Joseph V. Coniglio hosts the second episode of a new antitrust speaker series and interviews Alden Abbott, senior research fellow at the Mercatus Center at George Mason University and an advisory board member of the Antitrust Education Project.​ They discuss antitrust’s Chicago Revolution, Neo-Brandeisian enforcement, and the Google & Meta cases.

Publications Mentioned

• Bork, Robert H. The Antitrust Paradox: A Policy at War with Itself. New York: Basic Books, 1978.
• Posner, Richard A. Economic Analysis of Law. Boston: Little, Brown and Company, 1973.

Cases Mentioned

• Brown Shoe Co. v. United States
• Utah Pie Co. v. Continental Baking Co.
• United States v. Google LLC
• United States v. Microsoft Corp.
• Federal Trade Commission v. Meta Platforms, Inc.

Auto-Transcript

Joseph V. Coniglio: Thank you for joining us. My name is Joseph Coniglio and I'm the director of Antitrust Innovation at the Schumpeter Project on Competition Policy here at the Information Technology Innovation Foundation. And I'm proud to announce the release of our second episode of our new antitrust speaker series, we’re channeling Schumpeter's idea of creative destruction.

We're going to be having wide ranging and in depth discussions with really antitrust’s greatest luminaries to discuss cutting edge issues in antitrust, tech, economics and even beyond that as well as get to know, I hope a little bit more about some of the people that have really been extremely influential in the antitrust community over the past several decades.

So, with that, I'm very proud to announce our speaker today Mr. Alden Abbott, a senior research fellow at the Mercatus Center at George Mason University as well as an advisory board member at the Antitrust Education Project. Just a brief bio, Alden's reputation precedes him, but from 2018 to 2021, Alden served as general counsel of the FTC, where he'd previously worked in a number of roles in prior administrations. Alden also spent many years at Department of Commerce, including his acting general counsel, and additionally, a special counsel at the antitrust division during the Reagan and Bush one administrations.

He's also had very high level positions at Blackberry and also at the Heritage Foundation. And I think maybe we'll get into this a little bit later, but I really think it's fair to call him antitrust's conservative. Alden, thank you so much for joining us today. I'm really looking forward to speaking with you.

Alden Abbott: Thank you so much, Joe. I admire the work ITIF is doing on antitrust and competition dynamism, and I look forward to our conversation.

Joseph V. Coniglio: Wonderful. So maybe we could just start with, before we get into the issues how did you get started into antitrust? Give us a little summary of your career and how you became the man you are today.

Alden Abbott: Actually, I started my third year of college. I took a course on antitrust. I was undergraduate at University of Virginia, taught by Kenneth Elzinga, known antitrust professor called government regulation of industry. It wasn't really about regulation, it was actually about antitrust and to introduce students to, to how lawyers looked at it.

He actually used an antitrust case book. He also, obviously there was a lot of economic reasoning interjected into the analysis of the cases. And this was at a time before the economics revolution of Chicago, let alone post Chicago revolution had arrived. This was winter-spring of 1973 and the big predatory pricing case was a case called Utah Pie, and then there was a big vertical contracts case. And in those days there was era of inhospitability towards all sorts of contracts by large firms, which were not well understood, and a lot of them were viewed as per se illegal. That time is long passed, but I found professor Elzinga, I think, although he was careful how he put it, was rather skeptical of some of these Supreme Court decisions. And of course he wrote about decisions later on. And then later on in law school, I studied antitrust. I took an antitrust course at Harvard Law School. And I actually took a year's graduate course now it was undergraduate. I had been more a affected by a lot of the professors at Virginia had done their PhDs at Chicago.

They tended to be, shall we say, Chicago school types or even to the right of Chicago school types. But I took a yearlong course on industrial organization taught by Professor Richard Caves, a graduate course at Harvard, in which I learned in detail the development of the structure conduct performance paradigm of antitrust.

Professor Caves was quite a nice man but also introduced the students and made sure they were aware of the critiques of the SCP paradigm. And he also wrote articles on problems with regulation It was very interesting course. I had also read, I guess it was in college and finished reading later in law school, Posner's book Economic Analysis of Law, and I wasn't sure I wanted to be a lawyer. I thought I might go on and take and finish a PhD in economics, but I had an interview just out in the fall of '76 with the head of the Office of Policy Planning at the Federal Trade Commission. He and the executive director of federal Trade Commission. He was very much on economics and he started saying why is it bad for firms to try and profit maximize?

