 Great pleasure to introduce Professor Andy Gowell Howard should I mix it up and say Harvard Howard Howard University. Give me an office you can say it. Absolutely Howard University School of Law Written a great deal about it about antitrust generally Written about the Microsoft case in particular hard at work with Harry first on a book about the Microsoft case and Greater implications of the case Andy Thanks very much Phil I'm delighted to be here and and I've really enjoyed the two days Predictably since the conference is about the Microsoft cases. We've been talking predominantly about the Microsoft cases But there have been some references to this section to report that came out of this past week And so I thought for my time today what I would talk about is looking at the Microsoft case in a larger context of what has happened with respect to the law of monopolization and Attitudes about monopolization over the last eight years. So I've called my talk minding the gap how Microsoft contributed to the DOJ's It's a very long one eight-year effort to reform section two and amplify the gap between us and EU Antitrust policies on dominant firms We'll start out with one apology to Jonathan Zittrain who's not here He spoke yesterday and spoke disparagingly about using bullets. I I use bullets. I'm sorry All right overview of the talk in four parts I'd like to talk a little bit about why the intense scrutiny of section two has arisen Since 2003 in this area when you talk about the internet tidal wave You're talking about the productivity of academics during the last eight years about section two and section two related issues Also talk about from browser wars to standards wars the DOJ's efforts to reform section two I'd like to talk a little bit at the end about how wide and how durable the gap is between the EU and the US and Finally, whether or not section two can be rejuvenated if that is a Goal of some new administration and what what events during the last seven or eight years might constrain that effort First I think there were three triggering events to this effort to reform section two one clearly was the Microsoft case Which the Bush administration inherited when it came into office? And I think over time it became very clear that although they were modest in their comments at the start and when they settled the case In truth, they had very different views about the scope of section two And we'll we'll talk about the different heads of the antitrust division the progression of those during this period But it was clear that they had some fundamental problems with the case itself You can see that in some of their criticisms of other cases And so that became a beginning sort of triggering event and in talking about the law of unintended Consequences perhaps the greatest unintended consequence of the bringing of the Microsoft case by the Clinton administration Was that it triggered this effort by the Bush administration to constrain section two a second an important case And this was the LePage's case in 2003 you'll call that the LePage's case involved bundle rebates and it really triggered a quite an enormous Response both from the the bar from commentators it continues to this day It's reflected in the section to report discussions about bundle rebates and how they might be treated under section two and Finally, I think another important event was in 2005 The release in December of that year the EC discussion paper on article 82 as we'll see it was just three or four months after that That our Department of Justice and Federal Trade Commission announced that they were going to hold hearings on single firm conduct To some extent it really looked like they had been pushed into it I'm not sure that they really intended to do this in-depth study But there was a question of whether or not we were going to let the European Commission Take the lead and start talking about it without being part of the conversation and the hearings became part of that conversation The factors that work I think here were a lot of negative commentary generated about Microsoft and the pages And this shift of initiative as I mentioned I'm going to break the talk down into sort of two groups of things and we'll talk about them separately the first group of the Microsoft specific activities Things ready from the settlement to the opposition to the decree Commentaries from the Department of Justice on events in Europe the European Commission decision the CFI decision the Korea decision Sort of a running commentary and we'll talk about how it was essentially two components to it Defending the US decree as full and fair and all that is needed But also some fairly undiplomatic attacks on other enforcers and some unfairly Diplomatic attacks at the states at least opposition But it's not the only part of the picture and I think this is what broadens out the scope and the perception of what has happened over The last seven eight years We're going to look at the enforcement policies of the last eight years the amicus program a range of speeches and finally the DOJ section 2 report and I think at the end of the talk if it's clear I hope to get across that Microsoft and the DOJ to section 2 report of this week are two bookends Sort of a story being told this being the end story before the end of this administration on where they think we ought to be Going with section 2 There's three major themes that I think occur in the DOJ's responses from the time of the settlement on to any effort to enforce the Antitrust laws against Microsoft the first was that the settlement whoop The first There we go. The first was that the settlement was tailored to a narrow scope This is a Theme that came up a little bit earlier that the DC circuit decision was narrow and therefore the remote remedy should be tailored Narrowly to the scope of that decision and there was no basis for going any further the second was that yet they Repeatedly Asserted after that narrow theme that it was adequate to provide clear and effective protection for competition and consumers and Finally that anything more