Transcript of Merger Remedies Conference Call with Professors John Kwoka and Spencer Weber Waller

Sep 14, 2021

On September 2, The Capitol Forum hosted a conference call with Professors John Kwoka and Professor Spencer Weber Waller to discuss current U.S. merger remedy policy and their proposals to reform it, as outlined in their recent article “Fix It or Forget It: A ‘No-Remedies’ Policy for Merger Enforcement.” The full transcript, which has been modified slightly for accuracy, can be found below.

NATE SODERSTROM: Good morning, everyone, and thank you for joining The Capitol Forum’s conference call on U.S. Merger Remedy Policy. I’m Nate Soderstrom, Senior Editor at The Capitol Forum, and I am joined today by Professors John Kwoka and Spencer Weber Waller.

A quick note before we get underway. For the first part of the call, I’ll be asking a number of questions of John and Spencer. We’re also happy to entertain questions from the audience. If you do have questions for us, please email them to Again, that’s, and capitol is spelled with an “O”.

With that, let’s dive right in. John, Spencer, thank you so much for joining us today.

SPENCER WEBER WALLER: Thank you, Nate. It’s a pleasure to be with you.

JOHN KWOKA: Thanks for having us.

NATE SODERSTROM: Absolutely. So in your article, you are proposing a really interesting change to U.S. merger remedy policy, and I want to get to that. But before we do, I figure it makes sense to talk about your criticism of the current approach. I think concerns around behavioral remedies and their efficacy has been sufficiently well addressed that we don’t really need to spend a lot of time on that here. Structural remedies are certainly viewed as the much better approach. But your proposal in part seems to rest on the idea that even though we typically view structural remedies as much more effective than behavioral remedies, in practice that hasn’t actually always been the case. And I wonder if you could talk a bit about your concerns with how the U.S. agencies have used structural remedies in recent years as a solution to addressing problems with anti-competitive mergers?

JOHN KWOKA: Sure. Spencer and I have both been critics of behavioral remedies, and so I think we’re glad to see them fading as policy alternatives. But we’ve also taken a close look at structural remedies and divestitures to see how well they’ve worked and what sort of problems have been

encountered and whether the problems with, and the limitations of, structural remedies are really fixable.

So we’ve identified a couple of broad areas of concern. One is, and there’s no real surprise here, divestiture remedies are not necessarily easy to get right. Broadly speaking, the agencies know, and studies keep showing, that it may be difficult to identify the right assets, difficult to identify the right buyers, and it’s also difficult sometimes to understand fully the business models of the companies. And as a result, it’s not easy for the agencies that are not, after all, businesspeople or M&A advisors, to identify exactly what part of the businesses needs to be divested and what additional transition support or ongoing expertise may be necessary.

So the agencies, in fact, spend a lot of time negotiating with the parties. Some have described the process as one of negotiated restructuring of companies and sometimes of industries themselves. That’s not part of the agency’s expertise. And it’s clear that this has gone wrong repeatedly, despite considerable agency resources devoted to the divestiture negotiating process.

And the second concern we have, broadly speaking, is that the agencies seem tempted, and oftentimes succumb to the temptation, to misuse divestitures, to stretch, what looks like perhaps on paper, a reasonable and feasible policy, to stretch them beyond recognition, to try to accomplish things that are really outside the scope of the divestiture model.

We note in our article the experience with the Sprint/T-Mobile remedy, but also there are dozens of mergers, for example, in the pharma sector that have adopted a practice of identifying drug-by-drug overlaps and to reorganize the portfolio of companies simply on the basis of eliminating the nominal overlaps. These have overlooked, we think, other aspects of what constitutes a pharmaceutical company, portfolio effects, all-company effects, which we can talk about. But the point again is that the divestiture practice has been oriented toward avoiding having to challenge some of these, even though they are, I think, manifestly anti-competitive. And the agencies have yielded to the temptation to do this, we think, much too often. And there are many other experiences we can cite.