And then I said, why, it's not bad at all. And I started doing a Posnerian analysis of why firms do what they do. He says oh, you're the kind of guy we like to have. By the time we arrived Jimmy Carter had been elected and a man named Robert Reich, who became quite famous later on, Secretary of Labor under his Oxford classmate President Clinton, was head of the office We looked, actually, he had written some law and economics articles, but he had us looking into industrial policy and all sorts of new ideas and I figured after the first year was interesting, but I figured after a couple of years I might want to move on, and I had to decide. I almost went to graduate business school in Stanford at that point.

Instead, I said I'm going to see how a law firm is so I went law firm, Fried Frank. I thought I'd be doing antitrust. Instead, because of the flow of business, I ended up doing some energy regulatory and securities work, which really didn't interest me.

So fortunately, I had a friend, a law school friend who had been in the Reagan transition at the Justice Department and he was in a new office called the Office of Legal Policy, the Justice Department. He says the antitrust division has a freeze on. You can get there eventually, I'm sure. But come here and he had me doing some stuff on interagency stuff and I met people in the antitrust division. So eventually I went to the antitrust division. I was lucky enough to be, for a couple of years, an assistant to counsel. special assistant was a title they used there.

They always changed titles. Paul McGrath was head of the antitrust division right after Bill Baxter left, and then I worked for Doug Ginsburg and he was a great boss. I learned a lot from both of them, and I could go on and on, but probably spoken too much about my history, but it's often the case.

You stumble into a course, or you stumble into an interview and things just proceed.

Joseph V. Coniglio: Basically, what I took away was you almost went to Stanford Business School and you almost would've started to Google or something like that. But instead of that, you decided to become a antitrust lawyer. That's really so helpful. And I actually kind of want to pick up right where you left off there, as you got started in the eighties working in government. 'cause that's really when in a lot of ways, the Chicago School revolution that you talked about took off. Take us back there.

What was the antitrust world like before? And why was the Chicago Law and Economics movement so influential, not just in Republican administrations, but even to some extent the deregulation got started in Carter and then carried forward into the Clinton administration and beyond to become this bipartisan consensus.

How did that happen? Take us back.

Alden Abbott: I think there had been a lot of rumbling even by people who were not viewed as conservatives. Ralph Nader had criticized the FTC as an agency that was really doing stupid things and nothing of consequence and didn't deserve to survive. The ABA studied the FTC. There were critiques of antitrust in general by Lewis Powell, who was president of the ABA back in, I think in the early seventies. I don't remember exactly what, but certainly before he was a judge. And that basically said we don't know what antitrust rules are. In a merger case Justice Stewart said the only thing consistent in these cases is the government always wins. In the 1950s what became the Chicago school had developed as an oral tradition under Milton Friedman's brother-in-law Professor Aaron Director of the Chicago Law School, and a number of people who became leading conservatives and later professors who were advisors in the Reagan campaign had studied at that time or taught there. Robert Bork, of course, had studied at Chicago and had picked under Aaron Director and he and a number of other prominent judges.

So, I think there was a movement afoot. There was also an effort by economists. It was a famous Airlie House conference in 1973 that had economists look at the question supposedly competition is weak because you have all of these quote unquote, excessive profits, used supposedly to chronic oligopolies.

They're always going to be a handful of big firms. In the big industries. They're always going to price too high. They have to be reined in. And then the research suggested wait often there's no real evidence to show that there's competitive harm, that they're actually anti-competitively high, that high prices are associated with the profits. It made the point, some of these studies that look, it lowers costs, some of these companies have lower costs and therefore have higher rates of return, but consumers are not necessarily being hurt. So, the whole idea that had underlying this 1950s structure conduct performance approach that said, if you have just a few large firms they are going to act as oligopolists. They're going to know each other's moves, and that's going to lead to inferior performance, to harm to consumers. That was seriously under attack and more empirical work arose, and I really think it was, as the scholarship was growing in 1970s, it started to be picked up by the courts, and then of course, the Reagan election was really the big cataclysmic change because people in that campaign knew this research. They had some of the Chicago professors later became federal judges and were chosen by a White House to be that. Andone of those professors, Richard Baxter, Stanford professor, was made head of the antitrust division and Jim Miller, PhD Economist from the University of Virginia became head of the FTC and his protege sidekick, Tim Muris, joined him. And Tim Muris had been at the FTC earlier in the seventies and knew where all the bodies were buried, so to speak. So, I think it was a confluence of events. So, it really took the Reagan's election to say that we really start need to rethink economics, just as Aaron Director was rethinking antitrust economics in the 1950s.

