Prof G Markets - The Next Era Of Antitrust — ft. DOJ’s Jonathan Kanter

Episode Date: March 6, 2025

Ed and Scott open the show by discussing why European defense stocks surged following Trump's meeting with Zelensky, the announcement of a U.S. crypto reserve, and the latest tariffs targeting Canada and Mexico. Then Jonathan Kanter, former Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, joins the show to break down what antitrust enforcement could look like under the Trump administration. He explains why healthcare should be a top priority for regulators, pulls back the curtain on how lobbyists try to influence antitrust cases, and gives an update on the ongoing Google antitrust lawsuit. Finally, Jonathan weighs in on the growing monopoly concerns in AI and highlights which industries are most in need of tougher antitrust scrutiny.  Subscribe to the Prof G Markets newsletter  Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

On this week's episode of Net Worth and Chill, I'm chatting with internet sensation and everyone's favorite Philly influencer, Bran Flakes. He's a social media maverick and content creator turning viral moments into cold hard cash. Listen wherever you get your podcasts or watch on the YourHBFF YouTube channel. It might be enticing to try and sleep through the next four years, but if you're wondering how to survive a second Trump term while staying fully conscious, Pod Save America is here to help you process what's happening now and what comes next. Every Tuesday, Wednesday and Friday, John Lovett, Tommy Vieter, John Favreau and Dan Pfeiffer wade hip deep into the week's political news and fish out some political analysis you can trust. Yes, Tommy's shoes get ruined. Yes, he'll do it again

tomorrow because the endeavor is worth it. And so is your sanity. Tune into Pod Save America wherever you get your podcasts and on YouTube. Some things feel like a fact of life. The sun rises and sets, winter turns from spring to fall, and the deadline to get a real ID always gets pushed back. This week on Explain It To Me, the two-decade push and pull over that little piece of plastic in your wallet. Find Explain It to Me on Sundays wherever you get your podcasts.

Today's number $55,000. That's how much a lifetime membership costs at Miami's New Harbor Club, which offers a private speakeasy and weekly backgammon tournaments. Ed, what's the difference between a garbanzo bean and a chickpea? I think I know this one. What? I'm not going to pay a garbanzo to bean on my face. The delivery is wrong. To bean on your face?

Oh, dude, shut the fuck up. Just laugh and tell me how hilarious I am. No, not when the delivery is completely wrong. Wait, it's, I won't pay someone 50 bucks to garbanzo on my bean, but I will pay 50 bucks for a chick to pee on me. You get it? This was our worst opening ever. Your fault. Totally your fault. No, not my fault.

Do you not understand the corporate world when your boss makes a bad joke, you laugh hilariously no matter, oh my, oh it's so, it's funny because it's true. My job is to protect my boss. I don't want you to humiliate yourself in front of our audience. Let's talk a little bit about private members clubs,

which is my new hobby. You wanna know the story of my life, Ed? Yes, please. I finally get the ultimate hookup. The best room in Europe, I don't know if it's in Europe, best room in London is Chiltern Firehouse. They have a bar there that is so well done,

the DJ is on fire, and they have total obnoxious face control. And I wouldn't even go there, there was no way I could get in. And I went with some friends and this nice woman came up and started talking to me, recognized me from the pod. She's like, I'm starting a podcast,

would you be willing to have coffee? I said, yes. We had coffee, we became friendly and she said, here's my WhatsApp whenever you want to come in, here's my number. I'm like, oh my God. I am Charlie from Willy Wonka. I have just gotten the golden ticket. For about the last six months, whenever I was with friends and they'd be like, oh,

wouldn't it be great? Let's go to Children's Press. Does anyone know anyone? Does anyone have a hookup? And I'm like, oh, no problem. I'll handle it. No problem. I'll handle it.

And boom, ride in. Hello, Scott. Loved it there. Loved it there. Hot people everywhere, which is not easy in the UK. It's not easy. It's not like New York or LA, where they just let in a bunch of Uber drivers

who are looking for their SAG-AFTRA card and they're hot. No, it's not easy. You are definitely like, you've got some crazy pig hunting for truffles in the middle of some forest somewhere. I don't know how to come up with that analogy. Anyway, the best room I would bet in the UK, and I am totally, finally fucking hooked up, and you know what happened?

Burned down. It burned down. Yeah, I saw that. I had serious Schadenfreude on that, because obviously I've never gotten in. And I'm not exaggerating, no less than a dozen people are like, sent me video footage, and they're like, are you okay?

I'm like, I'm not exaggerating. I think it burned down on a Thursday. So sorry if you're lost Scott. No one died, so we can joke about it. Whatever, Andrew Belaz is already super fucking rich and the insurance will pay for it. So people, I'm not exaggerating, no less than a dozen people send me video footage

and they're like, are you all right? I was there the night before. I was there at the closing party. We just didn't know it was the closing party. Anyways, the new place is a place called Soho Muse. Yeah, I've heard of this. By the way, we really need to put a moratorium on the members club's talks,

because the problem is both you and I are irrationally obsessed with this stuff in a way that's very unhealthy and strange. Well, it's because I'm a narcissist. So I mean, I could talk about this with you all day, but we really gotta- Well, just let me finish up here. This is why the I could talk about this with you all day, but you know, we really gotta. Well, just let me finish up here.

This is why the audience comes here. They just can't get enough of Scott. Anyways, so I hear the new hot place is so amused. So I call him and, oh, no problem. I'm like a global member and I never go. And they're like, oh, hello. No, we haven't gone out with invites today. You know, and I'm like, so I can't come tonight?

I'm like, no, not yet. So even the Soho house has said, we have so many non-aspirational members to try and feed the public company earnings call that we've had to create a new Soho house that Soho house members don't have access to. So here I am back to who I really am, and that is not able to get into the hot place.

