Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, Makan Delrahim, spoke to RBC Capital Markets’ Mark Mahaney and Jonathan Atkin about the impact of applying antitrust law on the technology, media and telecom sector in the face of continuing growth and consolidation.
Business practice changes – but the law stays the same
According to Mr. Delrahim, Antitrust law is justifiably an important check and balance in the corporate sector, despite being written for the old railroad and oil industries. Technology as an industry may be more dynamic, but as long as there is the risk of consumer harm, there is a need for strong antitrust law.
The Microsoft factor – a game changer?
A significant legal turning point in the tech sector was 1998’s United States v Microsoft Corp trial, in which the court found against Microsoft. In Mr. Delrahim’s view, the firm had historically dominated the sector with its operating system, which in turn restricted competition unfairly. The impact of that judgement, he said, was ultimately beneficial to the cell phone market which flourished as a result.
Big isn’t necessarily bad
“Big isn’t necessarily bad, but big behaving badly is bad” stated Mr. Delrahim. In his view, striving for monopoly is an acceptable mission of capitalism which only fails when a firm pushes a restrictive product onto the market at the expense of competitors.
A big firm that continually innovates on the other hand, can actually do ‘good’ in the market.
The future is bright – but antitrust needs to evolve with it
The future of technology – not least 5G – has the potential to build a fantastic consumer experience. But price alone doesn’t determine if tech companies are behaving fairly or not, said Mr. Delrahim, who argues that antitrust law must evolve with this sector.
Google and Facebook are free at the point of use, he added, but they should also be assessed in how they strive for quality, innovation and choice. “That is the type of thinking we need to be doing,” he said.
Your privacy policy is a defining characteristic
Privacy is a measure of quality when assessing a firm’s behaviour and its likelihood to cause consumer harm. Mr. Delrahim argues that increasing transparency around how data is captured and used on behalf of the consumer is becoming an increasingly important part of that debate.
Antitrust involves prediction – to a degree
One of the paradoxes of antitrust is understanding what direction companies might take some years down the line, as well as reviewing their position or behavior at present. Mr. Delrahim says the lawyers typically look two years ahead to understand the direction of travel. On a set number of metrics, they will make their best predictions, though Mr. Delrahim admits that these calculations are not a perfect science.
Jonathan Atkin
Managing Director, Communications Infrastructure Investment Research Analyst
Jonathan Atkin is a Managing Director at RBC Capital Markets. His focus areas include telecom services, communications infrastructure, and cloud computing. During the last three years, Jonathan has received the #1 ranking from Institutional Investor in the Communications Infrastructure sector. He has also received #1 rankings from Thomson Reuters in Telecom Services and Real Estate Equities, a #1 ranking from the Wall Street Journal in Internet Services, and a #1 ranking from the Financial Times in Telecom Services. Before joining RBC, Jonathan was a senior consultant at BIA Companies focused on wireless strategy and valuation, worked in corporate strategy at Daimler-Benz AG, and was a policy analyst with the United States Congress. He has an MBA from Columbia University and BS and MS degrees in engineering from Stanford University. He is a two-time finisher of the Ironman triathlon.
Makan Delrahim
Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice
Makan Delrahim was confirmed on September 27, 2017, as Assistant Attorney General for the Antitrust Division. Mr. Delrahim previously served as Deputy Assistant to the President and Deputy White House Counsel. Mr. Delrahim’s rich antitrust background covers the full range of industries, issues, and institutions touched upon by the work of the Antitrust Division. He is a former partner in the Los Angeles office of a national law firm. He served in the Antitrust Division from 2003 to 2005 as a Deputy Assistant Attorney General, overseeing the Appellate, Foreign Commerce, and Legal Policy sections. During that time, he played an integral role in building the Antitrust Division’s engagement with its international counterparts and was involved in civil and criminal matters. He has served on the Attorney General’s Task Force on Intellectual Property and as Chairman of the Merger Working Group of the International Competition Network. Mr. Delrahim was also a Commissioner on the Antitrust Modernization Commission from 2004 to 2007. Earlier in his career, Mr. Delrahim served as antitrust counsel, and later as the Staff Director and Chief Counsel of the U.S. Senate Judiciary Committee.
Mark Mahaney
Managing Director, Internet Research Analyst
Mark Mahaney is a Managing Director covering the Internet sector research at RBC Capital Markets. He has been ranked No. 1 in the Institutional Investor Poll for the Internet sector (2008-2012). He has also been ranked No. 1 in the Greenwich Institutional Investor Poll for the Internet sector, as well as the No. 1 earnings estimator and the No. 1 stock picker in the Internet retail segment by the Financial Times and StarMine. Mark has been covering Internet stocks since 1998. Prior to joining our research team, he worked on both the sell side and the buy side, including with American Technology Research, Morgan Stanley, and Citibank. Mark holds an MBA from Wharton Business School, an MA from Johns Hopkins' School of Advanced International Studies, and a BA from Amherst College. Prior to Wall Street, Mark worked in management consulting with Deloitte Touche Tohmatsu and with the US Department of State, the US Senate, and the Office of the US Trade Representative.