Stock Market Sell-Off, Google Antitrust Verdict, and Guest Jonathan Kanter

23:53Just run your bank. Stop pontificating at us in your arrogant fashion. But anyway, go ahead. Sorry. Well, there's a difference between— No, seriously. His opinion was called, the next president must restore our faith in America. We've got plenty of faith, Jamie. Jesus. Sorry. Must restore our faith in America. That's the thing. The first line is, we live in a perilous time. But go ahead. Wouldn't that be nice? Yeah. Okay. That's hard to disagree with. But there's a huge, I think, opportunity for tech CEOs, not even tech CEOs, CEOs to have very well orchestrated working with IR, working with good production people to put out earnings releases or statements about their earnings out on YouTube.

24:35I think it's powerful. I think it's a means of meeting retail investors and it signals innovation. But I'm almost at the point now where CEOs, part of being a CEO is a few of the following things. One, you don't talk about religion or politics. You just give that up because no one, because you're just going to alienate 50 % of whoever, right? And we're not really interested in knowing about your views on Christianity or the president or whatever it might be. Two, you are not allowed to ever have sex with anyone at this organization. Doesn't matter if you fall in love. Doesn't matter if you're divorced.

25:08Doesn't matter if you've known each other. And then three, I would have no social media from you. It's just not worth it. On a risk-adjusted basis, sure, some people are good at it. Tory Burch was really good at it. Some CEOs could argue Elon Musk has built a huge following on Twitter. But on a risk-adjusted basis, the world does not need to know what the CEO of Intel is thinking at that moment. It's just not a good idea. Right. Yeah. Well, I agree with you. I was I literally am so tired of reading like all of them. Like stop talking. You know, and actually those that are causing danger, like you mentioned, tweeting these riots that are happening in Britain and this sad killing full of misinformation has caused all kinds of right wingers to come out and attack Muslims.

25:50And he was encouraging it. It was, oh, sit down and do your jobs. That's my feeling. So you feel OK about this global sell off? Everyone's all like. The Fed's going to do an emergency cut. That's what they think. Well, see, I hate that because, I mean, a couple of things. Looks panicky. Looks panicky, right? Doesn't it? Okay. But my generation has convinced Louis and Alex's generation and the generation of people who mostly work with me. The average age of Prof G, or I would say the median is 26. The average is probably 32 because me and Catherine who run the company are both really fucking old.

26:27but the median, the number of almost 12 of our 14 employees are under the age of 30. And what my generation has managed to do is convince them of a myth. And that is that market highs and strong markets are a good thing and that it's worth mortgaging their future in the form of debt and artificially suppressed interest rates to keep the markets high. And they're not. The markets touching all-time highs are good for Kara Swisher and Scott Galloway, who already own real estate and already own stocks, because there's two phases in your life. There's the investment phase where hopefully you've established professional currency, you are spending less than you're making, and you are investing that money.

27:07There's the harvesting phase. To a certain extent, you and I are still making good money, but we're kind of harvesting. We're slowing down. We have nice lifestyles. We want to give money away. We want to take care of our kids. We want to do nice things. We want to go to Scotland. We want to hunt Scott Galloway, right? We want to start spending money. You want the harvesters, my generation, wants markets at all-time highs. But what the youth don't recognize or that we've tried to evangelize this total fucking myth is that they should have market highs. No, when you're investing, you want the markets to crash.

27:42The reason I am wealthy, I'm talented, I've started companies. but the reason I'm really, really wealthy is that in 2008, we let the markets crash and you could buy Apple, Netflix and Amazon for about eight to 12 bucks a share. Netflix closed at$640 a share. So what will my generation do? My generation will panic if there's anything resembling a notion that my generation gets to be less wealthy and see my stocks and real estate go down. So we will mortgage their fucking future by issuing more debt and creating stimulus and pretending that it's good for everybody. You should let the markets fall such that young people can take advantage of what is a natural part in a capitalist cycle, churn, disruption, so they can have their shot at buying real estate, at buying stocks at a reasonable price.

28:30But instead, you're already hearing these - I gotta tell you, the newspapers are freaking out. You're already hearing this bullshit narrative of, oh, we've got the government needs to intervene with stimulus or bring down interest rates. No, we need to let the markets do their job. And the next generation of people needs to appreciate how wonderful capitalism is. And the other thing for people to realize, it's always said at all the times whenever there's a crash, it's a good reason to sit tight, right? That's right. Don't panic here. The market has already recovered most of its gains here. But what I hate is the notion that if you're a 30-year-old producer of a podcast and you're finally making some good money and you can invest 20 grand a year in a stock, you want the markets to crash because you're investing.

29:18You're in the investing part of your life. And this bullshit that we need to pull out our kids' and grandkids' credit card to keep us wealthy, it's a virus that infects our society. We need churn. We need disruption. Yep. Yep. Anyways, thank you for my TED talk. I like your change. That's a take. We'll see where it goes. Everyone loses all their money. They're going to call you, Scott. Anyway, we'll see what happens. And the tech stocks, I think, have just been so on a charge that it's hard not to imagine that they had to take a minute. And they have, you know, they've been growing like crazy.

29:49All right, Scott, let's go on a quick break. When we come back, we'll discuss Donald Trump's debate dodge and speak with friend of Pivot, DOJ antitrust chief Jonathan Cantor, who's popping the champagne right now about the landmark ruling in the Google antitrust case.

