Episode 33: Jonathan Kanter on Antitrust & Search

Summary

The Monopoly Report: Episode 33 Summary

Title: Episode 33: Jonathan Kanter on Antitrust & Search
Host: Alan Chappelle
Release Date: June 11, 2025
Guest: Jonathan Kanter, Former Assistant Attorney General for the Antitrust Division, Department of Justice (DOJ)

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Introduction

In Episode 33 of The Monopoly Report, host Alan Chappelle engages in a comprehensive dialogue with Jonathan Kanter, the former Assistant Attorney General who spearheaded the DOJ's antitrust initiatives against Google. This two-part interview delves deep into the DOJ's antitrust strategies, the evolution of enforcement across different administrations, and the specific challenges posed by major tech conglomerates in the digital media marketplace.

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Background on Jonathan Kanter

Jonathan Kanter brings a wealth of experience from his tenure at the DOJ, where he played a pivotal role in reinvigorating antitrust enforcement in the United States. His efforts extended beyond Google, targeting giants like Apple, Live Nation, Ticketmaster, and scrutinizing significant mergers such as Spirit Airlines and JetBlue. Post-DOJ, Kanter contributes to CNBC, offering insights into ongoing antitrust debates.

[02:30] Jonathan Kanter: "You should check it out."

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DOJ’s Antitrust Approach: Past and Present

Kanter and Chappelle explore the DOJ's antitrust enforcement during different presidential administrations. Kanter emphasizes the continuity in addressing corporate monopolies, irrespective of political shifts, highlighting a bipartisan acknowledgment of the dangers posed by unchecked corporate power.

[06:17] Jonathan Kanter: "Corporate power can be as dangerous, if not more dangerous than the concentration and abuse of government power."

Shift from Traditional to Modern Enforcement

The conversation touches upon the rejection of outdated economic theories, such as those from the Chicago School, advocating for a more empirical and market-reality-based approach. Kanter critiques the formalistic and simplistic market assumptions of past school philosophies, stressing the need for modern, sophisticated analysis in antitrust cases.

[07:23] Mark Hamer: "It's very formalistic and in many instances out of date, lack sophistication."

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Remedies in Antitrust Cases

A significant portion of the discussion revolves around the proposed remedies in antitrust cases, particularly against Google. Kanter defends the DOJ's strategy of implementing technical committees to oversee compliance, drawing parallels with the historical Microsoft Consent Decree.

[17:37] Alan Chappelle: "So how does DOJ build a better mousetrap?"

Kanter underscores the importance of technical expertise in these committees to navigate the complexities of modern tech products, ensuring that remedies are both practical and enforceable.

[19:14] Jonathan Kanter: "Because if you do that too often, the court gets annoyed and somebody gets yelled at and the results are probably less favorable."

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Google's Antitrust Strategy and Remedies

The episode delves into Google's defensive stance in antitrust litigation. Kanter describes Google's approach as one that involves negotiation and legal maneuvering, often resulting in tepid remedies that may not fully address the DOJ's concerns.

[15:12] Alan Chappelle: "Is that just how this typically works? Did Microsoft do the same thing?"

Historically, such cases often culminate in negotiated settlements, with courts later refining or rejecting these agreements based on their adequacy in curbing monopolistic practices.

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Technical Committees and Enforcement

Drawing from the Microsoft case, Kanter explains the role of technical committees in antitrust remedies. These committees, composed of industry experts and engineers, facilitate ongoing oversight and ensure compliance with complex technological requirements.

[18:34] Mark Hamer: "I'm fully aware."

[19:08] Mark Hamer: "The court said, that's one of the most important innovations of that settlement."

Kanter highlights that while not flawless, this framework provides a structured method for addressing disputes without overburdening the courts.

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Chrome Divestment in the Search Case

A focal point of the discussion is the remedy involving the divestiture of Google Chrome in the antitrust case against Google's search practices. Kanter elaborates on the significance of this move, aligning it with the court's findings on monopoly harm.

[21:22] Jonathan Kanter: "In the search case, can you quantify how important you think Chrome Divestment is."

[22:34] Guest Speaker: "I think the remedy was crafted to map to the findings."

The divestiture aims to dismantle Google's control over the browser market, fostering competition and preventing future monopolistic dominance, especially as the tech landscape evolves with AI advancements.

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Privacy and Antitrust in the Digital Media Space

Kanter and Chappelle discuss the intersection of privacy concerns and antitrust enforcement. They argue that while privacy regulations are essential, they should not inadvertently strengthen monopolistic positions by limitating competition.

[27:40] Mark Hamer: "In tech, the most dominant companies tend to be among the most invasive in terms of privacy."

The conversation warns against using privacy as a mere tool for competitive exclusion, advocating for balanced regulations that protect users without entrenching corporate monopolies.

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Future of Competition and AI

Looking forward, the dialogue anticipates the role of emerging technologies like artificial intelligence in shaping antitrust landscapes. Kanter stresses the importance of creating remedies that anticipate technological shifts, preventing dominant firms from stifling innovation.

[32:21] Jonathan Kanter: "The next inflection point that has the opportunity to unseat the search monopoly will likely come from Companies that are adjacent to search in AI."

The discussion underscores the need for proactive antitrust strategies that accommodate rapid technological advancements, ensuring a dynamic and competitive marketplace.

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Notable Quotes

• Jonathan Kanter [06:17]: "Corporate power can be as dangerous, if not more dangerous than the concentration and abuse of government power."
• Mark Hamer [07:23]: "It's very formalistic and in many instances out of date, lack sophistication."
• Jonathan Kanter [19:14]: "Because if you do that too often, the court gets annoyed and somebody gets yelled at and the results are probably less favorable."
• Jonathan Kanter [32:21]: "The next inflection point that has the opportunity to unseat the search monopoly will likely come from Companies that are adjacent to search in AI."

