Assistant Attorney General Jonathan Kanter Delivers Remarks at the 22nd International Conference on Competition

Remarks as Prepared for Delivery

Hello, and good morning! Let me start by saying I wish I could be with you in person today. I am honored to be a part of today’s event. The incredible collection of competition experts from around the globe that are brought together here is a testament to Germany’s leadership in the international competition enforcement community. And I have to acknowledge Andreas Mundt and his team at the heart of that. Thank you for your public service, Andreas.

The participation of so many international thought leaders in this conference makes me deeply happy and hopeful. We share great challenges in confronting the monopoly and competition problems of the modern era. But events like this are a reminder that we have an international community dedicated to better understanding how to make our economies work for their people. We are in an era of progress. New thinking is rising to meet the moment and capture both the problems, and the solutions, of modern market realities.

More than ever, we are realizing that antitrust is about — and for — the people. And we are acting on that vision.

At the Antitrust Division, we are seeing the fruits of that work. Corporations that propose anticompetitive mergers are finding an Antitrust Division willing and able to prosecute the case against them. For example, we have now won our last three merger trials in a row. We have twice stopped airline consolidation that would harm competition that air travelers desperately need to keep prices down. In a third trial victory, we stopped a merger of publishers that would have lowered authors’ wages in the labor market for their creative works.

More and more, corporations are realizing they are better off following the law than trying to test their luck in court. Avoiding a protracted review that ends in an abandoned or blocked merger is better for all sides.

That is why we are glad to hear from the defense bar that our new merger guidelines have made it into corporate boardrooms, where executives read and understand the threats mergers can pose to competition. A prominent practitioner recently shared a story about executives bringing a concern noted in the guidelines to corporate counsel before a deal was even struck, instead of the other way around. As a result of our providing clear guidance and backing it up with a willingness to litigate to stop violations of the law, fewer anticompetitive deals are making it out of boardrooms in the first place. That’s progress. 

Our work is far from done of course. With the rest of my time today, I want to talk about the problem of gatekeepers. More and more, enforcers are confronting the challenge of industries dominated by a small number of powerful chokepoints. The success of our economies in the years to come will depend on our ability to ensure competition in and around these chokepoints.

Our new merger guidelines approach every competition question the same way. They ask — how does competition play out here, and what are the threats to it? The gatekeeper challenge arises most often when competition plays out on and around platforms, although it also appears in a variety of other markets.

The guidelines explain that platform competition plays out in several important ways. We pay careful attention to “competition between platforms, competition on a platform, and competition to displace the platform.”[1]

In each of these situations, a gatekeeper platform can corrupt competition. Platforms write the rules, establish the field and referee competition. When they become players as well, the incentives to tilt the scales in their own direction to preserve long-term market power can be overwhelming. Their long-term valuations and profit motives can dwarf the short-term profit incentives that Chicago School analysis had relied on to suggest a hands-off enforcement approach.

All told, this gatekeeper power has real consequences for all of us — at home, at work and in the supermarket checkout line. Prices go up, and quality and choice go down.

Innovation suffers as well. Recent research suggests that big tech firms pay a premium to hire inventors, but then under develop and under deploy their inventions. The data bears out that the vested interest of a powerful, profitable firm in the status quo is fundamentally inconsistent with sponsoring disruptive innovation.[2]

That is why our enforcement program is laser focused on breaking up existing monopoly chokepoints across the economy, and preventing new ones before they arise. We need to ensure free and fair competition all across the economy. Farmers should get the benefit of competitive markets for the food they grow, and grocery customers should get the benefit of competition as consumers. But gatekeepers can deprive both. Patients should get the benefit of competitive markets for healthcare services, and doctors and nurses should get the benefit of competitive markets for their labor. Yet in healthcare too, gatekeepers can rob both. We must unwind and prevent these threats across the physical and digital economy.  

You see those concerns reflected in a wide variety of recent case filings and settlements. I am proud of the work of our civil and criminal enforcers to open up competition.

Our policy and advocacy work is also opening markets subjected to the market power of gatekeeper corporations. The entire administration is taking a whole-of-government approach to competition. The administration is using every available lever to combat concentrated power in the present and prevent it from emerging in the industries of the future.

It has been nearly three years since President Biden issued the 2021 Executive Order (EO) on Promoting Competition in the American Economy. I can say confidently that it has been a gamechanger. The EO catalyzed creative, pro-competition thinking across the government. In my own work, we’ve worked with what feels like every agency to combat concentrated power in agriculture, airlines, banking, healthcare, shipping, technology and many other markets. The administration has used tools that have existed for decades to take on corporations’ modern efforts to nickel and diming the American people, with real results for real people.

Crucially, the EO recognized that these principles have implications beyond domestic policy. The Executive Order “reasserts as United States policy that the answer to the rising power of foreign monopolies and cartels is not the tolerance of domestic monopolization, but rather the promotion of competition and innovation by firms small and large, at home and worldwide.”[3] All told, the entire administration is using all available statutory and policy tools to combat 30 years of rising concentration in industry after industry.

Those same insights animate President Biden’s recent Executive Order on Artificial Intelligence.[4] Because the AI tech stack is still in such an early stage, and because so many of these tools are still developing, the EO offers a real opportunity to underpin American policy towards AI (and the entire ecosystem as a whole) with open markets and fair competition. The EO and its associated guidance emphasize the importance of competition in the developing AI ecosystem, and the Antitrust Division is actively working to make that vision a reality.

The EO takes aim at the current and future opportunities for gatekeeper power and monopoly chokepoints at every level of the AI tech stack, from chips to cloud to the end user. This insight is core to our own emerging focus in AI: where are the current and future chokepoints, and what enforcement, policy and other tools can we bring to bear to open up the market? This approach will bear fruit for many years to come.

Let me close by reiterating how excited I am about this gathering and about the progress we are seeing in competition enforcement around the globe. Everything I just talked about was from one agency. One agency. I recognize the thought leadership and theoretical advances happening at agencies all around the world and welcome it. I look forward to working with, and learning from, all of you in the months and years to come. Thank you again for the opportunity to speak here today.