The Vergecast - Lina Khan on Amazon’s Antitrust Paradox

Episode Date: February 5, 2019

Should we break up Amazon and Facebook? Columbia Law School academic fellow Lina Khan, who wrote the impactful “Amazon’s Antitrust Paradox" for The Yale Law Journal, joins Verge editor-in-chief Nilay Patel to discuss whether Amazon and Facebook should be broken up and what it might look like if that were to happen. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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dropping May 14th. Tap in with us. Hey everybody, it's Neonoff from the Vergecast. On this week's interview episode, we have Lena Kahn, who is someone I've been wanting to talk to for a long time. So when Lena was a law student at Yale, she wrote this paper called Amazon's Antitrust Paradox,

which basically laid out the case for regulating Amazon. And it said that even though Amazon lowers prices, you have to look at its effects on the entire market of tech and services and say, hey, this is a monopoly. She wrote this while she was a law student. And it kicked off an entire wave of rethinking antitrust policy in America. She ended up at the Federal Trade Commission working for Commissioner Rohit Chopra. She's since left there.

Now she's a fellow at Columbia University. And she's part of the Open Markets Institute. But she's someone who literally wrote a paper in law school that you can go read. It's pinned on her Twitter account. Go read it. It's very interesting. But she wrote this paper in law school and kicked off a huge rethink about how we treat Amazon, Facebook, Google, Apple, Microsoft. And I've been wanting to talk to her about it for a long time.

time. So we sat down. We talked about it. She laid out the case for regulating these companies. She laid all the reasons she thinks Amazon is able to use its market power to actually reduce competition in America, which I think you know I am super interested in talking about. And, of course, you can't skip it in these times we talked about Facebook. So here is Lena Con. All right, Lena Con. Welcome. Good to be here. It's great to have you. You're like a superstar. You were at Yale Law School, you wrote a paper called Amazon's Antitrust Paradox. You kicked off a pretty big rethinking of how antitrust works and how it should work with the big tech companies that often give things away for free or cheap. You went to Open Markets Institute, which is a think tank.

Then you were at the FTC for a minute. Now you're back and you're at Columbia Law School. That's a lot. Do you feel like walking on the street like I'm doing it, like I'm changing antitrust in America? You know, it's really exciting that the public interest in antitrust has increased dramatically over the last couple of years. I mean, I started working on these issues in 2011 in D.C. at a different think tank. And, you know, D.C. is a pretty wonky place. But if I was at a party and I told somebody I worked on antitrust issue, you know, their eyes would glaze over.

I mean, it really did not register as being connected to issues that people understood or cared about. And this is part of the broader story of antitrust, of how it became so technical. and removed from public consciousness. And so the fact that that has changed in the last couple of years, I think, is making this a really interesting and exciting time, especially as we're seeing concentrations of market power across our economy. Yeah, even when I was in law school 2006, the antitrust people were like the nerdiest, scariest, most boring.

And now everyone kind of understands that Facebook might be too big. Like, that shift has just really occurred over time. And your paper, I think, is part of it. I want to start basically at the start, which is you wrote a paper, Yale Law Review, Amazon's antitrustpayer, which is going to walk us through the argument you made there. Sure. So the argument I made was that Amazon is a really elegant illustration of how the current framework in antitrust, the consumer welfare framework, really fails to capture forms of market power and forms of dominance

that should be relevant to antitrust. do raise competition concerns. And so I was writing about Amazon because I think aspects of Amazon's business strategy, specific practices that it used to become as dominant as it is, are a really useful vessel for talking about these broader shifts in antitrust. And so, you know, before I went to law school, I was a journalist and a policy researcher and had spent some time interviewing the merchants that sell on Amazon just to try and understand, you know, what are the business practices here? What are the contractual? terms, what are the kind of day-to-day reality for these millions of merchants that feel dependent on

Amazon, right? They feel that the only way they can really get to market in the Internet age is by using Amazon, by selling on Amazon. And then also by interviewing investors, hedge funds, venture capitalists, or try and how Wall Street was thinking about Amazon and the dominance it was amassing. Those perspectives, kind of people who have money on the line and interacting with Amazon and how they see the company really helped shape how I think about the company's power. and then thinking about how these people were thinking about Amazon and then thinking about how current antitrust law perceives Amazon just revealed this gap.

