Listen: Part I of our series "More than money" here.

Microsoft wants to buy Activision-Blizzard for almost $70 billion dollars.

It would be just one of Microsoft’s many acquisitions in just the past year.

Monopolies have always been defined as one big player in one market.

But now, the tech sector has a few giant players, pushing in a lot of markets. Are these mega-mergers a new kind of monopoly?

Today, On Point: Our series “More than money: The cost of monopolies in America” continues.

Dina Bass, tech reporter and Seattle Bureau Chief for Bloomberg News. (@dinabass)

Bill Kovacic, professor of law and policy and director of the Competition Law Center at the George Washington University Law School. Former chair of the Federal Trade Commission from March 2008 to 2009. (@gwlaw)

Jack Beatty, On Point news analyst. Author of the Age of Betrayal: The Triumph of Money in America and editor of Colossus: How the Corporation Changed America. (@JackBeattyNPR)

MEGHNA CHAKRABARTI: This is On Point. I'm Meghna Chakrabarti. Welcome to day two of our special weeklong series, More than money: The cost of monopolies in America, where we're taking a close look at this rather sweeping statement made by the current chair of the Federal Trade Commission, Lina Khan.

LINA KHAN [Tape]: Monopolies are bad. Not simply because they threaten to, you know, lead to higher consumer prices or even necessarily undermine productivity and growth. But monopolies are bad because they're bad for democracy.

CHAKRABARTI: Of course, that is subject to debate, which is why we're having this series this week. But what isn't debatable? There's been a veritable frenzy of corporate consolidation recently in this country. A lot of it has been relatively hidden from view. Yesterday, we talked about how just four companies control almost 90% of the meatpacking market in the United States. And it's not just in agriculture. M&A fervor is everywhere, worldwide.

Just guess how many major corporate mergers or acquisitions took place globally last year, with a merger value of more than $100 million? Just guess. Take a second. Do you have a number? Was it more than a thousand? Because that's the answer. Total transaction value: $1.4 trillion. Which is just off 2015's high of $1.5 trillion in global mergers, according to a report from the consulting and advisory firm Willis Towers Watson. Well, last month, on January 18th, to be precise, Microsoft announced its latest acquisition, and it's a big one.

SATYA NADELLA [Tape]: This morning we announced that we will acquire Activision-Blizzard in an all-cash transaction valued at $68.7 billion.

CHAKRABARTI: Microsoft CEO Satya Nadella announcing the largest acquisition in the company's history, and the largest ever in the video gaming industry. Activision-Blizzard is the maker of some of the most popular games in the world. Everything from Candy Crush to Call of Duty, all irresistible to Microsoft. And Nadella says why.

SATYA NADELLA [Tape]: Activision-Blizzard is one of the premier game publishers worldwide, and their mission to connect and engage the world through epic entertainment is deeply aligned with our own. Together, our ambition is to bring the joy and community of gaming to everyone on the planet. But too much friction still exists today between content consumption and commerce. We need to make it easier for people to connect and play great games wherever, whenever and however they want.

CHAKRABARTI: The monster merger comes after an already very active period for Microsoft. Within the past year alone, the company acquired companies in diverse sectors. Such as speech recognition for the health care system, education and 5G networking, among others. The Activision deal, if approved, would expand Microsoft's reach even further. In that January 18th announcement, Nadella envisioned a river of entertainment where content and commerce flow freely. A world of quote 'fewer constraints on distribution and that removing those barriers will only become more important as the digital and physical worlds come together in the metaverse.'

SATYA NADELLA [Tape]: Together, we have one of the most diverse and robust content pipelines in the industry across every end point.

CHAKRABARTI: Too much friction. Reduce constraints. Free flow of commerce across every end point. Basically, Nadella invokes familiar logic there of 'consumers will benefit, the company will profit, so everybody wins.' But if you're Lina Khan, the current chair of the FTC, you hear something different. You hear a tech company justifying its radical expansion across many sectors in a way that might not harm consumers, but might harm societies. So coincidentally, just hours after Microsoft's Activision announcement, Lina Khan and the DOJ's Antitrust Division assistant attorney general Jonathan Kanter held a joint press conference to announce their plans to modernize federal merger guidelines.

LINA KHAN [Tape]: Major technological and economic changes, meanwhile, have led to shifts in how businesses compete and grow, creating new interconnections and dynamics across multiple dimensions. For us to accurately detect and analyze potentially illegal transactions in the modern economy, ensuring that our merger guidelines reflect these new realities is critical.