The world, the order of the universe has been restored. I am now again on the outside looking in at... I'm sure you'll get into Soho Muse, but by the time you get in, there's going to be another Soho Muse. Yeah, probably. All right, enough of that shit. Get to the headlines. Now is the time to fly.

I hope you have plenty of the world at all. European defense stocks hit their highest level in four years after President Trump's meeting with Ukrainian President Zelenskyy put pressure on European leaders to boost defense spending. The stock's Europe Aerospace and Defense Index rose 8%, while London's FTSE reached a record high. Trump is planning to create a national crypto reserve that would include Bitcoin, Ether, XRP, Solana and Cardano. It's the first time he's proposed actively buying crypto in regular installments, rather than simply stockpiling the assets. Bitcoin and Ether jumped more than 10% on that news.

And finally, the 25% tariffs on imports from Mexico and Canada are officially in effect after hopes for a last minute deal fell through. Trump said there was quote, no room left to negotiate with the two countries. All three major indices fell on that news with the S&P 500 suffering its worst day of the year. Okay, Scott, we have three Trump headlines. I know we said we were going to try to talk a little bit less about Trump, but the trouble

is politics and markets, they are simply connected. And these are the biggest stories that are moving the markets right now, and they all have to do with Trump. And I think that's probably by design. Let's start with your thoughts on European defense stocks rallying

after that rattling meeting we saw between Trump and Zelensky last week. Russia is a fairly small economy. Russia's economy is smaller than Canada. So you want to kiss the ass, you want to give a lap dance to a small economy and alienate these dependable, prosperous relationships with economies in Europe that combined are 15 to 17 times the size of the gas station posing as an economy called Russia.

So this is incredibly stupid. Now what could go right? I love what Josh Brown said. What could go right on when he co-hosted with you? These nations are bigger than Russia. Spain is almost as big as Russia. Combined, they are a bigger economic force. And quite frankly, they've become lazy

and dependent upon a wrench uncle who is no longer, who's gone fucking senile, has become emotionally and mentally unstable and them recognizing they have to fight their own fights, but also waking up and realizing, you know what, I'm pretty goddamn strong and dangerous myself. If they massively increase their military budgets,

which I think they're going to do, and start taking leadership cues from their own leaders, and they unify, get rid of all the arguing and the bullshit, and they become a union again, there is absolutely no reason why they can't push back on Russia themselves. In addition, I think this is a starting gun, and this was one of our predictions at the end of last year before we even knew this for European stocks.

If you look at military spending, it's expensive in the short run, but there is the potential for dramatic technology spillover that realizes or is registered in huge economic gains in the markets. Apple and Google are basically adjuncts or thick layers of innovation put on top of innovation that was developed

during military or war spending. GPS, Apple's basically GPS technology with a consumer layer on it that was developed during the Cold War such that we could put an ICBM in Putin's pocket within 10 feet of its designated target. If you look at the internet for God's sakes, it was the US military decided a defense department, decided we needed a means of,

a nodeless means of communication for after the nuclear attack from Russia. That was DARPA, which became the internet. So I believe Europe is gonna be a union again. I believe they will massively increase the military spending, which will result in stimulus and possible technology spillover.

So I think there is a real silver lining here, and I am super excited about European getting the jolt it needed to move out of the house and realizing that they've got, they should start commanding the space they occupy. I'm completely with you on the silver lining here. And just, if we look at the numbers, so last year Russia spent,

if you adjust for their purchasing power and defense, they spent $462 billion on defense last year. All of Europe, meanwhile, spent only 457 billion. So less than Russia. And if you look at that as a percentage of their GDP, the difference becomes even more stark. So Russia spent 7% of their GDP on defense. That number is expected to increase this year to 7.5% or higher.

And then on average, Europe spent 2.2% of its GDP. So yeah, Europe can spend more. Trump wants them to go to 5% of GDP. He wants to make that a minimum. That's very unlikely. I think for a lot of these countries, it's just not possible for them economically. But I think Europe has gotten the message loud and clear. They're on their own now. I think we're going to see double digit percentage growth in defense spending from all of the major European governments, which means that these defense companies will be in very, very high demand. We saw shares in Rheinmetall, which is Germany's largest defense company.

Those rose 15%. Britain's BAE Systems rose 14%. Leonardo, a defense company from Italy, that rose 17%. So the markets are basically telling us European governments are going to significantly increase their defense spending and that's going to benefit these defense companies I wouldn't invest in those defense companies myself because I think the market is reacting a little too over enthusiastically To this what's what happened last week? I think they're expecting these budgets to transform overnight But in reality these transitions happen quite slowly and quite steadily. They have to get through governments

They have to figure out these supply chains. I mean, reconstituting an entire army is not an overnight job. But there is no doubt Europe will be bolstering its militaries. And I do, I like the silver lining you point out there and I think I agree with it. Let's shift to crypto and this new US crypto reserve. So our government will be buying Bitcoin, Ether, XRP, Solana and Cardano in regular installments. I find this quite ironic because you think about the conversation we just had about Ukraine, where America's position is, sure you need help, but we can't afford it. We've got our own problems. Meanwhile, we can afford buying up billions of dollars

of useless cryptocurrencies that provide no benefit to the real economy whatsoever, which I find ridiculous. The fact that these headlines are happening in the same weekend. The idea that we are going to increase our deficits such that we can artificially raise the prices of an asset class, the majority of which is controlled like every other asset class by very wealthy people, including the head of a VC fund that is the advisor to Trump, this is pure corruption in its most naked form. And people will say, and I got to give it to them,

well, the Democrats have just been doing this slowly, more elegantly and more covertly with lobbyists. Trump has just decided, fuck that. I'm just going to steal right in the light of day. But that is, it is insane that we have an individual who is the AI or the crypto czar encouraging the president to spend your money in the form of deficits, increased deficits such that he can dramatically

increase his wealth and the wealth of other people my age that have the money or have already invested in these assets. This is kleptocracy meets intergenerational theft. Yeah, the person you're talking about there is David Sachs, of course, who is the AI and crypto czar. He is a significant crypto investor, both individually and through his VC firm. And I do want to just play you a clip from the All In podcast.