would benefit rivals a consistent theme both of Microsoft and the Department of Justice during this time And that it would not benefit consumers and finally that it would inhibit innovation These three themes are really themes that repeat in the press releases and public statements directed at the Europeans and and the Koreans First sort of hint of this begins during the Tony act proceedings I've listed this as a criticism of the state's one and it's only sort of indirectly that Because this was out of the press release about the 30,000 comments and in looking at the 30,000 comments The press release concluded that many of the remedial proposals advanced were outside of the realm of the violation sustained by the court or would benefit Individual companies rather than consumers. So you see the themes beginning to develop right at the time of the Tony act proceedings Second was the amicus brief in the US. Oops that went too fast. No. Yes. Okay. Oh, sorry. Yes. I forgot the order I put these in Second focusing on the states come to the end of the process and the most recent Episode the extension of the decree and again here after this sort of surprise change of position that they were going to oppose the Extension of the decree the statement from the Department of Justice that as the final judgments have accomplished their goals Well, ironically that may have been true We could debate what those goals were and how much they accomplished them But I think this clearly turned out to be something of an embarrassing moment for the Department of Justice Opposing the extension of their own decree as an amicus in the companion decree only to have the judge order that the decrees would be extended Let's back up a little bit and start looking through some of the comments on the European Commission and the Korean cases I'm not a diplomat by by profession But it seems quite extraordinary that this would be done through press releases on the days of decisions coming from Sister agencies. I think it's important to look at the the larger picture of what's been happening in the world I've had some interesting conversations at dinner Last night and yesterday It's it's the glass half empty glass half full sort of problem If you were to turn back the clock 25 years or so and look at competition policy in the world It was really the realm of a small number of countries Fairly large and developed countries And it's quite extraordinary today that you've got a hundred countries talking about antitrust And from the point of view of compliance with firms That's a chaotic and scary world on the other hand from the point of view of the progress of the planet It could be a very good sign of moving forward and finding a common language and finding a common set of principles that Maybe in 50 years will bring us together on a common view of where it is that world commerce should go So we're in a difficult period right now and some of the agencies that are starting off This isn't so much true of the European Commission, but are certainly true. I think of the Koreans If anything they need support from the United States when they make decisions and if there are criticisms to be made It's my editorializing the criticisms ought to be made in appropriate and diplomatic ways But public dress downs is not a way to encourage rule of law around the world on competition law issues And it is not a productive way to really encourage even change in position because once you've dressed down and embarrassed a Fellow enforcer in another country. You've essentially made it impossible for them to change their position without creating even more diplomatic Excuse me problems. So I think the the reactions to the European Commission and the Koreans were were uniquely I don't know self-serving in some peculiar way serving some kind of US political Goals or maybe just ill advised maybe just ill advised But the language is harsh and the formula is the same in each of these statements You'll see I have up here the press releases Directed at the European Commission's decision then the press release directed at the CFI decision and the press release to Directed at the KFTC decision same formula Defend the US settlement as all that was needed adequate to restore competition and attack Specific efforts with these same things it will interfere with innovation It will be bad for consumers and ultimately just wrong on the law So let's take a look the United States final judgment provides clear and effective protection for competition and consumers You could cut and paste that into all three of the of the press releases even though they were released by different heads of the agency this is the the so-called code removal the Press release said sound antitrust policy must avoid chilling innovation and competition even by dominant companies It is unfortunate This is on the fine that they gave the largest antitrust fine And I think this is a very very important and revealing sentence that is Anticipating our section to report of this week the view that with respect to section to the Standards are the most ambiguous and controversial area of antitrust enforcement This too became a theme throughout this period in many speeches by the heads of the antitrust division and it's reflected in the section to report So there's there's clearly a view that starts developing in these press releases No complaint about the disclosures that facilitate interoperability that would have been a no-no That's in the settlement agreement here as well The DOJ press release in response to the CFI Will you have however concerned that the standard applied to unilateral conduct by the CFI will harm consumers chilling innovation Discouraging competition same themes because of the department's enforcement efforts consumers have benefited from increased competition and it goes on middleware web browsers media players instant messaging making broad claims on behalf of the U.S. Settlement The Korean release in December of 05 you see sort of the same language cut and paste same three themes Korea's remedy ultimately will harm