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The Department of Justice and Stanford University held a public workshop on Feb. 12, 2020, to explore the intersection between venture capital and antitrust law. The full-day workshop covered trends in venture capital investment from the 1990s through present, with a focus on what antitrust enforcers can learn from investors about how to identify nascent competitors in markets dominated by technology platforms. The workshop also addressed proposed solutions to concerns that competitive alternatives to the market-leading platforms are not attractive investment opportunities.
The Justice Department’s Antitrust Division and the Stanford Graduate School of Business co-hosted the workshop, which brought together venture capitalists, academics from both law and business, and other tech industry stakeholders. The Antitrust Division and Stanford explored the practical considerations that early stage investors face when calculating the risks of investing in a startup and exit strategies.
January 14, 2020
Press Release: Department of Justice Antitrust Division to Co-Host Workshop on Venture Capital Investment and Antitrust Law with Stanford University
Date and Location
February 12, 2020
|Paul Brest Hall
555 Salvatierra Walk
Stanford, CA 94305
View the opening remarks by Makan Delrahim.
Makan Delrahim, Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Fireside Chat with Michael Moritz: Trends in VC Investment: How did we get here?
View the fireside chat with Michael Moritz.
Michael Moritz, a partner at Sequoia Capital, will discuss trends in start-up investment from the 1990s through the present with Professor Joseph Grundfest, the William A. Franke Professor of Law and Business at Stanford Law School. Mr. Moritz will share anecdotes about early VC investment and discuss what can be learned from them. Topics may also include a discussion of early industry and regulatory challenges and how the investment community overcame them.
Antitrust for VCs: A Discussion with Stanford Law Professor Doug Melamed
View the discussion with Professor Doug Melamed.
Doug Melamed, Professor of the Practice of Law at Stanford Law School, will give an overview of antitrust law and enforcement as it may relate to venture capital investment. Professor Melamed will discuss the general aspects of merger review, including relevant recent mergers related to the tech industry and nascent competition. He will also describe both unilateral conduct (i.e., tying, exclusive dealing, predatory pricing and other exclusionary conduct), and coordinated conduct (e.g., no poach enforcement among tech companies). Professor Melamed will introduce the role of antitrust law and enforcement in the business of venture capital and tee up the question of how the relationship between the two can be improved.
|10:50 a.m.–12:05 p.m.||
Panel 1: What explains the Kill Zones?
Some fear that certain technology companies have created “kill zones,” or markets in which starting new companies is no longer worthwhile. Panelists will discuss the various market characteristics and industry conduct that may contribute to kill zones, including the role of network effects, property rights, and other barriers to entry. Panelists will discuss the pros and cons of investing in anticipated markets (e.g., 5G) and how to predict when markets tip.
Paul Arnold, Founder and Partner, Switch Ventures
Roger McNamee, Co-Founder and Managing Director, Elevation Partners
Ram Shriram, Managing Partner, Sherpalo Ventures LLC
Ilya Strebulaev, David S. Lobel Professor of Private Equity and Professor of Finance, Stanford Graduate School of Business
Susan Woodward, Founder, Sand Hill Econometrics
DOJ Moderator: David Lawrence, Chief, Competition Policy & Advocacy Section, Antitrust Division, U.S. Department of Justice.
View the afternoon remarks by Dean Jonathan Levin.
Dean Jonathan Levin, Stanford Graduate School of Business
Panel 2: Monetizing Data
Panelists will discuss the role of data in tech markets, both as an effective entry barrier and a means to protect investment. They will describe how rivals collect or access data, how they sell it, and whether data should be treated differently from other capital-intensive entry investments. The panel will also address the options available to protect incentives while encouraging competition (e.g., data portability).
Susan Athey, The Economics of Technology Professor; Director, Golub Capital Social Impact Lab at Stanford GSB
Greg Back, Managing Member, Free Sky Capital
Ari Paparo, Co-Founder and CEO, Beeswax
Kelland Reilly, Managing Director, General Atlantic
DOJ Moderator: Ryan Shores, Associate Deputy Attorney General and Senior Advisor for Technology Industries, U.S. Department of Justice
Panel 3: Investing in platform-dominated markets
Panelists will discuss the proper frameworks for evaluating internet platforms. For example, panelist will debate whether internet platform incentives are unique from other platforms to support a separate analytical framework and how to balance the inherent market power of an efficient platform with the potential for abuse. They will also discuss the pros and cons of building on top of on an existing platform and how to build a successful product or service in a platform dominated market.
Nick Grossman, Partner, Union Square Ventures
Mark Lemley, Professor, Stanford Law School; Partner, Durie Tangri LLP
Patricia Nakache, General Partner, Trinity Ventures
Ben Thompson, Founder, Stratechery
DOJ Moderator: Karina Lubell, Attorney Advisor, Competition Policy & Advocacy Section, Antitrust Division, U.S. Department of Justice
Roundtable: Is there a problem and what is the solution?
This roundtable will recap the discussion from the workshop and participants will provide reactions to what was discussed. Members of the roundtable will also describe the potential for regulatory solutions to address the concerns highlighted during the workshop and the effects—both positive and negative—of those regulatory solutions.
Erik Hovenkamp, Assistant Professor of Law at Gould School of Law, University of Southern California
Connie Loizos, Silicon Valley Editor at TechCrunch, Founder of StrictlyVC
Ted Ullyot, Adjunct Professor at Antonin Scalia Law School, George Mason University (formerly Partner at Andreessen Horowitz, General Counsel at Facebook)
DOJ Moderator: Taylor Owings, Counsel to the Assistant Attorney General, Antitrust Division, U.S. Department of Justice
View the closing remarks by Manish Kumar.
Manish Kumar, Chief of the San Francisco Office, Antitrust Division, U.S. Department of Justice
Public Comment Submissions
The Department of Justice invited comments from the public on the topics covered by this workshop. The deadline for submitting comments was March 14, 2020. The comment period is now closed.
Privacy and confidentiality: Written submissions and the identity of the submitter may be disclosed, reproduced, and distributed by publication and/or posting on the Department of Justice website, at the discretion of the Department of Justice. Information that is submitted in connection with this event cannot be maintained as confidential by the Department of Justice. Written submissions should not include any information that the submitting person seeks to preserve as private or confidential.