30:09From Pushkin Industries, I'm Jonathan Goldstein and Heavyweight is back. The new season is bigger than ever. Bigger hopes? I keep waiting for this moment when he says, Mom, I get it. I'm sorry. Bigger dreams. Tom Hanks wants to meet with you. This is a real chance. And bigger heartbreaks. I thought it would be my movie moment. And maybe he would even whisper in my ear, I've always been in love with you. Check out new episodes of Heavyweight on Apple Podcasts.

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33:00Scott, we're back. A debate between former President Donald Trump and Vice President Kamala Harris is looking increasingly unlikely. Trump said over the weekend that he will no longer appear a previously scheduled ABC debate in September and will only debate Harris on Fox News with a full arena audience. Harris has given no indication she would agree to that. And she said she'll show up for the ABC debate regardless of whether Trump attends. Wow, this is kind of stupid. And I have to say, New York Times had a real fail here where they said Trump agrees to Fox debate. You know, it didn't say that he just pulled out of a debate.

33:34That's what he did. He ran screaming from the room. is there any he's saying he's ahead so why should he debate her he is in fact not ahead anymore um the harris campaign has invigorated the democrats um it's looking to win over republican voters in a new effort called republicans for harris by the way the idea is to use well-known republicans to activate their networks with particular emphasis on primary voters who back nikki haley lots of former governors members of congress some white house officials for trump So what's the pros in this debate thing? I don't think there's going to be one. Or maybe he can't.

34:10You said he can't not take her bait. But what do you think? I think he's going to try. But look, my sense is he's trying to run other than the biggest debates, the biggest stubbed toe so far was his VP selection. And you got that right. I got that wrong. And that is dominating the news cycle out of his party. other than him saying that Vice President Harris, you know, turned black. I agree. And she is, in fact, black. He keeps pushing it, by the way. His aides are going crazy because he keeps pushing it. But go ahead. But that's what happened. I think his aides, and he's been fairly on message.

34:48I forget the name of the woman who's supposedly running the campaign. Susie Wiles. Susie Wiles. Supposedly, he really does defer to her. He's one of the few people that defers. And my guess is she has accurately assessed that he loses the debate the moment he shows up, because what you see is a 77 or 78 year old obese man who goes meandering. I mean, here's the thing. The big issue in the presidential election remains the same. It's age, except it's gone from a feature to a bug for the Trump campaign. Because relative to Biden, Trump looked vigorous and youthful. Now he's going to look old and he's going to look reckless.

35:28He looks old and crazy is what he does. Yeah, and his kind of – the crazy just will add to this notion that he's kind of lost it. And then you put this very attractive, very youthful, very sort of disciplined woman on stage. And just the image of her six feet from him, unless she really fucks up, she's won. And I think they realize that. And so they're going to come up with all kinds of conditions that I bet the Harris campaign would understandably not agree to. And he'll claim that both sides will claim that the other is run from it. The campaign should absolutely hammer him and do all sorts of motifs about him running and being a chicken and everything.

36:11Do you think those are effective? I think it looks pretty bad for him if it's clear that he is scared to debate her. Because his whole image is one of macho and don't back down. It's the little stuff behind the scenes that moves the needle. And we actually had someone on Pivot that I think is already, his fingerprints are already on the Harris campaign. And I don't know if this is true. I'm just speculating. David Plouffe. He joined it. He's joined it. He's joined the campaign. He's joined the campaign. Yeah, I know. That's what I'm saying. And I think they're just more disciplined and very thoughtful about messaging.

36:47And he's clearly, he was outstanding. The Obama campaign was incredibly disciplined and on message. And he's joined the Harris campaign, I think, as of two weeks ago. So a little later, but I think she's, the people have been surprised about how slick she's been, like in terms of not making a mistake. And she's added these people on a lot of Obama people and very experienced people and is taking their advice, right? That's the thing. And I think Trump is going off message for his people, who I think are going crazy because he keeps talking about race. He keeps talking about sharks and Hannibal Lecter.

37:20He talks about Hannibal Lecter on his speeches. Oh, that's right. Yeah. He's doing all kinds of crazy nonsense. Anyway, we'll see. I think, you know, she should not do a debate in an arena. They're screaming people. That's where he thrives. Right. You can't do it at Fox News. I would not show up on that network if I were her. Although there would be some power in showing up there, correct? I don't – it'd be a pretty gangster move if she said, listen, boss, I'll debate you anywhere, anytime. Yeah, which is what he said. I do think Fox – I think if the only debate was going to be on Fox, I do think some of the anchors on Fox would feel an obligation to at least appear to be not ridiculously biased.

38:04Well, it would be Brett Baer and Martha McCallum who are their best – Who are both really good. Yeah, they are. Brett is not, you know, I mean, you've seen that clip of Brett going through every one of his appointments and how they've either in jail, discredit him, aren't supporting him. I mean, Brett is good. So if I were her, I'd go gangster. I would demand, if they say Fox, if I were the Harris campaign, I would absolutely push to have mics turned off and no crowd. No crowd, yeah. And then say, we'll do it on Fox then, sure. But no arena. How ridiculous. What does he think this is? Anyway, whatever.