innovation and the consumers that benefit from it Not really a good public message to send to another enforcement agency in another country Especially one that is really in the last few years sort of feeling its oats having some government support and developing a serious enforcement program and Finally sound antitrust of policy must avoid chilling innovation and competition The United States final judgments provide clear and effective protection for competition and consumers clear and effective that must be Why they needed to be extended? Let's take it some a look at some other strategies I think one of the things I really wanted to try and accomplish as I said is to take the the Microsoft specific events and see Them in the larger context of other things that were happening over the last eight years As I said, I don't think the Microsoft case was the only trigger to this effort to revisit section 2 It was one of several developments that developed. I think into a strategy and a policy Well during the Clinton years there was an average of 1 to 2 section 2 cases brought per year And during the Bush administration there is an inheritance of 3 of those cases the American Airlines case the dense fly case in The Microsoft case the Microsoft case was the first to be decided That June after the new administration took office and it was a relative victory dense fly as we know also a victory in American Airlines was an eventual loss and there were some interesting issues if you get Down to the detail of the briefing of the cases There was some movement in the theories of the cases, especially in American Airlines away from the post Chicago Non-price predation literature reliance and more towards a more traditional predatory pricing case But at the end of the day you have these three cases that carried over and from that point on no significant cases were filed Under section 2 I've collected here the the statistics so you can see these are from the antitrust division zone Workload statistics I'll explain the two numbers in a moment what you have here are a number of investigations and number of cases file And this covers 93 to 2,000 basically the eight years of the Clinton administration And the seven years that we have so far in the Bush administration as you can see the number of Investigations goes up and down In both periods although generally the trend is downward And as I said there's sort of one to two cases brought a year There is some controversy within our little antitrust corner of the world about these statistics The reason there's two numbers is if you look at the workload statistics that have been published at different points in times The numbers are different So there's been some some looking back at to try and count cases that's been done And it appears that this one section two case down here as an outlier It's not really a true section two case Now it is certainly possible that in seven or eight years. They just didn't see any cases that made sense to bring but I think when you put it in the context of the Speeches that we'll look at and the larger efforts It clearly reflects at least to me that it was not a high priority And when you look at the section to report you see that there is a great level of concern About the dangers of bringing section two cases both in the conduct area and in the remedial area again Consistency in the themes that section two enforcement will actually do more damage than good and should be avoided the amicus program Another way and a more concrete way in a more durable way that the last eight years has affected section two was through the amicus Program, particularly in the Supreme Court. I wrote an article about this last fall looking at General Supreme Court antitrust activity over the last 30 years and the trends at the Supreme Court are quite pronounced a Plaintiff hasn't won an antitrust case in the Supreme Court since 1992 and that was Hartford fire sort of a mixed plaintiff defense victory Increasingly the government has appeared as an amicus in those cases The government itself hasn't been a party in one of those Supreme Court cases in quite some time So its primary role has been as an amicus in in every event during this administration on behalf of the defendants And they've won every single one of those cases because a plaintiff hasn't won since 1992 The two most important ones here are trinko and wirehouser linkline as most of you probably know is the case that is pending this term And involves the so-called price squeeze claims I'm not sure that wirehouser although it's Criticizable is is especially extraordinary in its holding It is an extension of Brooke group Brooke group becomes now something of a super precedent in the antitrust area It's standard the below cost standard a standard that is formidable and has to be addressed and you see that in the debates over bundle rebates That that really needs to be Considered in any kind of price related behavior But trinko I think is the is the case that in many ways the body language of trinko Is quite threatening not just to section 2 but to antitrust enforcement generally a lot of Dicta in there about the the little known small Quantifiable benefits of antitrust enforcement and a lot of body language directed at the private right of action I've included twombly down here because although twombly was a conspiracy case again twombly is just dripping with antiprivate right of action kind of language concerns about federal judges being able to control discovery Ability of the parties to manage discovery costs the implicit messages that we've over-incentivized Private rights of action through terrible damages attorneys fees costs of discovery And again looking at the case itself on its narrow facts. It's it's Defensible it wasn't crazy to say that a kind of broad sweeping seven-year conspiracy allegation would be enough to get you beyond it but the the Combined body language and the implications for other cases is quite extraordinary on the last time I looked at this in the in the fall there had already been in the thousands in terms of cases