WEBVTT 00:00:06.840 --> 00:00:08.641 align:middle line:79% position:50% size:55% Thanks again for coming this afternoon. 00:00:08.708 --> 00:00:11.711 align:middle line:79% position:50% size:75% It is my pleasure to introduce Dean Jonathan Levin 00:00:11.778 --> 00:00:14.214 align:middle line:79% position:50% size:70% of the Stanford Graduate School of Business. 00:00:16.015 --> 00:00:22.021 align:middle line:85% position:50% size:48% [Audience Applauds] 00:00:23.223 --> 00:00:24.958 align:middle line:85% position:50% size:18% Thanks. 00:00:25.024 --> 00:00:25.658 align:middle line:85% position:50% size:48% So, I'm John Levin. 00:00:25.725 --> 00:00:27.861 align:middle line:79% position:50% size:60% I'm the Dean of the Business School and I'll 00:00:27.927 --> 00:00:29.763 align:middle line:79% position:50% size:60% start by saying I'm just delighted to have this 00:00:29.829 --> 00:00:32.165 align:middle line:79% position:50% size:65% workshop here at Stanford, and so thank you to the 00:00:32.232 --> 00:00:34.667 align:middle line:79% position:50% size:60% DOJ Team and the faculty and staff at the GSB and 00:00:34.734 --> 00:00:36.936 align:middle line:79% position:50% size:65% the Law School that have put the event together and 00:00:37.003 --> 00:00:40.173 align:middle line:79% position:50% size:43% all the speakers and participants. 00:00:40.240 --> 00:00:42.509 align:middle line:79% position:50% size:65% I think as you all know, we have a great need right 00:00:42.575 --> 00:00:44.611 align:middle line:79% position:50% size:55% now in this country to bridge the technology 00:00:44.677 --> 00:00:47.147 align:middle line:79% position:50% size:58% world of Silicon Valley and the policy world of 00:00:47.213 --> 00:00:50.850 align:middle line:79% position:50% size:63% Washington D.C., and it's critical that we foster 00:00:50.917 --> 00:00:53.653 align:middle line:79% position:50% size:63% better understanding in both directions as we try 00:00:53.720 --> 00:00:58.324 align:middle line:79% position:50% size:63% to sort out the impact of new digital technologies. 00:00:58.391 --> 00:01:01.528 align:middle line:79% position:50% size:65% Stanford can and should be playing an important part 00:01:01.594 --> 00:01:03.797 align:middle line:79% position:50% size:60% in enabling that discussion, leading that 00:01:03.863 --> 00:01:05.765 align:middle line:79% position:50% size:60% discussion, and we take that responsibility very 00:01:05.832 --> 00:01:07.667 align:middle line:79% position:50% size:65% seriously, so I'm really, really glad that we get to 00:01:07.734 --> 00:01:10.336 align:middle line:85% position:50% size:48% host today's event. 00:01:10.403 --> 00:01:14.007 align:middle line:79% position:50% size:63% Now, I want to say a few things about the topic of 00:01:14.073 --> 00:01:16.409 align:middle line:79% position:50% size:60% today, and to do that, I'm going to take off my 00:01:16.476 --> 00:01:21.848 align:middle line:79% position:50% size:63% Stanford dean hat and put on my economist hat for a 00:01:21.915 --> 00:01:24.717 align:middle line:79% position:50% size:58% moment or two and, just say one or two things 00:01:24.784 --> 00:01:28.021 align:middle line:79% position:50% size:65% because I have to say, I started studying antitrust 00:01:28.087 --> 00:01:30.390 align:middle line:79% position:50% size:45% in graduate school 25 years ago. 00:01:30.457 --> 00:01:32.358 align:middle line:79% position:50% size:58% And at that time, I did not expect that I would 00:01:32.425 --> 00:01:35.295 align:middle line:79% position:50% size:65% ever see the words venture capital and antitrust in 00:01:35.361 --> 00:01:37.363 align:middle line:85% position:50% size:45% the same sentence. 00:01:38.097 --> 00:01:40.700 align:middle line:85% position:50% size:65% So, something has changed. 