Jonathan Kanter, the antitrust chief of the US Department of Justice, stopped short of criticizing efforts in Congress to transfer the Federal Trade Commission's competition enforcement powers to the DOJ but said that he is a "big, strong supporter" of the FTC. In an exit interview with MLex as he steps down from his role today, Kanter discussed the DOJ’s prolific monopolization lawsuits, record abandonment of bad mergers, profit-centric abusive behavior by giant firms and what he feared was an “insidious influence” of corporate-funded academic research and lobbying.
Jonathan Kanter, the antitrust chief of the US Department of Justice, stopped short of criticizing efforts in Congress to transfer the Federal Trade Commission's competition enforcement powers to the DOJ but said that he is a "big, strong supporter" of the FTC. In an exit interview with MLex as he stepped down from his role Friday, Kanter discussed the DOJ’s prolific monopolization lawsuits, record abandonment of bad mergers, profit-centric abusive behavior by giant firms and what he feared was an “insidious influence” of corporate-funded academic research and lobbying.Kanter was asked if he was worried about the One Agency Act, and how declawing the FTC's antitrust authority would impact competition in the US economy.
"You know what, Congress will do what Congress will do, and I'm not going to predict what they can and cannot [do]. But I'm a big, strong supporter of the FTC. I think it plays an extremely important role in our enforcement," he said.
"I believe that the FTC Act is a tool that, admirably, the Commission has revived and should continue to do so in the future, and has my full support," said Kanter, who is an alum of the FTC.
The One Agency Act is sponsored by US Senator Mike Lee, who has previously said the measure is a response to the two-headed antitrust enforcement system led by the DOJ and the FTC that has suffered from bureaucratic in-fighting, delays, redundancies and inconsistency. The bill would also prohibit the Federal Communications Commission from undertaking duplicative competitive analyses of deals under its purview (see here).
With Trump's second presidency three weeks away and with Republicans controlling both the US House and the Senate, calls to push the One Agency Act through have grown louder (see here).
Andrew Ferguson, Trump’s presumptive nominee to chair the FTC in the wake of Biden’s high-profile firebrand, has also signaled that reversing Khan’s “Anti-Business Agenda” is a top priority.
Kanter said the public will be eager to hear from Ferguson but declined to comment on what antitrust enforcement could look like under the new FTC chair and Abigail Slater, who Trump has named to replace Kanter. "I will be eager to hear from Commissioner Ferguson about his agenda."
— Ambitious cases, big win —
Of the many memorable moments Kanter has had during his three-year term at the DOJ, he recalled one momentous occasion for which the date will be marked in the history books of US antitrust enforcement.
Kanter said he was seated in the division’s main conference room, meeting with his counsel and discussing ambitious, forward-looking matters that they were bringing to his attention and developing together.
“And then my head of litigation Hetal Doshi walked in, jumping up and down, and said, ‘We won, we won’,” he said.
“And I start jumping up and down, saying, ‘We won, we won.’ And then I look at her and I said, ‘what did we win?’”
It was August 5, 2024, and US District Judge Amit Mehta had just ruled for the DOJ and a Colorado-led coalition of states in finding Google to be an illegal monopolist in the market for Internet search and search text ads (see here). The lawsuit was filed during the final few months of Donald Trump's first presidency.
Under Kanter’s leadership, the DOJ opened a number of monopolization lawsuits at the same time and had enforcement record not seen in decades.
The DOJ sued Google for allegedly illegally monopolizing the digital advertising technology markets, Apple for allegedly monopolizing the smartphone market, Live Nation Entertainment and its subsidiary Ticketmaster for its abusive practices in the ticketing industry and Visa for allegedly illegally monopolizing the debit network markets, among other conduct.
— Beginning of a shift —
Kanter agreed when asked if the work done by him and Lina Khan at the FTC has marked a turning point in the history of antitrust enforcement, because there are conversations happening now about monopoly power that hadn't been happening for the past 40 years.
“Yes, I think we have changed the conversation,” he said.
The Biden DOJ has demonstrated that one can have a robust, active and effective antitrust enforcement program, and that it can benefit the economy, Kanter said.