38:40All right. We'll see what happens. But so far, so good. We'll see who she picks. Again, last minute, I guess she's picking tomorrow. So do you have a guess so we can see how good we are? Oh, I'm about the VP? Mm-hmm. Oh, I absolutely think it's Shapiro. I think he's literally the perfect VP pick. He totally diminishes, immunizes the cudgel of Israel. All of his things that are quote-unquote controversial about him, are features, not bugs, school choice. It takes them to the middle. It makes them more moderate. And you want to talk about someone who's ready to attack. He immediately filed suit against the Trump administration on, quote unquote, the Islamophobia of this anti-immigrant, anti-immigration law.

39:23So that kind of protects him of saying, look, I'm about following the law. He's already gone after and filed suits and knows the script for all of this election denial bullshit. He would be so incredibly effective. And they're trying to position him as saying, well, he's compared protesters, the people are protesting for Palestinian rights to the KKK. The truth is, what he said was, if the KKK illegally trespassed and put up encampments, they wouldn't allow it. These universities would not allow it. But it's, you know, I think it would be interesting to see if there are, though, protests at the convention, which we are likely to be going to because of it, because of him.

40:08We'll see. We'll see. Anyway, the progressives are really pushing Waltz, who is so folksy, but I just don't think he's up to the task. The thing about Waltz is, quote unquote, regional appeal. He's an adorable daughter. The question around Waltz is, does he carry, is his popularity in Minnesota carry over to Michigan and Wisconsin, right? and he's very folksy but i just think i i don't know i mean you need a you need a heat you know you need someone who's really sharp like he's lovely and folksy and i'm like you know you should host saturday live sir but i don't know anyway what do you think kara i think it will be shapiro i worry that she will do waltz because i i like him too i see this appeal but i just think it's just not enough to be, you know, a corn dog eating, gun shooting liberal.

40:54I just don't know. You know what I mean? Like, I don't think it works. I don't think he's sharp enough. But I think Shapiro has to be the choice as much as Waltz is charming and Kelly is terrific. It's the boring shit that you learn from. She's supposedly announcing tomorrow, Tuesday. Where is she campaigning? Where is she doing a rally? I know, I know, but that might be a fake. Well, is that just too boring for us? The obvious shit? Yeah, that's true. That's a good point. That's an excellent point. Excellent point. And that note, let's bring in our friend of Pivot.

41:28Jonathan Cantor is the Assistant Attorney General for the Justice Department's Antitrust Division. Welcome, John. Good to be back with you. So we recorded an interview with you just a few hours ago, but in the meantime, there's been some breaking news. The DOJ just won a major victory in the Google Antitrust case. U.S. District Judge Ahmet Mehta ruled that Google acted illegally to maintain a monopoly in online search, violating Section 2 of the Sherman Antitrust Act regarding general search and general text advertising, saying Google is a monopolist and it has acted as one to maintain its monopoly.

42:00That kind of says it all there. I want to get your reaction. I'm still digging through the 288-page ruling, but let me hear your initial reaction. We talked earlier and I said, what's going to happen next? And you're like, a ruling. Here we are. Well, the last few hours, you know, certainly have, you know, been a long year. It's been an exciting time here at the Antitrust Division. I think, you know, first and foremost, the people here worked so hard for so many years to achieve this result. And they are the finest lawyers on the planet. They are the finest antitrust minds on the planet. I'm extraordinarily grateful to all of them.

42:39The work they did really delivered for the public today. So let me read through a couple of Judge Meta's ruling, which was something else. The fact that Google makes product changes without concerns that its users might go elsewhere is something only a firm with a monopoly power could do. Google, of course, recognizes that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenue, probably why they pay up to$26 billion for it to Apple, Mozilla, Samsung, largely Apple.

43:15And then lastly, time and again, Google's partners have concluded that it is financially infeasible to switch default GSEs, general search engines, or seek greater flexibility in search offerings because it would mean sacrificing the hundreds of millions, if not billions of dollars that Google pays them as revenue share. These are Fortune 500 companies. They have nowhere else to turn other than Google. So the case was built around these revenue sharing deals, right? And then the text thing comes off of the search part, correct? Yeah. I think when you look at a lot of our monopolization cases, they focus on mold building.

43:49And so the concept in mold building is that in these technology markets and networked industries, the more scaling you get, the harder it is for anyone to keep. And that scale has exponential impact. And so this is something that was certainly present in this case. You can see in the opinion, but it's something that's a theme that you can see throughout many of our cases. And so the deeper and more trenched a company gets in the technology market, the harder it is for anyone to compete, the higher the barriers to entry. And so when we're bringing a sophisticated antitrust case, it's important for us to make sure that we're explaining those market realities.

44:22And that essentially means that they just paid people off to put them in front, correct? Put them to the front of the line, and then no one else could get to the front of the line. I mean, I'll let the court's opinion speak for itself. It's pretty clear. That was your argument, correct? That was very much the flavor of the argument. And Google's was that people could switch easily. Now, if you do dig deep into Apple, you can have an iPhone say you can switch. It just everybody is sort of gets stuck into this system. One of the things I used to argue a lot and even 10, 15 years ago was that it wasn't easy to shift even for consumers, which wasn't an argument you were making, correct?

45:01Well, I think we were making that argument. So we talked about, and one of the, I think, important innovative approaches we took to this case is we put up the first day of trial, behavioral scientists. We talked about the real way in which consumers react in response to things on the screen. And I think those market realities, the way consumers behave in the wild, is something that's really important in all of our work to incorporate. rate. The second is a question that we asked at trial, and I think it was important, which is, if something is so easy, why pay a lot of money for it? And so, in this case, if defaults, a company was paying billions of dollars in money for defaults, and then turned around and said, you don't matter, the two don't necessarily line up.

