ginsburg would always say in her dissent, her dissents were blueprints for the future. So I look at my legislation and I’ve toiled it for years, and our staff has, and introduced, and gotten co-sponsors as a blueprint for the future, when it comes to competition policy, which by the way, I would love calling it instead of antitrust, but I won’t ban you from using that word, given that you are Politico’s Antitrust reporter. But for competition policy, I think the big thing to look at first is: does the existing situation work? The laws. I don’t think it works when we’re seeing a startup slump even pre-pandemic, and we’re seeing all this consolidation and these sophisticated companies. I think our laws have to be as sophisticated as the companies that the laws are trying to regulate.
And it doesn’t mean that we’re against success. I have a lot of successful companies in my state. I’m proud to have those companies. It simply means that we must have competition policy in our country to assure future success, and assure that consumers don’t get the wrong end of the stick. And we start with the big problem, conservative judiciary has really set us back when it comes to their interpretations of the Antitrust Law. There was one 10, 15 year period where there was like zero success in front of the Supreme Court, and more and more of these justices that come on, especially Gorsuch and Kavanaugh, the one, one case recently he went the other way, but they’re really conservative.
So what does that mean? I don’t think you can wait around and say, “Hey, we’re going to get a new cadre of justices 20 years from now, and that’ll change it.” No way. We’re going to have to update our laws so that they work with the current situation. What are my bills do? One: add enforcement resources, and I actually have a bipartisan one with Grassley that does that, and putting it on the backs of the mega mergers to pay for it. Big health. We have not seen the increases. We have less people at the FTC than we did decades ago. Number two: merger enforcement, and looking at these mergers with different standards, using things like making it easier to prove out, if there’s a problem with the merger, if it hurts competition by the language that we use in the law, instead of, “Substantial” that we use, “Materially lessens competition,” instead of, “Substantially lessens,” which is a really high standard. Shifting the burden of proof on mega-mergers, so the actually have to prove that they’re not hurting competition. And then finally clarifying that mergers that create a monopsony are illegal.
Another set of bills about exclusionary conduct. And that really gets to some of this tech stuff, because much of the conduct that’s an issue is where they’ve tried to exclude others. That’s a lot of the argument with Google, trying to exclude others, so that they can be dominant in the market. And so that’s another big set and I have a bill on that; The Anticompetitive Exclusionary Conduct Prevention Act. I don’t think it’s going to pass on the name alone, Leah, but we have a number of senators on that as well. So I’m pretty excited about these bills. Oh, finally, civil fines from monopolization violations, and that’s something else that I’ve introduced with a number of other senators that I’m leading. So I think that’d be helpful.
NYLEN:
Great, so-
KLOBUCHAR:
That’s a blueprint. It’s not just tech, there’s other things with tech, privacy legislation, all these things that we maybe we’ll talk about in a minute, but I think it’s really important to note we’ve seen consolidation in pharma, we’ve seen it in ag. We have now 90% of freight rail traffic is with four railroads, that’s like the exact same number on the monopoly board. People think they’re getting all these deals on online travel, oh, guess what? They’re all pretty much owned 90% by two companies. And they don’t know it’s things like that, that includes tech, but it is not only tech.
NYLEN:
The House Judiciary Committee came out with it’s report three weeks ago on antitrust in the tech sector, and they recommended a number of potential changes to the antitrust law and the FTC. What do you think of some of those recommendations?
KLOBUCHAR:
Well, I think it’s really important that they did this report and honestly, if we had the gavel, I would have done such report, and that’s what I’m hoping I’m going to get soon, because while Senator Lee and I have done a lot of good work together, and that’s been important because he wants this to be bipartisan, and you heard some bipartisan rumblings in the House by the way. But I think that I would really focus on all of these issues we’re talking about today with monopolization and the report itself that we got from the House is helpful because it kind of steps back, and we’ve been hearing these complaints forever about big tech platforms using their dominance to suppress competition. And now the evidence is they’re coming out of the tech report, combined with the lawsuit that’s going on out of the Justice Department, that we really have some hope there’s going to be some changes. So I think it’s really useful to have that report. And actually several of the ideas in that report are in my antitrust bills; things like establishing legal presumptions that we just talked about, shifting the burden, doing something on increased funding, doing changes to the law that would overturn some of the problematic case law we’ve seen coming out of the conservative courts recently, which has really hurt competition in this country.
NYLEN:
Some of the Democrats on that House Judiciary Committee have told me they’re pretty enthusiastic about this idea of creating a Glass-Steagall for the internet. So sort of separations in large tech platforms, so you can either own the marketplace or participate in the marketplace. What do you think of ideas like that?
KLOBUCHAR:
I think they’re worth looking at, and I’ve always said that, I think that’s really important. And I also think that we can look at it in terms of the structural remedy that the Justice Department is seeking right now in the Google lawsuit, right? They’re looking at it is if there’s this violation, then what do they do? By the way we could look at Facebook that way, you could look back at the WhatsApp, and the Instagram purchases, and look at what the results of that is and decide that really the alternative should be a structural remedy. And so they’re a little different ways and little different takes, but they’re both aimed at the same idea, which is that if you want to see real change, sometimes you need structural remedies. That’s the breakup of AT&T.
And by the way, I know a little bit about this because I represented MCI for years as they tried to get into the local exchange market, when I was a young lawyer in Minnesota at a law firm. And saw firsthand what they were up against, even though that’s during lot of the FCC rulings that had come out in the rules, but after the breakup had been ordered. So I saw the benefit to consumers and the way the prices were going down and the new products. And you could see the same thing happening in these complex tech markets, but it’s not going to happen if we don’t put the resources into Justice, if we don’t have the pressure coming from Congress. And then I would add in a big, big way, some changes to our laws to make it easier, to bring cases on mergers and to bring cases on exclusionary conduct, because you can’t do that if the court is going to throw every one of them out.
NYLEN:
As you mentioned a little bit earlier, some of the discussion in the report involved discussions about promising startups or conduct that seems problematic, but might not be a violation of the antitrust laws. Do you think the answer is just tougher antitrust enforcement, or might we need some other kind of regulatory process to deal with tech platforms?
KLOBUCHAR:
I think you need both. I think that part of this is looking back at what at the time might’ve seemed like a just innocent, small purchase. And then you get facts like emails that show you that maybe that’s not what it was. I don’t know what I could be talking about. But the point is that you have in some new information, so one under existing antitrust laws, you could actually look back at some of this, but you could even strengthen those requirements in the law to allow the look back, and allow the FTC, FCC, others to have look backs when there are consent decrees and the like, and so it’s kind of both forward-looking as we look at how the laws can work in the future to make it easier to do that, but then also backward-looking at what we have now to see and make that a priority in terms of what the results are, and what it has meant for competition.
NYLEN:
Well, thank you so much for joining us today, Senator.
KLOBUCHAR:
No, this has been really great. And again, I can’t think of a more timely topic. As you can see, I’m pretty excited to work on it. I think there’s just so much good we can do, and the fact that even in the House hearing, while there wasn’t agreement, by any means between Democrats and Republicans, there was some Republican interest in some of the changes we could make, and so it’s time to get out of the rhetoric and into the real policymaking.