And I was interested in exploring this gap and interested in thinking about how antitrust should be reformed in order to reflect the new realities of how market power gets exercised. And so the really TLDR version of where we are right now with antitrust as a standard is something called the Consumer Welfare Standard, which if you've been listening to VartChast, we talk about a lot, actually. But it's the notion that there's only an interest problem if prices are going up, right? If companies consolidate a part of a market, they have a monopoly, they raise consumer prices,

there's some harm. We should break that up to have more competition. But if prices are stable or going down, you probably don't have a problem. In Amazon, obviously, it's very low prices, but they have all this ancillary power all across the rest of the Internet, basically. Google's prices are zero. So it's very hard to articulate a harm in Facebook, right? Or we pay in data. Yeah.

I'm reluctant to say that they're free services. Right, but the dollar amount. The dollar amount we pay is zero. That's right. Yeah, I mean, that's the super TLD version because there's a debate about what consumer welfare means. Some people say, well, actually, it's a more capacious, more expansive standard that can encompass all sorts of other features like quality and innovation and whatnot. But it's very true that in practice, the way this ends up getting applied is that it's

sensitive to price and output foremost. Because these other things are harder to measure, that's why antitrust has become so price-centric. So you identified a gap. And we actually just wrote a really long feature about the weird shadow economy for marketplace sellers, where there are law firms that write letters to just basis for you. That was an amazing article. I've sent that to so many people. One of the people you profiled in that piece is like a lawyer in Dallas and I want to like go talk to her. I can partly live in Dallas. So I love that. That was an amazing reporting. We'll make the connect. Josh, the reporter wrote it sitting out there when we're done with this. We're out there and say hi. So right, there's like a shadow economy for Amazon marketplace, merchants. They're figuring out how to. basically scam themselves. Then you see hedge funders and investors saying, hey, they're, like, they're consolidating the market that we participate in. But at the same time, the consumer prices and Amazon charges are lower going down. And so there's a gap between sort of antitrust

enforcement and what the other part of the market is saying. Is that the gap you identified? The way you start in antitrust inquiry to nerd out a little bit is you say, what is the relevant market? So you start by focusing on one market and start identifying the harms in those markets. The problem is Amazon is in so many markets, and it basically leverages its position in different markets in all sorts of intersecting ways. So if your approach to Amazon is really to silo one particular aspect of the business, that can really miss the broader structural power that it's amassing. And so in part, it was because I was starting from this broader lens, I was able to pick up on just business strategies that Amazon's using, such that it's, you know, collecting data in this line of business. and then using that to inform its business strategy over here, just dynamics that are enabled by the digital markets and that antitrust is just a little crude in catching up to. One aspect, and this is not necessarily like an antitrust violation or an antitrust issue, but one really interesting feature is that Amazon has been reported to use AWS to identify which businesses are going fast, which startups are going fast, and then uses that data to then invest through its venture capital arm.

in these businesses. Right? So that's just one example of how when you're involved in so many different markets, they're just insights that you can apply across different business arms. And that sort of dynamic is something that I think the current approach to antitrust misses sometimes. Right, because how do you even identify what market is being affected by which other market? This is really interesting because, you know, I think about AWS. It's Amazon's profit center.

Yeah, it's the cash cow. It isolates the other business entirely. And everyone thinks of Amazon as this retail company, but they run that retail business at like zero. Right? The tiny little margins. And Walmart as a competitor cannot do that. I don't know how you can look at that and say there's fair competition in this market or even how you would design a policy to ensure competition in that kind of market. Yeah, I mean, there are a few issues in what you just brought up. One is, as you point out, most people think of Amazon as a retailer, but I think a more accurate way to think of Amazon is as a form of infrastructure. It provides the infrastructure for online commerce through its platform. It has an enormous logistics, physical. logistics network that is the physical infrastructure for all of these merchants, and then it has the cloud computing provider, which is now, you know, the virtual infrastructure. And so in all of these aspects of its business, it is kind of the 21st century railroad, where if you want to get

to market as a merchant, as a startup, as a business, you have to ride Amazon. And so, you know, there was one venture capitalist who I think described Amazon strategy as really wanting to tax every form of economic activity, just slicing a little piece off of it. Um, And so I think that complicates how we understand Amazon. I think your point about AWS being the cash cow is just another element of how it's able to cross-subsidize across businesses and ways that just give it this huge advantage, right? I mean, who else can just overnight decide to buy Whole Foods and drop close to $14 billion in that acquisition, right? And so most retailers are not in that position. Just from my perspective, it's like they bought Whole Foods and they never really said like what the plan is.