00:01:40.767 --> 00:01:42.969 align:middle line:79% position:50% size:58% And, now, part of it is surely venture capital 00:01:43.036 --> 00:01:45.505 align:middle line:79% position:50% size:58% because at that time, I also didn't anticipate 00:01:45.572 --> 00:01:47.040 align:middle line:79% position:50% size:60% we'd have a private, venture-backed firm that 00:01:47.106 --> 00:01:47.907 align:middle line:79% position:50% size:35% would be worth $50 billion. 00:01:47.974 --> 00:01:52.512 align:middle line:79% position:50% size:53% But, a bigger part is really the changing 00:01:52.579 --> 00:01:55.648 align:middle line:79% position:50% size:60% technology landscape and the establishment of a 00:01:55.715 --> 00:01:58.184 align:middle line:79% position:50% size:63% handful of dominant tech firms that are attracting 00:01:58.251 --> 00:02:00.153 align:middle line:79% position:50% size:43% so much antitrust scrutiny. 00:02:00.220 --> 00:02:02.355 align:middle line:79% position:50% size:63% And when I have thought about that change, I have 00:02:02.422 --> 00:02:05.391 align:middle line:79% position:50% size:65% found it useful, personally, to disentangle 00:02:05.458 --> 00:02:08.828 align:middle line:79% position:50% size:68% three different factors, and I'll just mention them. 00:02:08.895 --> 00:02:11.331 align:middle line:79% position:50% size:63% But the first is fundamentally technology. 00:02:11.397 --> 00:02:16.469 align:middle line:79% position:50% size:60% So, things like the rise of data and algorithms 00:02:16.536 --> 00:02:20.106 align:middle line:79% position:50% size:65% raise a lot of complex questions about privacy or 00:02:20.173 --> 00:02:24.143 align:middle line:79% position:50% size:65% chance for discrimination or the effects of mediated 00:02:24.210 --> 00:02:27.814 align:middle line:79% position:50% size:65% discussion on political polarization or discourse. 00:02:27.881 --> 00:02:29.415 align:middle line:79% position:50% size:63% Those are important questions, and they would 00:02:29.482 --> 00:02:31.818 align:middle line:79% position:50% size:58% be important regardless of market structure and 00:02:31.885 --> 00:02:34.087 align:middle line:79% position:50% size:55% market power because they are fundamentally 00:02:34.153 --> 00:02:37.657 align:middle line:79% position:50% size:38% questions about technology. 00:02:37.724 --> 00:02:40.894 align:middle line:79% position:50% size:65% The second issue is really the size and the power of 00:02:40.960 --> 00:02:42.228 align:middle line:85% position:50% size:48% largest tech firms. 00:02:42.295 --> 00:02:44.964 align:middle line:79% position:50% size:58% Those are related to technology in the sense 00:02:45.031 --> 00:02:49.235 align:middle line:79% position:50% size:60% that the technologies of data and software have 00:02:49.302 --> 00:02:50.970 align:middle line:79% position:50% size:65% significant scale economies, which of course 00:02:51.037 --> 00:02:54.674 align:middle line:79% position:50% size:35% give rise to concentration. 00:02:54.741 --> 00:02:56.976 align:middle line:79% position:50% size:63% And of course, that, and then therefore are all of 00:02:57.043 --> 00:02:59.612 align:middle line:79% position:50% size:58% our typical economic concerns about when you 00:02:59.679 --> 00:03:01.447 align:middle line:79% position:50% size:55% have market power leveraging it to block 00:03:01.514 --> 00:03:05.118 align:middle line:79% position:50% size:78% competition or block entry or monopolize adjacent markets. 