JONATHAN KANTER [Tape]: The attorney general remarked just earlier this month that too many industries have become too consolidated over time. We need to understand why, and think carefully about how our merger analysis tools can do better to prevent this problem from getting even worse.

CHAKRABARTI: So that makes the Microsoft Activision merger, in a sense, a test case for Khan's theory of monopolies. In the modern economy, do they behave in ways that might not harm consumers, but are as bad as she says for democracy? Joining us now is Dina Bass. She's a tech reporter and Seattle bureau chief for Bloomberg News, joins us from Seattle. Dina, welcome to On Point.

DINA BASS: Hello, thanks for having me back.

CHAKRABARTI: And I should note you've been covering Microsoft for, what, 20 years or so.

BASS: Since the dawn of time.

CHAKRABARTI: Definitely the before times, if we put it that way. So then give us some context then. How large is this proposed merger between Microsoft and Activision-Blizzard vis-a-vis Microsoft's own history of acquisitions?

BASS: Sure. So it's a $69 billion deal. It's more than two times, three times as big as Microsoft's last biggest purchase, which was its acquisition of LinkedIn for about $26 billion. It's also just, you know, by far the biggest games deal for Microsoft, for the entire industry. It's a takeover of a storied and very large game publisher. Activision was actually the original third party game publisher, when they were founded to make games for the Atari. That's how far back they go. And if this deal is completed, it would make Microsoft the number three video game company in the world, behind Tencent and Sony. It also gets Microsoft into mobile gaming. You mentioned Candy Crush, because Activision owns King.

And that's an area where Microsoft has been very far behind. And if you look towards the future, everyone's talking about the metaverse. Let's be honest, none [know] what that actually means. But Satya Nadella mentioned the metaverse as a motivation for this deal, as well as a deal that would help position Microsoft well with different communities of gamers that could eventually be a metaverse community. So there's both a [current] play and a future play.

And in terms of Microsoft's acquisition history. So first of all, it's important to remember that Microsoft is in a reasonably luxurious position compared to the other four Big Tech companies. Apple, Amazon, Google and Facebook, now Meta. Those companies have been much more heavily scrutinized by regulators, so they haven't been able to do these kinds of large deals. And Microsoft itself has poked at some of those companies. The clip of Satya Nadella that you began the show with, where he talks about friction. He isn't saying it overtly, but based on what Microsoft said that day to me and to others — and what they said before — what he's talking about there is the Apple App Store and Google's App Store, as well.

CHAKRABARTI: Keep going. This is just fascinating.

BASS: No, I was going to say, I mean, what we're seeing is Microsoft both fortifying and boosting existing businesses, and expanding into new areas through acquisitions. That's not new for them, but their frequency of their large deals seems to be accelerating, and their effectiveness seems to be there. And that may be why regulators are also starting to take notice. If you look back at the 2000's and the early teens, Microsoft's deals were often more likely to raise eyebrows from investors and regulators because they didn't seem to work out that well. But under Nadella and CFO Amy Hood, the deal strategy's been a lot more savvy. And to the extent that it's more effective, that will get regulators attention as well.

CHAKRABARTI: OK, so I understand that if this merger is approved, it would close by some early summer of next year. And I mean, just again, to lay out some of the basics for people who don't fully know. Beyond consoles, how much does Microsoft currently have a presence in gaming?

BASS: Sure. So there's a range on the close. Basically, Microsoft said it will close sometime in its next fiscal year, which starts July 1. So that's somewhere between July 1 this summer, and June 30 next year. So Microsoft actually started in PC games. They were in PC games before they were in console games. Think back to Flight Simulator. That was one of their original games, and they've now revived it. And they have a fairly expansive view of the gaming market, and it's gotten more and more expansive in the last couple of years. Where, you know, early in the days of Xbox, they wanted everyone on console. Now what they're looking for, they don't care where you play your games, they don't care if it's a PC, if it's an Xbox console, if it's on mobile phones, if it's on iPads. But they want to provide that content for you.

And the strategy has been not just to sell the consoles and to sell the games, but this monthly video game subscription called Game Pass that gives you hundreds of games for one monthly fee. And one of the plays here in the Activision deal, as well as their acquisition a year ago of Bethesda and ZeniMax, was to get more content for Game Pass. And that will be why when Microsoft goes in to argue this deal to regulators, they will say not only are we not harming consumers with higher prices, but we're giving them more value. For your same $10 or $15 a month, you can get even more games. That will be their argument.

