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- [00:00]
A
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C
LISTENER and Viewer as you know, there are so many things going on with Big Tech right now, particularly AI and these monopolies that are forming within the media. So we have asked for former Assistant Deputy Attorney General who was in charge of antitrust, and current Professor Jonathan Kanter on the podcast. Jonathan, thank you for coming on and I am desperate to find out what's going on with all this AI stuff. So you have an expertise with Big Tech and you've fought Big Tech and won. Can you explain to me what what the AI situation is currently and what your fear is going forward?
- [01:56]
D
Okay, the way to start is the word antitrust. The trust in the word antitrust goes back to an era where you had a bunch of these oligarchs, think Carnegie, think Rockefeller, and they had interests in all the companies, all the railroad companies, all the oil companies. It was this tangled web of control run by a small number of really, really rich oligarchs who essentially controlled societ society and Congress. And the public said, enough is enough. We want laws to prevent this. And so they enacted the antitrust laws. Here we are, over 100 years later, we have the exact same thing happening. We have oligarchs who have interests all over the place. OpenAI and Nvidia and Microsoft and Google and Amazon have investments in anthropic. Nvidia has investments in OpenAI. OpenAI has investments in AMD. All, all of these companies are tangled together. And it's a small number of them owned or controlled by these massive billionaires who have the same kind of influence on society that led to the creation of the antitrust laws in the first place.
- [03:09]
C
Now, it's terrifying. And is it the job of the Justice Department to go in and seek litigation regarding the monopolies and the antitrust, or is it done by civil litigation? Because I fear we're not going to get any help from the Justice Department.
- [03:25]
D
Well, that's the problem. So when I was at the Justice Department as ag for antitrust, we sued Apple, we sued Google, we sued Ticketmaster, Live Nation to break them up. We sued American airlines, we sued RealPage for increase in housing prices, we sued Visa and go on and on because these companies were too big. And for over 20 years or 40 years, frankly, since the early 80s, we were asleep at the switch in terms of concentration our economy, which is affecting the daily lives of average Americans. So we went in and we took decisive action. I'm afraid we're not going to get that same level of decisive action now. So it's going to be left to state attorneys general, who are great, but under resourced and private plaintiffs. But there's a real risk, right. When we need antitrust most at this time of change, with AI, we're not going to get it.
- [04:15]
C
No, I don't have. And are you aware of the legislation that Trump is touting that would limit the state's ability to regulate AI? And that's number one. And why do you think he's doing that?
- [04:30]
D
He's doing that as a handout to those companies. Right. So think about. We have for people who trade securities, we have the securities Exchange Commission, we have the Department of Agriculture for Agriculture, we have Health and Human Services and Transportation. When it comes to tech, we have nothing. Zero. The main law that controls privacy was written in 1914. Congress has had a whole bunch of ideas and there's bipartisan support and public support, but because of lobbying, Congress hasn't been able to do anything. We've invented the equivalent of cars and trucks, but we have no stop signs, no lines on the road, no traffic lights and no speed limits. So the feds, because of the gridlock in Congress, notwithstanding actual bipartisan support, haven't been able to do anything. So it's going to be up to the states. And so in the absence of the Fed stepping in, we need the states to do something. The problem with the executive order and this moratorium bill that didn't get passed in Congress is that it wants to basically eliminate the ability of the states to do anything at all, while at the same time, the Feds have no plan and no intention of doing anything, which leaves us in a complete wild west.
- [05:41]
C
Talk about how AI and these social media companies, how they disrupt our society. You know, micro and macro, if you will.
- [05:51]
D
Yes. So I love dogs, and I take my dog for a walk. And some people have fences in their yards, like we do, to keep their dogs from going out. Others have electric fences where the dogs have a little thing on their collar, and every time they get to the edge of the yard, they get a little zap so that they know not to go out there. We're all dogs with collars being zapped all the time. We are being in ways we don't even realize that we're being conditioned to see things, to click on things, to think things, and we're being manipulated in ways that we don't even understand and cannot detect. And then is happening almost every aspect of our lives, and it is changing the way society functions. And when that control and that power is handed to a small number of players, it gives them a massive control, not just over what people think and do, but policy and politics. And it's a very, very dangerous thing.
- [06:48]
C
My guess is, and I read that the radicalization of people has come due to, obviously, isolation and loneliness, all of those things. But the algorithm is feeding you. Is there a way to stop that?
- [07:05]
D
We need lines on the road, stop signs, and traffic lights. We need not just a little bit of transparency, but we need to understand and go at a pace that reflects the actual effect that this is happening, having on our brains, especially children. But we also need, and in my view, we need more players out there. We need more competition. When it's a small number of folks who are creating these algorithms, whether it's YouTube or Facebook or Instagram or TikTok, it is having a massive effect on what we see and think. And it gives a lot of control, too much control, to a small number of players.
- [07:41]
C
And on that topic, you have the news media, social media, streaming, you know, Paramount, cbs, all of these things are now going to be owned by one entity. When I first started reading about that, I'm an attorney, but I only did divorce law. So I'm not near smart enough to be able to talk intelligently about antitrust, but my first thought was that this is an antitrust violation. What is your thought on that?