citing Twombly and any idea that it might be limited to antitrust conspiracy is out the window It's being cited and used in every kind of antitrust case. I've seen it in section 2 cases I've seen it invoking Brunswick and antitrust injury Demanding more particularized pleadings before you can get on to this expensive process of discovery What are the main themes that you see in these amicus briefs, especially the section 2 ones? Well, one is the the major one that comes out in the section 2 report is that the court ought to embrace narrow section 2 Standards these cases are dangerous. Why are they dangerous? Fear of false positives has become sort of a mantra from the antitrust division and from many commentators There is in the section 2 report some recognition that false negatives can also be a problem But clearly the view is that false positives are more costly more difficult to undo False negatives more likely to be undone on their own through market forces The cause vague standards and unreliable juries the effect loss of incentives to compete and innovate a Consequence again hold up settlements due to over-incentivized private actions treble damages and attorneys fees discovery cross and Even cases like twombly in the conspiracy context a subliminal message that we'd much rather just leave this to public enforcement Which can be managed by the government What makes this in part so complex? I think to evaluate and we'll talk about this in the final slide when we talk about what looks looking ahead for the future is Clearly the Supreme Court is on the same page with some of these main themes and That means that it can't be easily dismissed It can't just be viewed as a political issue of Democrats versus Republicans and who's in the White House You have a long-term movement at the Supreme Court towards narrowing antitrust doctrine It has now been going on for in the bigger picture close to 30 years And there's no reason to think that this bad body language about private rights of action and antitrust enforcement Generally is going to change anytime soon at the Supreme Court and that is clearly trickled down to the lower courts You see it in the the struggles of the antitrust division and the Federal Trade Commission in the merger area and I think that it creates a A context in which any kind of notion of a revitalized enforcement effort really has to take into account the courts that That these cases will be facing And the limits and constraints on the doctrine and frankly it also has to take into account the Criticism of the old doctrine that has led to these changes the idea that somehow there were some glory years back before 1977 It's really outside the consensus view Nobody is challenging cases like Sylvania and BMI The conversation about where the differences of opinion has sort of worked itself over time into a more narrow channel We're really arguing about some very refined questions now But within those refined questions, there are some pretty broadly different philosophical views about the role of government I'll talk about that in a moment Doj leadership speeches the next piece of this puzzle I've listed a bunch of speeches I went through all of them and took a look and and there are some more There are other speeches that discuss section two But these struck me as kind of the major statements about section two policy across going back to Hugh Pate One of the most important I think early ones there was the common law approach speech that he gave which built on a very Interesting article that Bill Baxter wrote back in the 80s using a similar title a Piece I really recommend He talked about it in his benefits of global competition. These are I didn't make up these titles by the way These are somewhere. I didn't put the full titles, but these are in the titles of the speeches No, I didn't make up cowboys and gentlemen cowboys and gentlemen, by the way is a comparison of us and EU views on dominant firms I'm not saying I'm not I knew that was coming. I'm not saying which which are we This one is called the second Bush administration the gales have created destruction And I think these two last ones by Tom Barnett, especially the tiger by the tail speech that he gave this past summer Is very very much reflected in the section to report and if you go through and you look at these speeches and you read Them all in context. I don't think where the section to report was going to come out is much of a surprise The only surprise that we've seen is they were not able to get three Federal trade commissioners to go along with the view. That's not really a surprise either Anybody who's been sort of watching things carefully over the last eight years There have been differences between the agencies on shearing plow the FTC didn't join every brief that was listed They didn't join the twombly brief for example There clearly been instances where there's apparent divergence within our own two agencies on the view of where we should be going in the section Two area in the trinko briefing there was some subtle changes to the tenor of the briefs from the cert stage to the Merit stage that reflected some compromise between the two agencies This is a quotation that I pulled out of Tom Bar met speech because I wanted to introduce a broader theme here And it really is something of a quintessential theme in American politics and American theory about government and the economy Tom said it is in the nature. He's talking about remedies in the case of of section two violations It is in the nature. He writes of successful firms like tigers to pounce and devour and to deprive other hunters of their prey If you wanted to make section two look kai could deals with people who aren't really dangerous I don't know that the tiger was the best view, but I prefer to watch tigers and successful firms Even dominant firms from a safe distance and without interfering with their natural activities Confident that any harm they visit on competitors will in general were down to society's benefit question I would raise for further discussion is whether or not this really