Webinar Recap: Media & Technology Speaker Series – Fireside Chat with Dr. Susan Athey

On January 22, 2025, the Media & Technology Speaker Series hosted a fireside chat with Dr. Susan Athey, former Chief Economist at the U.S. Department of Justice (DOJ) Antitrust Division and Professor of Economics at Stanford University. The session was moderated by Emilie Feyler (NERA) and offered insights into Dr. Athey’s career at the intersection of technology, economics, and antitrust policy.

Introduction: Dr. Susan Athey’s Background

Dr. Susan Athey is an economist whose research spans digital markets, artificial intelligence, and the application of econometrics to real-world challenges. She is currently a Professor of Economics at Stanford University Graduate School of Business, with prior academic appointments at MIT and Harvard. She is also a fellow at the Stanford Institute for Human Centered Artificial Intelligence, and a faculty affiliate of the Institute for Computational and Mathematical Engineering.

In addition to her academic achievements, Dr. Athey has held several influential professional roles. She served as Chief Economist at the DOJ Antitrust Division in 2022, where she spearheaded efforts to tackle monopolistic practices, particularly in the technology sector. Previously, she worked as Consulting Chief Economist at Microsoft, where she applied her expertise to challenges in data strategy, marketplace design, and competition policy, and she served on the boards of directors of a number of large and small technology companies.

Dr. Athey’s Academic and Professional Journey

Dr. Athey shared how her career evolved from her early interests in computer science to her current role as an economist specializing in technology. She began programming in the 1980s as a child and pursued a bachelor’s degree in Computer Science and Mathematics at Duke University. Despite her passion for programming, Dr. Athey chose to pursue a PhD in Economics at Stanford, motivated by the potential for economics to address pressing societal challenges.

Her academic research initially focused on auction theory and market design, but her professional trajectory shifted during her tenure at Microsoft. Invited by then-CEO Steve Ballmer, Dr. Athey consulted on economic strategies for Bing, helping the company compete with Google. This experience reignited her interest in technology and inspired a new research agenda combining machine learning and economics. She described her time at Microsoft as transformative, offering unparalleled insights into emerging technologies like A/B testing, cloud computing, and artificial intelligence.

Insights from Dr. Athey’s Role at the DOJ Antitrust Division

As Chief Economist at the DOJ Antitrust Division in 2022, Dr. Athey led efforts to modernize the agency’s approach to competition policy, particularly in addressing challenges posed by the technology sector.

1. Building Analytical Capacity:
   Dr. Athey emphasized the importance of assembling interdisciplinary teams to enhance the DOJ’s ability to analyze complex market behavior. She spearheaded efforts to recruit data scientists, technologists, and economists, embedding them into collaborative teams to foster synergy. These efforts improved the DOJ’s ability to conduct in-depth analyses internally.
2. Advancing Competition Policy:
   Dr. Athey championed the Biden administration’s “whole-of-government” approach to competition policy. This initiative sought to align actions across government agencies, promoting innovation and reducing regulatory barriers that often entrench incumbent firms. She highlighted the importance of ensuring that government policies support small businesses and facilitate market entry.
3. Handling Complex Antitrust Cases:
   Dr. Athey detailed the challenges of addressing monopolistic practices in digital markets. Many cases involved intricate dynamics, such as vertical integration and exclusive contracts. She emphasized the necessity of presenting clear, evidence-based narratives to courts, grounded in rigorous economic principles, to address these challenges effectively.

Challenges and Reflections from Dr. Athey’s DOJ Tenure

Dr. Athey reflected on several challenges during her time at the DOJ, including:

• Modernizing Merger Guidelines:
  Dr. Athey led the development of updated merger guidelines that incorporated the complexities of modern digital markets. The guidelines emphasized the interplay between horizontal and non-horizontal conduct, particularly in platform markets, and were well-received for their clarity and relevance.
• Communicating the DOJ’s Work:
  Dr. Athey acknowledged the difficulties in effectively communicating the agency’s efforts to the public. While the DOJ supported vulnerable populations—such as poultry farmers and workers—these accomplishments often did not resonate widely with the public narrative.
• Government Integrity and Transparency:
  Dr. Athey emphasized the importance of ethical decision-making and transparency in government work. She noted that the significant discretion held by antitrust agencies underscores the need for integrity to build public trust.

AI and Antitrust Policy

The conversation also explored the implications of artificial intelligence (AI) for competition policy, with Dr. Athey offering several key insights:

1. Ensuring AI’s Benefits Reach Society:
   Dr. Athey emphasized the critical role of competition in ensuring that the benefits of AI—such as cost savings in healthcare and education—are widely distributed. She warned that monopolistic practices in AI could stifle innovation and limit these benefits.
2. Open Models and Interoperability:
   Dr. Athey advocated for open AI models to promote interoperability and prevent monopolistic consolidation. She cautioned that if the market perceives dominance by a single firm in general-purpose AI, it could lead to merger waves and exclusive partnerships that exacerbate market concentration.
3. Future Challenges in AI:
   Dr. Athey urged economists and policymakers to study AI’s evolving industry structure to anticipate bottlenecks and barriers to competition. She highlighted the need for competition policy to align AI development with societal goals, ensuring that AI contributes to social welfare.

Q&A Highlights

Comparing Academia, Industry, and Government

Dr. Athey reflected on her experiences across academia, industry, and government. She appreciated the mission-driven focus and teamwork of government work, the intellectual freedom of academia, and the fast-paced, problem-solving environment of the private sector.

Challenges of Generative AI

Dr. Athey addressed concerns about sustaining incentives for content creation in an era of generative AI. She discussed the challenges of managing misinformation while maintaining a nuanced public discourse.

Advice for Economists and Lawyers

Dr. Athey recommended that professionals deepen their understanding of platform economics and complex market dynamics to effectively address emerging antitrust challenges in AI and digital markets.

Dr. Susan Athey concluded by expressing optimism about the bipartisan nature of antitrust enforcement and its potential to address the challenges posed by AI and digital markets. She emphasized the importance of government integrity, transparency, and competition in fostering innovation and delivering benefits to society.