Joseph V. Coniglio: Alden, I'm so glad you put it that way. In talking about the economic angle and the empirical studies, 'cause that's what we're hearing today, right? Is a lot of people are questioning the last 40 years of antitrust, so to speak, and saying we have increased concentration, consumers have been harmed with higher prices, and you've been very vocal about a lot of those studies that have been put forward suggesting that concentration is increased and the sort of criticisms of the consumer welfare approach. Could you talk a little bit about that? How are you seeing the retrospective and a lot of the arguments that are being made against the past 40 years and allegedly some of the harms that have resulted from the antitrust paradigm?

Alden Abbott: It's interesting during the first Trump administration, Senator Warren, but also a number of commentators started developing the neo-Brandeisian approach to antitrust. The big is bad, monopoly power has soared, high concentration, but there was actually a study which nobody has refuted in a report of the Council of Economic Advisors under President Trump, and it wasn't a highly political report, it said, let's look at some empirical studies. First of all, there's no showing that industrial concentration overall is significantly higher. In some industries where it has risen it has not been associated with margins that are that much higher. And in some cases, indeed consumers have benefited from lower prices. There is no showing that mergers have somehow, as I say, created less dynamic, less competitive set of industries. Indeed, if you look in 1950s when you did have some oligopolies, that was a far less competitive period, even though the 1950s was a period when horizontal mergers among competitors were almost impossible because of the Supreme Court's attitude towards mergers. Some other number of economists have done work since then also. But the problem is that you still see, speech after speech during the Biden administration, and including remarks made at the time, that President Biden in July 2021 unrolled the 2021 competitiveness order, that Robert Bork's crazy ideas started a 40-year experiment that has failed. But there was absolutely no recognition that based on a lot of research, and I don't have all of it in front of me, but I've written about it and decided that the research did not support that position. In effect, one of the disingenuous things, I think of neo-Brandesians, was saying there's a monopoly problem in a concentration problem, but they do not recognize, and they don't even cite the critiques of that position. So I think this is all frankly a lot of vaporware, a lot of hot air.

There is no proof for what they've been saying. And certainly some consumers are doing better or worse. Thinking that antitrust is responsible for economic problems we're facing in that poor and weak antitrust is absurd. If you actually look at a period of some of the highest rates of innovation after the introduction of computers, it took a while, but in the nineties you had rapid rates of innovation. You had rapid development of new industries after deregulation on movement in the seventies. So, it was really, I think deregulation was spurring things along and that seems to be not recognized at all. In fact, I think you mentioned deregulation earlier, but it used to be a bipartisan effort for all his faults President Carter supported transportation deregulation, airline deregulation, trucking deregulation and study upon study show that the benefits to consumers in terms of lower prices. A greater variety, a greater ability for movement of goods expanded rapidly. Fortunately, a law that actually cut against and harmed interstate transportation, the Robinson–Patman Act hadn't been actively enforced, and now there's some threats that it may be enforced again. All the talk about the need to change to interventionist antitrust, there's a two-word description of it: it's willful ignorance. The evidence that what they're saying is not what they're saying is out there and it's willfully being ignored.

Joseph V. Coniglio: It is so true, and we've come up with similar studies at ITIF looking at the census data from early two thousands to today showing not at all a significant increase in concentration. And as you pointed out too, it's also the studies that find an increase in concentration show that it's driven by cost efficiencies, right?

Through things like information technology, innovation and all that's developed the last several decades. But I want to go forward now and talk about the neo-Brandesians because again, we've heard, as you've said, this allegation that the last 40 years have been a failed experiment.

What have we learned from the experiment of the last four years of the neo-Brandeisian antitrust under the Biden administration? What's the retrospective there? Is that where the real failed experiment lies? When you think about not just the enforcement, but agency morale and really what the FTC has become that the the second Trump administration has had to deal with.