00:03:05.184 --> 00:03:07.453 align:middle line:79% position:50% size:65% But actually, I think that's not the fundamental 00:03:07.520 --> 00:03:09.722 align:middle line:79% position:50% size:63% issue that we're grappling with right now. 00:03:09.789 --> 00:03:11.658 align:middle line:79% position:50% size:65% The fundamental issue that we're grappling with right 00:03:11.724 --> 00:03:15.828 align:middle line:79% position:50% size:65% now is a concern that goes much deeper, and really 00:03:15.895 --> 00:03:18.765 align:middle line:79% position:50% size:45% reflects a sort of fundamental public 00:03:18.831 --> 00:03:22.235 align:middle line:79% position:50% size:58% discomfort with having firms that are so large 00:03:22.302 --> 00:03:25.338 align:middle line:79% position:50% size:63% and that extend so deeply into people's lives and 00:03:25.405 --> 00:03:27.907 align:middle line:79% position:50% size:63% having so many decisions concentrated in the hands 00:03:27.974 --> 00:03:29.509 align:middle line:79% position:50% size:50% of a small number of people, sometimes 00:03:29.576 --> 00:03:31.878 align:middle line:85% position:50% size:63% controlling shareholders. 00:03:31.945 --> 00:03:33.846 align:middle line:79% position:50% size:45% And their discomforts are... 00:03:33.913 --> 00:03:37.016 align:middle line:79% position:50% size:43% it's a political discomfort, not a 00:03:37.083 --> 00:03:39.819 align:middle line:79% position:50% size:50% fundamentally economic discomfort. 00:03:39.886 --> 00:03:43.456 align:middle line:79% position:50% size:65% And, so, I think that's behind a lot of the public 00:03:43.523 --> 00:03:46.159 align:middle line:79% position:50% size:58% push for more antitrust intervention and 00:03:46.225 --> 00:03:49.395 align:middle line:79% position:50% size:68% regulatory intervention and the calls to breakup firms. 00:03:49.462 --> 00:03:51.364 align:middle line:79% position:50% size:60% And I think, it's, it's useful to have that lens 00:03:51.431 --> 00:03:53.800 align:middle line:79% position:50% size:58% because we shouldn't be surprised as antitrust 00:03:53.866 --> 00:03:56.369 align:middle line:79% position:50% size:45% enforcement adapts and response. 00:03:56.436 --> 00:03:58.137 align:middle line:85% position:50% size:58% And if you, you know... 00:03:58.204 --> 00:03:59.839 align:middle line:79% position:50% size:55% In this audience, most people will know the 00:03:59.906 --> 00:04:01.040 align:middle line:85% position:50% size:38% history of U.S. 00:04:01.107 --> 00:04:04.577 align:middle line:79% position:50% size:55% antitrust, but just to remind you of that. 00:04:04.644 --> 00:04:08.514 align:middle line:79% position:50% size:68% U.S. antitrust, the origins go back to the late 19th 00:04:08.581 --> 00:04:12.151 align:middle line:79% position:50% size:65% Century in the Gilded Age, which was also a time when 00:04:12.218 --> 00:04:14.854 align:middle line:79% position:50% size:55% there was a rapid rise in inequality, the 00:04:14.921 --> 00:04:17.056 align:middle line:79% position:50% size:63% consolidation of a lot of economic and political 00:04:17.123 --> 00:04:19.759 align:middle line:79% position:50% size:63% power in a small number of hands, a lot of public 00:04:19.826 --> 00:04:22.362 align:middle line:79% position:50% size:73% discomfort came from the rise of a lot of large firms. 00:04:22.428 --> 00:04:24.097 align:middle line:79% position:50% size:53% And people recognized at that time that the 00:04:24.163 --> 00:04:25.231 align:middle line:85% position:50% size:33% technologies. 00:04:25.298 --> 00:04:26.566 align:middle line:79% position:50% size:63% which were different, they were things like the 00:04:26.633 --> 00:04:28.935 align:middle line:79% position:50% size:58% railroads, had a lot of scale economies, which 00:04:29.002 --> 00:04:32.438 align:middle line:79% position:50% size:55% made the economics of large firms favorable. 