In this installment of “From the Vault”, we revisit a compelling 2019 episode on antitrust featuring a conversation with Danielle Wood. At the time of the interview, Wood was a director at the Grattan Institute, a leading Australian public policy think tank. Since then, she has ascended to the influential role of Australian Productivity Commission Chair, marking a significant journey in her career dedicated to economic reform and policy innovation. You can listen to the interview wherever you listen to your podcasts (e.g. Spotify) or via the embedded player below.
This episode dives into the intricate world of antitrust laws, fueled by a renewed interest in scrutinizing the massive market power wielded by big tech companies such as Google, Facebook, and Amazon. Danielle Wood, with her expertise as a former principal economist and mergers director at the Australian Competition and Consumer Commission (ACCC), offers invaluable insights into the evolution of antitrust laws from their inception in the United States in the 1890s to their critical role in today’s digital economy.
The conversation illuminates the historical roots of antitrust laws, born out of a desire to combat the influence and economic power of “trusts” in sectors like railroads, energy, and steel. This backdrop sets the stage for a deeper exploration of the challenges and complexities facing contemporary antitrust enforcement, especially in an era dominated by digital platforms and the unique economic dynamics they present.
Wood’s analysis provides a nuanced perspective on the “hipster antitrust” movement, which advocates for a broader interpretation of antitrust enforcement, beyond traditional economic harms such as price gouging, to include considerations of impacts on innovation, privacy, and political power. This movement, symbolized by figures like Lina Khan and Tim Wu, underscores a growing concern over the adequacy of current antitrust frameworks to address the multifaceted influence of tech giants.
Reflecting on Australia’s own regulatory environment, Wood highlights the work of the Grattan Institute in assessing market concentration and the effectiveness of competition law. Despite not identifying a systemic market power issue, Wood acknowledges sector-specific concerns, particularly in technology, where the enforcement of existing laws, rather than the introduction of new ones, might be key to addressing competitive imbalances.
This episode serves as a timely reminder of the ongoing debates surrounding market power, competition, and the role of policy in ensuring a competitive, dynamic, innovative, and fair economy. As we continue to navigate the complexities of the digital age, revisiting conversations like these provides valuable context and guidance for future economic explorations.
Transcript of Episode 22: Antitrust with Danielle Wood
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 0:08
The Economist magazine published an article last October titled dismembering big tech. The massive market power of the big tech companies such as Google, Facebook, and Amazon has prompted a renewed interest in antitrust laws. To help us understand antitrust, I’ve invited Danielle Wood from the Grattan Institute onto the programme. The Grattan Institute is a leading Australian public policy think tank based in Melbourne. Danielle is the budget policy and institutional reform programme director at Grattan. Later this year, she will take up the CEO role at the Institute. Danielle is well qualified to talk about antitrust, as she once worked as principal economist and mergers director at the ACCC, the Australian Competition and Consumer Commission. I hope you enjoy our conversation.
Danielle Wood from the Grattan Institute, welcome to the podcast.
Danielle Wood 1:17
Thanks for having me, Gene.
Gene Tunny 1:18
Excellent. Danielle, today, we’re going to be talking about antitrust. And this is a topic that has had a resurgence of interest, particularly due to the market power of the big tech companies such as Google and Facebook. Could we begin with you explaining what is this concept of antitrust? And where does it come from, please, Danielle?
Danielle Wood 1:47
Yes, sure. Well, this is a concept that’s been around a very long time, even though as you say, it’s recently had a resurgence, which is always very nice when something you’re interested in, finally comes to prominence in the debate. But people have been worried about the impacts of market power and concentration of big firms going back a long time. So the first antitrust laws were introduced in the United States in 1890. And at that time, there were a number of big firms known as trusts, they dominated particular sectors: railroads, energy, steel, and sugar. And people were worried about the power they had, their economic power. So because they were in a dominant position they were able to price high.
They were worried about the impact that had on societies, and on groups like farmers who were suppliers, on inequality, and on the political power that those firms had. So, in response to that, they introduced some antitrust laws. And during the 20th, the early 20th century under Theodore Roosevelt, they started to be quite strongly enforced. So the government actually use the powers that were there in the laws in order to break up those trusts in a number of cases.
So, from there, many other countries got on board. And now almost every major developed country, and most developing countries have some form of law that controls the actions of firms. So normally, there’s some component that says they can’t get together with their competitors and do things like fixed prices. And then there’s rules around firms with market power, how they behave. So essentially [there are] regulations to stop them misusing their market power.