And this was recorded, I think, a couple of years ago. Really? You mean the All In podcast. Um, and this was recorded, I think a couple of years ago. Really? I mean the, the all Grifter podcast. Yeah. The old Grift podcast. And basically David and his boys are talking about their positions in Solana, which is one of these cryptocurrencies that is going to be included in the national crypto reserve.

I'd like to get your reaction to this. You better clear that Solana position. What's your lockup? 24 months? Fuck no. He's trying toup? 24 months? Fuck no. He's trying to sell it to me on tax message. Yeah, of course he is. We're negotiating discounts.

I just had the fact of the fun. Hey, you're fucking the whole thing up. Bro, you don't think to... I'm hodling. I'm hodling. You think I buy hundreds of millions of dollars of anything without a discount? Everything is a discount. Everything's discounted.

You want to clear that position in an LLC? Are you saying I got a billion dollars of Solana? No, bro. I'm saying I have one. of anything without a discount. Everything is a discount. Everything's discounted. You want to clear that position in an LLC? Are you saying I got a billion dollars to Solana? No, bro, I'm saying I have one, but you know, I brought it at a discount. But you're holding, correct? Ish. Ish, okay.

Yeah, me too. David Sachs did sell his individual crypto position before he joined the government. So he doesn't own Solana anymore, but his VC still owns stakes in these crypto startups. And of course, all of his friends are big crypto investors. So yes, he's not enriching himself directly with this move, but he is certainly enriching himself indirectly. And he is for sure enriching his friends. So I just want to get that argument out of the way. But doesn't he have huge investments

in crypto-related companies? Yes, huge investments in crypto-related companies, exactly. That is a direct enrichment. That's like saying I don't buy Google keywords, but I own Google, so I'm not directly benefiting off of the government buying $10 billion. Well, this is the argument these guys like to make.

So I'm just still man'm still mounting that corrupt position. Look, I think David is an intelligent guy. I, you know, when I've seen clips of him on YouTube, I think he makes interesting points. He and I have different politics, but I think he's the least intellectually honest about his politics. But he's essentially part of this kleptocracy that wink, wink, I'll become your AI czar and I'm going to use taxpayer, the taxpayer purse to enrich myself. And that used to be not allowed.

The more existential stupidity here is that you are essentially trying to come up with another default currency and the, the carrier strike force that is the invisible carrier strike force that is probably more devastating than even the SS Gerald Ford carrier strike force that is the invisible carrier strike force that is probably more devastating than even the SS Gerald Ford carrier strike force is the US dollar. The fact that we can track the flows and control the flows of the default currency globally, and it is very difficult for anyone to do business when we put sanctions on them and we get to see where money is going and coming, is such an incredible advantage. We are purposely ourselves trying to undermine the acceptance and

ubiquity of the default currency by creating a second with crypto. I mean, okay, measles surrender and just fucking stupid is the new American brand. Your thoughts on it? I think that applies specifically to Bitcoin and, you know, I'm willing to hear the Bitcoin argument out, but yeah, it is ultimately a bet against the US dollar. So why would the US government be betting against its own currency?

This is completely different though, because this is a ton of other cryptocurrencies in addition to the Bitcoin. So now we have our government actively recommending individual tickers to the public, and these aren't even companies. These are assets that generate no revenue, no cash flows, no profits,

assets whose value is entirely dependent on the greater fool theory. I mean, this is literally the equivalent of the US government creating a national beanie baby reserve. There is literally no difference. And it benefits no one other than the people who already own beanie babies.

And in this case, those are the people who are crypto investors, most of whom are in Silicon Valley and who are good friends with David Sacks, who is the guy who came up with this whole charade. You know, Elon keeps on talking about how the government is the biggest scam in history. That might be true now. This might actually be the biggest scam in history. Let's move on finally to tariffs. Your thoughts, Scott. This has been, I guess, a long time coming, but it is finally in effect 25% tariffs on

Canada and Mexico and an additional 10% tariff on China. What happens now, Scott? It's simple. Our economy shrinks. Our costs go up. Our exports go down. I mean, tariffs are taxes on the consumers. So whenever Donald Trump makes a really fucking stupid decision, they're like,

oh no, no, no, we can't defend it intellectually. So we're just going to say it's 4D chess and he gets it and we don't. And that latest argument is, oh, it's a negotiating ploy. This is just dumb. And it costs money to spin up these tariffs and then spin them down and we lose credibility. It's economic warfare against unbelievably big economies that have been great allies. I think in economic history, we're going to say our entry into Southeast Asia, our invasion of Iraq,

Brexit, and these tariffs will be seen as the biggest self-inflicted wounds in history, unless they are merely rectified. And even then, it's just like you look stupid. Well, I'm leaving you. I'm leaving you. Just kidding. I'm back. Well, okay, that takes a toll on the relationship. Yeah. Just to go through the numbers that we can expect if these remain intact, it's expected prices across the board will rise 0.7% according to estimates. Price of certain other goods will be even higher, for example fruits and vegetables which we largely get from Mexico. Also smartphones

they're expected to increase in price by more than $200. GDP growth is expected to fall. Economists are expecting a 0.6% decline. Interest rates are expected to remain higher for longer, as expected. Corporate profits are expected to fall, unless, of course, corporations just pass all of the costs onto the consumers, which is, of course, entirely possible. All of this in concert, that is why the S&P and the Dow and the NASDAQ all had certainly one of their worst days in a long, long time. And basically all of the gains that we saw in the stock market since the election, it's all been erased because of this decision.