As a result, our proposal is not one that precludes divestitures, to be clear, but what it does is to call a halt to protracted negotiations between the agencies and the merging parties, where the two sides kind of move pieces around on the board trying to find an arrangement that passes muster, at least for all appearances, seems to resolve the competitive concerns. We think that’s not the agency’s expertise. We think it’s easy for that to go wrong. And it’s also quite clear that it’s quite burdensome to the agencies to go down this path. So we have chosen to reconsider merger policy, merger remedy policy, as you say, even in the divestiture setting.

NATE SODERSTROM: Yeah, and just to kind of build off of that, and on the idea that divestiture talks, to some extent, constitute a negotiated restructuring of a transaction. One thing you mentioned in your article that to me really stood out—again, we know some of the problems that come along with failure to divest entire business units or when divestiture buyers lack adequate financial and operational capabilities. You also mentioned that some divestiture failures have resulted from the fact that the agencies are at an “informational disadvantage” with respect to technology, operations, marketing and financial aspects of these businesses that they’re evaluating from a remedy perspective, which I thought was really interesting. Because it seems like we have seen the agencies in recent years take a more rigorous approach to, for example, buyer adequacy or evaluating buyers’ financial and operational capabilities in particular.

The point that you’re making is that, almost by definition, the agency is going to have an informational disadvantage relative to the merging parties when it comes to considering a remedy. And as a result, it becomes very hard for the agency to have certainty that a divestiture is going to work, and also the incentives aren’t necessarily aligned. The agency wants the divestiture to work well. The merging parties have an incentive for the divestiture not to restore competition. So I thought that was a really meaningful point and I wanted to ask if you could kind of flesh out a bit these concerns about the informational disadvantage the agencies face when they’re negotiating merger remedies.

JOHN KWOKA: Sure. The agencies, as you say, face a significant and informational disadvantage. The parties know their assets. They, of course, know the business model. They know exactly what’s required in order to have a division, a product line, a subsidiary, viable in the marketplace. And there should be no illusion that the agencies and the merging parties’ interests are identical. They really are not. And the examples along the lines you mentioned are pretty numerous.

So, the agency, for example, should be seeking the most capable buyer of divested assets. While the merging parties will want and propose and advocate for the weakest. They may offer an asset at an advantageous price to a weak buyer for the simple reason that it will be attractive to the buyer, even though the parties may know and the agency may be hard pressed to figure out why a particular buyer is not the most competitively capable to receive the divested assets.

Another example concerns which of the overlapping assets ought to be divested. The parties presumably will have every incentive to offer the weaker of the two overlapping assets. If it’s a drug or in the case of Sprint/T-Mobile, where there are literally thousands of towers and hundreds of retail sites, the merging parties will presumably offer up the weaker package of assets in order to ensure that they retain the stronger of the two in each case, and they will automatically sort themselves into a stronger merging party set of assets and a weaker set to the recipient company.

So there are these asymmetries in information that lie at the root, I think, of a lot of the agencies’ difficulties, despite their best efforts, and they obviously put in a great deal of time and energy to making the best effort to sort these things. But this is not what the agency, in our view, ought to be doing. The agency really ought to be focused on examining the competitive consequences of mergers. And as our proposal describes, the parties are free to propose specific divestitures that will cure the likely competitive problem. But what we seek to avoid is putting the agencies at a significant disadvantage, but nonetheless getting embroiled in a never ending or lengthy process of trying to identify which are the best assets in each case. So that is really the concern we have. It is rooted in the asymmetry and the lengthy and protracted process of negotiating restructuring of merger deals that come before the agencies.

SPENCER WEBER WALLER: And let me just briefly add to what John said. Obviously, John’s a distinguished economist, and I approach things more from the legal side. But we’re both concerned that whether it’s a behavioral remedy where we think the problem’s even worse, but even in a structural remedy, the parties are proposing things that are not really in their best interests long-term to get their deal through. And it creates an incentive structure that sets up failure or at least suboptimality in a lot of situations because of these incentives.

