Thanks again for coming this afternoon.
It is my pleasure to introduce Dean Jonathan Levin
of the Stanford Graduate School of Business.
[Audience Applauds]
Thanks.
So, I'm John Levin.
I'm the Dean of the Business School and I'll
start by saying I'm just delighted to have this
workshop here at Stanford, and so thank you to the
DOJ Team and the faculty and staff at the GSB and
the Law School that have put the event together and
all the speakers and participants.
I think as you all know, we have a great need right
now in this country to bridge the technology
world of Silicon Valley and the policy world of
Washington D.C., and it's critical that we foster
better understanding in both directions as we try
to sort out the impact of new digital technologies.
Stanford can and should be playing an important part
in enabling that discussion, leading that
discussion, and we take that responsibility very
seriously, so I'm really, really glad that we get to
host today's event.
Now, I want to say a few things about the topic of
today, and to do that, I'm going to take off my
Stanford dean hat and put on my economist hat for a
moment or two and, just say one or two things
because I have to say, I started studying antitrust
in graduate school 25 years ago.
And at that time, I did not expect that I would
ever see the words venture capital and antitrust in
the same sentence.
So, something has changed.
And, now, part of it is surely venture capital
because at that time, I also didn't anticipate
we'd have a private, venture-backed firm that
would be worth $50 billion.
But, a bigger part is really the changing
technology landscape and the establishment of a
handful of dominant tech firms that are attracting
so much antitrust scrutiny.
And when I have thought about that change, I have
found it useful, personally, to disentangle
three different factors, and I'll just mention them.
But the first is fundamentally technology.
So, things like the rise of data and algorithms
raise a lot of complex questions about privacy or
chance for discrimination or the effects of mediated
discussion on political polarization or discourse.
Those are important questions, and they would
be important regardless of market structure and
market power because they are fundamentally
questions about technology.
The second issue is really the size and the power of
largest tech firms.
Those are related to technology in the sense
that the technologies of data and software have
significant scale economies, which of course
give rise to concentration.
And of course, that, and then therefore are all of
our typical economic concerns about when you
have market power leveraging it to block
competition or block entry or monopolize adjacent markets.
But actually, I think that's not the fundamental
issue that we're grappling with right now.
The fundamental issue that we're grappling with right
now is a concern that goes much deeper, and really
reflects a sort of fundamental public
discomfort with having firms that are so large
and that extend so deeply into people's lives and
having so many decisions concentrated in the hands
of a small number of people, sometimes
controlling shareholders.
And their discomforts are...
it's a political discomfort, not a
fundamentally economic discomfort.
And, so, I think that's behind a lot of the public
push for more antitrust intervention and
regulatory intervention and the calls to breakup firms.
And I think, it's, it's useful to have that lens
because we shouldn't be surprised as antitrust
enforcement adapts and response.
And if you, you know...
In this audience, most people will know the
history of U.S.
antitrust, but just to remind you of that.
U.S. antitrust, the origins go back to the late 19th
Century in the Gilded Age, which was also a time when
there was a rapid rise in inequality, the
consolidation of a lot of economic and political
power in a small number of hands, a lot of public
discomfort came from the rise of a lot of large firms.
And people recognized at that time that the
technologies.
which were different, they were things like the
railroads, had a lot of scale economies, which
made the economics of large firms favorable.
But there was a lot of concern about the rise in
inequality and about the concentration of political
power.
And it was those latter concerns that were the
ones that were behind the Sherman Act and then
subsequently under Roosevelt, under the
enforcement of the Sherman Act, which wasn't enforced
for 15 years.
But it's getting into the early 20th century with
the Northern Securities case and then the breakup
of American Tobacco and Standard Oil.
And, so, the world has changed a lot in 130 years.
The technologies are very different.
We've had several decades now, many decades now of
relatively narrow antitrust enforcement
that's been almost exclusively on economic
grounds and not on political economy grounds.
But, I think there's probably a lesson to be
learned by what happened at the beginning of antitrust.
If you were projecting forward, and so if...
You know, if I was to make that projection forward,
it makes me even more happy that before
embarking on that course or in the process of
embarking on the course, if that is the course that
gets followed, that the DOJ would reach out to us
to want to listen and learn from a lot of people
and think really carefully through all of the ways
things ways might go and that we get a chance to be
part of that discussion and to host it, here at Stanford.
So, really, really delighted to have you all
here, and I'm really excited to hear what this
afternoon's panelists have to say about these issues.
So, thanks a lot for being here.