What's the upside in all of this? I don't know. I mean, as I've said, this is very much like Brexit. You shoot yourself in the foot and you label it patriotism because you decide, oh, we're better off alone. But every economic study said Brexit would be a disaster. But people just loved the emotional argument. It was so compelling. They loved this sort of fake reboot version of independence. And now the UK has its tail between its legs. Most of the country agrees it was a giant mistake. And I think, as you say,

I think a similar thing is happening here. All the ingredients look the same to me. So my prediction is quite simple. Sounds like it's the same as yours. This is Brexit 2.0. People feel very patriotic and then we turn around and we see all the damage that we did to ourselves. We realize we buried ourselves for no good reason at all.

We'll be right back after the break for a conversation with Jonathan Cantor. If you're enjoying the show so far, be sure to give Proffesion Market a follow wherever you get your podcasts. Support for the show comes from Public.com. All right. And if you're serious about investing, you need to know about public.com. That's where you can invest in everything stocks, options, bonds and more. They even offer some of the highest yields in the industry, including the bond account 6% or higher yield that remains locked in even if the Fed cuts raise. With public, you can get the tools you need to make informed investment decisions. They're built in AI tools called Alpha doesn't just tell you if an asset is moving, it tells you why the asset is moving so you can actually understand what's driving your portfolio performance. Public is a FINRA-registered, SIPC-insured, US-based company with a customer support team that actually cares.

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and they'll take care of this for you for free. No subscription required. That's pilot.com slash ProfG. Support for ProfG Markets comes from Found. Have you ever been so bogged down by your business's finances that you look up and realize you spent the entire day or a week sifting through spreadsheets and filling out tax forms? That's probably not what you signed up for when you started out. With Found, you can

finally spend a little less time worried about finances and more time growing your business. Found is a business banking platform that lets you effortlessly track expenses, manage invoices, and prepare for taxes all in one place. And Found doesn't just consolidate your financial ecosystem. Found automates manual activities, including expense tracking and finding tax write-offs. And the best part? No hidden fees. That means no account maintenance fees, no minimum balance, and it's free to sign up. Oh, and by the way, other small businesses are loving Found too.

According to Found, one user said, Found is going to save me so much headache, it makes everything so much easier, expenses, income, profits, taxes, invoices even. And they also claim they have 30,000 five-star reviews just like this. You can open a Found account for free at F-O-U-N-D dot com slash ProfG. Found is a financial technology company, not a bank. Banking services are provided by Piermont Bank member FDIC. You can join thousands of small business owners who have streamlined the finances with Found. Welcome back. Here's our conversation with Jonathan Cantor, former Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice. Jonathan, thank you so much for joining us on Profgy Markets. Great to be here.

So we are nearly 50 days into Trump's second term. We've had a lot of attention on tariffs, on foreign policy, on immigration. What we haven't been hearing that much about though is antitrust. It feels like it's been kind of outshined by these other issues. So I'm really excited that we can discuss this with you today. For those that don't know, Jonathan is probably the number one expert in America on antitrust. I mean, he

worked for a number of years at FTC, he was a partner at several top law firms, and then he led the antitrust division for the DOJ under Joe Biden until you resigned in December of last year. So Jonathan, give us the state of play of antitrust under Trump at the moment. What has happened thus far and how have things changed since you left? So we're in a wait and see mode, but I'm, I will say I'm cautiously optimistic that we're going to see continuity. Um, ultimately personnel is policy.

And the two people that President Trump nominated for the Department of Justice, my old job, and the chair of the FTC, Andrew Ferguson, are both enforcement-minded. And so what they do will be different from how we enforce the law. But what antitrust does is it touches on this sort of weird area in Washington of policy overlap, where there is more of a realignment around antitrust and economic populism and controlling corporate power for the benefit of workers, for the benefit of consumers, for the benefit of entrepreneurs. And I think we're likely to see that continue, at least to some degree, in this current administration. And what is the other side of the argument?

So it sounds like where you land is tough in terms of antitrust, tough on regulation and enforcement. These new picks are probably in the same camp. And that's for the benefit of the public, basically. What is the other side of it? What could he have gone with otherwise? Let me just, if you don't mind me picking at that a little bit. I think I am not super pro-regulation.

So my belief is that I believe, I'm a capitalist, I believe in markets. I believe that ultimately free markets and competitive markets can yield better outcomes for society and that are much better alternative to invasive regulation. And so sometimes regulation rules are necessary, but I would much rather have markets sorted out through competition in the first instance. That's ultimately the theory that I had and animated our approach to antitrust enforcement. And I think it actually reflects the theory that animates the approach to antitrust enforcement in the current administration, but we'll have to wait and see.

The alternative to that is a neoliberal view, one that really dominated in the era of Reagan and George W. Bush, the Clinton administration to some degree part of the Obama administration, which is ultimately that mergers are efficient, monopolies are efficient, and ultimately we should just regulate the big companies rather than stopping them from getting big or maintaining their bigness. And I think that view is pretty much out of fashion right now in Washington. So if you had to outline the top priorities for this administration when it comes to antitrust, maybe one or two things they definitely want to accomplish when you look at what they've

done so far, What do you think those priorities would be? Taking them at their own word, I think those priorities are big tech, workers, and what remains to be seen, but I think what should be among the highest priorities is healthcare. Interesting. Why do you think that healthcare is such an important priority right now? The healthcare markets today remind me a lot of big tech in 2016 or 2017, where we've seen this sort of gradual, if not alarming, march toward concentration and convergence around a handful of conglomerate platforms that have outsized control in the healthcare system. And there is now a greater appreciation

that those integrated companies are essentially emerging as platforms unto themselves and control our healthcare system. And so whether you're a doctor or a nurse, a pharmacist, another insurance company, you kind of have to plug into those healthcare platforms. And they're exerting a massive amount of control and it constitutes a massive spend for our