is economic analysis or a statement of a deeper political and social philosophy For fun. I went back and looked at Hans Thorelli's 1954 Wonderful book on the history of the antitrust laws And here's something that he had to say on page one By setting out to prevent prohibit monopolies combinations and depredations which had begun to manifest themselves as a rather usual outcome of unbridled freedom of contract the Sherman Act Constituted a major deviation from the ideals of laissez-faire and economic Darwinism So for use of those of you who are political theory inclined you remember the debates in the political theorists that precede even our constitution About the notion of the state of nature and whether or not social contract is a response to the state of nature And whether or not the Sherman Act in the economic sphere was a response to laissez-faire and social Darwinism I put that up just for some thought because I think it's important not only to look in the context of these little eight-year Periods and debates about Democrats and Republicans in some sense. These are quintessential American debates that have gone on for centuries, and they're not even just American debates These are deeper debates in the political theory about the role of government How the economy functions and I think what we're seeing here is some of those debates being played out And you see it in the section 2 report Last word of course is the section 2 report as I've said I think it's the culmination of seven years of efforts to reform and narrow section 2 Many of the positions advocated in the briefs are in the speeches, and they're incorporated into the report One criticism the FTC had was whether or not these court victories are exaggerated Are they reading the cases especially cases like trinko for all their worth as opposed to what might be a more reasonable Narrow reading that seemed to divide the two agencies on some of their positions And we will be left to figure out the significance of the FTC dissents and where that leaves the DOJ report In terms of any durable impact and meaning Likely point of controversy. I think is the refusals to deal. That's already been an obvious point of controversy Excuse me And I suspect given that if you go back to the second part of the IP report that came out a couple years ago There's an issue in there about refusals to license and in the refusal to license context It's quite clear that the agencies could not really agree on which of the competing standards in our courts of appeals cases Was the right standard Kodak versus CSU Xerox if you remember the debate and they came out I don't remember the exact language I knew I should have put it on the slide because I'd forget but it was the most most mealy-mouthed Kind of fudged thing that two agencies could imagine that they would say without really saying anything And I suspect the DOJ at this point of the administration was not willing to do that and they weren't willing to compromise further They wanted to state their views and state them clearly and put them in a coherent framework And so they went ahead and did that and their view on refusals to deal is that antitrust Liability for a mere unilateral unconditional refusal to deal with rivals should not play a meaningful role in section 2 enforcement That's not quite what Trinko says that's sort of sticking an amplifier in Trinko and trying to read it for all its worth And since we are here at Harvard and I knew that we would be footsteps from Orita Hall I thought it would be worth Pointing out something about the Orita quotation that I have up on the board I'm the Supreme Court cited this article by Professor Orita in Trinko It's probably one of the most frequently cited articles in any debates about essential facilities He described essential facilities as an epithet in turn in search of limiting principles but it's often cited for the kind of Visual impact of the insult essential facilities must be crazy But lost in the reading of this relatively short and insightful piece about essential facilities is that He proposes what a standard would be so he doesn't reject the idea of essential facilities doctrine He just says we need some standards and an interesting footnote Interesting as you'll see in a moment because I think it relates ultimately to our debates about and discussions about Microsoft He endorses the result in MCI versus AT&T and says that was probably a correct decision I think that's significant for our discussions today because if you compare the standard that was articulated in MCI With the standard articulated by the Court of First Instance Although without citation, I think they clearly had MCI as one of the sources they were looking at There are some obvious similarities between the standards that are chosen I also put this up for Purposes of a couple of my final points about the quote-unquote gap between the United States and Europe Is there a gap between the United States and Europe on section 2 issues on dominant firm issues. I think the answer is yes I think that article 82 has very different views of what is dominance and what is exclusionary conduct the question on my mind is how big is the gap and I think that this movement within the Department of Justice over the last seven eight years has created the perception that the gap is wider than it actually is and If you look at all the different pieces we've put up There's a gap between the FTC and the DOJ There's a gap between DOJ and some commentators The point is is that we are debating this here in the US which means that there is some possibility That the gap will close but I do emphasize that I think we are on some pretty different tracks and some very basic ideas I agree with the comment that you know total convergence is not likely to happen But we are talking about similar frameworks and I would emphasize the glass half full again That the degree of agreement on basic framework is far more significant for us in the long term than the areas that we might have disagreements That's my point about what lies ahead final slide here