Aug 1, 2022 · 26m · another-podcast
The FTC's antitrust thesis
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Tech commentators Benedict Evans and Toni Cowan-Brown examine the FTC's lawsuit blocking Meta's acquisition of Within, evaluating Lina Khan's aggressive antitrust thesis, its ramifications for the startup ecosystem, and the legal hurdles of regulating nascent markets in US courts.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 88.3% of the talking time here. How this is scored →
The hosts as informed peer 7.8 Guest teaching 1.0 Guest disagreement 0.7 The hosts pushing back 1.7
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:38 Questioning Khan's Litigation Viability
Tony presses the fundamental hurdle in the FTC's strategy, questioning how Khan can realistically convince a judge on speculative metaverse projections.
Hardest push from the hosts ▶ 7:59 Playing Devil's Advocate on Deal ComparisonsBenedict challenges the simplistic comparison between the Activision and Within acquisitions by unpacking the underlying market definition dilemmas.
Biggest teaching moment ▶ 15:03 Academic Perspectives on Defining VR MarketsTony introduces an antitrust academic's framing that the entire legal outcome hinges on a judge's subjective interpretation of VR market definitions.
The host holds their own ▶ 12:21 Unpacking the Google TAC and Mozilla InterdependenceBenedict showcases extensive industry expertise by explaining how antitrust enforcement against Google's search default payments could inadvertently bankrupt Mozilla.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Lina Khan's Antitrust Thesis and the Consumer Welfare Standard | 8 | 1 | 1 | 2 | Benedict provides an in-depth breakdown of Lina Khan's Yale paper on Amazon, historical antitrust paradigms, and FTC deal study statistics. Tony primarily acts as a conversational partner, validating the premise and prompting further explanation. | |
| Market Definition Dilemmas and Comparative Tech Acquisitions | 8 | 1 | 1 | 2 | Benedict deconstructs the paradoxes of market definition using examples ranging from Coca-Cola to Microsoft and Amazon's acquisitions. Tony offers a tweet by Casey Newton comparing Activision and Within, which Benedict expands upon. | |
| Ecosystem Interdependence and Multi-Dimensional Tech Competition | 8 | 2 | 1 | 2 | Benedict demonstrates deep industry knowledge analyzing the Google TAC search deal and Mozilla dependence to illustrate ecosystem complexity. Tony brings in an antitrust academic's view regarding the difficulty of defining emerging VR markets. | |
| Comparative Legal Frameworks: US Litigation Versus European Regulation | 8 | 1 | 0 | 1 | Benedict contrasts the US legal model of proving Sherman Act statutory violations against the European and UK technocratic regulatory frameworks like the DMA and CMA. Tony listens and encourages the comparative deep dive. | |
| Judicial Hurdles and Discovery Realities for the FTC's Case | 8 | 1 | 1 | 2 | Tony raises the practical difficulty Lina Khan faces in convincing a federal judge of speculative VR market harms. Benedict outlines judicial precedents like Apple v. Epic and explains how discovery could reveal Within's real metrics. | |
| Evaluating Policy Sustainability and Concluding Thoughts | 7 | 0 | 0 | 1 | Benedict summarizes his skepticism regarding ex-ante speculative acquisition bans versus repeatable conduct regulation. Tony fully concurs as they wrap up the episode. |
Statements from this episode (12)
Evans: Meta's purchase of Within was likely a low-priced soft landing
“And I have no information on this at all, but I strongly suspect that that means it wasn't really working and they didn't pay very much for it because when stuff works and it's a big deal and you hear about it and I kind of suspect this was a soft landing or a…”
Evans: Amazon holds 40% of e-commerce but tiny share of US retail
“It's got 40% of e-commerce and like a tiny percentage of US retail, but it has this large market share.”
Evans: The idea that Big Tech buys up all startups is nonsense
“And they're actually a very small percentage of all the acquisition, all the startups in the field, or indeed all of the exits, because, you know, I think it was something like 60 or 70 of those 400 were more than fifty million dollars, which is the point that…”
Evans: Instagram is probably Meta's most valuable asset
“And yet you look back five and 10 years later, Instagram is probably the single most valuable part of Facebook. It's probably more valuable than the blue app or certainly more valuable than WhatsApp.”
Evans: One Medical holds no meaningful market power in US healthcare
“There's no possible basis on which you can say One Medical has any kind of meaningful market power in the US healthcare industry.”
Evans: Nest and Within probably would have failed without Big Tech buyouts
“The practical effect would probably be that Nest would have gone out of business. Within would probably have gone out of business.”
Evans: Google pays roughly $15B for default search in Safari and Mozilla
“And so Google is paying something like fifteen billion dollars to be the default search engine in Mozilla and Safari and whatever else is out there, basically Mozilla and Safari.”
Evans: Mozilla would go out of business without Google search payments
“And the second problem is, of course, that almost all of Mozilla's revenue comes from this. And so if Google stops doing this, Mozilla goes out of business by default, and there's no competitive web browser, or the main competitive web browser, the main compet…”
Evans: US antitrust requires proving unlawful conduct unlike European regulatory regimes
“And in generality, what can happen is that the regulatory agency can basically say that we don't like the structure of this market, so we're going to change it. And they don't have to prove that you broke the law. This is kind of the crucial point that in the …”
Evans: The US will not pass an equivalent to the DMA
“The US isn't going to get an equivalent of the DMA.”
Evans: Meta has sold roughly 15 million VR headsets
“Facebook probably sold fifteen million. So there's maybe ten million people using one.”
Evans: Conduct regulation is more sustainable than guessing on startup acquisitions
“I would suggest that trying to do conduct conduct regulation is at least a more kind of repeatable and predictable and sustainable model than, you know, guessing the toss of a coin on these teeny tiny acquisitions.”