45:48Those are themes that we certainly emphasize the trial and ultimately deferred the court and its opinion, but we're pleased with the outcome. So let's talk about that. The ruling didn't include a remedy because it wouldn't have. The judge still needs to decide that in another trial. You have talked about some remedies you'd like. You've spoken to structural ones like a breakup, I would assume. You also want to limit advantages of future tech like AI, correct? Well, I want to be careful in this case. I want to respect the court's process here. And so we received the favor of the ruling today. We're very excited about that.

46:21I think the next step is to await the court's instructions in terms of how to proceed with regard to remedies. One of the things we discussed in our earlier conversations about our approach to remedies more broadly in the process is that it's important in technology industries for them to be forward-looking. And it's important, particularly if you have this kind of moat-building concept, that the remedies address the moat that might protect company from future inflection points. And so I think all of this is, you know, really important in context of any case, but I wanted to be thoughtful and careful to ensure that we are proceeding a piece here.

46:56We have a lot of work still out of us. One of the things I think people won't notice as much is the second part, the text advertising, came from the first part. With the search dominance, they were able to have text advertising dominance, correct? So that you build, it's like a daisy chain, including into AI, correct? Yeah, I mean, these are the flywheels that we talk about in a lot of our cases. And again, whether it's contract tickets or operating systems or search engines, there are often multi-sided markets where you have a massive amount of scale and scale on one side of the market fuels the scale on the other side of the market and it makes it harder to compete.

47:28And often you have to compete on one side of the market, give the product away for free, and then build enough distribution of traffic in order to then sell it off to advertisers or another side of the market. So these are, again, market realities. It doesn't suggest that these business models themselves are problematic. It does mean that these business models have characteristics that might lend themselves to tipping. And so the effect of a contract or a restriction or an impediment on switching to default might have an outsized effect in a market that has these characteristics. So the remedy phase, does it enable you to revisit any of the arguments, say, made by Yelp and other companies that have used Google pushing them down?

48:07Does that allow you to do that? Or is that a different thing here? So I think, you know, again, I do want to be respectful of the court's process here. And so I've got to hold off talking about how many remedies in this specific case. I'll just refer to my comments that I mean during our conversation earlier today, which is that the remedies have to matter and they have to map to the theory of liability. but one of the themes that came out of the court's decision back in the US v. Microsoft was that remedies in technology markets have to be sufficient to address the current competitive harm, but they also have to be forward-looking because technology, more often than not, it's the next inflection point that presents the competitive threat or the competitive alternative.

48:51And so I think we have to look ahead and see where it's coming down the pipe and then make sure that the conduct that we have successfully proven to be illegal can't be replicated in a new form. You don't want it to happen over and over again. One of your DOJ colleagues said during the opening arguments, this case was about the future of the internet. What's the immediate and long-term impact here besides you being very excited to win this? What's the first biggest, it's the first and biggest result in forever since I have been yelling about it, I know. Yeah, so the future of the internet is one that is built on data, it's built on information, it's built on content, and it's built on managing users to that content, whether it be in a search result, in a cancer generated by AI, or any other app or surface.

49:42And so I think understanding what the rules of the road are from the antitrust perspective is table stakes to understand how those technologies can develop. And I will say another thing, which is the importance of bringing cases like the one we want today is that it creates decisions, the judicial decisions. And those decisions help explain where the rules are, what the rules are, and what the boundaries are. So we're hopeful that the precedent that we create through successful decisions like today's, not only create clarity in this market, but explain what the rules of the road are for technology companies or any company in any industry going forward.

50:18So speaking of rules of the road, the judge was very upset about the lack of a paper trail and internal chats deleted after 24 hours, which is Google's policy unless the setting has changed. He declined to punish them, which the states had asked, I think you had asked. But he certainly gave them a tongue lashing the company. Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril. So it's warning them for the future, presumably. Correct. All tech companies. Yeah, again, I'll refer, defer to the court's words and its decision. Generally speaking, in conversations that we have, our process is extremely important.

50:56And when we engage in legal discovery, we expect companies to abide by its obligations to preserve documents in response to subpoenas. Yeah, that was an interesting part. So, yeah, we've got it. I mean, this is the whole system creators in the absence of compliance. Yeah, yeah, that was an interesting thing. Last thing, the case, for people who don't know, did start under the Trump administration in 2020. But you took it to court in 2023 and continued. It's somewhat bipartisan in that way. Obviously, other lawsuits are happening. Your biggest question, you and I have been talking this for a long time.

51:33Is this the moment, finally, where tech gets to be treated like every other industry? No company is above the law. And so, you know, I think, you know, the antitrust laws have been in existence since 1890. And we've seen them enforced against companies off railroad, oil and telecommunications operating systems. The Internet and Internet companies are not about the law. And so if a company breaks the law, the antitrust laws, we'll be here to kill. All right, John, thank you so much. Congratulations. This is a big deal. It's, you know, and you never know where it's going to go because Microsoft trial was a big deal and then it fell apart.