How about rejuvenating section 2 well if rejuvenating section 2 means bringing back more Robust enforcement at the agencies I think that there are going to be some hard questions to be asked to the agencies before they go running off to court and bringing any cases for one 1998 versus 2008 are 10 years since the Microsoft case the case law is different if you go back to the the primary appellate brief that was filed in the DC circuit by the Department of Justice a couple of real key paragraphs there What are the cases relying on Aspen? Kodak Newman versus reinforced earth the decision from the DC circuit at the end of three paragraphs Doug's statement about no economic sense. It's in there, but it comes in the context of those cases Well, where are those cases you look in the trinko briefs Kodak is you know banished to the the adequate the crazy ant Aspen skiing is now on the outer edge according to the court in trinko Have you look at some of the conduct we come back to maybe some of it's pretty straightforward pretty basic It doesn't need those cases Maybe the Microsoft decision itself and the framework it sets out is where we are But we're still arguing about what that balancing stuff means and whether there is a section 2 rule of reason So I think any effort to rejuvenate is going to have to think hard about that section 2 report I think that's why they released it. It is now something to be reckoned with even if it's withdrawn on January 21st Could a targeted program of test cases successfully challenge any of them the more extreme court assumptions court with a capital CS and Supreme Court I think that is going to be one of the things that a new enforcement group will have to Think about reflect on the way the civil rights movement approach civil rights cases thinking about what the targeted focused Issues are that could be improved upon and looking hard for cases that might test those principles that's hard to do it takes time and Criticism of zero cases is going to mean there will be you know pressure to bring cases And I only hope that if they do decide to bring cases they give bring good ones that are defensible Like I think the original Microsoft case was Because more defeats in the Supreme Court will really Narrow and narrow the box until section 2 is a pretty irrelevant small little feature which might work for some But maybe be problematic for others Thanks very much Sure sure any questions? Yeah, I hope this won't be too wonky, but Just going back to the Rita quote about essential facilities one thing that always Was in my mind or I thought about during the trial was the fact that a lot of people were saying That Microsoft That it was a shame that the judges had overturned all of the cases from the 70s on essential facilities and I'm wondering how you think it would have played out if the government had Actually, just really rolled the dice to the end and said you know what? Microsoft is an essential facility. We think it's like the railroad to you know, you know to your desktop and it ought to be regulated Or is the bench just so Against that kind of argument, I think they would have got reamed pretty good is my immediate response the the the question would have been Even looking back at that areita piece Could you have framed this case in a way where the facts of the case met that frame? It don't know that they did I think it would have been very hard to frame this case as an essential facilities case and Refusal to deal was not really part of the case here It was part of the European case And I think one of the interesting things in comparing the two cases is you can come up with a remedy of a duty to deal in Cases that don't involve conduct of refusal to deal. That's one of the things we did here I prefer when I talk about refusal to deal to really talk about when it is that we are willing to impose a duty to deal Refusal to deal is one situation where we might but it's not necessarily the only remedy that would be available But we do have duty to deal in other cases Where refusal to deal was not the conduct? Yeah Anyone else? Gosh, it's just like class. Oh, there is one. Oh, sorry. Go ahead. Thanks. Yeah You know we talk about the difference between the US and EU on antitrust policy But it really can't exist in a vacuum and it branches out of a whole view of how to organize an economy I mean we have not had statutory change in the antitrust laws in the United States in a long time And we've seen this pendulum swing back and forth My my favorite quote to counter the one about tigers pouncing is actually from Richard Hofstadter's essay whatever happened to the antitrust movement which came out in 66 or 67 and he has a line where he says something like Every businessman in America spends his time looking over one shoulder for For antitrust enforcers from the Department of Justice to come in second. Yes, his business decisions Which I think is probably not a good description of the current environment In the US so I guess I mean how can you know how can how can we talk? Doesn't there have to be a gap as long as we've got a debate within the world about whether or not we should have a Primarily free market economy with some sort of social safety net in place or primarily paternalistic economy that allows free markets Only to the extent that it doesn't interfere with social welfare I'll I'll answer the question with a brief story. I was at a Small conference is one of these sort of dinners with invited guests things talking about antitrust issues and There was a represented from the Department of Justice when we're talking about article 82 And they said that the the problem was that the Europeans just don't understand and we just haven't done a good enough job of Explaining to them where it is that we are And I asked him afterwards. Why isn't it possible that they completely understand? They just disagree and think our standards are too lenient and too permissive, which I think they do I don't think there's a challenge of understanding here I think they look at cases like trinko and they look at cases You know coming