Gene Tunny 3:25
Okay. And the big concern back in the late 19th century and early 20th century in the US…you mentioned a number of industries, but particularly, big oil, is that correct? With Standard Oil?
Danielle Wood 3:40
That’s right. So the railroads and the oil companies were really a couple of the really big trusts. And they had almost entirely monopoly positions. There was particular concern. Theodore Roosevelt was very worried about the amount of political influence they held. And so breaking up those trusts was really one of the defining features of his presidency. He was referred to as a Trust Buster, and also an octopus hunter, which I love–the idea of these kinds of firms having their tentacles in all sorts of different markets and being being reined in by the exercise of these powers.
Gene Tunny 4:19
Yes, yes. That’s a really good metaphor, isn’t it? And I think Standard Oil was broken up, wasn’t it? That was broken up into, I think, was it Exxon? Esso?
Danielle Wood 4:35
Many of the companies that we still know today, were broken up from the original trust of Standard Oil.
Gene Tunny 4:42
You mentioned an act in the US. I think it’s the Sherman Act. Is that correct?
Danielle Wood 4:51
That’s right. So, the Sherman Act went through in 1890, and then it sort of sat there unenforced for more than a decade. And it’s one of those laws that could have just withered on the vine if someone didn’t pick it up and use it. But Theodore Roosevelt, who I mentioned before, was particularly concerned about the amount of political power that these firms were exercising. So he took, I think his first case was against JP Morgan and the railroad trust, but then went on to take on Standard Oil and a number of others. And I think he filed more than 40 cases, during histerm as president, so he really enlivened that law by using it very actively. And that, you know, really sort of set the precedent for future administrations.
Gene Tunny 5:40
Right. Okay. Now, why I approached you on this topic, Danielle, was that you wrote an article on hipster trust busters last year, which I thought was very good. And I’d just like you to explain, if you could, who the hipster trustbusters are and what they’re concerned about, please.
Danielle Wood 6:07
It’s one of those terms that really catches the imagination, but it was originally used, actually, as a pejorative. And it was simply directed at a group of young scholars that are the ones that have really led this push to revive antitrust laws. So there’s a group of them, Lina Khan is probably the best known. She wrote a very well known paper on Amazon and why she believed it was misusing its market power, while she was still at law school, and she got a huge amount of prominence for that. Tim Wu, who’s recently written a book called The Curse of Bigness, is another one that sort of gets lumped in as a hipster.
And really, the main contention is that antitrust laws have not been enforced to their full capacity. They are particularly worried about the dominance of the big tech companies, as you mentioned in your introduction, and they would like to see a return almost to those early days of the Sherman Act. We were just talking about it. In those days, really, the laws were enforced quite strongly. And they were enforced, not just with reference to potential economic harm through market power, so that the normal things we think about there: no firms are in a dominant position, so they might be able to up their prices, somewhat.
They say no, no, that’s certainly not the only harm we should be worried about. It doesn’t even make sense to talk about that kind of harm, particularly for products like Google and Facebook, where it’s free. You know, we should be thinking more broadly about the harm that these firms do to the competitive process. And even things like their sort of dominant political position, their impact on inequality. So they have a very broad ranging set of complaints about how the economy is functioning. And they would like to see a stronger antitrust policy help deal with those.
Gene Tunny 8:00
Okay, so they think that we don’t have strong enough laws already. Do they give any examples? Are they able to point to cases where governments haven’t had the powers that they’ve needed?
Danielle Wood 8:19
It’s less about that the laws aren’t there. And certainly, the antitrust laws are cast quite broadly. it’s more a critique of the way in which they’ve been enforced. So it’s a view that, in recent decades, that people have taken too narrow a view on what sort of harm antitrust law should be concerned with. And certainly the case they put, if you go back to the early case law, there was a lot more going on than concern just about price increases. So they say, you know, the law is fine, but it’s how we enforce it that needs to change.
Lina Khan, who writes a lot about Amazon, says we have this firm that we have allowed to become really dominant in terms of online and retail. Yes, it’s priced at a low [price] but if you look at things like its price-earnings ratio, it’s pretty clear that it’s buying market share and at some point in the future, people are expecting it to start upping its prices to take advantage of its dominant position. We’ve let it vertically integrate so now that it’s both a platform where people buy products, as well as a supplier of those same products, and this has all sorts of implications for how retail markets function. So the thesis there is we should have first of all stopped it taking over other competitors, we should have intervened early to limit its behaviour, or we should get involved at this point to try and break it up in some way just like happened with Standard Oil as well as a lot of the other big trusts back in the day.