52:11But thank you for jumping back on with me and we'll return to the rest of our earlier conversation. Thank you. Let's start with the recent reports. The DOJ has launched two separate antitrust probes into NVIDIA. One investigational report examined NVIDIA's buyout of Israeli startup RunAI. The other will determine if NVIDIA abused its dominance to push customers away from its competitors. What can you tell us about these probes? I suspect not much because you're not supposed to, but go right ahead if you feel like it. Yeah. Unfortunately, I can't comment on specific companies, which you know. But what I can say is important for us to understand how these markets function.

52:45AI has the potential to be an incredibly transformative technology and frankly generate a lot of great innovations. And that's really exciting. I think we want to make sure that that happens in an environment that's free of anti-competitive obstacles. or we avoid a situation where a small number of companies capture so much power and then use that power to stifle innovation and competition. We studied the last go-around in technology, and I think one of the things that we learned is that lack of intervention in real time can often make it really difficult to go in after the fact and try to undo decades of monopolistic behavior.

53:22So we're going to make sure that we get it right and that if there's a need for intervention, we're going to make sure we do so in a timely and effective manner. What do small interventions look like, just putting them on notice that you're looking at them? NVIDIA is not unlike a bunch of companies that had this sort of hammerlock on a certain thing that was hot for the moment. Cisco was like that in the early internet, for example. What does small interventions mean from your perspective? Yeah, small interventions might mean making sure that we are addressing conduct, for example, contractual restrictions or terms and conditions that are applied to developers or acquisitions that might deepen a moat and create a difficult environment that's difficult to compete.

54:10So those are the kinds of interventions that I think many look back in the last 20 years as the current tech environment emerged and wish had taken place because perhaps we would have seen a more competitive environment for today. So just to be clear, the DOJ and the FTC agreed to divide and conquer investigating AI companies back in June. The DOJ took the lead on NVIDIA and FTC has open AI and Microsoft. Is that correct? Yes. Again, I can't confirm those kinds of understanding. But that's what you've done in the past. But in the past, there's a Venn diagram where the two agencies overlap, and it's quite substantial, a lot of the antitrust conduct.

54:50And so it's important for us not to duplicate efforts or have the same company being investigated by the two different agencies. And so it's important for us through a process that is a bit clunky but has been on the books for a long time called the clearance process to make sure that we are allocating our resources, scarce resources effectively. You recently told the Financial Times that you were looking into monopoly choke points with AI companies. And you also said regulators will be looking into aqua hires. We've talked about this a lot, the Microsoft purchase of inflection AI, for example.

55:27What are your biggest concerns? Can you talk about what a monopoly choke point and acquihires, why those would be of concern? Yeah, I think there are two distinct categories. In terms of choke points, think of it a lot like moat building or gatekeepers. And in a lot of these sort of network technology industries, as you know better than anybody, the power is not usually from a store across the street. It's from a network where the ability to enter, where the capital you need, the scale you need, the participation in the platform that you need becomes so massive that it really doesn't make sense for others to compete.

56:11And then those choke points become the platform that the entire industry relies on for specific tasks or specific access to markets. And then that gives the choke point a lot of power. And so we just want to make sure we understand where those choke points and moats might emerge in the context of AI. In terms of aqua hires, it's really substance over form. And so I think, you know, we have to, you know, make sure that if it looks like a duck and quacks like a duck, well, then it's probably not an elephant. And so we want to make sure that we are focused on following the facts, however they present themselves.

56:47Would inflection AI be one of those things? I mean, an elephant? Yeah. Who knows? But again, I won't talk about specific companies. But again, I think substance over form is really the message I would deliver. Good to see you, Jonathan. Something I don't think gets enough attention is the impact of when you have an industry that becomes so concentrated is its impact on inflation. Can you speak to the connection between a lack of competition and inflation? Sure. To me, it's obvious, right? I think we all understand, even the most kind of fundamental work-in antitrust people, that competition can result in higher, lack of competition can result in higher prices, right?

57:33And so if you have lack of competition throughout a supply chain, whether it's in shipping or in manufacturing or at the retail level, it creates the opportunity to exercise and extract market power. And so if you're against the backdrop of an inflationary environment, absolutely, you want to make sure that you have competition to help lower prices. The thing I always try to emphasize is that competition isn't a switch that you can flip on and off at will. And so we saw around the time of the pandemic, we had very vulnerable supply chains. And the resiliency concerns, I think, were on full display.

58:11And at the time, we needed more access to products and services. We needed to open the spigot in terms of manufacturing and imports in order to meet growing demand, and we didn't have it. And so the lack of competition available to deliver those products and services, the lack of resiliency in terms of our existing supply chains, led to an environment that certainly was not helpful against the backdrop of inflation. So just a follow-up question. We always have a tendency when we talk about antitrust and we bring you on and we talk about Lena Kahn to talk about tech or big tech. But a concentration or unfettered M &A and consolidation, which is, in my view, it's incredibly damaging to the economy.

59:00It's not only tech. I mean, there's big chicken, there's big pharma, there's big home improvement. And what industries, I think there's big ed, I think education has been allowed to consolidate. But anyways, when you look at industries outside of tech, generally speaking, where do you think, which industries represent, in your opinion, the most unhealthy concentration of power? Yeah, let me walk you through some of the areas where we've taken action over the last couple of years. Transportation, airlines. People are pissed off about the cost of air travel. A family of four trying to afford a hard-earned vacation or a college student trying to travel home for the holidays.