We're going to figure it out. Like, this seems great. This is like, we've never been able to do groceries. Whole Foods needs a buyer. Here we are. Now we have, I don't know, we'll put echoes in Whole Foods and maybe that all just work itself out. And like, A, being able to have that sort of flexibility, that margin for error in your balance sheet is remarkable. I think there's definitely a side of me and I think aside of the verge cast audience, I think Amazon is great, right?

Like, it's cool that there's a big company that can, like, take big innovative flyers and they, like, invent a bunch of stuff. on the flip side, I constantly worry that there's not enough competition in these markets. And I think that's, as I talk about the consumer wealthiest standard with our listeners and readers, and we talk about on the show, the thing I keep coming back to is we need more competition in the market. And you kind of look at the European tradition where that is the sort of the point of the policy initiatives is to create competition in the market. Are we at an inflection point here?

Are more people taking that seriously now that we should be regulating towards competition as opposed to towards consumer outcomes? Yeah, it's an interesting question. I mean, what's notable about what you just said is that antitrust started in America, right? It's like foundationally our tradition that then we've managed to export into all these other regimes. But as you point out, especially contrasted with Europe,

we've kind of our antitrust regime is really underperforming right now. I think in some ways we've been living under this natural experiment for 40 years where, you know, in the late 1970s and 1980, we just flipped the switch and we're like, we've been doing antitrust one way, now let's just do it this other way. And I think right now we're almost in the process of this reckoning with the world that that approach to antitrust has resulted in. And insofar as there are more studies showing that market after market is highly concentrated,

that markups have increased by like 300 percent that all these firms are sitting on huge piles of cash. And instead of investing, last year, I think they issued like a trillion dollars worth in stock buybacks. I mean, these are metrics and signs that something is deeply wrong. and our markets are not competitive. And so insofar as this empirical evidence is forcing people to rethink, maybe we should rejigger how we do antitrust.

I think that's really productive. I mean, whether we're at an inflection point, the fact that the public discussion around these issues is much more robust and vibrant is really healthy. Congress is becoming more interested in these issues. You know, last year, the House of Representatives started an antitrust caucus for our members interested in this to become educated to engage. if you watch the last few oversight hearings in antitrust, I mean, members of Congress are just becoming smarter and more interested in this. And so I think as Congress becomes more involved, that's really healthy because it helps show how antitrust is relevant to the public. And I think right now people are connecting the lack of competition to all these other problems across our economy and across our politics, right? And that doesn't mean that, you know, the excessive political power of companies should be like a factor in merger analysis. But,

the narrowing of antitrust meant that people even just stopped making these connections. And so I think redrawing those connections between economic structure and political outcomes is really important. So I was reading the 18-T-Time Warner merger decision district's court in D.C., and it just struck me that missing the forest for the trees, I mean, it's hundreds of pages of technical analysis about whether prices will rise 30 cents, and zero discussion of, hey, 18-T. owns the pipes and the content and it is almost certain that they will discriminate against other content providers. How did we end up there? The court isn't even saying this obvious harm that exists, right?

Like they will discriminate against Netflix just doesn't come up. Is that part of that narrowing or is that just one judge not understanding what was going on? I think that judge was an extreme example of a broader phenomena in antitrust, which is that there's a very particular type of neoclassical economics that is. used to inform how we think about antitrust. And, you know, neoclassical economics assumes a bunch of things around how markets will self-correct, around how entry barriers are minimal, just assumptions that over the last few decades we've seen don't actually always correspond to reality.

And so I think at the center of how we currently do antitrust analysis is a set of assumptions about markets that are just deeply flawed. And I think that's, in part, what leads to pretty erroneous decisions. Give me some of those assumptions? The main kind of intervention of the Chicago school was they said, you know, the way we do antitrust is so amorphous. It's just this balancing of all these vague values. It ends up leading to all these absurd situations where we're blocking mergers that are only concentrating 5% of the market. We really need a much more rigorous approach.