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Insights and Conclusions

The episode offers a nuanced examination of modern antitrust enforcement, highlighting the DOJ's efforts to adapt to contemporary challenges posed by big tech. Kanter advocates for a balanced approach that combines rigorous competition policies with thoughtful regulatory frameworks, ensuring that technological innovation thrives without being overshadowed by monopolistic entities.

Key takeaways include:

• Empirical and Modernized Antitrust Analysis: Moving beyond outdated economic theories to incorporate real-world market dynamics.

• Technical Committees as a Remedy Framework: Facilitating ongoing oversight through expert panels to manage complex tech compliance.

• Strategic Remedies in Antitrust Cases: Utilizing divestiture and other structural remedies to dismantle monopolistic practices effectively.

• Balancing Privacy and Competition: Ensuring that privacy regulations do not inadvertently reinforce corporate dominance.

• Proactive Antitrust Strategies for Emerging Technologies: Anticipating and mitigating future monopolistic threats posed by advancements like AI.

Kanter's holistic view underscores the intricate relationship between regulation, competition, and technological progress, advocating for strategies that promote a fair and dynamic marketplace.

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Closing Remarks

Alan Chappelle concludes the episode by praising Kanter's comprehensive understanding of the digital media landscape and his strategic approach to antitrust enforcement. He hints at a forthcoming Part Two, which will delve deeper into remedies proposed in the Google Ad Tech case, promising further insights into the complexities of regulating big tech.

[37:10] Alan Chappelle: "Look out for part two of my interview, which focuses mostly on the remedies being proposed in the Google Ad tech case."

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Transcript

[AdTech God]

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[Alan Chappelle]

Welcome to the Monopoly Report the Monopoly Report is dedicated to chronicling and analyzing the impact of antitrust and other regulations on the global advertising economy. If you are new to the Monopoly Report, you can subscribe to our weekly [e-mail] and you can check out all of the Monopoly report [e-mail] I'm Alan Chappelle. This week my guest is Jonathan Kanter. Jonathan is the former Assistant Attorney General for the Antitrust Division of the Department of Justice and was effectively leading the DOJ antitrust efforts against Google. He is now a contributor on cnbc. If you want to know more about Jonathan's background, there's a great podcast that the Capital Report did a couple of months ago.

[Jonathan Kanter]

You should check it out.

[Alan Chappelle]

In my view, Jonathan, along with Lina Khan, deserve a lot of credit for his role in reinvigorating antitrust enforcement in the us. While this podcast is mostly focused on the digital media Marketplace, I want to drive home that Jonathan's impact has been significantly broader, including bringing cases against Apple, Live Nation, Ticketmaster and and challenging the merger between spirit Airlines and JetBlue. This is going to be a two part interview. In part one, we will discuss three specific issues. First, we talk more generally about the DOJ's approach during the cancer era and.

[Jonathan Kanter]

How that compares to not Only the.

[Alan Chappelle]

Previous 50 years of antitrust enforcement, but.

[Jonathan Kanter]

Also how it compares to the current.

[Alan Chappelle]

Era under Gail Slater. Second, we talk generally about how both the DOJ and Google have approached the proposed remedies in these cases. And then third, I ask a number of questions specific to the Google search antitrust case. And yes, that'll include a number of questions about Chrome divestment. One more note before we get started. And I encountered a similar thing a few weeks ago when I interviewed Mark Hamer, who is currently at DOJ under Gail Slater, working on the Google Ad tech case.

[Jonathan Kanter]

Jonathan Kanter is not going to tip.

[Alan Chappelle]

His hand and reveal internal deliberations while he was at the doj. So in my view, in a number.

[Jonathan Kanter]

Of places, you need to read between the lines a bit to understand Jonathan's answers.

[Alan Chappelle]

But it was a tremendous honor to have this opportunity. So let's get to it.

[Jonathan Kanter]

Hey, Jonathan, thanks for coming on the pod.

[Guest Speaker]

How are you? I'm great. It's good to be with you.

[Jonathan Kanter]

Well, thanks. So I thought I'd start with a.

[Alan Chappelle]

Really, really tough question. Piano or guitar?

[Jonathan Kanter]

What's your preferred instrument?

[Guest Speaker]

Ooh, better piano, but I prefer playing guitar.

[Alan Chappelle]

Ah, interesting.

[Jonathan Kanter]

I grew up playing the piano. The closest I got to guitar was the ukulele and I, you know, I lived in Brooklyn and I don't know if you know this being part of the government for a while, but you were legally required to play the ukulele if you lived in Brooklyn from about 2008 to 2011.

[Mark Hamer]

I'm fully aware.

[Guest Speaker]

So I grew up playing piano and keyboards, but always wanted to be a guitarist like most keyboardists. And so when I was in my twenties, I decided to take the plunge, bought a guitar, then bought another guitar and a few more guitars later and a nice size collection. And it's a, it's a labor of love and a passion and I don't.

[Mark Hamer]

Claim to be any good at it.

[Guest Speaker]

But I love it and it's a lot of fun.

[Jonathan Kanter]

Yeah, yeah, it sure is. With your permission, I want to start with some more general questions about antitrust.

[Alan Chappelle]

Enforcement in the US and then maybe.

[Jonathan Kanter]

Narrow things a bit to focus on.

[Alan Chappelle]

Some of the DOJ cases against Google.