Gene Tunny 10:04
What did you mention with Amazon? Would that be an example of predatory pricing? Is that what you’d call that, that they’re charging a price that’s lower than the cost just to gain market share, just to try to crush their competitors?
Danielle Wood 10:22
I’ll say this is the challenge. So I mean, how does the behaviour fit into the normal economic models? And what the hipsters are saying is the normal economic models are broken. So if I was normally thinking about predatory pricing, it’s quite a specific conduct, which is really the firm setting the price below cost. It is making losses in the short term in order to drive out competitors in order to later up the price and it would recoup those losses. So normally, that’s the kind of framework that we think about something like predatory pricing in.
Here, it’s difficult to say that it would meet that technical definition of predatory pricing. They are probably pricing close to costs, certainly not being a company that’s posted a lot of profits. But they’re not necessarily making losses. But they have clearly been aggressively chasing share. And clearly the market does expect some kind of recoupment at some point. But the sort of time horizons we’re talking about are pretty incredible. And it’s been doing this for more than a decade. Normally predatory pricing models expect a short drop in price, and a year or two later prices jump up again. It looks very different. And I think partly what they’re picking up there is the standard economic models have struggled to cope with quite a different paradigm.
Gene Tunny 11:48
It would be good to talk about what economists have traditionally thought about antitrust. What have been the different schools of thought on it? Because opinion amongst economists has changed over the decades. Is it fair to say that there have been times when economists have been more in favour than less in favour, and maybe economists are more in favour again? Are you able to tell that story, Danielle, please?
Danielle Wood 12:16
Yeah, sure. Look, so really, the resurgence of economics, really the point at which antitrust became a very economic discipline. And I’ve always said to people, I really think of it as where Economics and Law meet, was in the 1970s, with the emergence of the Chicago school. So the Chicago School, in an antitrust sense, was really almost a single person at the University of Chicago, Aaron Director who went on to lecture a lot of people that became prominent antitrust scholars in their own right, like Richard Posner, and Robert Bork. And the idea they introduced was that this was an economic law. So we shouldn’t be worried about all those other considerations I was talking about around political power, or the impact of market power on inequality, or other types of concerns. We should be sort of narrow, really looking at this question of market power through the lens of consumer welfare. So the only question we need to answer when we’re looking at conduct is does it enhance consumer welfare? Or is it hurting consumer welfare? And so that was very much an economic approach to bring.
From my perspective, I think that was a good thing to introduce more of a structure and certainly put economic considerations foremost in the enforcement of the law. I think it’s arguable that in the decades prior to that, there was a lot of inconsistency in cases. And there were certainly some cases that by today’s standards would be viewed as very unusual, intervening in mergers where firms were going to reach 2%, market share and things like that. So they said, let’s focus on this, will there be consumer harm?
The criticism of that approach is that, perhaps it was a little too narrow. So, in defining consumer harm, there was a lot of focus on price as an indicator of harm. What we know, of course, is that in markets where firms have market power, they may choose to exploit that through monopoly pricing, but there can be all sorts of other detriments as well and maybe poor quality. It may be that they are asking us to accept terms and conditions that we might not otherwise accept. So, for example, diminishing privacy would be an example. Or it can just be that they’re enjoying the quiet life. So they’re not pushing to find ways to cut costs or to innovate their product in a way that firms in competitive markets do. So there’s a whole lot of harms that I think are rightly considered economic harms that were perhaps not really emphasised by that narrower Chicago school approach. So I think the Chicago School was good at taking the discipline forward and putting economics front and centre. But at the same time, the criticisms that it’s too narrow in approach do have some validity.
Gene Tunny 15:22
Okay. So you mentioned the risks of monopoly power. There’s also risks from oligopolies. When you have just a small number of companies in an industry, there are risks of the oligopoly companies coordinating their prices and effectively having some sort of cartel and conspiring to raise prices and rip off consumers. There’s that risk. Now, can I ask you about the view that came in the early 80s or late 70s, early 80s, from William Baumol, that contestable markets view. Was that influential in how we thought about monopoly power and antitrust?
Danielle Wood 16:07
Yes, it absolutely was. So, previously, perhaps people were very keen to look at indicators of market concentration. So how many firms are there in the market? If there’s not very many, well, then we should assume that there’s a market power problem. So the idea of contestable markets is that, so long as there is a threat of entry, that could be sufficient to constrain the behaviour of the firms in the market. So even in a market where you might have only two or three players, if barriers to entry are low enough, if they tried to either get together, or they found a sort of non-cooperative way to increase prices, then they know that someone’s going to come in and compete those margins.So that kind of keeps prices down.
