Published on Feb 21, 2024
Caffarra talks reaction and legacy. First and foremost, the architect of the conference, Cristina Caffarra, published a comprehensive recap and assessment, including this take on the lasting effect she hopes to see from the event:
“The conference was groundbreaking, and the moniker “Woodstock of Antitrust” (in Politico) was appropriate not just because of the sheer size of the audience, but because the content was so rich and different. Of course, it was disconcerting and disturbing to the “status quo” brigade.
As in all epochal shifts, the group that is very comfortable with the status quo would like nothing better than to continue with the same playbook: deals, retentions, instructions, billable hours, submissions, some pulped version of economic analysis, rinse and repeat. Even without suggesting pure self-interest, there is intellectual resistance and clinging to the notion that “what we have been always doing is applying the law and that is pure.”
But alongside this pushback and resistance and muttering in corners, there was also a large group (many young lawyliners, students, corporates who know change cannot be rolled back) who said they were left with heads buzzing with ideas and inspiration. Because there is aspiration for change and for better outcomes, as citizens. This I hope will be a lasting legacy of the event.
Dialogue reinvigorated for future analytical framework at the EC. Following the conference, a full-on debate over the future direction of the EC broke out in the pages of the Financial Times.
Faroohar’s fireworks. Rana Faroohar set off fireworks with her column on February 5 titled “The great US-Europe antitrust divide.” In the piece, Faroohar argued that “there are two fundamental differences in how Americans and Europeans see the issue of corporate concentration.”
She said that Europe still views markets through the lens of “consumer welfare,” whereas “Americans are undertaking a much broader examination of how corporate power is amassed and wielded, and what the consequences of undue power might be — not just for consumers but also industry competitors, workers and society at large.” She added that Europeans were divided on how to move ahead, saying that some Europeans, “including members of the European parliament Andreas Schwab and René Repasi, seemed to want to adopt a more aggressive US-style approach.”
However, she continued, “it was most telling that Olivier Guersent, the director-general of competition at the European Commission, called antitrust “a side dish” to other state policies that encourage competitiveness.” Overall, Faroohar concluded that, despite not having any national champions in the tech space, Europeans are, “stuck in the narrow, technocratic world of pricing models.” She concluded her piece by expressing hope that “the next EU competition commissioner makes antitrust a main dish.”
Guersent’s defense. Guersent then responded with a letter to the FT titled “Europe has an unrivalled record on antitrust,” in which he pointed to a 25-year track record where “the European Commission has been at the forefront of enforcement in both antitrust and mergers.” He pointed to the EC’s role in derailing or mergers, including Booking/Etraveli, Nvidia/Arm, Adobe/Figma and Amazon/iRobot. He also said that the EC focuses not on “consumer welfare” but on “the efficiencies of, and harm to, the competitive process.”
Stoller calls for courage to learn. The FT then published a response to Guersent by Matt Stoller, Director of Research at the American Economic Liberties Project, titled “Europe’s antitrust record is a matter of embarrassment, not pride. Stoller said that the “EU’s long track record of enforcement with few actual accomplishments” is actually what led to the EU enactment of the Digital Markets Act.
Stoller then described an antimonopoly movement in the US that started with the Trump administration, saying that Trump, Senator Warren, “agencies under President Joe Biden, as well as private litigants and Republican state officials” have brought cases against Big Tech and are generally focused on breaking up the tech giants. Finally, Stoller described how EU enforcers have “explicitly” rejected the antimonopoly movement in the U.S. and called for Europe to learn from its mistakes.
Lynn calls for collaboration to face the world’s three grave threats—big tech, supply chain fragility, and the hydrocarbon industry. Open Markets also sent a letter [LETTER] to the FT that the FT has not yet published.
In the letter, Lynn wrote, “Director General Guersent is absolutely correct that the European Commission did admirable and important work in antitrust for many years, at a time when the Bush, Obama, and Trump administrations were still flying the flag of extreme laissez faire. For this Europeans deserve the deep gratitude of all Americans.”