And so they introduced what's known as price theory as a particular form of economic analysis. And there were a few assumptions that they offered. One was the idea that markets generally. self-correct. The idea that market power, if it ever arises in the economy, is likely to be very fleeting because, of course, any time a monopolist would try to jack up the price, which is the only real form of harm, you would see this rush of competitors that would discipline that firm and kind of compete away those supram monopolistic profits. So there was a sense that generally we don't have to worry about market power and monopoly power, save in exceptional market

failure type situations like in natural monopolies or whatnot. And in order for that dynamic to happen, we don't really have entry barriers. The idea that if there is a way in which a dominant company is abusing its market power, you're just going to see competitors show up because, of course, what's stopping you from tomorrow is starting a business and competing with this person. I hear this all the time. So, yeah, so this is the kind of theory that was offered and that ended up forming the basis for how antitrust analysis gets done. What's interesting is that a lot of economics has actually evolved past the kind of neoclassical assumptions, and I think those forms of insights have been incorporated in all sorts of other areas

of law. I think in some ways, antitrust is this backwater of, you know, more old school economic analysis that doesn't correspond to reality. And I think one thing that's been interesting for me is actually reading more Wall Street analysis and seeing how investors react to say a particular merger. and oftentimes, you know, they are aware of market dynamics that the theory is really not capturing. And so, again, you see this gap between how Wall Street and markets react to new mergers and new competitive realities and how the law is able to recognize those.

And there's just a huge blind spot in the law. All right. We're going to take a quick break for an ad. We'll be back right after this. Support for the show comes from Framer. Framer is an enterprise-grade, no-code website builder used by teams at companies. like Perplexity and Miro to move faster. With real-time collaboration and a robust CMS, with everything you need for great SEO,

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So let me ask you the hardest question of all. I think the question. Should we just break up Facebook? I'm just asking you directly. Is it just time to go full Tim Wu and blow this thing up? Do they have too much market power? It would be better if independent Instagram is competing with an independent Facebook?

I think that's right. I think in hindsight, allowing them to buy up both WhatsApp and Instagram proved to have been the wrong call. And so far as both of those acquisitions did seem to substantially lessen competition, I mean, to make that a little bit more concrete, I mean, let's think about over the last year, as we've seen revelation after revelation about how Facebook security and privacy practices were quite weak, we've heard from, you know, just among my friends, among people, I've generally heard, quitting Facebook. I'm shutting down my account, but it's okay because I have Instagram. Right. And I think that's an example of how having all of these properties under the Facebook

empire means that we haven't really seen competition on privacy issues, right? And I think this is especially significant with regards to WhatsApp, which, you know, was introduced as being especially sensitive to security and privacy issues. And then when Facebook acquired them, there was a, you know, they made all sorts of promises and representations about how they would maintain. those same levels of commitments, and then gradually over the years, bit by bit, they've chipped away at that. And so if you had a competitive marketplace, there would be an opportunity for people to compete on privacy. And that's just not something we've seen. The fact that Facebook also now has internally a piece of technology that lets it track in very close detail, which rival

applications are diverting attention from Facebook, information then it then uses to either go buy up that company at the very early stages before anybody outside really understands. the competitive significance or then just roll out a direct replica and kind of, you know, send that company reeling. That's a dynamic that I think also is not promoting real competition. So I just interviewed Shesana Zuboff on C-SPAN. Actually, it's not out yet. I don't know when C-SPAN is going to release this interview.

But we talked for an hour. She wrote a book called The Age of Surveillance Capitalism. But when she said to me in an interview, I'm just curious for her thoughts on this, was there's an enormous amount of consumer demand for privacy for things that aren't what she termed surveillance capitalism. I think she said it was a generational business opportunity. You can change the world if you can just harness this amount of consumer demand for basically treating your data with respect.

That's a market correction, right? If Apple is just like we're keeping your stuff private, we're not tracking you, they're one of those valuable companies in the world. Is that not a significant enough market force to kind of counterbalance the trade or do you need yet more competition in that market? So is the idea that if there were this market? market demand for privacy, we should be seeing new companies offering music? It should get filled.

Right. Or is it just Apple happens to have its business model that fills it, and that's the only demand that can be filled? Yeah, I mean, it's interesting to think about the dynamic, right? I mean, we've seen reporting around the kinds of questions of venture capitalists ask when they're confronted with a startup that has a business idea. One of the first questions is, so what's going to keep Amazon, Google, or Facebook from eating your lunch?