So, when when economists are talking about market power, they always have an eye to that question of barriers to entry.
But I think, perhaps we’ve, in a lot of cases assumed that barriers are lower than what they’ve turned out to be in practice. So often, I think it can be harder than people might expect for firms to enter the market. So if we look at the big tech firms as an example, what’s the entry barrier there? It turns out to be a lot about the data that they already have, and the fact that they’ve collected such deep profiles on all of us, it’s just simply harder for someone to come in and build an equivalently good product.
Gene Tunny 17:46
Absolutely. And there’s that strong network effect, too, isn’t there, the fact that I mean, Facebook has 2 billion people on the platform already. So it’d be very difficult to set up a social media platform in competition with Facebook.
Danielle Wood 18:05
Right. So, for some of the platforms, network effects really matter. And Facebook is definitely the most obvious example of that. So, network effects, really, that I get more benefit from being on that platform when other people are already there. So when I’m on social media, and I want to see what my friends are doing, the fact that they’re there on Facebook already adds value to my experience going on Facebook. The same arguments don’t necessarily apply in the same way on something like Google. You can imagine a new search engine coming in. The fact that there’s not a whole lot of other consumers or advertisers, that might not bother me if I’m just there for organic search. But we do know that people prove to be a lot more sticky than we might expect. So even something like changing your search engine, which is a pretty low cost thing to do, there’s literally zero price, you just need to go to a different website to what you’re used to. Even then people prove to be very kind of path-dependent in their behaviour, and they’ll tend to just keep going back to the one that they know.
Gene Tunny 19:15
Okay, Danielle, I know that Grattan has done some interesting research on market power, the concentration in different markets. Would you be able to give an overview of that research, please? What you found in Australia in the US, I mean, what what industries are the most concentrated overall, how much concentration is there? And is it something we should worry about? So if you could just give us a flavour of what Grattan’s found, please, that would be great.
Danielle Wood 19:49
Sure. So this is actually work done by my former colleague Jim Minifie and another former colleague Cameron Chisholm. And so they were sort of I’m interested in this claim that markets had got more concentrated over time. So they went to have a look at the data for Australia. And the picture is a bit more nuanced than I think a lot of people might expect. So, you know, they found that there were a lot of concentrated markets in Australia. And perhaps if you think about, supermarkets or insurance or a lot of manufacturing, that’s probably not going to be a surprise to people.
When they compared market concentration in Australia by market to overseas, they found that we didn’t actually look that bad by international standard, although there were some markets in Australia that were particularly concentrated. So things like supermarkets, mobile phone networks and life insurance,were three that looked particularly more concentrated in Australia than elsewhere.
In terms of concentration over time, there was no clear pattern. So some industries, like banks have become more concentrated over the past 15 to 20 years. In others, like supermarkets, its concentration has actually fallen. And nor could they really find evidence that profitability, had substantially increased over the last two decades. So sometimes, when you’re trying to measure market power, you look more at profit margins than market concentration, because of some of the limitations with market concentration as an indicator we were talking about before.
The one thing that they did find, though, that I think perhaps suggests that all is not well is that, in more concentrated sectors, profit margins were higher, and that those profits tended to endure. So if you looked at the 20% of most profitable firms, a decade later, about a third of those were still in the top 20%. So, if you think that markets are contestable, you would expect to see these sorts of excess profits eaten away over time, by new people coming into the market. We seem to have a segment of markets where that didn’t occur over as long as a decade, and they were able to maintain high profit margins. So it suggests there might be parts of the economy where competition isn’t working as well as it should be.
Gene Tunny 22:20
Yes. And in Australia, that’s probably in banking, is that fair to say? The big four banks have a privileged position in the marketplace, for, well, a variety of reasons. One of which might be the government of the day appears to favour the big four banks and gives them special deals. Remember, during the last financial crisis, for the big four banks, it was much cheaper for them to access the government borrowing guarantee, than second-tier banks. So is that an issue, that we have regulations that favour particular market players? Is that one of the things that’s driving concentration in some sectors?