CHAKRABARTI: In Nadella's announcement there last month. I mean, he talked about the scope and basically the reach of gaming around the world. You talked about how there's some three billion gamers now. Expected to be, you know, four or five or six. And he says eventually, we could reach the whole world. Which is absolutely fascinating here because the other language that he sort of talked into here, it wasn't just about gaming. He also talked about the possibility of commerce. Can you talk about, am I wrong to sort of have that word jump out at me?

BASS: No, I don't think so. And there's a fair amount of commerce in gaming as well. This whole notion, again, people are starting to talk about this metaverse, that you could buy things in it. People have been doing that in video game communities for a long time. I don't know ... if you have a kid who plays Minecraft.

CHAKRABARTI: The dreaded in-app purchases, exactly.

BASS: Sure. Or, you know, you buy a Battle Pass. It's a completely different model than than it used to be in gaming. And as for the three billion, that's a change, also. When I started covering Xbox, video games weren't niche, but they were confined to a certain demographic. And Microsoft, and Sony and Nintendo to the lesser extent, because they've always had a broader demographic, tried to figure out how to broaden that. Now, I mean, I don't know. How many people are playing Wordle.

CHAKRABARTI: A lot, but maybe not so much after the Times bought it. Sorry. Well, Dina, hang on here for just a second, because we've got to take a quick break. And this is part two of our weeklong series called More than money: The cost of monopolies in America. And today, we're taking a special look at the tech sector. Specifically, through this giant merger proposal between Microsoft and Activision-Blizzard. Because it really is kind of a test case for Lina Khan's theory of a new definition of harm when it comes to monopolies. And we'll take more a closer look at that when we come back. This is On Point.

CHAKRABARTI: This is On Point, I'm Meghna Chakrabarti. And today it's part two of our weeklong series called More than money: The cost of monopolies in America. And today, we're taking a look at the tech sector through the story of the ongoing attempt of Microsoft to purchase in an all-cash deal for $69 billion, gaming giant Activision-Blizzard. And when I say ongoing attempt, it's because it has to go through federal approval. And we'll talk about the chances of Microsoft gaining that approval in a few minutes. But I'm joined today by Dina Bass. She's tech reporter and Seattle bureau chief for Bloomberg News, who's been covering Microsoft for about 20 years, and joins us from Seattle.

Dina, I want to just put again the size of this merger into context, in comparison to other sort of big deals in tech in recent years. For example, I'm seeing here that when Facebook bought WhatsApp, that was $19 billion. T-Mobile and Sprint, when they merged, $26 billion. Back when Amazon bought Whole Foods, $13 billion. And way back when, that tiny little $1 billion purchase of when Facebook bought Instagram. It seems like the coins you can find under the couch these days, in comparison to the $69 billion Microsoft is paying for Activision.

So we're talking about giant sums of money in the tech sector here, but specifically with Microsoft. Can you tell us more about their activity, their merger or their acquisition activity over the past year? And some of the companies they've bought and why? Because it's outside of, sort of what I would say is, quote-unquote traditional tech, right?

BASS: Sure. So, first of all, everybody is caught up in the eye watering sum on the price tag on Activision. But I would point out that some of the deals you just mentioned happened a couple of years ago. And think about what the stock market has done since then and the dramatic increase in Microsoft, Facebook, meta, et cetera, and their market valuation. Well, Facebook come down a bit. But everyone's market cap is up. So that's part of why the deal prices are going up.

But you know, I think the thing that you have to remember for Microsoft again, we all have sticker shock around this deal. And they've done some other large ones in the past year. We talked before about Nuance, the health care AI company, as well as ZeniMax, another game company. But generally speaking, most of what Microsoft does is smaller deals. So every year, and this past year is no different, they purchased about a baker's dozen or more of smaller companies, that are small enough that they don't disclose the value, but they can be really strategic for Microsoft.

You mentioned some of them at the top of the hour, but you know, in the past year alone, Microsoft has purchased several computer security firms, a platform for students to connect with tutors and academic subjects, as well as hobbies. You know, a piece of software that mines supplier data to give some of Microsoft customers information on things like contract and purchase orders.