NATE SODERSTROM: That leads very well into my next question, which is the remedy you mentioned in the article, and John just mentioned now, which are the asset sales to Dish that got DOJ onboard with the T-Mobile/Sprint merger in 2019. Again, ostensibly a structural remedy. John, you were an early voice criticizing that proposal, at least in part that, the possibility that Dish would rely on T-Mobile for wireless network access until the year 2026. Since that deal closed, T-Mobile has announced plans to sunset its CDMA network relatively quickly. Dish has a lot of customers that rely on that network. And as a result, it’s called the move anti-competitive. DOJ has become involve in the dispute, and said recently it has great concerns about the T-Mobile move. And the California Public Utilities Commission in a recent ruling demanded that T-Mobile show cause as to why it shouldn’t be sanctioned for making false or misleading statements about the network shutdown in its merger application. It’s not great. John, given all that, I’d be interested in hearing your thoughts on what this recent set of developments tells us about the T-Mobile/Sprint fix in particular, and perhaps non-merger remedy policy more broadly.

JOHN KWOKA: Spencer, you want to take that?

SPENCER WEBER WALLER: Well, it was addressed to you, but I’m happy to jump in because I think you and I look at it the same way. We’re concerned that Sprint/T-Mobile is a great example of what can go wrong, which, as you already said, is pretty much everything. What does predictably go wrong in complicated structural divestitures that sort of have some behavioral elements, but

even if you want to view this is purely structural, we think with a low probability of success under the best of circumstances.

And it’s a little bit hard to sort of assess this one out. I mean, obviously, there were four competitors and the agency was trying to more or less invent a fourth new company in order to approve a merger between two of the original four. And the only candidate that it could find was a company outside the industry, vaguely adjacent, that was supposed to reinvent itself as a national wireless carrier. And it was supposed to do so by cobbling various assets together and relying on the merged carrier for years for technical assistance, access and services.

And the AAG really pushed this hard. I’m not privy to any inside information. But the discussions were in many ways led by, certainly actively participated, in the Justice Department. And it started falling apart almost immediately. You mentioned that the new merged entity shut down the CDMA network. This is handicapping Dish’s entry into the prepaid market. And in addition, the idea that you have a freestanding, really independent, new competitor to keep things level to what it was before, it’s really impossible if Dish is entering into an agreement with AT&T to help carry its traffic, undermining the supposed independent role that this is going to play. This was a sort of a Rube Goldberg machine. And even if it works, it’s not going to have any significant effects, as far as we can tell, for years to come.

So there were many comments, obviously, opposing this deal. But what was so unusual was the almost M&A investment banker style of negotiations with the department being way beyond and way out over its skis, not limiting itself to analyses of likely competitive effects, but brokering a deal and supporting that deal and marshaling it through both the halls of Congress and the consent decree approval process.

NATE SODERSTROM: Yeah, it was certainly a curious one. One more question before we get to your proposal. So, in your article, you identified a number of failed remedies. It’s certainly true that DOJ, especially under AAG Varney, did do a ton of behavioral remedies. They haven’t aged well. You mentioned Google/ITA and Live Nation/Ticketmaster in your article. There’s obviously also Comcast/NBCU. I do think it’s fair to say, though, that the period was kind of the high watermark for behavioral remedies. And John, you said earlier, it’s kind of faded away. And then on structural remedies, Spencer, you just mentioned T-Mobile/Sprint. I think it’s probably something of an outlier, again, as to exactly why AAG Delrahim decided it was a good idea. Perhaps we’ll never know. But it seems to have been a unique situation.

Given all that, I guess my question is from where we sit in 2021, is current U.S. merger remedy policy actually that broken? And again, it seems like the heyday of behavioral remedies was a decade or so ago. Agencies aren’t relying on them the way they used to. On the structural side, T-

Mobile/Sprint, again, I think something of an outlier. So what do you make of the argument that the agencies have kind of organically moved toward a more effective remedy policy than existed five or even ten years ago, and that the current approach isn’t quite as broken as some of critics may argue?

SPENCER WEBER WALLER: Well, let me start with that and I’ll turn it over to John, who’s done some really path breaking work on analyzing the effectiveness of mergers under a variety of different administrations, under a variety of different theories. Of course, there’s some divestitures that work. And what we would like them—maybe we sort of backloaded this.