Right. And so I think partly it's that the dynamics of the marketplace have been such that if you have a good product or a good service, you're not really able to compete on the merits of that product or service, in part because these firms, especially Amazon and Google, control the marketplace, right? They control the arteries. And so I think in part, we need to inject competition into these markets or at least have rules that prevent them from, say, appropriating or stealing the business value of people who actually have the ideas in order for us to see more products and services. What does that rule look like? At a very basic sort of consumer experience,

level. I invent Dropbox. What does a rule preventing Google from introducing Google Drive look like? I think this is most clear in the Amazon context. Insofar as Amazon both runs a marketplace and then sells Amazon branded goods. And so insofar as it's able to use its marketplace to basically identify what goods is doing well and then roll those same goods out on the marketplace. I think that's where we see the most extreme form of this. I think in the other context, it's hard. I mean, there's, I think, a decent role for intellectual property law to play here in terms of protecting certain forms of business ideas and investments. But these are questions that are also going to require, you know, just more aggressive merger enforcement. And so far as blocking the ability of these companies to acquire some of these firms and so on. But I think we're just actually at the very earliest stages of figuring out what to do. I think only very recently has everybody woken up to the fact that there's a big problem. And I think now people are trying to figure out what to do about it. You just crossed the, hey, hey, everybody, there's only five companies in a little that matter. Exactly.

And, you know, I mean, I think the enforcers are also trying to figure out what to do, right? I mean, the FTC has been having these hearings that are pretty broadly trying to assess what are the problems, what tools do we have? Are tools able to address these problems across the economy? Be pretty focused on the tech sector. If we're just to the place where we've identified harms, we kind of don't know remedies, what do you do with something like the news at Facebook? You know, Mark Zuckerberg is saying, I'm going to commingle the technical enforcement. structure of Instagram Messenger. Does that scare you?

Like, how does a regulator go into that and say, okay, don't do that because we might break you up? Or do they say, do whatever you want, we're still going to break you. Does that affect it? Because we read that as Mark Zuckerer trying to get ahead of regulation. Of a potential breakup? Yeah. I would hope that enforcers wouldn't be influenced by attempts to sidestep their enforcement.

But, you know, we've kind of lost the tradition of the breakup. And, I mean, of course, Tim writes about this in his book, that structural remedies, yes, they're not to be taken lightly, but there have been a key remedy in antitrust, right? I mean, if we have a merger enforcement regime that is now very fact-specific, and oftentimes those facts are not available until after the fact, right? I mean, merger enforcement is all about predicting what's going to happen, predicting how this company is going to use its newfound market power, but also predicting how this one merger is going to ripple across the market and potentially lead to other forms of consolidation. In the law is this idea that there is an

insipiency standard. The idea being that you, the merger enforcement is supposed to prevent not just the point at which we're going from like two companies to one company, but actually try to keep markets competitive from the get-go. And so even if they're mergers that are on the edge, but you think they could potentially lead to huge waves of consolidation across the market, those should be suspect under the law. I think the fact that we've moved away from that approach to one that views these mergers are much more benign means that we should also be willing to break them up when we get things wrong. And I think there's just been this unwillingness to do breakups or to do structural remedies more generally that we should revisit. That's really interesting,

the idea that you can be more lenient in letting firms combine, but to balance that out, you have to be much more willing to break them apart. I don't think I've heard it formulated quite that way before. Yeah, I mean, I think my preference would be to be more rigorous, on the front end. But I think if we're going to have an approach where we're not, then I think we have to be more open to admitting we made mistakes. Yeah. So what would it take to break up a company like Facebook or Amazon? What does it look like? What's step one? And then what's the process? So I think there's a first order institutional question about do you want to pursue this through an antitrust case, which would involve, you know, coming up with a theory of harm, coming up with

a theory of liability, pursuing that case in the courts, having it be appealed. This could go on for a decade and then landing at the question of remedy. You could either do it through Section 2 of the Sherman Act, which is all about monopolization and when single firm conduct is monopolizing. You could try to achieve it through what's known as Section 7 of the Clayton Act, which is all about merger enforcement, and so that's most applicable when you've approved a merger that you're now trying to undo. So that would be the kind of antitrust litigation approach. We could also try doing it through some kind of regulatory regime, right? I mean, some of the separations principles in the past were applied through, say, the FCC or through very sector-specific regulators.