He then said, that there were two differences in the way that the US and Europeans are focusing on antitrust. The first was that the Europeans view antitrust as “simply one tool in a much wider enforcement kit,” whereas US enforcers are saying that “political economy, properly understood, is the art of using the full array of antimonopoly tools to shape the competition that exists always among people in ways that empower us to build a stronger democracy, a better society, and a truly shared prosperity.”
Lynn then said that the second big difference is in language. He said, “Director General Guersent in his letter writes that European enforcement aims to ensure “the efficiencies” of the “competitive process.” Compare this to AAG Jonathan Kanter’s comments that day, which focused on how the purpose of antimonopoly is to protect “democracy” and the “liberty” of the individual.”
Lynn concluded by calling on Europe and the U.S. to face together the world’s “three grave threats, each of which stems in part from the laissez faire approach to power of the last four decades. These are Big Tech’s threat to the news media, debate, and democracy; the threat to our security posed by extreme supply chain chokepoints; and the continuing power of the hydrocarbon corporations and nation states.”
European Digital SME Alliance weighs in, calls for “revolution” in EU enforcement. Sebastiano Toffaletti, Secretary General of the European Digital SME Alliance, also wrote a letter to the FT on the matter, calling for more urgency at the EC to deal with the “state of crisis” in the digital market. He said, “despite previous well-meaning efforts of the European Commission… there has been no change on the ground” and that the “digital market is now the plaything of a few giant corporations.”
Toffaletti explicitly called for a “revolution in Europe’s enforcement efforts that preserves the welfare of small businesses and start-ups against the existential threat of excessive market and power concentration” and he further said that the revolution would entail “going beyond the narrow focus on consumer welfare, looking not just at the index of prices, but focusing on the broader economic and societal effects of power accumulation by these giants.”
An EC spokesperson declined to comment on the remarks by Lynn and Toffaletti. She said the EC has nothing to add to Guersent’s letter to the FT.
WSJ Opinion Page attacks Ambassador Tai following conference remarks; Kovacevic says quiet part out loud. U.S. Trade Representative Katherine Tai’s comments at the Brussels Conference also led to familiar criticism from the Wall Street Journal’s conservative editorial page.
The Journal piece does not cherry pick from Tai’s remarks at the conference and does a good job of portraying Tai’s, and the President’s, new vision for trade policy.
The WSJ editorial board pointed to this quote from Tai at the conference, “If we’re only pursuing policies to benefit people as consumers, and those policies are actually impoverishing those people as workers, the entire system doesn’t work,” and then the piece concluded that “No longer does Washington aim to lower trade barriers and expand American access to foreign markets. It wants trade share and production regulated by governments.”
The WSJ piece laments a move away from laissez faire policy toward a policy more focused on the interests of workers. WSJ also highlights the groups that support and discuss new ideas for trade policy, including the American Economic Liberties Project, Open Markets, and Public Citizen. WSJ makes the argument for laissez faire policy, arguing that “protecting intellectual property” and efficient cross-border data flows is good for myriad American businesses.
While WSJ argued that even small businesses might be helped by such trade policy, its piece was undermined by big tech cheerleader Adam Kovacevich, who made clear on Twitter that he believes big tech deserves protection from trade policy when he said, “The US tech economy is the crown jewel of our economy. When it succeeds in the world, US workers succeed.”
The quote from Tai that he was responding to is perhaps the perfect way to contrast the two approaches to trade: “What we’re trying to do in trade… is to break ourselves out of the assumption that what is good for the biggest corporate stakeholders in our system equals what is good for America and Americans,” Tai said.
She added, “I think for a long time we’ve pursued this assumption that, well, these are iconic American companies, they’re brand names that we’re very proud of, therefore anything that is good for them will be good for us, that benefiting the companies will create that trickle-down benefit to the company’s workers and the communities where those workers live. And we’ve seen over time, that just isn’t happening. It just isn’t happening.”