00:04:32.505 --> 00:04:35.942 align:middle line:79% position:50% size:63% But there was a lot of concern about the rise in 00:04:36.009 --> 00:04:38.311 align:middle line:79% position:50% size:65% inequality and about the concentration of political 00:04:38.378 --> 00:04:39.012 align:middle line:85% position:50% size:15% power. 00:04:39.078 --> 00:04:41.147 align:middle line:79% position:50% size:58% And it was those latter concerns that were the 00:04:41.214 --> 00:04:43.316 align:middle line:79% position:50% size:60% ones that were behind the Sherman Act and then 00:04:43.383 --> 00:04:44.651 align:middle line:79% position:50% size:50% subsequently under Roosevelt, under the 00:04:44.717 --> 00:04:47.487 align:middle line:79% position:50% size:65% enforcement of the Sherman Act, which wasn't enforced 00:04:47.553 --> 00:04:48.221 align:middle line:85% position:50% size:33% for 15 years. 00:04:48.287 --> 00:04:50.390 align:middle line:79% position:50% size:63% But it's getting into the early 20th century with 00:04:50.456 --> 00:04:52.625 align:middle line:79% position:50% size:63% the Northern Securities case and then the breakup 00:04:52.692 --> 00:04:55.828 align:middle line:79% position:50% size:48% of American Tobacco and Standard Oil. 00:04:55.895 --> 00:04:59.766 align:middle line:79% position:50% size:68% And, so, the world has changed a lot in 130 years. 00:04:59.832 --> 00:05:01.701 align:middle line:79% position:50% size:48% The technologies are very different. 00:05:01.768 --> 00:05:05.271 align:middle line:79% position:50% size:63% We've had several decades now, many decades now of 00:05:05.338 --> 00:05:07.340 align:middle line:79% position:50% size:53% relatively narrow antitrust enforcement 00:05:07.407 --> 00:05:09.442 align:middle line:79% position:50% size:58% that's been almost exclusively on economic 00:05:09.509 --> 00:05:13.546 align:middle line:79% position:50% size:65% grounds and not on political economy grounds. 00:05:13.613 --> 00:05:15.815 align:middle line:79% position:50% size:58% But, I think there's probably a lesson to be 00:05:15.882 --> 00:05:17.984 align:middle line:79% position:50% size:68% learned by what happened at the beginning of antitrust. 00:05:18.051 --> 00:05:21.187 align:middle line:79% position:50% size:55% If you were projecting forward, and so if... 00:05:21.254 --> 00:05:23.790 align:middle line:79% position:50% size:65% You know, if I was to make that projection forward, 00:05:23.856 --> 00:05:26.693 align:middle line:79% position:50% size:53% it makes me even more happy that before 00:05:26.759 --> 00:05:28.428 align:middle line:79% position:50% size:60% embarking on that course or in the process of 00:05:28.494 --> 00:05:30.396 align:middle line:79% position:50% size:65% embarking on the course, if that is the course that 00:05:30.463 --> 00:05:33.866 align:middle line:79% position:50% size:63% gets followed, that the DOJ would reach out to us 00:05:33.933 --> 00:05:37.070 align:middle line:79% position:50% size:65% to want to listen and learn from a lot of people 00:05:37.136 --> 00:05:40.239 align:middle line:79% position:50% size:65% and think really carefully through all of the ways 00:05:40.306 --> 00:05:42.408 align:middle line:79% position:50% size:65% things ways might go and that we get a chance to be 00:05:42.475 --> 00:05:45.211 align:middle line:79% position:50% size:73% part of that discussion and to host it, here at Stanford. 00:05:45.278 --> 00:05:47.714 align:middle line:79% position:50% size:63% So, really, really delighted to have you all 00:05:47.780 --> 00:05:50.049 align:middle line:79% position:50% size:63% here, and I'm really excited to hear what this 00:05:50.116 --> 00:05:52.685 align:middle line:79% position:50% size:65% afternoon's panelists have to say about these issues. 00:05:52.752 --> 00:05:54.187 align:middle line:79% position:50% size:40% So, thanks a lot for being here.