[Jonathan Kanter]

Because that's really where my audience is going to be particularly interested. The first question is, as we move.

[Alan Chappelle]

From the Biden administration to the Trump.

[Jonathan Kanter]

Administration, some of us were concerned that there might be a philosophical shift on antitrust approach.

[Alan Chappelle]

And thus far, and certainly as it.

[Jonathan Kanter]

Comes to big Tech, it doesn't seem to have materialized. And I could, you know, go into that Mark Mador commentary on the Chicago School, but specific to the remedies in.

[Alan Chappelle]

The two Google cases, what are the.

[Jonathan Kanter]

Differences between your team's approach and Gail.

[Alan Chappelle]

Slater and her team's approach?

[Jonathan Kanter]

I noticed some minor changes in the remedies around AI, but was there something I was missing in there?

[Guest Speaker]

No. I think for the most part, there's.

[Mark Hamer]

A great degree of continuity that doesn't surprise me.

[Guest Speaker]

I think, as you observed, the antitrust landscape has shifted. And it's one where, whether it's Republican or Democrat, conservative, liberal, progressive or otherwise, there's a sense that corporate power, monopoly power, tech power, is dangerous not just to our pocketbooks and our bank accounts.

[Mark Hamer]

But dangerous to our way of life.

[Guest Speaker]

And while business can result in lots.

[Mark Hamer]

Of great innovations and benefits to society.

[Guest Speaker]

If business becomes too powerful and there are no appropriate checks, then that power can end up having the concentration of power.

[Mark Hamer]

Corporate power can be as dangerous, if not more dangerous than the concentration and.

[Guest Speaker]

Abuse of government power.

[Alan Chappelle]

Completely agree.

[Jonathan Kanter]

Are you familiar with the speech and the piece that Mark Mador had written about the Chicago School in Bork? And do you have some thoughts on that?

[Alan Chappelle]

Sure.

[Guest Speaker]

Ask away.

[Jonathan Kanter]

Well, I think just overall, to me it seemed like an inch away from a complete repudiation of the Borg philosophy. And I mean, is that how you're reading it?

[Mark Hamer]

Well, I'll let Mark speak for himself. He's extraordinarily capable and smart and so.

[Guest Speaker]

I guess what I will say.

[Mark Hamer]

Yeah, you should.

[Guest Speaker]

He's great. I think what you'll. What I think is that that philosophy.

[Mark Hamer]

Has proven to be largely wrong and misguided.

[Guest Speaker]

It's very formalistic and in many instances out of date, lack sophistication.

[Mark Hamer]

Right.

[Guest Speaker]

A lot of the, you know, Chicago schoolers based on very simple assumptions about how markets function. And even assuming arguendo and I don't.

[Mark Hamer]

Necessarily agree that those assumptions were right.

[Guest Speaker]

Then, they're certainly not right now. And you know, the way markets function.

[Mark Hamer]

Today is so different and so assumptions.

[Guest Speaker]

About rational consumers and the way businesses vertically integrate to become more efficient in manufacturing, I mean, those ideas and markets are outdated and it would be irresponsible.

[Mark Hamer]

For us as enforcers not to update our focus.

[Guest Speaker]

It also, ironically, it was a foundation of economics, but not enough forensics, not enough actual analysis of how Markets really function. And part of what we tried to do is start with market realities. And if you talk to even the most sophisticated and successful economists today, the newer ones, most of them are focused on empirics, less of the theoretical kind.

[Mark Hamer]

Of pie in the sky work, but really trying to untangle how things function.

[Guest Speaker]

And I think that's the approach we took at doj, and I think that's the right way to do it.

[Alan Chappelle]

Agreed.

[Jonathan Kanter]

I think what really struck me politically is that type of statement might make it more difficult to go back, you.

[Alan Chappelle]

Know, to the olden days of the last 50 years in terms of how.

[Jonathan Kanter]

Antitrust law was viewed. And so for me, that that was.

[Alan Chappelle]

Seemed like a pretty significant shift.

[Guest Speaker]

Yes. And it's one that is not partisan. You know, there might be differences of opinion, but it's not about whether you.

[Mark Hamer]

Wear a red shirt or a blue shirt.

[Guest Speaker]

I think it's. It's a function of, you know, do you believe that the marketplaces, we confront.

[Mark Hamer]

It today is dramatically different than the marketplace we confronted in the 1970s?

[Guest Speaker]

The way in which businesses react to consumers and suppliers and the way in which they exercise power in the economy.

[Mark Hamer]

Is different today than it was in the 70s? And whether some of those theories, again, like the rational consumer and some of.

[Guest Speaker]

The assumptions that were baked into the Chicago school philosophies, I think we owe it to ourselves to examine whether they played out in reality.

[Mark Hamer]

And if the answer to that is.

[Guest Speaker]

No, then we shouldn't double down on bad ideas completely.

[Jonathan Kanter]

Agree. So my next question is a little bit more philosophical with respect to the digital media space. So for most of the last 20 years, it strikes me that regulators across the globe have often pushed the gatekeepers of certain marketplaces, and forgive the term.

[Alan Chappelle]

Gatekeeper, because I don't mean this just.

[Jonathan Kanter]

From an EU gatekeeper perspective, but regulators have pushed gatekeepers to more effectively police their marketplaces when it comes to privacy and consumer protection. Protection. And more recently, it seems like things.

[Alan Chappelle]

Have evolved where competition law is starting.

[Jonathan Kanter]

To recognize there might be a downside to deputizing gatekeepers with so much power. So I'd love your reaction to that and your thoughts on. Because I think it's a pretty significant shift, not just within the broader market, but potentially within the digital media space.