economy. And so I think the degree of concern, the degree of concentration, the degree of control and the impact on our economy are all the ingredients that usually point to greater antitrust enforcement and greater interest by business in seeing antitrust enforcement. One of the things I noticed when I was at the government was that there are lots of businesses who want to invest in fixing our healthcare system. They want to invest in improving the ability

to get access to pharmaceuticals for less money. The insurance system is completely bloated and bureaucratic, not at the government level, but at the private sector level. And there's a great interest of business to disrupt that, to compete, but they can't break in, in part due to the moats that surround these large healthcare platforms. I think one of the other big issues that a lot of people are talking about is just the power of lobbying. That's certainly important in the cultural conversation around healthcare,

the idea that politicians are basically being paid off, or at least these you know, these healthcare companies are investing millions, maybe billions into lobbying, such that these regulations can work in their favor. You served in government for three or four years. You can now speak freely, I assume. How bad is lobbying in government? Is it something that you experienced yourself? It's everywhere, right? But, and so you have to, when you take a job like the one I took, you have to decide

you don't give a shit. And ultimately, I'm a lawyer and I have clients and I viewed my client as the public. And I was gonna, you know, jump in front of a train if I had to in order to protect my client, which was the public. That's my philosophy toward representing Companies in the legal area and so that's what we did

and so we if companies came in and made sensible arguments and Presented facts we would listen but the idea of playing politics going to the media Going after us personally going to Congress and trying to interfere with legitimate antitrust enforcement, we tune that out. But I would say that there's a real risk that that kind of lobbying and PR campaigns and public affair campaigns can take hold. And it's really dangerous when it does. Companies pour a ton of money into this.

I'll also say that the bigger they get, the more weight they can throw on Washington. And one of the things that I think people inside Washington understand, sometimes it's not appreciated outside, is that it's really hard to do something. It's really easy to get people to do nothing. And so most of the money that gets invested is not into solving the problem and fixing the problem. Most of the lobbying money goes into throwing sand in the gears against any effort to actually make things better. And so you have to have a tremendous amount of will. You have to have a tremendous amount of courage and perseverance in order to actually

make a difference. That's something that we did, but it's really freaking hard. The whole lobbying industry feels so obscure and strange. In a lot of ways, I just don't really understand how it actually works. So just at a very basic level, what does lobbying actually look like? Is it a meeting with someone and they present all the arguments as to why something should or should not be done? Why is it so compelling and why does it push politicians so far in either direction? So there are a number of different dimensions that go into this.

First, there's kind of the straight traditional lobbying, which is I'm gonna pour a ton of money into a campaign, and people who are running for office, especially if it's every two years, need a constant influx of cash. And so they're trying to figure out how do they come up with a policy agenda that allows them to stay in office?

And it's very easy to rationalize that, well, if I compromise and get enough donors, then I can stay in office and do other good things. Right? But that can easily tilt into a very dangerous place. That's one. But it's more than just that. Most of the money that gets reported as lobbying is really just for that going up to Capitol Hill and meeting with a Senator or Congressman. That's not where most of the money goes though. Most of the money goes into PR campaigns. It goes into funding university professors who write favorable articles that then they can cite to into their in their PR campaigns. It's planning stories and getting people to talk on podcasts

and this insidious layer of operatives who you don't realize are speaking on behalf of big business but are there to seed ideas and promote their clients' interests, often not disclosing who they work for, who paid for their stuff. I can't tell you how many times I heard the same arguments from these grassroots public advocacy organizations

that are just front groups for the same handful of big companies. They're everywhere, they're pouring a ton of money into it and it far outstrips the amount that they're disclosing in their lobbying forms. I mean, it sounds like you were fighting against that to the best of your ability. It's possible now that the DOJ will have its funding cut

with DOJ. I mean, what do you think of that? Do you think that DOJ will target the DOJ? And if so, what would that mean for antitrust? It would be devastating. Let me just give you a little bit of context, right? So when I ran the antitrust division at the Department of Justice,

we were in charge of antitrust enforcement. We were about 800 people. That's about 250 fewer people than we had in 1979. We were smaller than 1979. But I will also tell you this in terms of efficiency. We ran at zero cost to taxpayers, and each year during my tenure, we had a budget surplus. And we relied on fees, merger fees,

to fund the entire antitrust division, even though that's not what we did. So taxpayers got a great deal. And during that time, we brought cases against Google, we brought cases against Apple, Ticketmaster, American Airlines, Visa, United Healthcare, RealPage and the big landlords, the big meat packers we touched through a case involving a company

called Agrostats. We brought some of the most effective, significant antitrust cases. We did it at zero cost to the taxpayers and we did it at a budget surplus while at the same time investing in things like AI and other tools to make ourselves more efficient. If there's a real interest in making government more efficient, then there's a real conversation to have. But I don't believe that's what's happening. I think what's happening right now is attempt to dismantle our government infrastructure

because they don't want it there. Are there any sectors of the government that you believe actually could benefit from budget cuts or from at least being inspected by some form of government efficiency oversight? I think they can all benefit from being more efficient. So I think the amount of process and sometimes norms that have good intentions often create debilitating bureaucracy. And so I will tell you, sure, right?