Danielle Wood 23:14
It certainly can be. So, we certainly found that firms in heavier, more regulated industries tend to have higher returns than those in less regulated industries. It can be a bit hard to unscramble that observation, because, of course, we tend to regulate more in concentrated industries. So natural monopoly industry is a good example. The reason governments are in their regulating is because it is, by definition concentrated, and it’s trying to sort of mimic competitive market outcomes. But there are certainly examples, and the banks might be a good one, of where the regulation itself can create an entry barrier, and are an advantage for a particular group of firms, which can increase returns.
So high-regulation firms definitely stood out as tending to be more concentrated and having higher returns, as did innovative firms. This is a pretty consistent finding across the world. So a lot of the work in different countries has suggested that returns have gone up over time, but they’ve gone up only for a segment of the market. And that’s tended to be the firms that are heavily exposed to innovation. So tech firms, platforms, and pharmaceutical companies, tend to be the ones that have been making higher returns over time.
Gene Tunny 24:39
Could that be a good thing, Danielle?The fact that these firms are being rewarded for innovation, that’s probably what we’d want to see, isn’t it? It might be necessary to have those higher awards to provide the incentives to undertake that innovation. What do you think about that?
Danielle Wood 25:03
Sure. I would say that this is the idea really that our law is based on. So, under Australian law, it is not illegal to have market power. And the reason it’s not illegal to have market power is you want market power there as an incentive. So if a firm has got there by competing on its merits, so it’s designed something better than its competitors, or it’s just done something, it’s played hard, or whatever it is, if it’s got there on its merits, and then it stays there on its merits, then it has done absolutely nothing wrong. And that is really the fruits of that work, and what creates the incentive for firms to innovate in that way. What the law says is that’s fine.
But you can’t misuse that market power when you’re there to maintain your market position. So, if you are doing things like predatory pricing, or bundling your monopoly product with another product to leverage into another market, there’ll be certain circumstances in which those things are being used in order to maintain or grow a dominant market position. That’s when you’ve got a problem, not with the market power, per se.
Gene Tunny 26:16
Absolutely. You just reminded me with that example of using your product, bundling it with something else. You’ve got a monopoly in one area, and then you bundle it with something else to try and get into another market. That reminded me of what happened with Microsoft in the 90s. And that’s why the US Department of Justice went after Microsoft, over the Internet Explorer browser, if I remember that correctly.
Danielle Wood 26:42
Exactly. Right. So I mean, it’s interesting, another tech example. And probably the last time the Department of Justice went in really hard on a big company and a big tech company. And the browser was free. So it wasn’t an issue of price. But it was a question of leverage. Were they using their dominance in the PC market in order to get a dominant position? And what they saw was the next big thing, which was the browser market, and that really drove their major competitor at the time who were getting out of the browser market at the time, because everyone ended up using the Microsoft browser that came with the computer.
Gene Tunny 27:26
Yes, I think it was Netscape if I remember.
Danielle Wood 27:29
I was trying to remember whether Netscape was Microsoft’s or the competitor. That’s right. Yes.
Gene Tunny 27:33
Because I remember the first time I ever saw the internet, it would have been second or third year uni. And we were taken to the library and shown this wonderful new tool. And Netscape was the browser of choice at the time.
Danielle Wood 27:49
It’s so funny to think back to those days as well. It was it was high school for me. And there was one computer in the library that you could access the internet from. And your librarian had to sit with you and supervise. And I always thought, Gosh, why would anyone want to use the internet when we’ve got this perfectly good library here? All these books. Goodness me!
Gene Tunny 28:07
Absolutely, Danielle. Before I ask the last question, could I just ask you to tell us where we can find out about your work on the internet, please?
Danielle Wood 28:17
Yes. So if you go to the Grattan website, and you’re interested in our work on market concentration, there’s a report called Competition in Australia: Too Little of a Good Thing? That’s the place to look. If you’re interested in the article that I wrote on the hipster trustbusters and how things are changing, that’s an article on the Inside Story website called The Hipster Trustbusters.
Gene Tunny 28:45
Very good. Now, to wrap it up, Danielle, I’d like to ask how concerned are you overall about market power? And what do you think needs to be done? Do we need specific measures to rein in these big tech companies?
Danielle Wood 29:06
Look, so as an overall proposition, I think it’s not clear to me that there is systemic market power issue, but I think there are clearly concerns in particular sectors, and Tech is one of those. Do we need special measures is an interesting question. And you know, the ACCC has just spent more than a year doing an inquiry on the power of the digital platforms. And my reading of their findings there is, really, that they’re not looking for new powers. They believe that existing powers will generally be enough perhaps with some tweaks.