They bought an in-browser app for creating and editing videos, and a company that works on online content moderation and safety. I wouldn't say these are outside tech, because everything Microsoft does is some amount of hardware. They're in tech. But they're in this ever broadening set of areas. So, you know, in the last, Microsoft's always been interested in computer security, but it's now a $15 billion business for them, and you've seen them get more and more into that. You've seen them focus more on enhancing their cloud business so that they can better rival Amazon's cloud business. They've been in education for the history of the company, but again, they're getting more and more into different areas. They're looking for ways to enhance their Teams chat app, which is the Slack rival.

So they just continue to try to dramatically expand. And a lot of it is these smaller deals, where they acquire promising technology, promising employees. And that's a question that the FTC has raised before, not just with Microsoft. You mentioned Facebook, Instagram. There's been this look at the FTC, even before Lina Khan, at whether there are deals that regulators are missing. Either because they're small enough that they fall under the historical threshold of what regulators look at, or because they're entries into new markets. So they don't fall into that traditional example of, Hey, this company is consolidating power in an existing market.

CHAKRABARTI: And that is exactly the thing that, you know, even if it's come before. Lina Khan's being more vocal about, I would say, than previous FTC chairs. I mean, she's sort of centered her post journalism career on that exact thing. So you've given us the perfect segue, Dina, for me to introduce our next guest into the conversation. Bill Kovacic joins us from Washington. He's a professor of law and policy and director of the Competition Law Center at the George Washington University Law School. He's also former chair of the FTC, served in that position from March 2008 to 2009. And also served as a member of the FTC from 2006 to 2011. Professor Kovacic, welcome to you.

BILL KOVACIC: Great to see you, Meghna, and great to be here. Thank you.

CHAKRABARTI: OK, so first of all, professor, if I could. I want to just play a cut from something that Chair Khan said last month. And this was after Microsoft announced the Activision deal. She was talking with the New York Times' Kara Swisher and CNBC's Andrew Ross Sorkin. And while she couldn't directly talk about the FTC's scrutinizing of the Microsoft Activision deal, because it's ongoing, she was asked this question about how some traditionally overlooked acquisitions ... might be considered a new kind of monopoly power in Khan's view. And here's what she said.

LINA KHAN [Tape]: The FTC, under my predecessor, initiated a study of these acquisitions to try to understand what did we miss and what can we be learning to make sure that we are identifying accurately what types of deals may be illegal. Even if they're not mapping on to the traditional way that we might have been looking at this.

CHAKRABARTI: So first of all, Professor Kovacic, can you give us a definition of that traditional way that Lina Khan talked about? And what was the traditional way of looking at it?

KOVACIC: A traditional framework would ask the question that Dina was posing before. Which is, does a merger increase concentration among firms that produce the same product or service? Does it involve a combination of firms that could be considered to be direct rivals? And generally speaking, under the traditional framework, there was a great deal of latitude given to incumbent firms, large companies, to acquire new capabilities. Unless there was a confidence sense that the firm being acquired could emerge as a rival. That's why Facebook-Instagram has attracted so much attention.

Where the second guess that's taking place now, the reflection is if Facebook had not bought Instagram, would Instagram have evolved to become a significant social network on its own? And what the FTC chair is suggesting is that we're going to look more closely at the acquisition by a large enterprise of promising new ideas, small companies, that have the capacity, perhaps to grow and evolve in ways that would stimulate broad competition across the market. So a basic change that is embedded in her comments is greater scrutiny of acquisitions that could stifle the emergence of nascent threats to the existing order.

CHAKRABARTI: But of course, those same large companies would argue that it is the acquisition that would allow the idea to flourish, right? Because of their scale, their resources, etc. That perhaps they would be able to give those promising new ideas a leg up.

KOVACIC: Precisely right. And in the conflict that's taking place in the courtroom coming up between Facebook and the FTC. Facebook's argument is going to be we did not bury Instagram, we did not bury WhatsApp. We propelled them into a higher orbit. And what you have in front of you is our demonstrated success in elevating their presence, and extending their services to a wider group of users. And so you have something that you can observe directly that happened, that arguably was favorable.

And the alternative vision is another reality in which things might have been better. So how do we know it would have been better? So the firms in question are making exactly the argument you've made, which is we do not stifle these ideas. We inject vitality in them, and make them much more broadly available. It's a comment that Dina was making about the Microsoft chair's vision of making these capabilities universally available. That's a major theme of their acquisition strategy and others.