Alden Abbott: I think so. The FTC under chair Lina Kahn did a number of procedural things as well as substantive things. There's some internal procedures, gave more power to the office of the chair or chairman. That was decried by some of the other commissioners. But at the same time the treatment of mergers was really in undermining the rule of law because there was, at least for many years, had been bipartisan understanding that look, there are these mandatory, as I think many of your listeners know, reporting of mergers above a certain size under the Hart–Scott–Rodino pre-merger notification act. Now. Most mergers, 95% on average or more, have not been problematic after a quick look. And for a 30-day quick look there was tradition of early termination. Okay? Say an ice cream company's being acquired by a maker of iron bolts or something. And they don't have any other possessions. Let the merger proceed. The FTC started not letting them proceed. Even mergers that clearly could not have succeeded in a court challenge. And people were warned, okay, you can foresee that your risk or the fact that we are not doing anything now doesn't mean we won't do anything in the future, that was incompatible with the rule of law. Basically, that's been eliminated, which is a good thing from the new Trump administration. But there were...

Joseph V. Coniglio: And early termination is back.

Alden Abbott: Yeah, early termination is back. There were a number of other things, frankly. The pulling of the rescission of earlier merger guidelines. There was a sort of last minute 2020 set of vertical guidelines, but earlier 2010 guidelines, which were built upon earlier guidelines, they were pulled. Draft guidelines came out in 2020, which were very interventionist, had very little economics in them. After about a year and a half that were revised and November, 2023, a new set of guidelines was released. But the guidelines were not really giving guidance.

And as Greg Werden, the economist, spent decades working on merger analysis and the Justice Department put in a number of times, he said, you know what guidelines is supposed to do is give guidance. These things didn't give guidance. Why? They basically said here, 11, or depending upon how you counted it, 13 different ways a merger theoretically might be anti-competitive. Yes, the theory says that, but instead of saying upfront that most mergers are, we think are not anti-competitive and there should be no presumption that a merger is problematic. And we want to minimize any effort to challenge mergers that aren't problematic because we think they'll be generally welfare-enhancing and good for consumers.

That language, bipartisan language dating back to 1980s was yanked, no longer in there, and there was I think a more skeptical tone about efficiencies saying that by 2010s as well in efficiencies defense. It's not really separate defense, it's the possible efficiencies are integrated in a holistic way into a statistical analysis of based on the actual facts, to see a likely outcome. That approach really has been abandoned. There are all of these series of anti-competitive harm, adding appendix to the back. A hypothetical monopolist test, which was developed in the early eighties and revised over the years. That's still there, but the whole tone of it is we can go after you in a dozen different ways, all based on these economic theories, but the whole tone of it is very unfortunate. Now, the current administration hasn't pulled the guidelines. I wish at least they would say we don't like pulling guidelines, but the new additions and all of these theoretical cases don't worry about those. And we're only going to go after cases where it's likely harm based on the hard facts, based on hard studies. But so far they haven't really given a full-throated speech that says that. I think it would be helpful.

Joseph V. Coniglio: Even worse than what the FTC did was issue guidance on unfair methods of competition, November 22, which basically said any business practice we find troublesome or somehow oppressive or unscrupulous, we may go after as an unfair method of competition. No economic basis whatsoever. And this was, I think most courts, most judges would say this sort of statement, is that law with a rule of law? Is that war with a rule of law? And it's a sort of statement that may mean the statute is impermissibly unenforceable and invalid because it's void for vagueness, you could say. If you believe the statute allowed you to say that, it would be, a sort of, delegation of power that had no ends, no borders, and would be illegitimate. Now, nothing really has been done on that, but it should be pulled. I can't understand, very frankly, why it hasn't been pulled, because it's not a question of an evolution that at least as a matter of economic theory system correct things. Basically it's total nonsense. And Christine Wilson, former commissioner, basically said that upon leaving. It's so true, and I think picking up the thread here, hopefully the Trump administration does, pull the section five statement and issue new merger guidelines, better guidelines. And I think one of the reasons perhaps they haven't is because they're busy on a lot of other things where you also see some continuity with the Biden administration and also the first Trump administration.

Of course, a lot of the cases against the big tech companies and we've had a lot of big decisions, this year in the two DOJ v. Google cases and also the Meta case. And you've got a regular column at Forbes, Alden, I think one of the few antitrust leaders who does have a regular column, which is great.