[Guest Speaker]

Yeah, it's an interesting question, and I.

[Mark Hamer]

Think there are a few different approaches to it.

[Guest Speaker]

One is, you know, the concept of the benevolent monopolist, which is let's put somebody in control and then rely on them to do the right thing. And I think what we should rely on is that for profit companies that.

[Mark Hamer]

Are trying to maximize valuation and shareholder.

[Guest Speaker]

Value are going to behave as they.

[Mark Hamer]

Should, frankly, in the best interest of their business, best interest of their shareholders, and they're going to make decisions accordingly.

[Guest Speaker]

And even if they want to ultimately.

[Mark Hamer]

Do the best thing for society, they have fiduciary obligations and shareholder obligations to.

[Guest Speaker]

Maximize profits so long as they're operating.

[Mark Hamer]

Within the constraints of the law.

[Guest Speaker]

And so even, even the best intentioned big company is going to operate itself.

[Mark Hamer]

In the best interest of that company.

[Guest Speaker]

And so what do you do about that? Well, you can regulate it and say, okay, you're going to operate within the.

[Mark Hamer]

Best interests of your company, but we want to impose regulations.

[Guest Speaker]

There's a school of thought, and I've.

[Mark Hamer]

Heard this directly from some folks, that we are better off having a smaller.

[Guest Speaker]

Number of really big companies and regulate.

[Mark Hamer]

Them because it's easier to regulate a smaller number of big companies.

[Guest Speaker]

I don't subscribe to that point of view. Or there's another view which is, okay.

[Mark Hamer]

We recognize that companies are going to behave in the best interest of shareholders.

[Guest Speaker]

So let's, as a line of first defense, make sure that the markets are competitive so that they are being pushed to share as many of those benefits with society in order to stay on top or to be successful. And then over time, if there are market failures or things that are beyond the reach of competition, then you can focus on, you know, surgical regulation or other kinds of rules or laws to make sure that companies are behaving properly. But the idea that we simply are.

[Mark Hamer]

Going to say please in a company that has a fiduciary obligation to its shareholders is going to say, okay, we'll sacrifice our value or value to our.

[Guest Speaker]

Shareholders or profits in order to make.

[Mark Hamer]

You happy person from the government.

[Guest Speaker]

I just don't think that's realistic and frankly, it's naive.

[Jonathan Kanter]

Yeah, that was the philosophy. I don't want to say of all but many of you, the privacy advocates, there was a strategy going back 10, 15 years ago which is like, listen, let me just remove all of these tiny companies who are bothering us off the field and then I can focus all my attention on a handful of larger companies. The problem is as that's sort of played out is like, you know, once.

[Alan Chappelle]

There are only five to seven companies.

[Jonathan Kanter]

Left, they're meaningful within a marketplace, they're even less likely to listen to you.

[Guest Speaker]

Well, yeah, I mean, and then they.

[Mark Hamer]

End up having a tremendous amount of.

[Guest Speaker]

Power and then it makes it really.

[Mark Hamer]

Difficult to impose rules or Regulations because.

[Guest Speaker]

They have outsized lobbying influence and you can sort of see that kind of run.

[Mark Hamer]

I mean, there's no perfect solution here.

[Guest Speaker]

I mean, I ultimately believe, and it's why I'm in business, I'm in that a free market economy is great when it works. And so it needs competition to work. And so let's start there and solve.

[Mark Hamer]

As many of our problems as we can using the marketplace, a competitive, thriving marketplace.

[Guest Speaker]

And then if we need to impose rules or, or regulations on top of that for safety and security and other needs, we, including market failures, we can do so. I also believe though, their lines on the road, stop signs and traffic lights are good. And so yes, it's true. When you drive on the road, you.

[Mark Hamer]

Can'T drive everywhere you want to drive. You have to drive on one side.

[Guest Speaker]

Of the road, not the other and.

[Mark Hamer]

You have to stop so that somebody else can go. That's not bad for business though.

[Guest Speaker]

That's actually good for business because it.

[Mark Hamer]

Allows people to get to and from.

[Guest Speaker]

Where they want to be.

[Mark Hamer]

And I think in the context of.

[Guest Speaker]

Technology we would all benefit from some.

[Mark Hamer]

Lines on the road, some stop signs.

[Guest Speaker]

And some traffic lights, not so that we can keep people from going to and from their destinations, but so that.

[Mark Hamer]

Everyone can get there safely or at.

[Guest Speaker]

Least in a way that's safer than it is today.

[Alan Chappelle]

Completely agree.

[Jonathan Kanter]

And I know as somebody who's been pretty heavily involved in the advertising self regulatory movements on some level we're all cheering because the rule set to the bar is low, but over time that's actually not been our friend, at least the small to mid sized VC funded companies, because however much that we may.

[Alan Chappelle]

Have benefited from a slightly higher rule.

[Jonathan Kanter]

Set, the big tech companies have been benefited much, much more.

[Guest Speaker]

Yeah, and so that's where one of.

[Mark Hamer]

The reasons we are where we are.

[Guest Speaker]

Today and you know, antitrust is supposed to help keep that in check even if it's not a panacea.

[Mark Hamer]

And I think it failed us for too long.

[Guest Speaker]

And that's where some of the work.

[Mark Hamer]

That we did over the last four.

[Guest Speaker]

Years came into play.

[Jonathan Kanter]

So two questions that are more general to the two cases the DOJ is currently pursuing. The first is, and I'm not looking for you to get inside their brain, but what's your take on Google's strategy.

[Alan Chappelle]

When it comes to some of the.

[Jonathan Kanter]

Proposed remedies and findings of fact? I mean what they've been proposing strikes me as at best tepid. And I'm curious just if you can.