59:37Healthcare has become impenetrable. And we have a world where health insurance companies are now the largest healthcare providers. Doctors and nurses who used to be these smart countries' small business owners are now under the thumb of big corporate provider systems. authors and journalists who should be able to realize a reasonable return on the investment of their hard work and content creators, concert tickets, the affordability or lack thereof of live music, farmers and ranchers who want a reasonable return on investment for meatpackers, for their livestock, and for their chickens, students in education.

1:00:16You talked about that earlier. We've brought cases about financial aid and the NCAA and college athletes. I would say just this week, there's a great article in Politico about my super badass colleague, Doha Meckie, and her views on education and antitrust. I would encourage you to take a look at that. Fast food workers want the ability to move from one establishment to the other. Because of non-competes, right? Exactly. The cost of housing commissions, the cost of rent, the cost of groceries, the cost of advertising. These are all issues that we have taken on front and center, and I'm really proud of the work we've done.

1:00:56By the way, I just want to say I just love that. I just love that. I could listen to you do that for an hour. I'm sorry. Go ahead, Garrett. Thank you, Scott. Okay, so another in your case is also making news. Apple has asked for the DOJ suit, which accuses the company of monopolizing the smartphone market to be thrown out. The company said in a filing last week that DOJ's lawsuit bears no relation to reality. It will harm innovation. The time the case was brought in March, you said at the time Apple inflicted anti-competitive harm that is acute and substantial. So what's your response to their claims that you bear no relation to reality?

1:01:33We look forward to providing our response in writing. And so, you know, again, this case is an act of litigation. you know an interesting experience a couple weeks ago i was out in bay area and had the opportunity to sit down and talk to lots of different vcs and founders from really across the technology continuum and one of the things that i heard without was was overwhelming support for our tech cases and and a lot of enthusiastic overwhelming enthusiastic support truly yes the biggest tech companies, but it's not just the other big companies, it's the VCs, it's the founders. I think they feel like they're often in kill zones.

1:02:16I think they feel like they're often under the thumb of tech companies that essentially function as regulators in their markets, and there's very little to process. And that the ability to bring a company forward and have it thrive and maintain its durability is something that has been threatening their ability to realize the fruits of their investments and stifling innovation. And so I was really overwhelmed by the degree of support that I heard behind closed doors about these cases. Did anyone give you a case that you were wrong, that you said, okay, I'll listen to it? No. I mean, there are some, listen, there are instances where there are some tech companies want to exit by selling to the massive tech companies.

1:03:05But I think privately, what I heard was, you know, there's an understanding that, you know, making the biggest companies even bigger, and I'm not talking about a lot of companies, I'm talking about a very small number, you know, really risks the long-term success of businesses and long-term success of startups in the Bay Area and elsewhere. One of the things I did hear is that there's, you know, the importance of making sure that there's a pathway for companies, particularly small cap, but even micro cap companies to go public and remain durable so that they could take on larger companies and build new businesses without having to think about an exit strategy to, you know, three or four companies.

1:03:56Yeah. And so I think that's a legitimate conversation to have. My sense is there's quite a few Republicans who are actually fans of what you're doing. Any thoughts on where you're getting support or resistance that you didn't expect? Yeah, I'm not surprised by the support we receive across the political continuum. And I think there is a broad understanding that if a small number of companies have too much power, that that's a real risk, not just to our wallets, but to our freedom. I think also when it comes to the marketplace of ideas, when it comes to the distribution of information and news, nobody in this country, whether you're on one side of the political continuum or the other, wants a small number of oligarchs deciding what we see and don't see, or a small number of plutocrats deciding who gets to be platformed and who doesn't.

1:04:45And I think the diversity of viewpoints and ideas depends on the diversity of viewpoints of distribution channels and access to information. We all just celebrated the return of a journalist who was unfairly imprisoned for being a journalist. And I think we all recognize that the reason why that was such a threat, not just to this person who was unjustly detained, but to our society is because that, you know, journalism and ideas are free, are the equivalent of, are necessary ingredients for freedom and democracy. Well, if we don't have industries that are, have the ability to succeed here, then those same concerns start to manifest.

1:05:29And so we have to make sure that we protect the marketplace like this. Except they haven't funded you in the same way, as much as they may support you, and Matt Gaetz are unusual, unlikely people, or conservatives, right, with Lena Kahn. They don't still give you the resources you both, both the agencies need, correct, for this kind of stuff? Well, we have an issue. You know, we have, sitting here today, we have 200, more than 200 fewer people than we had at the antitrust division in 1979. We more often than not, we have a single company on the other side of the litigation that deploys more lawyers than we have people the entire antitrust division.

1:06:08And so we're used to punching above our weight. We're used to facing down companies with vast resources, certainly more than we have. But we've made progress, too. And I don't want to overlook that. A Senate mark just came, and I'm really grateful to people like Senator Shaheen and Klobuchar who fought for additional funding. And hopefully that'll come through in the budget. But I often like to say that the return on investment from antitrust enforcement is a multiple that would make the street jealous. us. So one of the things in that sort of vein, we have to be thinking about the election coming.

1:06:43I'd love to do your thoughts on how you think Donald Trump and Kamala Harris will approach antitrust. But interestingly, Barry Diller and Reid Hoffman, two major Democratic donors, both said they hope Kamala Harris will replace FTC chair Lena Kahn. Explicitly, they said that Barry said something rude about Lena and took it back, but he still said it. How are you thinking about that? Yeah. So just to be very clear, I'm a sitting government official. I can't and won't talk about politics or prognosticate about elections or outcomes. But I, listen, I, you know, these are a small number of really rich people who want to be even richer.