- [08:10]
D
Yeah, so I have very significant thoughts on this. First, let me say, let's take a look at the whole Warner situation. It is a sad statement on society. When Warner Brothers, which owns the storied library of movies, hbo, the crown jewel of media streaming, CNN and all these linear channels, when Warner Brothers is too small and too subscale to be a competitor on its own, what does that mean to the small business? Mean for the small business in Iowa or the startup coming out, a university in Ohio? What does it say to the average person who wants to start their own business and fulfill the American dream when they can't? If Warner Brothers is too small to succeed on its own, we have a problem in this country. That problem is in order to be big, you have to be big. And so you create this massive gap in wealth, and it creates a massive gap in opportunity. And so my concern is, yes, there's the concentration, but there's this tendency toward bigness that is destroying really, the essence of the American dream, which is, in my view, the ability to start your own business and own your own house and homeownership. And small businesses are being crowded out of society in a way that I think is not only harming the American dream, but making people feel like they have no hope and no opportunity, which creates anger. And that anger can be harnessed into division. And that division can be exploited through algorithms and through thirsty politicians. And that's the world we're in today.
- [09:49]
C
You bring up algorithms, and I've always wanted to know, so these algorithms are developed by these companies. And then I've seen, like, whistleblowers before Congress. What is the ability of the government to go in and find out? How are you creating your algorithm?
- [10:06]
D
The government has subpoena authority. They have the ability to go in and understand everything that's happening. When I was at the Department of Justice running the Antitrust Division, I created a data science unit. For example, we did an investigation into a company called RealPage, which we alleged was fixing rents using algorithms. All the landlords would get access to this algorithm that would help them set prices, which was optimized to raise the rent and reduce the amount of apartments that were available for rent to make it harder and more expensive. And so we subpoenaed the algorithm. This is all public. We subpoenaed the algorithm and we had our data scientists do A line by line review of the code to figure out what was happening. We discovered exactly what was going on in terms of the effect on the American public and then we brought a lawsuit and we said so. One of the deficiencies we have in our government is that our leaders one are too old and they don't understand this stuff. And our agencies are ill equipped to actually do the kinds of investigations necessary to get to the bottom of what's happening in these technology markets. And so we need to rebuild the agencies to make sure that they are fit for purpose in a modern economy and have the expertise in house to do this kind of stuff.
- [11:19]
C
I completely agree because I don't understand how this is all trending, but I understand it's dangerous. And I saw that Australia recently limited use by minors. Do you think that's where we should be heading? I know it's not where we're head, but do you believe like the AI and social media that there should be limits on that for the young person whose brain is not fully developed?
- [11:43]
D
Absolutely. I mean this is in many respects very similar kind of tobacco where, you know, it used to be that, you know, kids would smoke in high school and or, you know, it would be glorified. And these are the kinds of things that are having a significant effect on the health of our children. And in this case it's the mental health of our children. And I know a lot of schools, and I support this, are banning the use of cell ph and phones in schools. People need to learn how to interact with other humans. They're lonely, they're losing the ability to relate socially and it's creating a sense of loneliness, despair. On top of the wealth inequality, on top of the algorithmic manipulation which in totality is creating this divisive, sad society which is highly vulnerable to demagoguery.
- [12:32]
C
It certainly is. And like you said, it's the same demagogues over and over and over in terms of resourcing. Are there private groups? Because in my opinion the federal government is not going to stop this because Donald Trump wants the money from big tech. That's why they're giving him prizes and all of those things. Are there private funds that can help these states regulate this because they are so under resourced and not experts in this.
- [13:02]
D
Yeah. Yes and no. Right. Not enough. Right. There are some really good nonprofits and foundations that are trying to do this, but one of one of the problems we have is the zone is flooded. We're like dogs in the yard chasing squirrels every day. There's Something new. There's a new scandal, there's a new overreach. It's the irony, because if it were just one of these kinds of scandals in government that you talk about so eloquently on a regular basis, we'd capture our attention, we'd be able to dissect it, we'd be able to address it. When it's something new every day, we can't keep up. And so what's happening is not only are we allowing a lot of this, this pernicious behavior, this bad behavior that is antithetical to our democratic way of life occurring, but we're not investing the kind of resources we need to build the government agencies that are fit for purpose to do this kind of work on technology. And so it's such a distraction that we're falling short. One of the most interesting things that's happening right now, particularly post doge, is the New Deal era is over. All of the institutions that we had in government were really a product of the New Deal era. That's been stripped down to the studs. All the norms, all of the resources, all of the continuity in those agencies in Washington and elsewhere have essentially been ripped down. We're gonna have to rebuild it from the ground up. When we finally get the will and the political will and the public will to do that, hopefully sooner than later, we're gonna have to start from scratch almost. And so we're gonna need new ideas, we're gonna need new people, we're gonna need new voices. And that's one of the to do in this country, is we need to figure out not just how do we stop the demagoguery today, because we'll never get to a good place if we. Unless we do that, but also how do we build and how do we actually build a government in a society that works for everyone, not just for the 1%.
- [14:55]
C
I completely agree. Jonathan, thank you so much for being on. I'm going to have you on again because you break it down like the stop sign and the traffic lights. I get that. I can understand that. So as we navigate this, I hope to have you on again. Thank you so much for being on.
- [15:11]
D
It's my pleasure. Thank you.