I mean, I think if we reflect back on how we got here, in terms of the tech companies, there may have been some decisions around mergers. that you would have hoped would go a different way. So if we look back, we know that Facebook bought Instagram, it bought WhatsApp, Google bought YouTube. I think there is a fair contention that perhaps the major US regulators were too relaxed about those acquisitions. And what looks to be, you know, acquisitions in different markets have actually helped enhance their power in the core markets in which they operate because of the sort of data advantages that we’re talking about. So I think we could be stronger. And this is largely for the US regulators, because obviously Australian regulators can’t control those types of mergers or future acquisitions.
The ACCC has pretty clearly signalled that it will be looking very closely at all sorts of behaviour by the tech companies under existing laws. So things like trying to leverage power into other markets. So Google, using its search results to favour its phone product, and it’s already been taken on by the European competition authorities over that sort of behaviour. All of that can be done under existing laws.
And probably the next question is should we see a break up? Again, that’s not a proposition for Australian regulators and Australian regulators do not have the same divestiture powers that they have in the US. Could you envisage a world where at least they reverse the impact of the mergers? A breakup only makes sense if you can kind of find units, self sufficient units to break these companies into, but I could certainly see an argument that you could go back and reverse some of those problematic mergers which occurred in the past. And I think that’s a really interesting proposition, whether a future US government and the US regulators will have the appetite to do that. And that’s certainly come up as a big issue during the Democratic primary race. Candidates are really expected to have a position on whether or not the big tech companies should be broken up, which I think is a pretty interesting development.
Gene Tunny 32:19
Right, absolutely. Okay. I’ll have to go back and have a look at what some of those candidates have said. I know there have been a lot of debates on health care and on tax. Now that you have mentioned it, I am recalling some of that discussion. So I might go back and look at that. Thanks, Danielle.
Danielle Wood 32:39
Elizabeth Warren, in particular, as she has a very long history of advocacy around antitrust law. So she’s got very well-thought-out positions, but certainly, others have thrown their views into the races.
Gene Tunny 32:54
And before we conclude, Danielle, are there any other points you’d like to make? Is there anything you think we might have missed in our discussion, our broad overview of antitrust?
Danielle Wood 33:06
Look, I would just say that I think even though this hipster antitrust movement has been very critical of both the courts and regulators in the US, it’s not clear to me that the problem is anywhere near as acute in Australia. I think we have a real history and a record of pretty robust antitrust enforcement. There’s a reason why the chair of the ACCC tends to be a household name in this country. They’re out there and pretty heavily using the law. The thing I think we should look out for in Australia is what further powers they might seek.
So the ACCC has been pretty successful in campaigning for law changes where they don’t think they have enough power. And the kind of beefed-up misuse of market power provisions that came out of the Harper review is an example of that. At the moment, they are saying that perhaps the mergers laws aren’t sufficient to block anti-competitive mergers. So I think it’s ‘watch this space’ on whether we actually do get some further beefing up of our laws, but not necessarily to do with the tech companies, but to deal with the fact that the ACCC’s struggled to win mergers cases in courts.
Gene Tunny 34:26
Okay. So it sounds like the ACCC, the Australian Competition and Consumer Commission, has been doing some great work, but you mentioned it has struggled to win in the courts. So I guess the big corporations can hire the top QC’s; perhaps that’s the issue.
Danielle Wood 34:49
Well, look, I think that’s probably partly true, although the ACCC’s got some pretty good QCs on the payroll as well. I think there is a particular problem with mergers cases that courts struggle with because it’s prospective, trying to work out what might happen in the future with and without a merger. It’s quite a different exercise to the normal exercise the courts are going through, which is trying to establish something that’s happened in the past. So I think there’s inherent difficulties in that prospective nature of the mergers tests, which has made it really hard for the ACCC to win. And I think the stat is that they haven’t actually won a mergers case in court in 20 years.
Gene Tunny 35:30
Oh, no. Okay. Well, we might have to come back to that topic. I haven’t, haven’t looked at mergers for a while, but that doesn’t sound good. And that sounds like something we should look at in the future.
Danielle Wood 35:43
Yes, so the agency took one to court, the Vodafone Hutchinson one to court last year, and I think if they lose that, we’ll be hearing a lot more on the topic.
Gene Tunny 35:54
Yep, absolutely. Okay. Danielle Wood from the Grattan Institute. That’s been terrific. I’ve really enjoyed our conversation, and I’ve learned a lot. So thanks again for coming on to the programme.
Danielle Wood 36:06
Thanks for having me, Gene.