CHAKRABARTI: Well, so Dina, let me turn back to you. For Microsoft specifically, is that what Microsoft has been doing, sort of pumping resources into these, the smaller acquisitions that you were talking about? Or do they buy and bury sometimes?

BASS: They do both. In some cases they, you know, I mean, it's a large deal, but they've injected a lot of resources into LinkedIn. They've injected a lot of resources into GitHub, and both of those were companies that were having some challenges when Microsoft acquired them. But certainly they've bought some office mobile apps. You know, I can think of one, the email app, which they injected a lot of resources into it, is now kind of the underpinning for Microsoft's own mobile phone email app.

But another one, the task app that they bought, they buried. You know, it's another great area to consider what Bill is saying. Is what is happening in the AI startup space. And this is both Microsoft acquisitions, but also companies like Amazon, and Facebook and Apple and Google. You know, we did a story about a year and a half ago when the FTC was looking at these smaller deals that they might have missed. And we called it, you know, Big Tech swallows all of the AI startups. Because over a 10 year period, over 60 AI startups have been bought by the largest U.S. tech companies. And the question then is, If those tech companies buy all of those companies, how could one of those possibly emerge to be a rival, to be the next Microsoft, to be the next Facebook?

CHAKRABARTI: Excellent question. So Bill, let me just turn back to you here for a second. When Lina Khan talks about those traditional ways that we've defined monopolies, she's essentially saying that we need to start thinking of nontraditional ways. So, I mean, put your FTC hat back on. How do you look at the Microsoft Activision proposed merger?

KOVACIC: Well, one of the challenging things that the FTC chair mentioned, was how we are trying to understand what's taking place in these sectors. I thought Dina did a wonderful job of laying out the complex, newly forming relationships that take place across a variety of different technologies. One thing that the FTC will be trying to do in this transaction, and others involving tech, is simply to understand what's happening in the sector. Where is commercial activity going? Where is innovation going? And how does allowing a deal or blocking a deal inspire greater rivalry, imagination in that process? I sense in the FTC chair's comments, what Lina Khan has said is we're still trying to figure that out. So that's a big challenge in looking at this transaction.

So one ingredient of  the evaluation that the FTC staff will be doing is, Where is this sector going now? If we block this deal, how might it evolve? What are the alternative paths that innovation and rivalry might take in this area? So that's one big challenge, is simply what's going on? And what are the alternative paths? That puts a lot of pressure on the capacity of the agencies, with the resources they have, with the people they have, to do the kind of forward looking assessment. That puts you in a position to think about what life would look like if you do or did not allow this deal to go ahead. Well, that's a really hard challenge.

CHAKRABARTI: I do also want to ask about just again trying to understand this theoretical shift that we're exploring here, at least that some people, Lina Khan, the assistant attorney general you heard there, talking about rethinking what monopolies mean. ... How would a company like Microsoft is doing, buying a lot of little companies, occasionally a huge one, how does that differ from, you know, a traditional, more easily understandable conglomerate per se? Like, you know, if Unilever can make every product in half of a grocery store, practically. ... Is there any difference between that and what companies like Microsoft are doing?

KOVACIC: I think there's a reassessment of what conglomerate structures mean for competition, for the economy. By conglomerate, especially using the main models that emerged in the 1960s and 1970s, you had firms that achieved great corporate size. By buying largely unrelated enterprises. You might have a company that ran a chain of hotels, owned a steel mill, a golf course and sold tangerines. Not a lot link those different activities together.

And essentially, what the firm was saying is we the board can manage all these assets better as a portfolio than individual firms could manage them on their own. The interesting question here is whether or not there are in fact, closer relationships across the range of capabilities and business interests that the large tech companies have. So that they are not completely unrelated enterprises, but the assembly of a collection of different complementary capabilities. Content and equipment. Different types of content put you in a position to exert significant market control over time.

What is interesting to me in hearing Jonathan Kanter and Lina Khan discuss these things, is notice the extent to which they're saying we are rethinking this. It almost suggests that we don't really know exactly what methodology we're going to use. We've identified the problem. But the analytical technology to make that operate, to make our larger concerns operational, is something we are having to construct right now, at the same time that we're looking at these transactions. So it's a challenge in a way of building the house and living in the house at the same time.

CHAKRABARTI: Dina Bass, what do you think about that?