Our proposal’s in a short article that’s in Competition Policy International, and it’s also now up on the Social Science Research Network. And it’s called “Fix It or Forget It” for a reason. We want to get away, as John has talked about, from prolonged negotiations where they say the first offers and negotiations and bogging the process down and consuming a lot of resources where the agency, and to some degree the parties, are negotiating over a shifting target all the way through and sometimes into litigation. And so we think the agencies are often chasing a moving target, having to respond at every turn to a deal that is evolving. And we want to create good incentives for the parties to, in essence, make their best, not necessarily final, but their very best offer at the beginning of the process.

So what we will we propose for reform, and I hope John has time to work with me on expanded versions of this down the line, we would like to see basically the agency’s role being giving thumbs up or thumbs down after an appropriate investigation to the proposal of the parties at the initial HSR filing or at the latest in the response to the second request. So that if the parties identify likely problems that they intend to fix, we would certainly welcome that at the beginning. And the role of the agencies is not a negotiating role, but an evaluating role, under the Clayton Act or the FTC Act to decide whether the deal as presented does or does not violate the legal standards and litigate that if necessary. Parties can, I suppose, withdraw their filing and resubmit a new one if they can read the handwriting on the wall, if that stops the clock.

But the idea is this is not a negotiating process. This is a law enforcement process evaluating under the law and the facts whether the deal that the companies propose does or doesn’t violate the law. We think that creates better incentives than under the current system. So we’ve got a couple of minor exceptions for very de minimis proposals, de minimis divestitures, at any step of the way. Because, frankly, if there’s a pharma deal where the main problem is some $25 million overlap and nothing else is wrong, then fine. That deal is going to go through with a minor fix. We want that fix to come at the front end, not at the back end. And we don’t want to see that process of negotiation and literally litigating the fix at every step of the internal and external evaluation of that merger. It’s up to the parties to propose their best offer and see if it flies or if it dies. As to whether merger

remedies in general are effective, I’ll throw it over to John, who’s done one of the big retrospectives on this issue.

JOHN KWOKA: So, yeah, you asked, Nate, whether the examples that we cite and some others are really outliers and that perhaps there’s a pattern of improvement in policy measures with respect to remedies, divestitures in particular. And, of course, we like you can find examples where of divestitures that work. And no doubt there is additional attention to some things at the agencies. But the studies that I’ve done, and perhaps even more to answer your question directly, the studies that the FTC has done of its own remedy policy, really do not support the idea that matters overall have improved significantly.

In 2017, the FTC conducted its own study of its remedies experience, focusing on divestitures, and the report was full of favorable statements. But a close reading of this—and probably something that describes my critique of it in some detail—but a close reading of the study, in fact, reveals that overall, a very substantial fraction of remedies continue to fail, and fail even though the FTC uses a pretty loose definition of what success is.

And just to give you one example, the FTC examined the reasons for failures of mergers and in a large fraction of cases, one of the causes, one of the principal causes, was the failure to transfer an entire business unit. So 44 percent of the remedies that failed were the result of the failure to transfer an entire business unit. And the report recommended that the agency avoid these incomplete transfers in the future because that’s a high percentage.

But even more startling is the fact that in 1999, twenty years ago now, the FTC conducted a similar review and asked exactly the same question about incomplete transfers, and they found almost exactly the same failure rate for these types of transfers. And they continued to use them for 20 years or more. So there is an unfortunate lack of improvement in merger policy, and that includes divestiture policy. So even if behavioral remedies are fading or have faded in their appeal, the problems associated with divestitures have not gone away. And, in fact, some of the recent experiences we would propose are not really exceptions, though some of them are pretty glaring and spectacular, but not really the exceptions to a broad merger policy that continues to use, and sometimes we think abuse, the divestiture process in an effort to avoid challenging otherwise anti-competitive mergers.