out of our I think they're looking at the section to report as a challenge to their own discussion paper on article 82 That essentially is a Very extreme view of how small dominant firm enforcement could be but I liken this to Civil procedures my other love and and I liken this to the kind of question that goes to a jury What kind of question goes to a jury by definition the question on which reasonable jurors could disagree? I think that one of the places we need to get as an enforcement community is to stop just Dismissing saying we're right and everyone else in the world is wrong the beginning of a more meaningful discussion comes from Recognizing that they may just have a different view. They have a different historical experience for example with dominant firms We didn't have an IG Farben like Germany that twisted the government for For profits from war. Oh, wait a minute. Yes, we do. Sorry But there there really are some differences in regional Experiences with dominant firms that would cause people to be a little bit more concerned About the power of corporate money. It's present in our culture You can't watch a James Bond movie without there being some, you know corrupt corporation trying to destroy the world for profit So it's present in our own culture. It's very much present in other cultures Like I said, I prefer to see the glass half full. Do I agree with their standards as opposed to our standards? I think that we have gotten too extreme in our standards in terms of leniency I think there are some ways in which they are endangering efficient business practices But if you can't accept that there's conversation if you just want to go teach them about economic analysis I come back to my slide on Tom Barnett. I don't really view that as economic analysis. That's ideology And I think they've figured that out, too But doesn't doesn't the economic analysis have to come from an ideology? I mean what you're going to find you can you can certainly analyze the numbers But whether you find something is a harm to competition Doesn't that have to depend on your view of how the economy should be structured to begin with and again to use Civil procedure, yes, but in civil procedure we think about burdens and presumptions And I think what you're seeing is coming from a different position on burdens and presumptions Let me give you one hard example from the section to report the disproportionality standard. Okay a Disproportionality standard means the tie goes to the defendant So if you have a balancing test, whatever that means, and I don't think I agree I forget who said earlier. We don't really use a balancing test There's no reported cases where a judge or a jury says well There's five dollars more any competitive effect than efficiency, so therefore we condemn the way jurors and judges decide cases I was on the strength of the evidence and they either believe the any competitive story or they believe the efficiency story But there's none of this sort of dollar-for-dollar trade-off But assuming that the difference is a balancing test means that whoever is a dollar ahead That's where you come down But a disproportionality test says the room for error there is too great So we're going to require the plaintiff to prove that the anti-competitive effect is Disproportionate you could very easily articulate the opposite standard and say if there's evidence of some anti-competitive effect We're going to require the defendant to show that the efficiencies are disproportionate to the anti-competitive effect It's to mirror standards, but it's a matter of what presumption you bring to the table and and where it is you think the better Direction would be and whether you're more concerned about false positives or false negatives So yes economic analysis and ideology are clearly, you know intertwined But I think when you get to the point of trying to sell ideology as economic analysis, you're being disingenuous Yeah You turn your mic on From other from foreign jurisdictions and maybe I'm really about 95% of what you're saying is not a difference in economics They read the same text their economists are as good as our economists. They understand the economics and it's not therefore It's not a difference of empirical judgment either about what it is that will make a market efficient or inefficient It comes I think from differences in the political and legal culture for example in Europe I think it's a much more status culture. They don't have the concern about false positives not because false positives aren't important But because they have more confidence in government than we do I think and I think you can trace that through a number of the other differences the other thing I wanted to mention is Unintended consequences and be careful what you wish for and so forth at least from my perspective I didn't do no have any involvement in the international interest here until I went to the Justice Department in 96 And the perception I had there was that a lot of the proselytizing Any trust which has now led to this global mess Came from the US business community Which thought that any trust if exported would enable For it would enable us Companies to use any trust to open up foreign markets to trade that they thought were were blocked by Any competitive practices and local cartels and the like I used to give the Justice Department was it was actually very conservative as if There was a trade people in the US government who were pushing that along with the Europeans who had a similarly imperialistic Agenda I used to give speeches to showing how diplomatic I was saying that any trust law is like a driver's license And you shouldn't give it to your to a teenager until he's mature enough to handle and if too many immature teenagers have it you're gonna have a lot of collisions and That that was fairly close to where the Justice Department was then but we lost that battle Because of US firms who didn't understand that they might be defended someday Why don't we go ahead and stop there even though I'd love to go on we have a lot more Thank You Andy great stop