And you've written very critically about some of the remedies that DOJ sought in the Google case, and I know you've also suggested that the FTCs defeat in Meta may have very big political or broader implications really for antitrust and beyond. So, could you give us your take on these decisions that we've seen this year in these cases?

Alden Abbott: Sure. Let me start with a clear defeat for the FTC and the Meta case because I think that was, of all the opinions that's been issued, that was the best written and most persuasive opinion of all. Written by Judge Boasberg, who became in conservative circles a figure of controversy because of some of his immigration work, immigration holdings.

But what you have there is a classic application of applied economics due the facts. Basically, this case involved the theory that somehow the FTC had acquired a couple of companies that made complimentary products and that it had a social networking monopoly which had been boosted. The FTC had really ignored the growth of YouTube and the fact that YouTube and TikTok and other companies were really doing some of the same things, they were not counted in their market. The judge said that's the problem. If you have a monopolization case and you don't really have a monopoly, because there's so many other competitors in the market, that's the problem.

It is really hard to underestimate how badly the FTC lost that case.

Yes, it was great embarrassment, and I think because every claim they made about harm to consumers, or lack of innovation, basically he looked at the facts and he refuted them. He even used a merger test to Brown's Shoe Factors from the 1960s, which would not be applied by Modern court, if they ever got the Supreme Court ever looked at the merger case again, applied it in a monopolization case and said, even using it, which they're not suited to anyway, but he says, even applying these factors, the FTC loses.

So that that is a signal, I think, to lots of judges that look this is about as well written opinion as you can get, and it closely looks at the facts. Now, the two Google decisions. One decision involved the Google search case. The idea that Google was making payments to Apple and other companies to in effect, to preload the Google search engine and that those payments were made to prevent rival search engines from developing. There are lots of economic arguments that was not the case at all, that even apart from those payments, Google would have a 90% plus share of search engines just because its search engine was proved to be superior and was preferred by consumers and there were limitations on Google and Europe, and it turns out European consumers also preferred the Google search engine to other search engines. But the judge did issue this opinion saying there's this argument with payment for exclusivity. I won't get into economic arguments against that, but at least it's a colorable argument that there are these exclusive dealing arrangements. Other search engines have not gotten much of a share, but at least what the judge did is said, we don't want to do anything drastic. We do not want to break up Google by making them sell, their Chrome browser and other assets and the Justice Department, disappointingly had recommended that Chrome, that basically Google be broken up, that Chrome browser be sold.

Joseph V. Coniglio: And even Android, potentially.

Alden Abbott: Yeah. And Android too. The Android is to the extent necessary and the claim that it was a problem with these exclusive dealing arrangements.

Even if you bought that, that had nothing to do with the Chrome browser. It had nothing to do with their Android system. And basic legal analysis says, you can't, it's illegitimate to come up with a remedy that is not related to the competitive harm that's supposedly being caused. That was the problem with the old Microsoft case 25 years ago. When the judge wanted to break up Microsoft. And again, the problem, the basic problem was certain exclusive dealing contracts, certain other business arrangements, but no justification for breaking up the company. So there has been a hearing, separate hearing on remedies.

I think the judge suggested limited remedies. Justice Department said we were disappointed but... So that's still on a pause of sorts. What was the ad tech case? Google was running a very, very successful auction for sales of online ads. And the variety of complimentary services. And basically, the claim was that Google's, contractual practices were creating a monopoly, a monopoly on online sales engine to sell all of this online advertising. And that's harmful. And that engine had to be sold off. Other assets had to be sold off. Although the judge did find that, while the monopolization, I don't think the findings of the judge, justified certainly selling off vital assets again. And I think again, the findings of the two judges in the two Google cases, they are somewhat justifiable, as a matter of antitrust theory.

I think there's some economic gaps and problems with them. I think in all of these cases, footnote, none of these monopolization cases, if it eventually went to Supreme Court, would be a winner for the government.

I want to turn now if we can, to sort of, the big picture policy issues.