In this case, obviously, we don't have one for the tech companies. I think the FTC is probably best positioned, given that it has an authority known as the unfair methods of competition authority, which basically gives it broad leeway to identify what constitutes an unfair method of competition. They also have what's known as rulemaking power, which means they get to interpret laws, offers very specific interpretations of laws through this rulemaking process. And so if the FTC were to engage in something like that, it could potentially lead companies to have to break themselves up. So you're saying you can go directly through the courts or the FTC could sort of have this ambient authority that they're constantly putting the pressure on and the companies would

just spontaneously sort of separate. Or you could have Congress legislate something on this. So if you're looking at the big five, which of them seems the most problematic, right? The big five being Apple, Microsoft, Google, Facebook, Amazon. Each is problematic for different reasons. I mean, I think when I think about privacy, I think it's Google that concerns me the most, just given all the reports about all the different ways in which it collects data, when I think about access to markets and just more and more of economic activity being mediated through a single company, I think, of Amazon, right?

So I think each of these firms prompts some different concerns, not all of which are going to be addressed through antitrust and not all of which can be resolved through more competition generally, right? I mean, I think antitrust and competition are one slice of what's going on, but there are a lot of different forms of legal interventions that I think are necessary at this point. Yeah. Cashmer-Hilke is a Motto is a great reporter. She's actually doing a series right now on trying to live one week at a time without each of the giants and basically finding that it's impossible. That to me is the, that's the one where the market no longer can help, right? If you just cannot live on the internet without touching Amazon, then we should probably pay more attention to what Amazon is doing and the amount of power it exerts. I'm stuck at the remedy question of, well, what are you going to do?

As a consumer, there's not much you can do about Spotify serving music from Google Cloud if you don't want to have Google in your life. Like there's literally nothing you can do. But I'm also not sure what a regulator could do about that either. Is that something that you've like? like tried to pull apart. Like, what are the remedies here? What is the new standard?

And how would you drive the market towards that standard? Yeah. I mean, I think before we think of remedies, it's helpful to think of principles. So one principle we talked about earlier is if you run and operate the marketplace, maybe you shouldn't be allowed to be in the businesses that are directly competing with all the firms on your marketplace. Right. And so that's a principle you could apply to Amazon, Amazon Marketplace, to Android, certain kinds of Google apps, that sort of thing. Another principle is non-discrimination, right?

a net neutrality type approach for these platforms so that they're not able to pick winners and losers effectively. I think one around how do you draw lines to decide when a merger is one merger too far or one acquisition too far, at what point should the burden be shifted? So right now we're living in an anti-trust regime where the burden is always on the government to show why a merger is anti-competitive. I think if we were to switch that to say, well, in certain instances, the burden's going to be on the company to show why it's pro-competitive, I think that could lead to very

different outcomes too. Yeah, I think the concept of picking up your business and taking it elsewhere gets very, very difficult when your business to Facebook looks like a complete map of your personality and social graph. There's actually not anywhere else you can go, and then taking your business is like a very nebulous idea. I was looking at Twitter feed today, and I've seen this come up quite a bit, actually, is that antitrust is actually much more conservative idea. It's not part of like necessarily the overly liberal tradition, but sort of the Republicans are as interested in breakups. The conservative tradition of antitrust is quite strong. Do you see that actually in practice? There's attention to this from both sides or is this kind of like

one party is leading the charge? I think we have seen attention on both sides on certain issues. So especially around some of the tech issues, we have seen Republican members of Congress, you know, express concerns, you know, whether that's rooted in a deep concern about concentrations of power generally or if it's concerned instead about biases against conservatives and other very self-interested political outcomes, I think, is an open question. But it's definitely true that there is a conservative, small-sea conservative tradition of being skeptical of concentrations of power, whether that be public power or private power. And so I think that's the way in which we've seen the antitrust movement be part

of the conservative tradition in the past. I think right now we're not really seeing members from the Republican side, kind of being the flag bearers of reviving antitrust. But I do think that in terms of principles and values, there's definitely opportunity for antitrust to be a big tent. So we've talked very big picture, but let's bring it down to human scale things. What can people do? If you're interested in this, what are the next steps beyond just your paper is free of the internet?