1:07:23And I get that. I used to be in private practice. I spent over 20 years doing M &A. And I understand that they have a very small, narrow set of interests that they are serving, which are their own. But when we enforce the law at the Antitrusted Mission, our focus is on making sure that we're delivering for the public more broadly. But we also want to make sure that we're working for businesses who are not violating the law, right? I want to be very clear. Most businesses never get a call from us. Most businesses who obey the law are doing just fine. And not only that, they deserve the opportunity to compete in an environment that's free from anti-competitive conduct and kill zones.

1:08:02And so we want to make sure that they have the ability to realize the return on their investments. And so, yeah. If Kamala Harris wins the election and asks you to stay on the DOJ, would you say yes? And same thing for Donald Trump. Well, I'll worry about that if and when the time comes on either side. I really, and I know that's the politician's answer, but I'm generally not a politician. I'm a law enforcer. I'm here to do my job. I've been here. I'll be three years in November. I work with the most talented team that I've ever had the privilege of seeing. And we're just going to try to deliver results day in and day out with every resource we have.

1:08:40The Borg test of consumer harm or prices as this litmus test for when antitrust should kick in or antitrust scrutiny should kick in is obviously a bit outdated with some of the most dominant companies in the world offering their products for free. In your mind, roughly speaking, what are sort of the basic tests for the trip-a-trip wire in terms of concentration of an industry? It's competition, right? And so we have, you know, merger guidelines and other things that go into the technical nature of like how much increases in concentration tend to focus. But I think taking a step back, the purpose of the antitrust laws is to protect competition.

1:09:20Congress decided that competition is important. Yes, it results in better prices, but it also results in better wages. It results in more opportunity. It results in better distribution and more distribution of ideas and improves our economic freedom. And so really it's the competitive process. It's rivalry. It's the fighting it out in the marketplace that results in all these benefits. And our job is to make sure there's enough rivalry and that companies, especially when they get too big, are not using anti-competitive tactics to win in the marketplace, but instead winning on the benefits of their own innovations, prices, and hacking them.

1:10:04All right, John, thank you so much. We're excited to hear, to find out what happens with your various cases. Thanks. It's always delightful to see you both and really appreciate it. All right. Okay, take care. Thank you so much. All right, Scott, one more quick break. We'll be back for Wins and Fails.

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1:12:56Okay, Scott, let's hear some wins and fails. Would you like to go first? You go first, Kara. All right, I shall. Well, a fail is Elon Musk has revived his lawsuit against OpenAI in federal court. He had dropped it and now it's back again. I can't believe it. It's no different. I know. He's saying he was manipulated into believing that the artificial intelligent company was helping launch was a nonprofit. He was manipulated. Altman assured Musk that the nonprofit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value. But as it turns out, this was all hot air philanthropy, the hook for Altman's long con.

1:13:33He's really attacking him. You know, I just recently, we were talking about the case being away and I said, don't be so sure. And here it is. He had previously filed one in March saying the company had, the excuse then had broken its founding agreement by giving priority profit over technology's potential benefit humanity. And then he filed a complaint and then he closed it out and now it's back. It's just, he's got to just move on. And by the way, you know, state's attorney generals across the country are asking him to fix Grok because it's so fucking bad. And of course he won't do it. So why don't you mind your own P's and Q's, Elon, on that thing.

1:14:12You lost out there. So we'll see where it goes. My win is it's the 100th anniversary of Caesar salad. And I love Caesar salad. I was not expecting that. I know that, but it is. You know where Caesar salad was from? Do you know? No, Cara, where is Caesar's salad from? Oh, stop it. It was born in Mexico. Really? It was born in Mexico. Son Ensalada César? I guess, yeah. I'll just say, though the salad's origins are famously contested, it's most likely the invention of restauranteur César Cardini, and last month 30 Mexican chefs gathered at César's to celebrate the centennial. I feel like it's the greatest salad ever.

1:14:54I love Caesar's salad so much. Louis makes an amazing fragrance. That's a bold sound. You think it's better than the Cobb? I do. I don't like the Cobb. The Cobb is very aggressive. I love the Caesar. It is an aggressive salad. It's just like loose enough. It's a loose salad. It's a slutty salad. I like the whole... Watermelon and goat cheese? That doesn't flick your back? I don't. No, the Caesar. It's slimy and fantastic and anchovy-ish. My win is Caesar salad. And my loser is the slimy Elon Musk. Anyway, yours next. All right. So my, it's a weird loss. My loss is, or my fail is, I'm a corporate governor.

1:15:38I'm a total boomer when it comes to corporate governance. My attitude is shareholders are the owners. Employees are, you know, the CEO is management and the board are fiduciaries for shareholders. And I feel as if there's just so much outrageous behavior on the part of CEOs that there is almost just a total lack of corporate governance. And I think it's bad for shareholders. I think it's bad for the market. And essentially, it manifests itself in a bunch of CEOs who are the new kind of idols, right? Israel, they idolize their military. The UK used to be their politicians. In America, it used to be entrepreneurs and athletes.