Joseph V. Coniglio: Before Alden I said, I called you antitrust conservative. And that may be confusing to some because obviously I think the Chicago school and all of that the past 40 years. But really that was very libertarian and by conservative, I think we mean something really what we're seeing now with the second Trump administration, this idea of maybe the importance of order and even things like morality and natural law in jurisprudence, and we've heard talk about the future of antitrust from the right as we're at this sort of inflection point. What comes next, neo-Brandeisianism, and I guess I just would ask you, when we think about things like human flourishing, which is something we've heard, things about competitiveness and having antitrust sort of work in the national interests.

What might an America first antitrust look like that's truly conservative, as distinct from the more libertarian, neoliberal Chicago school approach that we've had the last 40 years?

Alden Abbott: Look, I think the term, as you said, human flourishing is subject to different definitions. The notion of human flourishing goes back to Aristotle and even earlier. there are some who argue, some social policy writers who say man does not live by bread alone, and the actions of these big companies, these who are politically powerful, big actors are somehow oppressive to workers and oppressive to other causes. And indeed, you need to limit the power of these actors. First of all, some of those statements seem to ignore the fact that, unions have fundamental protections under U.S. laws, and indeed there's an attempt to extend some of their protections. But antitrust is a limited set of tools.

It's valuable, but if you start saying we want to use antitrust to go after size because once you reach trillion dollars or $2 trillion in capitalized value, or what's the magic number? $3 trillion. It's just too much. It means that these companies are too powerful. Plus, there's the undertone they may have attacked conservatives in the past by, in effect preventing news from coming forth, misrepresenting--

Joseph V. Coniglio: Censorship, yeah. That's—

Alden Abbott: —censorship. I think censorship goes pretty far as a term, but all of these concerns are raised. And so, what should antitrust be? It's a limited set of tools.They say you would not use a hammer to do delicate surgery. It should be used to try and deal with situations in which economic actions by a company or agreements among companies reduce opportunities on the merits of other companies to compete, harm consumers by really reducing the quality of what they get or raising the prices.

And there's a set of economic tools, applied price theory, which can be used to do that. And this was viewed until about a decade ago as a bipartisan agreement by the mainstream Republican and Democratic appointees, and lawyers and economists. Some wanted to go a little farther, some a little less far.

Joseph V. Coniglio: I mean if you look at the period sort of after the formative era, so to speak, the sort of rule of reason period where the courts really started to shape antitrust, you might say they had some moral theories there, they had sort of a classical view of economics, but they did that while keeping antitrust to rule of law and believing in limited government. And that's the key thing that I think a lot of the conservatives today that are talking about new forms of antitrust from a populist angle are missing. Alden, before we conclude, I want to ask our last question here which is, a lot easier than a lot of the big picture stuff that we've discussing, but, given that it is the Christmas season a little fun fact. What is the favorite Christmas tradition at the Abbott, household?

Alden Abbott: I think it's keeping my grandchildren now from destroying too much at our home. But I think we have a couple of traditions because my daughter-in-law, her parents are from Poland. We have a fish dinner at my son and his wife's house, and her parents are in from Poland right now.

Traditionally in Catholic, Southern and Eastern Europe, people ate fish, different combinations of fish on Christmas Eve. So that's become a tradition, although it was not my tradition growing up. Growing up I had a pasta wrapped in crepes wrapped in a variety of cheeses. It’s a fancy dish we always had at Christmas. I think before the tenderloin. I think this year it's going to be relegated to maybe lasagna before the tenderloins. In terms of particular songs or traditions? We usually go to midnight mass.

And that's probably, we'll do it again, but.

Joseph V. Coniglio: Hear, hear. I can tell you the feast of Seven Fishes, Christmas Eve is also a Coniglio family tradition.

Alden Abbott: In Italy, yes.

Joseph V. Coniglio: And it's the best. With all that, I want to thank you so much for your time and just close here by saying really appreciate everybody who listened to this.

I want to thank again, Alden Abbott. For taking time to be with us and hope everybody will look forward to our next episode coming up in a month where we will talk with another great antitrust luminary on the key issues of the day and some of the big picture questions that we're thinking about in the antitrust community.

Thank you very much. I'm Joe Coniglio, director of the Schumpeter Project at ITIF and really appreciate you joining us.

Alden Abbott: And thank you so much, Joe and happy holidays to all and hopefully happy, prosperous economically rational and successful and joy filled and human flourishing oriented 2026.

Joseph V. Coniglio: Hear, hear. Thanks everyone.