[Alan Chappelle]

Place that into some historical context I.

[Jonathan Kanter]

Mean, is that just how this typically works? Did Microsoft do the same thing? Did IBM do the same thing? And is there a backstory here? Is this really just about not undermining their inevitable appeals?

[Guest Speaker]

The answer is largely yes to all of the above. So the Microsoft, AT&T IBM cases were.

[Mark Hamer]

Ultimately, for the most part, resolved through negotiation. Right.

[Guest Speaker]

And so you had, at least in varying degrees, litigation, someone won, some were.

[Mark Hamer]

Settled prior to litigation or after some losses and such, but ultimately they were largely negotiated.

[Guest Speaker]

And so it was a matter of.

[Mark Hamer]

The parties coming to the court and.

[Guest Speaker]

Saying, okay, we've arm wrestled and here's where we've landed. And then the court saying, that's too much, it's not enough and it needs.

[Mark Hamer]

To be changed or it's perfect, whatever, some variation thereof. Here we have a contested liability phase.

[Guest Speaker]

And so defendants in that context will.

[Mark Hamer]

Often take the position, well, I'm not going to give you an inch.

[Guest Speaker]

I'm going to make you fight for everyone. And so, yes, I lost if the.

[Mark Hamer]

Court disagreed with me.

[Guest Speaker]

And I'm just going to say, okay, I'm going to just say I'm going to stop doing what I was doing for the last 15 years and everything's just fine, or that even if we lost, the market has moved on and so you don't have to worry about anything. I think that's not a surprising point of view. It's certainly something I expected every step of the way. It's not likely in any case, in.

[Mark Hamer]

Any context to prevail.

[Guest Speaker]

I think courts are a little smarter than that.

[Jonathan Kanter]

So I think in both the cases, the remedies proposed by DOJ refer to some flavor of technical committee to oversee.

[Alan Chappelle]

Google's implementation of.

[Jonathan Kanter]

Whatever ends up being decided. So how does that work in practice, particularly with a company like Google who really seems to be particularly adept in running everyone around in circles? I mean, if you look at what's happened between Google and the competition markets authority in the UK with respect to third party cookie deprecation, like they seem.

[Alan Chappelle]

Really, really good at running people around in circles.

[Jonathan Kanter]

So like, how does DOJ build a better mousetrap?

[Guest Speaker]

Yeah, they are. So the technical committee was an innovation in the USV Microsoft case. And it ended up being, I had some direct experience with this, you know, a pretty substantial organization that effectively say it operated as the regulator for Microsoft. But it was this group of people, engineers who really had in depth knowledge and it was their job to make.

[Mark Hamer]

Sure that Microsoft was complying with the decree. And when questions inevitably came up about.

[Guest Speaker]

New products and services and code. It was just more attuned to, adept and proficient in its ability to untangle.

[Mark Hamer]

The questions and concerns.

[Guest Speaker]

Ironically, during the Microsoft Consent Decree, Google would often approach the technical committee with complaints about Microsoft and, you know, whatever one's view is, good, bad or otherwise of that structure. It was applauded by the court at.

[Mark Hamer]

The end of the Microsoft Consent decree.

[Guest Speaker]

As being one of the most important.

[Mark Hamer]

Innovations of that settlement, of that remedy.

[Guest Speaker]

Rather, and a good framework for the future. And so again, I don't think there's a silver bullet. It's not perfect. But if the goal here is to.

[Mark Hamer]

Figure out how to resolve questions and.

[Guest Speaker]

Disputes as they come up without having.

[Mark Hamer]

To race to the court every six.

[Guest Speaker]

Weeks, having a group, a dedicated group.

[Mark Hamer]

Of engineers, people in the industry, people.

[Guest Speaker]

Who know the technology, a degree of proficiency and expertise will certainly help oversight.

[Mark Hamer]

And monitoring from the Department of Justice and state attorneys general.

[Guest Speaker]

And it will likely lead to, as it did in the Microsoft case, the party sitting down, getting a common understanding of what's happening under the hood and.

[Mark Hamer]

Then figuring out a path forward and trying to resolve as many of those new issues before having to go to the court.

[Guest Speaker]

Because if you do that too often, the court gets annoyed and somebody gets yelled at and the results are probably less favorable.

[Jonathan Kanter]

That makes sense.

[Alan Chappelle]

So you have a, you have a.

[Jonathan Kanter]

Fair amount of confidence that a technical.

[Alan Chappelle]

Committee is going to be able to.

[Jonathan Kanter]

Succeed where in recent past with Google, others maybe have been less successful.

[Guest Speaker]

We'll see. I mean, I don't know. I think success and failure is a, it's too binary. I think it's, there's a continuum here, right? This is going to be a tug of war.

[Mark Hamer]

And what you're trying to do is.

[Guest Speaker]

You'Re trying to, you're trying to reduce the knowledge deficit that will inevitably exist.

[Mark Hamer]

Between the company that has a very.

[Guest Speaker]

Technical product and the government that is trying to make sure that the company is complying with the law regarding its very technical product and having somebody to help translate and get to the facts quickly, accurately is going to make it work better. It may not be perfect, it may not achieve all of its intended results, but it's likely to be better with that structure than just having a bunch.

[Mark Hamer]

Of lawyers who may not have, who.

[Guest Speaker]

Are well intentioned and even a bunch of folks who have very, very strained resources trying to keep up with, you.

[Mark Hamer]

Know, all the different coding and technical changes.

[Alan Chappelle]

So I want to turn to the search trial.