1:16:19America, slowly but surely, it's become CEOs, are a new kind of objects of affection. And then you couple that with their ability to share their thoughts on why they should be treasury secretary or that their losses are actually an asset, said Cathie Wood, the most ridiculous fiduciary for other people's capital. It just feels to me that this is a failure of boards to put in place guardrails that say, you represent stakeholders and you need to be more thoughtful about your communications. And what's happened is I just feel as if we have the most entitled group of children and we're supposed to be as directors, the adults in the room, and we're literally scared of our kids.

1:16:59Because typically the dynamic that's developing in companies is there's the CEO and one large investor. And the large investor is just hoping to get their money out at a good point. And if the CEO seems to be fairly good, they just let them act like totally indulgent children. and boards aren't, I've been on boards for 25 years. Boards used to represent shareholders and used to on a regular basis, sit down a CEO and say, Hey, this is inappropriate. And regardless of whether or not the stock's going to go up this quarter or not, you have to, you have to acquit yourself and behave in a certain way that that is good for all stakeholders.

1:17:39And I feel as if we have totally lost that, that the majority of boards are there just to collect a check and a free dinner every three months and kiss the CEO's ass. And I have seen this. And to be fair, it's flipped. It's gone. It used to be the other way around. It used to be the tech companies were backed by VCs and the founders were idiots that if the company showed any progress, they needed to be replaced. They needed to bring in a CEO from Pepsi. And now it's totally, which was unfair, because some CEOs were actually the right person to keep in the seat. And it has swung so far the other way that corporate governance is sort of just a total afterthought.

1:18:17They're over-sugared toddlers, I swear. I want them to shut up. I want CEOs to shut up this week. I really thought that. What's your win? My win is, I just think, so the Olympics, it was my win last week, but I still think. It's okay. It's even better this week. The Olympics are not about medals, they're about moments. and some of these moments have just been fantastic. So I don't know if you saw last night, but Noah Lyles ends a drought in men's 100 meter, just this incredible race where he barely photo finished. The 27-year-old sprinter took the gold in the 100-meter final, becoming the first American since 2004 with Justin Gatlin to do so.

1:18:59And just an incredible photo finish. After 24 grand slams, And I should also just highlight that I'm getting this from where I get all my sporting news, and that is from Vogue magazine. Who would have thunk it? Anyways. No, everyone's doing great coverage. Great coverage. Martha and Snoop together is hysterical. That's hilarious. It's hilarious. After 24 Grand Slams, Novak Djokovic won a gold medal, something, one of the few things he had not accomplished, beating 21-year-old Spaniard in straight sets. Who was the guy then? Oh, Carlos Alcaraz. The guy who's Superman with the glasses and the depth perception who won the pommel horse guy?

1:19:38That's right. I saw that. That was fantastic. And the footage of him on the bench. Chinese badminton player, picks up a gold medal and an engagement ring. I don't know if you saw that. Yeah, I did. The whole thing's adorable. I thought that was just lovely. The Chinese synchronized swimming women. I think Olympians swimming in the Seine was fantastic. I thought it was just so cool and creative. Katie Ledecky. And let's just say, who is Simone Biles? Oh, well, that's a given. I mean, she's established herself as a different species. I mean, anytime I see her on my TikTok, I just stop and I watch.

1:20:16I love her. You know what they should do? They should bring her to the DNC. You know, she tweeted after she got her last gold medal. She got a silver today, I think. That's a great idea. She said, I love my black job. Remember? She tweeted, I love my black job, when she won, which I loved. was such a kick in the pants to Donald Trump. Well, actually, Kara, I do think there's some credibility to the notion that immigrants are taking black jobs. The last time it happened was when Melania Trump became first lady. That's correct. So I think there's some truth there. I don't like sports. And I now, Amanda has shifted me.

1:20:47I love the Olympics now. Oh, it's fantastic. It really is. I was not interested, but now it was really delightful. Tim USA wins gold in women's gymnastics team final. The men's four in rowing won a gold medal for the first time in 40 years. The discovery of the air pistol becomes, as I said, with the South Korean Yi Ji Kim. Like, that's kind of the sport. Remember when archery was like, all of a sudden caught everyone's attention, but the air pistol. An Egyptian fencer, once she was knocked out of the round, made an announcement that she was competing while seven months pregnant, which is especially impressive.

1:21:22The U.S. men's gymnastics team takes home its first medal in 16 years. and just some Bruin pride here. So far, the U.S. men's volleyball team under the leadership of John Spira, who has led the Bruins to five national titles, is 3-0 and has earned the spots in the quarterfinals. We'll be watching for that. And by the way, Bruins have 49 Olympians, 40 athletes, and nine coaches. So that's exciting for UCLA alumni to watch. But it's just been a series of wonderful moments. Congratulations to the IOC. Congratulations to the host nation. And I think it's been fantastic. And if you look at what is really drawing attention, it's not the events itself.

1:22:02It's the athletes and their emotions before and after the event. I love that. I think it's been really, really wonderful. Yeah. Speaking of air pistols, it was this Turkish shooter named Yusuf Dikek or something like that. He has the casual attitude when he's shooting. He's like, you have to shoot the pistol and he wins and everything else. Anyway, we want to hear from you. Send us your question about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Okay, Scott, that's the show. We'll be back on Friday for more. Please read us out.

1:22:34Today's show is produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie and her Todd, engine in this episode. Thanks also to Drew Burrows and Emil Severio. Nishat Kruwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pop. We'll be back later this week for another breakdown of all things tech and business. Go Team USA.