And in fact, I was an agent of change and I came in and despite those headwinds, we were able to move things forward, change policies, change the composition of our workforce, hire more experts, invest in more technology. There are plenty of things you can do to make it more efficient. I will say this though, if you wanted to address efficiency in government spending, employees, federal employees are the last place you'd probably start. They're a sliver of the federal budget. Just from an employment perspective, I think four-fifths of government employees reside outside the DC area, one-third are veterans, and that's before you factor in all the money that goes into funding employers like state universities and hospitals

Particularly in the Midwest and the South that are themselves the largest employers in their states These are the federal government is the largest employer in the US So one firing people wholesale indiscriminately without regard for whether they are talented or whether they are Lower wage than someone who's been there a long time is not the way to improve efficiency and lower cost. You wanted a lower cost the place you'd start would be government contractors. Massive amounts of money fraud, waste, and abuse is often in private government contractors who are overcharging the government. You talk about Medicare for example there have been studies by the Wall Street Journal and reports about massive billions

upon billions of dollars in overcharging due to things called up coding, which is when an insurance company goes in, they take someone on Medicare, make them look really sick, and then they get to bill for all that, but then they don't necessarily reimburse for all that, and they keep the money in between. These are the kinds of areas you would focus if you were actually trying to make government less expensive and more efficient. There might be things you can do in terms of personnel

and in terms of process, but that's not where you'd start if you were actually trying to address the problem. We'll be right back. So strawberry margarita, extra shot of tequila. There you'll be able to see special live episodes of hit shows including our show Pivot, Where Should We Begin with Esther Perrell, A Touch More with Sue Bird and Megan Rapinoe, Not Just Football with Cam Hayward,

and more presented by Smartsheet. The Vox Media Podcast stage at South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon. I'm not joking. I love South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon. I'm not joking. I love South by Southwest. The people are a ton of fun. It's a great time. If you do come, come up and say hi. Visit voxmedia.com slash sxsw to learn more. That's voxmedia.com slash sxsw. We're back with ProfG Markets. Let's talk about some of the biggest antitrust cases that you brought and how you think they

may play out in the next few years. So let's start with Google. You brought one of the biggest cases against Google for maintaining an illegal monopoly in the search market. The judge ruled in your favor. But of course, Google is now working on appealing that decision. Give us the say to play on Google. Where does that case stand today?

And how do you expect that lawsuit will play out? So there are two cases against Google. One is the search case, which we won, and now is in what they call the remedies phase. So Google was found to be an illegal monopolist that illegally maintained its monopoly position in search, in part through spending tens of billions of dollars a year contracting with companies like Apple and others to say you won't work with anyone else,

or there'll be limits on your ability to work with other folks. That case is really all about not just those contracts, but it's about the network effect. It's about the moat that protects Google's search business. We are at a moment in time, we're at a key inflection point where AI and other kinds of technologies may not be perfect replacements for search yet, but they are in shooting distance. They have the opportunity with the right nurturing to start creeping into those markets and then eventually hopefully take on some of those advertising markets, the search advertising

markets. The remedies phase, really the current proposal on the table from DOJ, which I was a part of, is focused on making sure that those markets have the opportunity to develop and the inflection point, the disruption that can come from things like AI, have the opportunity to achieve their full potential. There will be a trial in a few months to address the remedy and we'll see how that goes, but it's a very important part of this. Second case involves what people call ad tech. That's the stuff

that you don't realize is being bought and sold through Google, but when you go to any website or often an app and you see an ad, that is going through a stock-like exchange or commodities-like exchange that is run by Google. Google owns the exchange, they buy on the exchange and they sell on the exchange and they run the tools that run the infrastructure for publishers, news publishers and others, who want to show ads. And that case is full of allegations that Google abused that position, manipulated the market,

and squeezed out competition. We finished the trial there, and we're waiting for a decision. One of the suggestions from the DOJ on the first case at least was a breakup, breaking Google up into several, or I guess two different companies, specifically it's the search product. Why do you think breaking up Google is the answer? And I'll just plug in a little bit of my opinion here. Why wouldn't simply making Google stop paying those contracts to Apple and other companies to be the default search engine?

Why wouldn't that cut it? Why couldn't that be the remedy for this situation? So those are backward looking remedies, which are important, right? And so cutting off the mechanism that a company used to dominate a market is really critical. But if you focus on competition, and if you focus on where the next competitive threat is going to come from, you have to look at the ingredients that go into creating competition.

And in something like search, it's data. It's an index. It's the ability to monetize that through a sufficient base of advertisers, right? Those are the kinds of market dynamics that create the important infusion of capital. There are conflicts of interest when you're on all sides of a market, right? And so if you want to create competition,

you have to look at, okay, what are the ingredients that a new competitor needs? Also, to what extent, if conduct in an antitrust case has occurred over a year or two, it's much easier to fix, because their company's not entrenched. But if the conduct occurred, for example, over a 10-year period, which is what happened in the search case, then it's far more entrenched.

The network effects, the scale effects, the learning by doing, and the feedback loops are far more significant today than they would have been a decade ago. So if you want to create openings in competition, you have to think about a suite of remedies that are going to create the opportunities to compete and start addressing the scale advantages that were obtained through illegal behavior. You also launched an investigation into NVIDIA last year. And I'd like to get your views on NVIDIA from an antitrust perspective more generally, but there was also just some confusion over that investigation because all these news

outlets said that the DOJ had subpoenaed them, NVIDIA, and then NVIDIA said, no, we never received a subpoena. So I'd love to just get clarification from you. What happened there? Did NVIDIA get a subpoena? Was that falsely reported on? Why was there so much confusion with that? Yeah, there are still some things,

I'm free to speak about a lot of things now, but there are things that are confidential that I can't talk about that occurred. But what I can say broadly is that AI is a really important focus. And when you think about the areas of competition or where competition can come into place in AI, you have to think both about the hardware infrastructure

and you have to think about how that technology is deployed. We were looking at all of it, and I think my recommendation is that enforcers should continue looking at all of it. The way to focus in a market like this is look for the choke points, and then look for the exclusion. Where are the choke points in AI? Well, let's start with the hardware. They're all pretty obvious, right?