[Jonathan Kanter]

In the search case, can you quantify how important you think Chrome Divestment is.

[Alan Chappelle]

To the overall viability and effectiveness of the remedies.

[Guest Speaker]

Yeah, someone who, you know, was there putting the remedy together. I'll probably be, I want to be careful not to speak about anything that happened while I was there. So I'll speak in more general terms, which is this has been discussed in court. The crumb divestiture, the importance of Chrome.

[Mark Hamer]

To Google was something that was featured.

[Guest Speaker]

Prominently in the court's opinion. And so the divestiture is, you know, when done right, is supposed to map.

[Mark Hamer]

To the theory of liability, the theory.

[Guest Speaker]

Of harm that was in the court's underlying opinion and then the goals of the remedy, which include recurrence, fruits, depriving fruits of violation, and technology industry necessarily going to be forward looking to make.

[Mark Hamer]

Sure that we're dealing with kind of where the puck is going, not where it is today.

[Guest Speaker]

In the Google search case, Chrome was.

[Mark Hamer]

Again featured prominently in the underlying pinion.

[Guest Speaker]

And, and I think the remedy was crafted to map to the, the findings.

[Mark Hamer]

Of fact and the findings of law regarding Chrome and other items.

[Guest Speaker]

I will also say that, you know, divestiture is cleaner. It's not perfect, it's not clean, it's not. Nothing is clean.

[Mark Hamer]

Right.

[Guest Speaker]

But you know, divesting or taking an.

[Mark Hamer]

Open source product and making it fully.

[Guest Speaker]

Open source rather than controlled in many respects is a cleaner, neater remedy. And ironically, it's one that the private.

[Mark Hamer]

Bar has been pushing for in the context of mergers.

[Guest Speaker]

They were upset that we weren't doing.

[Mark Hamer]

Enough divestiture remedies in the context of mergers.

[Guest Speaker]

And so there's actually a lot of.

[Mark Hamer]

Familiarity with divestiture as a remedy in antitrust cases.

[Guest Speaker]

It's just not usually used in monopolization.

[Mark Hamer]

Cases because we haven't had as many monopolization cases.

[Guest Speaker]

But historically that's the most common or.

[Mark Hamer]

Effective remedy in a monopolization case.

[Guest Speaker]

And look back at and t, the.

[Mark Hamer]

Remedy in the early 80s, which was.

[Guest Speaker]

Done under the Reagan administration, was involving Western Electric and in an oversimplified way.

[Mark Hamer]

Kind of separated the hardware from the line. Perhaps without that divestiture, we'd all have.

[Guest Speaker]

Rotary iPhones right now that we're renting from AT&T.

[Alan Chappelle]

So as a private citizen, do you.

[Jonathan Kanter]

Have thoughts on what an ideal buyer for Chrome might look like?

[Guest Speaker]

I'll leave that to the court. As I indicated earlier, I think it's an interesting question and I'll just make an observation, let others decide how it should resolve. But you know, if you have a product that's essentially has its roots in.

[Mark Hamer]

Open source There's a question about whether.

[Guest Speaker]

Those kinds of products can be handed.

[Mark Hamer]

Back to the community or handed to.

[Guest Speaker]

The community to run. And you know, I think we have.

[Mark Hamer]

A lot of history of successful open source products.

[Guest Speaker]

In fact, Google itself built a lot.

[Mark Hamer]

Of its technology on the back of open source Fair.

[Jonathan Kanter]

And I will tell you that the.

[Alan Chappelle]

Subject of potential acquirer has been heavily.

[Jonathan Kanter]

Discussed within the ads community. And I don't know that there's a.

[Alan Chappelle]

General consensus within that community.

[Jonathan Kanter]

And I share that, not that anybody there is an antitrust expert. I do share it because, you know, they're thinking through how the marketplace might evolve. And I, I really do think it's.

[Alan Chappelle]

An example of almost least bad options.

[Jonathan Kanter]

Because just about anybody who might want to acquire it is going to have their own motivations which, you know, may or may not end, you know, wind up back in antitrust court a couple years.

[Guest Speaker]

Listen, you don't want to, you don't want to. That's where the danger always comes in. On the other hand, the status quo is one that has resulted in violations of the law. And so fixing that status quo is.

[Mark Hamer]

Really important and structural remedies are going to be more definitive, they're going to be more effective.

[Guest Speaker]

And again, I do think it's certainly not lost on me and perhaps shouldn't be lost on others that the proposals.

[Mark Hamer]

Revolve around open source products.

[Guest Speaker]

And you know, I think it's a different dynamic and potentially more familiar in terms of, you know, how to make that product and service available more freely and openly.

[Alan Chappelle]

Well, and they've started to spin Chromium.

[Jonathan Kanter]

Already out into a separate standards body. Now I know that those three things are not necessarily directly related, but it does at least.

[Guest Speaker]

No, no, I think they're related. Yeah, I mean, yes, exactly. And it's now, right, like there are a lot of the most common browsers are built on Chromium. It's just a question of who operates the kind of front end and the distribution and all of those things. And so my view is there are.

[Mark Hamer]

To quote something that was quoted in the Microsoft remedies case. There are remedies for all things but death.

[Guest Speaker]

And so still look hard enough.

[Jonathan Kanter]

So one of the areas that has.

[Alan Chappelle]

Kept many of us in the ad space up at night is the deprecation.

[Jonathan Kanter]

Of cookies and Chrome. And so you may not be familiar.

[Alan Chappelle]

With all the details, but I would.

[Jonathan Kanter]

Imagine that, that you know that the competition and markets authority in the UK and the ICO had sort of claimed cookie deprecation in Chrome as a, as A central issue. At least that's how it, you know.