BASS: Well, I think there's a couple of other things, maybe to think about as well. What's the concentration, or is there a concentration in the labor force here? If you have a certain number of highly successful tech companies, do they dominate the market for the best engineers? When you look again at artificial intelligence, we've already heard complaints from start ups that in order to run artificial intelligence models, you need significant and very pricey compute power. Can only the biggest companies field that bill? How does that work? If we go back to our original example of the video game industry, what happens to independent video game designers and developers?

You have all of these independent studios that build video games. Are they going to be able to fund those? Are they going to be able to publish those if too much of the market is controlled by the very large video game companies, by the very large publishers? I think there is a number of issues that regulators are going to want to consider here. But as Bill is saying, they have to figure out how they're going to do that, within the context of existing laws and regulations. Or do they need new laws passed? Obviously, Congress is discussing some of those, but what's the mechanism under which they can address all of these issues?

CHAKRABARTI: Because Lina Khan in that cut we played said, Are these things illegal? Well, I mean, within the bounds of current law is the question that has to be asked. So again, do we have to expand the bounds of law? And we'll take a look at that when we come back.

CHAKRABARTI: This is On Point. I'm Meghna Chakrabarti. And we're blazing through episode two of our special weeklong series called More than money: The cost of monopolies in America, where we're taking a look at this idea advanced most vocally by the current head of the Federal Trade Commission. That a new way to think about monopolies shouldn't just be limited to consumer harm or lack of competition, but she wants us to think bigger about whether monopolies harm democracies.

And today, we're taking a look at the tech sector, specifically. And the giant proposed merger between Microsoft. I should say, Microsoft's acquisition of Activision-Blizzard, the gaming company, for $69 billion in an all-cash deal. And I'm joined today by Dina Bass. She's tech reporter and Seattle bureau chief for Bloomberg News. And Bill Kovacic joins us, as well. He's director of the Competition Law Center at the George Washington University School of Law, former chair of the FTC and a member of the FTC as well, between 2006 to 2011.

And before we move further into sort of the attention that tech has gotten on Capitol Hill, Professor Kovacic, I just wanted to ask you, given that you have been inside the agency and also headed the FTC. How remarkable is it, or do you think it's remarkable at all, that the woman now running it is vocally asking this question about needing to rethink monopolies, in terms of impact on democracy and not just business, or consumers and competition?

KOVACIC: I think it's a crucial question, and I applaud her raising it. It's fundamental to the establishment of the U.S. system. And I think it's impossible to look at U.S. antitrust experience and policy without connecting it to the larger political framework in which it's developed. It's a fundamentally important question. To what extent does the structure of enterprise, the size of businesses, the manner in which they operate, affect the electoral process itself? That's a vital question. The hard part, having identified the question, is to come up with a good answer that tells you what to do in individual mergers, to think about what kind of merger creates an enterprise of such size and significance that it is a threat to the larger social and political order.

That's the harder point that we finished on just a moment ago. Which is, how do you close the gap between the intuition, the idea and its realization and process? That's the hard part. But in my mind, it is a mark of responsible public service to ask exactly that kind of question. And our field is better for the fact that she's doing it.

CHAKRABARTI: Was it a top-line question when you were at the FTC?

KOVACIC: I don't think it was ever identified in quite the same way. But I was always aware of the deep connection between what we did, and the larger sense that our institutions were functioning well or not. I mean, the question sometimes has been raised, is there politics in antitrust law? To me, that was a bit like asking, is there flour in bread? ... And the question is, how do you link and relate what you're doing to the good functioning, not just of the economy itself, but to the larger society? Those are the kinds of questions I got asked all the time by the Congress. And they did not want to hear my pedantic descriptions of the fabulous technical features of the antitrust system. They wanted me to relate it to these larger issues.

CHAKRABARTI: So they wanted you to, and was the structure of the agency conducive to that?

KOVACIC: I would say a couple of things got in the way. One is it was very difficult for them to situate what antitrust agencies could do in the larger framework of what the government as a whole can do. That's the focus of President Biden's executive order from last July. His executive order on competition policy, where he said in effect, antitrust law is important. But it's only one dimension of the larger framework of policy that shapes competition law. So that we need a broader focus on what he called, whole of government competition policy. I felt a lot of frustration in not being able to drive that idea ahead.