It's the equipment that's used to make it. It's ASML, right? In the Netherlands. It's the fabs, the highly specialized fabs, which are in Taiwan, TSMC. And it's the chip design. Now it's easy to say, okay, well, chip designs are just science and somebody else can come up with a better design and great. But it's not just the chip design. Now it's easy to say, okay, well, chip designs are just science and somebody else

can come up with a better design and great. But it's not just the chip design that can create lock-ins and modes. It's the software that goes into operating those chips. And so one of the things that people talk about, for example, in the context of NVIDIA is its CUDA, which is its software layer that people who want to interoperate with NVIDIA chips must use. And the ability, for example, to have a data center that might have workloads running on different kinds of chips and mixing and matching. And so to the extent that we're going to see competition emerge in this space, we're going to need to address some of those choke points, or potentially at least. One is by creating more manufacturing and process tool capability.

The other is by making it easier to mix and match chips in a data center and elsewhere in order to diversify your dependence on one particular supplier. I'd also like to get your views on AI in the startup world. This has been probably one of my biggest concerns when it comes to AI from an antitrust perspective. I just see all of these big tech companies investing in all of these AI startups. And it feels like they're all kind of investing

in each other, collaborating with each other. You've got Microsoft, which was on the board of OpenAI for a while, but they also invested in Mistral and Inflection, which compete with OpenAI. You've got Reid Hoffman, who was on the board of OpenAI for a while, but they also invested in Mistral and Inflection, which compete with OpenAI. You've got Reid Hoffman, who was on the board of Microsoft, and then he's also the co-founder of Inflection, and then all the employees at Inflection suddenly go over to Microsoft.

I just see what's happening in AI, and it feels like it's all kind of puppeteered by the big dogs in big tech, and it feels like they're sort of playing pretend competition, but ultimately they're all collaborating with each other, has been my sense of the situation. What is your read on the AI startup scene? And do you think there is legitimate concern

for antitrust enforcement as I have on this subject? This is a significant question and concern that has been raised quite a bit. It's actually something we raised in our proposed remedy in the Google case, which is that if there are query-based AI solutions, generative AI solutions that have the potential to compete against search,

Google would need to divest its investments, existing investments, and refrain from making additional investments. These are the kinds of things that seem self-evident in the context of antitrust. We have an opportunity finally, after all these years, to introduce new actors, new players, create new opportunities for companies to go public

and create tremendous amount of value. And whether it's through acquisition in form or acquisition in substance, if these massive players are essentially pulling the puppet strings of smaller emerging rivals and disruptive players, then it creates the same kind of antitrust concern and will lead to the same small number of firms controlling our economy.

And that's bad for so many different reasons, not the least of which is already our indices are too dependent on a small number of players so that it creates resiliency risk. One or two of those players get hurt in the stock market and our whole markets crumble. We need to be more diversified. We need newer voices alongside the bigger companies.

We need smaller players nipping at their heels in order to make them more competitive. We need more companies going public. I think that's been a real deficiency is good companies going public and entering. And frankly, some of these companies might be well suited to unlock value by divesting assets that might be worth more as independent companies than they are as part of a conglomerate. Um, I feel like there is an opportunity for the technologists to push back on that argument and say, Hey, you know, AI is happening really fast. China's getting really good at AI. Look at this thing they've just created with supposedly less money and less compute. We need to increase, uh, or at least we need to pull back our regulation.

We need to make sure that big tech can build bigger AI, more AI. We don't want to be too harsh from a regulatory perspective. I think that's an argument that is beginning to emerge. I just would love to get what would be your response to those concerns. I think that's a distraction. So first, there's DeepSeek. I think we all need to learn a little bit more. If you listen to some, it sounds like they used,

you know, 20 bucks and an Olive Garden gift certificate to create this major competitor. I think people who understand the industry, know that's not true, right? The models were trained using something called distillation probably, which is essentially when you copy someone else's stuff. And a lot of the investment in the innovation is in the reasoning part, which is a little less

compute intensive. And so that's not to say there weren't really exciting innovations that come from DC. There were. But I think what happened behind it, whether they were circumventing export controls in order to get chips is something I don't know. But I think those are the kinds of questions that people need to ask. It is antithetical to our system to say that we need a small number of really big players in order to compete against China. The way to compete against China is not to be more like China. We are at our best when we have a free, open, fair market economy that allows a thousand

flowers to bloom and to innovate. And if anything, we become too dependent on a small number of players, many of whom are not, I mean, these are great companies, but they're global companies. They're not the U.S. government. Many of them have huge alliances with China and care deeply about China, both for manufacturing and for growth.

And so we are at our best when we are promoting the development and growth of more companies, when we are forcing more innovation. I would much rather see a world where we have numerous chip suppliers, where we have more onshore manufacturing capability, where we have big players and small players and everybody in between innovating on top of the various different models and structures. Yes, some of this is very capital intensive and some of these markets are going to result in a handful of small big players models and structures. Yes, some of this is very capital intensive, and some of these markets are going to result in a handful of small, big players. Hopefully not.

But now our question is, are we going to let those big players now vertically integrate and conglomerate so they can take over every market that relies on that platform? These are the kinds of lessons we learned from the internet age. We did nothing for 15 years with respect to big tech. And I think we got to a place where everyone in Washington, or at least most people in Washington, realized that antitrust enforcement was too lax. And rather than having invasive regulation and rules, we're better off creating a market

where we can have significant amount of competition and entry. And I think that is far more important. The other thing I will say is, in terms of regulation, I sometimes roll my eyes at this because here we are in 2025 and we still don't have any basic privacy regulations. Zero.

Think about all the data that these companies collect. There's not a single comprehensive privacy bill that's ever made it out of Congress. This is the most unregulated industry relative to its size and its significance that the country has ever seen. So this idea that there's been too much regulation is not something I quite understand. That being said, I think the, you know, so I push back against this concept that we need a small number of really big players and then we regulate them through government control.