[Alan Chappelle]

Appeared from the outside.

[Jonathan Kanter]

So as your team was thinking through.

[Alan Chappelle]

The proposal for the divestment of Chrome, how much were the UK regulators actions.

[Jonathan Kanter]

Making their way into, into your thinking?

[Guest Speaker]

Yeah, I just want to be careful.

[Mark Hamer]

Not to go into internal deliberations.

[Guest Speaker]

So I'll, I'll hold off there, but let me just take a step back and make a few observations about kind of privacy and some of these concepts. I think there's a real danger that when companies get so dominant on the.

[Mark Hamer]

Back of a certain kind of technology.

[Guest Speaker]

And then a company, for example, like Google, that has massive first party relationships, when first party is defined extremely broadly, um, because essentially you're a conglomerate and have, you know, you can find a.

[Mark Hamer]

First party relationship sort somewhere in the.

[Guest Speaker]

Stack because it creates a world where you can imagine regulatory gamesmanship where you say, okay, we're going to deprecate something and then, but we're going to still use it or we're going to deprecate it and then it's going to cement our power. And so I think if you look at privacy and competition as two completely.

[Mark Hamer]

Distinct exercises, you can make mistakes on both sides.

[Guest Speaker]

And so I think while we should focus on good solutions that protect privacy of users, we need to make sure.

[Mark Hamer]

That we're not entrenching monopolies in the.

[Guest Speaker]

Process of doing that, which inevitably will lead to, you know, privacy not being any better. I mean that in, at least in.

[Mark Hamer]

Tech, the most dominant companies tend to.

[Guest Speaker]

Be among the most invasive in terms of privacy. And so I think just sort of locking that status quo in is not desirable.

[Alan Chappelle]

Different people will have different things that they hearken back to from 10, 15 years ago.

[Jonathan Kanter]

For me, the big one wasn't necessarily the purchase of DoubleClick, but the big.

[Alan Chappelle]

One was I think in 2011 when.

[Jonathan Kanter]

Google had announced they were combining all.

[Alan Chappelle]

Of their data into one big pot.

[Jonathan Kanter]

Because that's when I knew that the rest of us were in real, real trouble.

[Guest Speaker]

Yeah. And then there were some additional changes.

[Mark Hamer]

To terms and conditions like in I think 2016ish timeframe.

[Guest Speaker]

And so, yeah, I mean this kind of goes to the question you're asking earlier about kind of the self regulatory nature.

[Mark Hamer]

Right.

[Guest Speaker]

Like people bought into these ecosystems with.

[Mark Hamer]

One expectation about how the data was going to be used.

[Guest Speaker]

And then that changed and it changed after a moment when the world was.

[Mark Hamer]

Dependent on those technologies.

[Guest Speaker]

And so are you going to sit.

[Mark Hamer]

There in 2016 or whatever it might be and say, I'm going to Reject the terms and conditions and stop using my Gmail. The dependencies were so great by that.

[Guest Speaker]

Point that you almost had this sort.

[Mark Hamer]

Of unilateral ability to change terms and conditions.

[Guest Speaker]

And for the most part, most people don't read them anyway. And so I think again, this is one area where the kind of moving goalposts, you know, can be a problem. And also, frankly, the lack of, you know, lines on the road and stop.

[Mark Hamer]

Signs can be a problem to you.

[Alan Chappelle]

So I'm hopeful you can comment on.

[Jonathan Kanter]

This because a lot of this, I.

[Alan Chappelle]

Think, is in the public record.

[Jonathan Kanter]

But when it comes to providing access.

[Alan Chappelle]

And data to competitors as part of.

[Jonathan Kanter]

The remedies, I thought DOJ did a great job.

[Alan Chappelle]

And you went to some pretty significant.

[Jonathan Kanter]

Lengths to demonstrate how Google has used.

[Alan Chappelle]

Privacy as a bit of a red.

[Jonathan Kanter]

Herring in order to avoid providing data in other contexts. I think there was a, like a half day. It seemed like it was dedicated to.

[Alan Chappelle]

Some things around the EU dma and.

[Jonathan Kanter]

I think Microsoft's requests for data and.

[Alan Chappelle]

How little came out of it.

[Jonathan Kanter]

And so I'm just curious how you as a private citizen are thinking about.

[Alan Chappelle]

These types of access and data remedies.

[Jonathan Kanter]

And their relative effects. And I don't know if that's the same answer as the technical committee answer, but I just love to get your insight.

[Guest Speaker]

Yeah, I mean, listen, these, these questions are always very nuanced and you have to think about them thoughtfully and how they get implemented in any one context.

[Mark Hamer]

Will differ from the other.

[Guest Speaker]

And so I'm not sure I have.

[Mark Hamer]

Ton to add beyond what's in the public record, other than to say that.

[Guest Speaker]

If the information is so dangerous, then maybe the dominant firm shouldn't be using.

[Mark Hamer]

It in the first place.

[Alan Chappelle]

Fair point.

[Jonathan Kanter]

So one area that hasn't gotten as much attention was the imposition of rules around indexing. So the idea that, and I think this was also in the proposed search remedies, the idea that you can't collect data as part of your search engine.

[Alan Chappelle]

And then use that for something different.

[Jonathan Kanter]

For example, an AI engine. And I was just curious, was that in your original remedies or is that something Gail Slater added?

[Guest Speaker]

No, no, that was in our remedies.

[Jonathan Kanter]

What was your thinking there?