So it’s really that which leads us to rethinking remedy policy and in particular divestiture policy as well, for all the reasons that Spencer mentioned and for all the reasons that I’ve mentioned. There seems to be inadequate—there seems to be no clear evidence that matters have really improved in the way that the agencies either choose or are capable of implementing divestiture policy.

NATE SODERSTROM: Yes, and this idea of rethinking merger friendly policy leads us well into your article, which you published recently, linked to in our call invite, published in CPI and now SSRN. I recommend everyone go check it out. Spencer, you alluded to some of this a bit ago, but in your article, you proposed a new approach to merger remedies, which you call “Fix It or Forget It.” I wonder if you could talk at a high level about the logistics of what you’re proposing and how it would differ from the current approach.

SPENCER WEBER WALLER: Well, I started to get into that, and it’s even hard to summarize in the word budget that we were given in the article as well. But we’re looking to avoid the problem of the ever-moving target, that the deal is being renegotiated at every contact from essentially pre-HSR filings all the way through the approval of the consent decree. And we’re trying to create the incentives for the parties to come in with a proposal that will be the basis for the evaluation and the approval or challenge of the merger by the agencies.

And as a result, some of it we’re suggesting is changes to the internal policies of the agency. And the basic idea is, if you’ve got a fix, tell us now or forget it. We’re going to look at the deal as you proposed it, and we’re going to tell you whether we’re going to challenge it or whether we’re not going to challenge it and act accordingly. That is our recommendations to the agencies. We think that puts the incentives to put the best offer possible on the table. And I guess we would create two offramps from this. One is if the parties want to withdraw the deal and propose something else, that’s fine. They can do that now as well. And I suppose we would also, again, permit de minimis divestitures a little bit deeper in the process, if it’s really just a trivial matter of divesting a tiny part of the deal. We make suggestions of perhaps five to ten percent limits on that and perhaps a billion dollars.

But the basic idea is the onus is on the parties when they file the HSR, and at the latest, in responding to a second request to put an offer on the table that the agencies can identify and respond to with the decision of we don’t see a problem or we do see a problem and we’re going to challenge it. And we would suggest at this point going forward that if their agreement’s acceptable, there’d be an expanded version of Tunney Act review as to the public interest of this with expanded participation of affected parties. And again, the court’s review of the consent decree being really what’s proposed and no further changes.

And more importantly, if the matter goes into litigation, the best offer has been put on the table. The deal is being challenged, and the court is not in a position to litigate a fix or later proposals that come forward, because there are no—there really haven’t been any negotiations and there’s been a proposal. It’s been deemed inadequate. The court ruled on the legality of the transaction as a whole. So we think this is both going to improve the internal processes and also the quality of the offers that accompany the HSR filings in the first place.

NATE SODERSTROM: Yeah, and just to expand on that, and you already, I think, got to some of this. So what do you see as the advantages of your proposal relative to the current system? In particular, I’m interested in this idea that your approach, in your words, “gets the incentives right from the perspective of both emerging parties as well as the government.”

JOHN KWOKA: Let me jump in here, since you said the magic economic word of incentives. This proposal, as Spencer has outlined, gives the parties every incentive to do, propose, file, only fixable deals. Those that are transparently unfixable because they rely on conduct remedies or are breathtaking in their divestiture scope, we would view as not fixable and nonstarters. And the firms would be on notice ex ante that these are not going to go through the process smoothly at all.

It also gives the firms every incentive ex ante to identify exactly what may be necessary, what may be fixable and to either undertake those fixes or more likely to enter into binding commitments to do the fixes, assuming that the agency otherwise approves the deal. Either way, the agencies will be presented, as Spencer says, with a complete package so they will know what the question is before them, as opposed to the moving target strategy, which of course, the present process invites companies to embark on.

I’ve been involved as a consultant on lots of different mergers. And I’ve watched this transpire where parties, of course, have every reason—why not—to float trial balloons at the beginning to see what the agency may object to and then to modify their stance as they hear from the agency, but certainly not to offer what they perhaps themselves know to be necessary in the hope that less than that will emerge from the bargaining process. The parties also sometimes introduce new remedies along the way so that the agency is chasing the moving target, having to reanalyze a new package of a, let’s say, merger, plus a new divestiture proposal. And there appears to be no limit on when or whether parties can do that, causing considerable disruption to the agency’s investigation process.