That to me sounds like a planned economy. It sounds more like China. I would much rather have a free and open market that keeps these big firms from dominating, allow smaller and medium sized players to get the scale they need in order to compete effectively. Matthew Feeney As you look at the state of competition across the US, and I think maybe let's put big tech aside because I think it's clear what's at stake there. Which sectors would you say are most in need of antitrust enforcement?

In other words, where in the economy, aside from tech, is monopolization most problematic or most egregious? Number one on my list is healthcare. Okay. Um, another area is defense. We had massive consolidation starting in the nineties among our prime contractors. Um, and the government spends a lot of money, um, without enough competition, uh, in too many contracts for sole source or if you're lucky dual source. Um, and, um, there needs to be more manufacturing, more supply, more prime

contractors. I think there's a lot we can do to help save money there. Another is agriculture. Talk to farmers. They are the lifeblood of our economy and our society and our rural communities. They're being squeezed, whether it's seeds, meat packers, tractors. I mean, it's unbelievable. A farmer can't fix their own tractor. He or she has to go to a specialized retailer, buy expensive parts that might be hours away. They can't fix their own stuff in order to operate on their own farms because of right to repair restrictions.

These kinds of things are debilitating for farmers around the country. And if you go to rural communities, they will tell you that they are being squeezed and they need more help. Everything you've said so far feels so bipartisan. Like I can't figure out how you could really take issue with any of your positions that have been explained on this podcast, but I'm gonna try.

Or at least, I to point out some things that would maybe be said on the Republican side of things. Not always the Republican side. That's the part I would just... So this issue creates strange bedfellows, right? And so figuring out who's favor and who's opposed is not as simple as looking at red or blue. These issues transcend politics, and I think they go to different philosophies on do we want a

controlled economy with a small number of players and more regulation or we do want a decentralized economy with lots of players and perhaps lighter regulation only when necessary in order to promote safety and security. I love that distinction. Who in your view is on the side of the former? Who, in your view, in America today, or which kinds of people want more monopolization in America? The monopolies.

So this is actually really the kind of interesting little bit from my experience. For every case we brought, for every monopoly we went against, whether it's... There probably were 20 or 30 companies that were asking us to bring the case. Not because they wanted a handout. They weren't going to make any money from our litigation. They just wanted the opportunity to compete. So the dirty little secret is that business actually likes what we do.

They're the ones encouraging us to bring cases because they want access to markets. They want supply chains that are affordable. They want greater supply of key inputs. This is something that's quite popular in business. The monopolies, they'll hate it because the one or two companies in each market that control it don't like it when they're sued. I will say this, they might not like it, but it's better than massive industry-wide regulation. It's more surgical, it's more of a scalpel. Two is they invest tremendous amount of money to throw sand in the gears.

They'll go after you personally, and they'll send people to your house, and they'll get op-eds written in the newspaper, and they'll go pay university professors to say that you're destroying innovation and this, that, and the other thing. You just have to brush that off. But most of the cases that we brought, the only people defending the monopolists were the monopolists or people paid by the monopolists. So it's basically in line with what we're seeing in government right now, which is the tech oligarchy

is emerging, where we have a few monopolists who are running around trying to convince everyone that we should maintain these monopolies. And now they're getting cozy with the president. What is your view on these people's relationship with Donald Trump, and does it concern you? Yeah, it concerns me. I mean, I've seen this movie before,

and it doesn't end well, right? The role of Google in the Obama administration was well-documented in terms of their role not just in getting the campaign and the data, but in terms of the infiltration in government. We tried to squeeze that out, and we tried to say, we're going to put people people in people like me and others who don't care and who are gonna focus

on representing the public first, not the big companies and the donors. And I worry that if we go right back to that situation, it's going to be a problem. The other is you can't dismiss self-dealing, right? And so when companies are advising a government and have something to gain from it, it creates distrust in government.

Also say like, and this to me was a concern is, think about the inauguration, right? The night of the day of the inauguration, it was held indoors because supposedly it was too cold to be outside. So in the Capitol Rotunda, nice and warm and cozy, you had the CEOs of Google and Apple and Amazon and Meta and others, while the rank and file grassroots supporters

were outside freezing their tuchesis off, right? So like, to me, that's a metaphor for the situation. And I think if the public wants government to work for it, and not just big companies, then it needs to say so. Well, Jonathan, this has been exceptional, and I really appreciate your time. I have one final question for you. If you had to give a piece of advice to young people

who are listening to this program, who are interested in government, who are interested in service, and they're trying to figure out how to provide value for our country. What would your advice be? Have a North Star. So I kept a compass on my desk because it was a reminder that every day, ultimately, my North Star was making sure we had a competitive economy that worked for the broader public.

I think developing your North Star early on in your career, understanding what values you hold dear, and then working through public service or organizations around public service in order to further those values, in order to make people's lives better. That's what my advice is. It's really easy in Washington. It's really easy in this public policy conversation to get caught up in attention and caught up in ideas and catchphrases. Have a North Star. Start by helping people. Figure out what you believe in and then work backwards from that. Jonathan Cantor is the former Assistant

Attorney General for the Antitrust Division of the U.S. Department of Justice under the Biden administration. During his tenure, he brought major antitrust lawsuits against Google, Apple, Live Nation, and Ticketmaster, United Health, RealPage, American Airlines, the meatpacking industry, and many others. He also previously served as an attorney at the FTC and he founded his own law firm, Cantor Law Group. Jonathan, this was so great. I really appreciate your time.

And I will just say, it's very nice to have you out of office because now we get to hear about how things actually work, which is a great benefit. So, you know, there's a silver lining there. All right. Well, it's good to look under the hood every once in a while and let's go, Matt. Thanks, Jonathan.

Take care. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss, Mia Silverio is our research lead, Isabella Kintzel is our research associate, Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to ProfD Markets from the Vox Media Podcast Network. If you liked what you heard, give us a follow and join us for a fresh take on markets on

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