[Guest Speaker]

Again, I'll defer to the documents there because I don't want to go into internal deliberations, but I think it's hopefully self evident, which is on a few different fronts. One is the next inflection point that has the opportunity to unseat the search monopoly will likely come from Companies that are adjacent to search in AI. And so even if those companies are not direct competitors today, they're building the ingredients and are likely to move into that direction. Similarly, when a dominant company is under most threat at a time of an inflection point, and often we see the greatest use of anti competitive behavior, including tying, bundling, leveraging, exclusion, what have you, when firms feel threatened by an inflection point that might disintermediate the dominant player or provide openings for new technologies to change the paradigm. And so when you're designing remedies, you want to maximize the opportunity for those.

[Mark Hamer]

Inflection points to have their full competitive.

[Guest Speaker]

Effect, whatever that might be.

[Mark Hamer]

Right?

[Guest Speaker]

Because part of the beauty of competition.

[Mark Hamer]

And especially in technology, is it could.

[Guest Speaker]

Lead to unexpected outcomes. The other is to, if you are.

[Mark Hamer]

Trying to develop a forward looking remedy.

[Guest Speaker]

See if there are ways to accelerate that timeline. And acceleration could flow from data sharing and other kinds of remedies that might, you know, help create an on ramp for some of those natural competitive forces.

[Mark Hamer]

To make decisions to enter faster, enter.

[Guest Speaker]

At all, and really compete more aggressively. And so I think back to a lot of the inflection points in technology, but the Microsoft remedy came right at.

[Mark Hamer]

The time that the Internet or broadband.

[Guest Speaker]

Internet was about to have its heyday, right? And Google grew up in browsers, on Windows machines, and then the next technologies grew up inside of search results coming from Google. And you know, you can sort of take that forward.

[Mark Hamer]

And so one platform often leads to the next. And I think you want that natural, healthy cycle of innovation to occur and you want to keep the dominant firm from imposing obstacles.

[Guest Speaker]

Or if you need a forward looking remedy, you know, again, trying to provide avenues that are safe and effective. And so I think it would be massive missed opportunity. One, to allow a dominant firm like Google to prevent potential competitors who are coming in through this new avenue of AI to compete.

[Mark Hamer]

And two, it would be a missed.

[Guest Speaker]

Opportunity from a forward looking perspective not.

[Mark Hamer]

To try to at least see if there are ways to help accelerate or.

[Guest Speaker]

Invite those competitive forces in, in a manner that is consistent with the theory.

[Mark Hamer]

Of liability, the case and the law.

[Jonathan Kanter]

So it's interesting, I feel like you and I are reaching the same place.

[Alan Chappelle]

But coming at it from very different angles.

[Jonathan Kanter]

From my perspective, and not disagreeing with anything you just said, from my perspective, there's a concept in privacy circles where.

[Alan Chappelle]

There'S a thing called a secondary use of data.

[Jonathan Kanter]

If you provide a notice that you can use data for A and then you use it for B, that's Generally considered impolite, if not illegal in some contexts. From my perspective, what I loved about that remedy or that proposed remedy was that you created a foothold not just for Google, but potentially for others.

[Alan Chappelle]

Because there's a huge marketplace problem right.

[Jonathan Kanter]

Now with respect to many of the AI companies where they're collecting data for one purpose and using it for a different purpose. And I think that just in terms of overall marketplace health, I'm encouraged and hopeful that that moves from just something that's in a DOJ proposal to something that is generally accepted as acceptable behavior.

[Guest Speaker]

Yeah, I mean, the amount of power that again, an inflection point from, let's say, a perspective of a publisher who may want to say, okay, I may not be able to 15, 20 years.

[Mark Hamer]

In, I may have no choice but.

[Guest Speaker]

To play ball with Google search crawlers, but damn, I don't want to be.

[Mark Hamer]

In this situation again.

[Guest Speaker]

And so if they're going to use.

[Mark Hamer]

My data to train their algorithms or.

[Guest Speaker]

Their AI or power AI generated stuff that's on the back of search, I want a choice. And I want to either get compensated or I want to pick somebody else to work with and let competition play out. And I think we, as antitrust proponents, we want that competitive process to. To flourish rather than sort of letting.

[Mark Hamer]

The incumbent win simply because you can't.

[Guest Speaker]

Say no to the dominant distribution channel and therefore you're stuck saying yes to letting them, you know, these secondary uses.

[Alan Chappelle]

That was a great conversation. I couldn't resist the temptation to talk.

[Jonathan Kanter]

A bit about music.

[Alan Chappelle]

Overall, I was struck by how holistic Jonathan's view of the media space is. It would be very easy for him to say that he was just operating a law enforcement agency and limit his remarks to antitrust. But Jonathan went very comfortably into the.

[Jonathan Kanter]

History of digital media space and privacy issues and how historically, regulators may have.

[Alan Chappelle]

Helped facilitate the creation of some of the leviathans of big tech. Also, in my view, Jonathan struck me as being keenly aware of how important Chrome divestiture is to the future of the digital media marketplace.

[Jonathan Kanter]

And finally, I'll note that Jonathan seems.

[Alan Chappelle]

To have much more confidence than I do that a technical committee will be.

[Jonathan Kanter]

Able to ensure that Google honors whatever remedies are imposed.

[Alan Chappelle]

Look out for part two of my interview, which focuses mostly on the remedies being proposed in the Google Ad tech case.

[Jonathan Kanter]

Please subscribe to the [e-mail] or on Spotify, Apple, YouTube, or wherever you listen to your podcasts.

[Alan Chappelle]

And thanks for listening.

[Audiohook]

Thank you for listening to the marketexture podcast. New episodes come out every Friday, and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at Markitecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's [e-mail]. and if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtech God.com.