go read the Amazon's antitrust paradox right now. What can you do? How do you push a legislator? How do you push an agency? Is there something you can actually do to participate? So the Federal Trade Commission, as I mentioned, has been hosting these hearings. So they're asking for comments from the public. And so I think, you know, submitting a comment. They have, I think, 12 or 13 different topics on which they're inviting comments. And they're going to read all those comments and have to put together a report. And so that becomes part of the public record. and so that's one avenue for engaging. I think more generally, yeah, talking to legislators about this,

talking to lawmakers about this, kind of putting antitrust back on the radar of kind of public consciousness and public awareness and an issue that people are going to get behind, I think is important. Do you think it's going to come up in sort of the 2020 cycle? I think that's very possible that it could be a key pillar or key issue in the 2020 campaign. Well, that sounds exhausting already,

but I'm super into it. I really do think everyone should just go read it. your paper because honestly it's really good. But you've got other new stuff coming out soon, right? That's right. I have a paper coming out in the Columbia Law Review called the separation of platforms and commerce. And it's basically reviewing this principle that we've talked about, about if you're running the platform, if you're running a form of infrastructure, what kinds of potential limits should there be on what else you can do? That, to me, is the heart of it, right? Like if you're Apple and you run the app store,

should you be able to preload all your services all the time? And one answer just seems an obvious, yes. Right? Like, this is. how it works. You know, on the platform, you get to put Apple music on it and give three months away for free. On the other hand, it seems very obvious that it just disfavors anyone else from ever wanting to compete. Do you think that you should actually be prevented from Runei or do you think you should have more open access? Like one remedy for that was like a browser ballot in Europe, right, which is like a notorious non-starter. But is that where you want things to go? I think how this gets played out in different contexts will vary because, you know,

I mean, take Apple, for example, I mean, that's a much more closed ecosystem than say Android is, And so the question is, do you want to be punishing open ecosystems, relatively more open ecosystems, or a closed one? I mean, I think there are some complicated questions here about how you would apply this. But I think what's unmistakable is that there is a tradition of applying this principle in network industries. So 100, 130 years ago, railroads started buying up coal mines. They started getting into the commodities business. And so there was this big problem where independent coal producers couldn't get to market because they would go to the railroad and the railroad say, sorry, our cars are full. And so Congress ended up having some hearings and passing a law that

said, if you're a railroad that's treated as a common carrier, you're not allowed to transport any goods in which you have an interest. And this is a principle we applied in the TV networks, where for a period of time we separated distribution from content production. It's a principle that informed how we did the AT&T breakup, where we separated the local exchanges from the long distance pipes. It was one of the remedies that at some point was introduced to the Microsoft case, where we said you have to break up the operating system from the apps and the browser. So this is a principle that we've seen applied in various network industries. I think how we apply that principle with each tech platform and each tech market is an open

question. But I do think giving this principle a seat back at the table is really important at this moment as the conversation about remedies is starting to heat up. So do you use Amazon, Facebook, Google products and services? Like, if you're just a consumer in the market and you say, screw it, I'm boycotting Facebook today, is that going to send enough of a signal into a market that is this consolidated? No, absolutely not. I mean, as you just mentioned, you know, Cashmere did that series,

which shows it's, like, effectively impossible, right? Like, they're parts of the Internet that stop working for you if we don't use these services. And I think that gets to a deeper issue, which is that, you know, these are systemic issues, these are governance issues, These are political issues, and so expecting people in their consumer identity try to tackle them really misperceives what the problem is. And I don't think that, you know, asking everyone to cancel their prime accounts is really going to be the way that we're going to get to structural. Are you a prime customer? I don't have a prime account.

I do. It's very convenient. Let me just be out there. All right, Lena, thank you so much. I really appreciate it. It was really fun talking to. Likewise. I'll have you back soon.

All right. That was Lena Con. She's so smart. There's something happening with Anna Tristle on this country, and I think she's going to be up before. forefront of it. Okay, I can't tell you who we have on the interview episode next week, but it's huge. I think you're going to be into it. We'll be back this week with a regular Vergecast on Friday, and the next Tuesday, it's big. You're going to like it. Talk to you then.