But another that I felt really held us back is the question of agency capability, and resources. I compare this to my experience in the United Kingdom, where I'm an outside director of the UK's competition agency, the Competition and Markets Authority. And I look at the great strides they've taken to put themselves in a better position to address these issues. I feel in many ways the U.S. system is so far behind. And the Congress has spoken now for 18 months about a major increase in resources, but they haven't provided an additional dime.

And I guess I'd put it this way, unless you're willing to pay to enable the agencies to build the capabilities, I'm talking about hiring computer scientists. I'm talking about hiring people who are superior in data analytics. I'm talking about building the human capacity to answer the hard questions we've been doing. If we're not going to pay for it, if we're not willing to do it, we will be riding a bicycle and chasing a Formula One racer, and we'll never catch up.

CHAKRABARTI: I understand that there are fewer people at the agency to do that work now at the FTC than there were, say, in the 1980s.

KOVACIC: Yeah, the good part about what's happening is that so many of the people who have left performed administrative tasks. That is, I was never allowed when I was a junior lawyer at the FTC in 1979, for the first time, to type my own documents. That had to go into a pool of people who would do that. Those people aren't there now. The number of lawyers and economists is roughly the same. But even so, it's not enough. And again, it's not just hiring lawyers and economists.

If you want to be in a position to judge what's happening in these complex, fast evolving commercial sectors, and understand the companies and what they do, lawyers and economists — wonderful that they are, are not going to be enough. I look at the United Kingdom agency I mentioned. They have a team of tech people and data analysts, and now numbers 50. They are computer scientists. They are quants. They are people who are skilled in the technical analysis of the sectors in question. I'd hate to guess how many people — either the Department of Justice or the FTC have, who are really computer scientists. So it's ... having the right team to play in the match. And if you cannot do the right kind of analysis inside, you're going to forever be behind.

CHAKRABARTI: Dina, I want to ask you a question that keeps popping up in my mind, as I'm hearing both you and Bill. Because I can imagine that there are many people out there, many of them sitting in the C-suites of the very companies we've been talking about, who would say, the things that the FTC would have to do in order to determine whether or not these mergers have a bigger sort of systemic or democratic impact, that's not even the role of government. Like, should government be trying to think about how many engineers would be left, or what competition would look like in five, 10 years down the line? Or if democracy might be impacted somehow? I mean, is that the kind of thinking that even questions the very role of government, when it comes to analyzing these mergers?

BASS: There's definitely some of that thinking in some tech C-suites. We're not seeing that, at least publicly from Microsoft. Microsoft, on the contrary, has been, if anything, asking for more regulation of certain areas. They've been lobbying for more regulation on the App Store. Because, as discussed earlier, they're not very happy with, in particular, what Apple has done. They've been asking for more regulation in certain types of A.I. as well. And if anything, the stance in the C-suite from Satya Nadella, from president or vice chair Brad Smith, has been the opposite.

It has been to say, we're not going to argue that we shouldn't be regulated. We are going to comply with what regulators and people writing the laws, senators and members of Congress want. And they've, if anything, made a big show of trying to position themselves as the adults in the room, as the people that are in favor of regulations that can keep these markets flowing well, and keep everything fair. We saw that as recently as last week, on the Activision deal. They began this sort of charm offensive last week in Washington, D.C., holding a small press event with Nadella and Smith and an Xbox executive, Sarah Bond, where they laid out new rules and principles for the App Store that they said they will comply with.

So they've been trying to make this argument that they're going to embrace these sorts of things, and they're going to embrace fairness. You know, one of the comments out of that event was quote, 'We want to be clear with regulators and with the public that if this acquisition is approved, they can count on Microsoft to adapt to the rules that are emerging, and run our business in a responsible way.' So they are not taking the tactic of saying, We don't think regulators, we don't think members of Congress should be getting involved in this.

CHAKRABARTI: OK, so Bill, I've got 30 seconds left with you. Do you think that this nod towards wanting regulation is also a way for these big tech companies to tamp down the voices that might want to just go further and break them up?

KOVACIC: I'm sure they'd prefer not to be broken up. I do think that the impulse that Dina has described as genuine. I think the company learned a lot from its earlier experience in the antitrust process in the United States and in Europe. I think that compared to their Big Tech counterparts, their engagement with policymakers and their discussion of fundamental policy issues has been far superior. So I think that the message that Dina referred to before is genuine and significant.