So this does get the incentives right. It encourages the firms to present what is a sensible, viable and plausible merger plus remedy proposal. And it gives the agency the opportunity to conserve on resources, not to be chasing down various paths that are really not viable. And it presents the agency with basically an up or down question on the exact deal that the parties are offering.

So for all these reasons, it seems to fix a great deal of what is wrong with the current process, both the strategies to be adopted and pursued by the merging parties and the difficulties that the agency has in chasing down all of the things that may emerge along the way. That seems to be at odds with the law enforcement posture of the agency and also with good policy strategy where the agency

really at some point needs to know what it is that is the deal before them that they need to make a decision on.

So that would be the purpose. That’s the sense in which to get the incentives right and resets merger remedy policy back to what, in some sense, it perhaps was intended to be.

NATE SODERSTROM: Yeah, that all makes sense. I think one specific thing you mentioned in your article is the idea of a de minimis standard for divestitures first, the idea being that agencies would consider de minimis remedies, ones that represent a small fraction of a company, but divestitures above a certain level, perhaps five to 10 percent of revenues, would be inherently unlikely to yield a satisfactory outcome. I wonder if you could talk a bit more about that idea that the divestitures above the de minimis amount should be something the agencies view really, really skeptically, if not even reject totally out of hand.

JOHN KWOKA: Spencer, you want to discuss that?

SPENCER WEBER WALLER: Well, again, I think I briefly mentioned this. We want a world where the parties fix their deal before they bring it to the agency and present the deal for up or down consideration. And if acceptable to the agency as proposed, then it would be embodied in the consent decree. And if not acceptable, it would be litigated before a judge or perhaps an administrative law judge, depending on which agency and which procedure is used.

We wanted to create at least an off ramp. And this is a little bit fuzzy because we didn’t have the room to sort of spell it out in the proposal. But, John, if I understand our own proposal, we have a situation where very small additional divestitures could certainly be allowed at any stage of the process, if it’s really just a small matter, probably that got overlooked. Where if you have, for example, a merger in the supermarket industry, where, for whatever reason, the initial proposal failed to take account of a minor city where there was some overlap, that could be added to the deal later and it wouldn’t derail the process. It wouldn’t fundamentally change the up or down nature of the investigation. And it wouldn’t involve a great deal of negotiation or what we think is improper sort of investment banking, brokerage type activity by the agency. So we just wanted to do that because of common sense and because human beings are not perfect. And every once in a while, something comes up that you want to allow a commonsense resolution of. That’s my reading of it, John. Do you disagree with my view?

JOHN KWOKA: No, that’s exactly right. Just to be clear, we’re not attempting to throw sand in the gears or to prohibit divestitures. To the contrary, we’re trying to focus everyone’s attention on those that make sense and certainly to allow for circumstances, like Spencer said, where there’s a minor divestiture that needs to be dea

eliminate the tails of the distribution that really make little or no sense and to have both the parties and the agencies focus on those that do, allowing for some flexibility as well. And the latter the flexibility, as a result of this, as Spencer said, not to try to prohibit or make difficult or force everything onto exactly the same path where some discretion is allowed. We’re concerned about the vast discretion that presently is held by the agencies and is abused by the parties too often and to eliminate those sort of activities.

NATE SODERSTROM: Absolutely. The last question I had on this, in your article, you write, “even where policy guides set up coherent principles, the competition agencies consistently misuse their discretion, resulting in remedies too easily evaded and mergers too often anti-competitive.” Which I thought was really interesting because you read various iterations of DOJ’s merger remedies manual. In an abstract, they all make sense. It seems to be in the actual implementation of these policies that’s been really tough and arguably suboptimal.