“There's a lot of work left to do, but we were facing what I viewed as an effort that had gone on for years to dismantle the infrastructure—both the resources but also the ideological infrastructure of antitrust. And we had to build that and do so quickly in order to be effective,” the outgoing DOJ enforcer said.
“I think we're at the beginning of the shift, not the end,” Kanter said.
In a speech delivered earlier this week, Kanter said that when he took office in 2021, questions about monopoly power were no longer “just a technocratic concern relegated to the narrow halls of white-shoe law firms and elite academic institutions.”
“Our nation was experiencing a remarkable moment unlike any I had seen in my lifetime,” he said in his speech. “Plutocracy is its own kind of dictatorship,”
When companies larger, wealthier and more powerful than most world governments threaten individual liberty with coercive private taxation and regulation, it threatens our way of life, Kanter said.
— Still worrying about problematic mergers —
Kanter takes pride that the DOJ, along with the FTC, has redefined merger enforcement. He counted success in court, including the first ever labor monopsony case challenging a book publishing merger and a major airline transaction.
The DOJ saw a record number of abandonments, public and nonpublic. The DOJ’s count of abandoned mergers is up to at least 26 over the last three years, Kanter said (see here).
“But I think the most impactful part of our program has been deterring mergers that should never leave the boardroom in the first place,” he said.
Kanter was asked if he is now worried that once he steps down and once the Biden administration leaves, these problematic mergers might now make a beeline for approvals.
“Of course, I worry about that. But on the other hand, that's somebody else's responsibility, and that's the way, you know, our system works,” he said.
“I'm optimistic that we have demonstrated that a rule of law first approach, one that is rooted in the case law, one that is rooted in economic realities, one that focuses on only accepting remedies if they fully resolve the problem and don't leave the public to shoulder the burden of failure can be successful,” he said.
Kanter hopes that will inspire future generations of leadership in the antitrust division.
“But when push comes to shove, I can only focus on what I do during my tenure, and I feel like we've really left it all out there and done a great job,” he said.
— Follow the money —
As he leaves, Kanter stressed on identifying threats to competitive markets when dominant firms prioritize shareholder paydays over innovation.
“We want a world where companies are reinvesting in the US economy, and so when companies are taking money and sitting on cash or engaging in stock buybacks, that can often be a sign that instead of reinvesting in the economy, that they're taking those profits out,” Kanter said.
Fierce competition can force companies to take that money and reinvest in innovation, lower prices, increase the pace of new products and services. “I think pushing at that's really important,” he said.
Those concerns have made their way into one of the highest profile monopolization lawsuits brought during Kanter’s time at the helm of the antitrust division.
“It is not surprising that Apple spent more than twice as much on stock buybacks and dividends as it did on research and development,” the DOJ and a coalition of states said in a lawsuit filed against Apple in March. The suit targets the iOS ecosystem, which the government alleges insulates Apple from competition and reduced incentives to innovate.
“While Apple’s anticompetitive conduct arguably has benefited its shareholders—to the tune of over $77 billion in stock buybacks in its 2023 fiscal year alone—it comes at a great cost to consumers,” the complaint said (see here).
Kanter also blasted what he called “the influence machine,” calling the problem of paid economic experts “existential.”
“We need to call it like we see it,” he said. "Having a conversation out in the open about the insidious influence of corporate funded academic research and lobbying, and the kind of ecosystem of influence that has become pervasive in our area of antitrust is something we need to discuss out in the open,” Kanter said.
This has created more strain on the antitrust agencies and forced them to rely more on internal expertise, because there is less honest, open and reliable conversation happening on the outside, he said.
“Too many people are coming to the table and being paid to say things or being paid in a way that influences what they say. It has created a crisis of credibility in the antitrust community,” Kanter said.
On being asked what comes next, Kanter replied that he had spent his entire “three-year sprint” deliberately avoiding any thought toward the answer to that question.
“I have never thought about or considered what my post-DOJ employment will look like,” he said. “And that was by design, because this job is too important to do with yourself in mind.”
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