CHAKRABARTI: Well, Bill Kovacic, former chair of the FTC and now director of the Competition Law Center at the George Washington University School of Law, thank you so much for joining us today.

KOVACIC: Thank you, Meghna, and thanks for the chance to have the conversation with Dina, too.

CHAKRABARTI: And Dina Bass, tech reporter and Seattle Bureau Chief for Bloomberg News. Dina, it was excellent to have you on the show. Thank you so much.

BASS: Thank you so much for having me, Meghna.

CHAKRABARTI: All right. Well, let's turn now to Jack Beatty, On Point's news analyst, who's also written several books about the previous age of monopoly in the United States. Hello there, Jack.

JACK BEATTY: Hello, Meghna.

CHAKRABARTI: OK, so the Microsoft Activision-Blizzard story, or the tech sector more broadly, what do you see in it that helps us understand sort of this rethinking of monopolies?

BEATTY: Well, we are seeing a new kind of power. The big four in tech. Apple, Google, Amazon and Facebook. They have rightly been called gatekeepers over key channels of distribution. Distribution, not only of information, but of consciousness itself. Apple monopolizes the mobile app store market. Google monopolizes 90% of the search market. Amazon controls about half of the retail market. Facebook, of course, is the gateway to all social media.

Writing about Facebook, one of its co-founders, Chris Hughes, in an article called It's Time to Break Up Facebook, writes: Marc alone can decide how to configure Facebook's algorithms to determine what people see in their newsfeeds, what privacy settings they can use, and even which messages get delivered.

He sets the rules for how to distinguish violent and incendiary speech from the merely offensive. And he can choose to shut down a competitor by acquiring, blocking or copying it. Is that power vested in one man and one company consistent with Republican government, with democracy? And I think the change that's happening now in the FTC, and what we've been talking about, is  trying to adjust our thinking to this new kind of power. The thinking behind the antitrust laws.

CHAKRABARTI: Yeah. And so it makes me wonder, though, Jack, how far have we come in terms of what to do in the face of this kind of new consolidated power? Because it seems like the solutions that we began to talk about in the hour are familiar ones. Regulate, change laws or break up.

BEATTY: Yes, and that's of course, we're going to be talking tomorrow about how the previous century dealt with the growth of monopoly in the late 19th and early 20th century, and that was the debate. Do we break up these behemoths, Standard Oil, the railroad trusts? Or do we regulate them? And we're back to that conversation today. What is striking, though, is how they grew like this. You know, Facebook had 67 unchallenged acquisitions, Amazon 91, Google 214, unchallenged acquisitions.

And why? Well, as we're going to find out on Thursday, antitrust has been under a panglossian drowse, induced by the baleful writings of Robert Bork. In which the only way you look at monopoly power is price. Is the consumer getting a good deal? And the questions that you've raised, what is the danger to democracy? What is the danger to even people's understanding of the world, through consciousness? Those questions weren't asked, and these kinds of acquisitions just went through because, after all, it benefits the consumer.

CHAKRABARTI: You know, Bill Kovacic used a very gripping analogy. When he said in even beginning to ask those questions and trying to gather the tools to answer them. I mean, he basically said the FTC is riding a bicycle, chasing a Formula One. Is that similar to the period that you've studied so deeply before, Jack? I mean, was there a sort of asymmetrical power 100 years ago or so in the great trust-busting era that came before?

BEATTY: Yes, there was. And of course, the main instrument then was state governments. In the 1880s, Massachusetts, the Commonwealth, had 6,000 employees. The B&M Railroad in Boston had 18,000. You know, it dwarfed the entire capacity of state governments to deal with it. That's why the national government had to be involved. And of course, it had to scale up massively in order to do that. We're in that sort of situation. Lincoln said, When our circumstances are new, so we must think anew to act anew. Our circumstances are new, and we're talking in this series about the new thinking that'll help us to take the new action.

CHAKRABARTI: Well, tomorrow, Jack is joining us for the full hour. Because we're going to actually look back in time to see what we can learn from the old thinking that came in a previous era. Where monopolies grew so big that it wasn't just their economic power, but their political power that Americans became very concerned with. So, Jack Beatty, On Point news analyst, looking forward to saying hello to you on tomorrow's show. But thanks a lot for today.

BEATTY: Thank you.

CHAKRABARTI: So stay tuned for that tomorrow. It's part three of our special series, More than money: The cost of monopolies in America.