I do wonder, especially amongst the Neo-Brandeisians, the view that we need to move back toward bright line rules when it comes to merger reviews, whether it’s restoring the market concentration metrics from the 1968 guidelines, things like that. It does seem like your approach is potentially consistent with that idea in that it would remove some of the agencies’’ discretion and ability to be flexible on the remedies question. And what I wonder is, from your perspective, is that a feature, not a bug, in the sense that, yes, we’re removing some discretion, some flexibility. But given the outcomes we’ve seen over the past five, 10, 20 years on remedy policy, whether removing that discretion is a good thing, removing that flexibility is a good thing, and something that we should actually be seeking to do.

SPENCER WEBER WALLER: Yeah, it’s interesting. John and I probably came into the practice and the profession a generation before the Neo-Brandeisian movement really came into effect. I entered the Justice Department in 1983. Bill Baxter was my first boss. They were very different times. That said, at least as a law professor, I’ve always been arguing for more effective enforcement of the antitrust laws. And I’d say I’m a fellow traveler with the Neo-Brandeisians, even if I’m not one of the people who are on the front lines right now.

So I’m comfortable with a bright line approach. This is coming out in various legislative proposals and other things. And it’s to some extent, part of the deep background of our proposal. We certainly view a brighter line, if not a completely bright line, as a strength. John and I keep debating if our proposal is too radical or too modest. We think it sort of hits the sweet spot. It doesn’t preclude effective remedies. It mostly puts the onus on the parties for putting it on the table so the agencies can just take a look, use their comparative advantage of evaluating what can and can’t be done in a merger challenge in court and what does and doesn’t violate the law. And it also both relieves the agencies, and to some extent prevents them from, doing things that they’re not 100 percent qualified

to do, which is the Wall Street investment banking specialty work of reorganizing assets and altering business models and lets them get back to the role that Congress really intended as primarily law enforcement agencies deciding whether or not to sue and whether or not to challenge.

And I think it’s important. I think our system is very different from other models all over the world where the agencies act as they can say no and then the parties have to challenge on appeal. Our agencies have to decide whether to challenge and then win in front of a judge.

I have a personal theory that a lot of this discretion and dealmaking came out of agencies being afraid of challenging innovative mergers and innovative theories in front of a largely hostile Chicago School-trained judiciary. And I think they were overly cautious, got burned in a few cases and as a result went out of their way to try to come up with creative remedies that too often fail. I don’t want to speak for John on this. I’d like to see them robustly challenge mergers they think violate the law. I’d like to see the courts evaluate up or down and more substantive changes in the law, at least the Congress as our democratic institution that has plenty of proposals for substantive changes to the law.

JOHN KWOKA: Hear, hear. I could not improve on that statement, Spencer.

NATE SODERSTROM: Yeah, and certainly we do seem—I think it’s fair to say the agencies are moving in that direction. Again, how the courts will evaluate those kinds of challenges is yet to be seen. We do have a question from the audience. It is a predictive one and it is this. What is your view on the odds of the agencies actually implementing something like your proposal, either in part or in whole?

JOHN KWOKA: Well, I’m not so much a betting person. So I think I’ll pass on that. Obviously, it’s a different era in the agencies with a lot going on and certainly with reconsidering a lot of what has gone on in the past. And so this is an opportunity for them to reconsider aspects of merger remedies policy as well. But again, what the prospects are. I don’t know, Spencer, if you have any—if you’re a betting man, but I think I’ll otherwise pass on that.

SPENCER WEBER WALLER: I’ve got a lousy crystal ball. I will say this. If anybody from the agency is on this call and would like us to come and talk to you about what we said in the article, we will get on a plane or get on a Zoom call as soon as possible. There’s new leadership at the FTC and there’s proposed new leadership at the antitrust division. And if they want to hear more about our proposal, they know where to find us.

NATE SODERSTROM: Excellent. We have included this by making a connection. It is unfortunate that in these days a Zoom call is the most likely outcome, but we will roll with it. John,

Spencer, that’s all I had. Thank you so much for taking the time. I think your proposal is really interesting and I think there’s a lot of interest in it. And thank you again for jumping on with us. And we very much appreciate it.

JOHN KWOKA: Our pleasure.