Business Law Program

Professor Jonathan B. Baker, Research Professor of Law at American University Washington College of Law, specializes in antitrust law and economic regulation. As a leading authority in antitrust law and market behaviour and competition, Professor Baker has written extensively about current developments in antitrust law. Professor Baker discusses some of these issues and his new book, The Antitrust Paradigm, below.

1. What is antitrust law about?  

Antitrust law is about protecting and fostering competition in the economy by scrutinizing business practices and mergers. It encourages firms to pursue success by developing and selling better and cheaper products and services, not by coordinating with their rivals or trying to exclude them. That’s important because competition helps prevent firms from exploiting their buyers, including consumers, and their suppliers, including workers.  It’s also important because competition leads to greater productivity and innovation. For these reasons, antitrust law and enforcement help support inclusive economic growth, which makes society as a whole better off.  By doing so, antitrust also helps buttress our democratic political institutions.

2. How did you become interested in antitrust?

I was exposed to the concepts of market power and market concentration in the introductory economics course I took as a college freshman. That led me to want to learn more about how firms interact and how markets perform. After that, it was natural for me to specialize in industrial organization economics in graduate school and to study antitrust in law school.

3. How has your work as a government antitrust enforcer and your background in both antitrust law and economics contributed to your scholarship? 

Working at the Justice Department’s Antitrust Division and the Federal Trade Commission involved me in topical policy debates that integrated law and economics. That experience gave me a leg up in identifying promising paper topics and understanding the issues they raised when I returned to academia.  Many of my articles work through the relevance of developments in economics for antitrust law and policy—which takes advantage of my background in both law and economics.

4. How have your views on market power and antitrust changed in recent years?  

When I began my career in antitrust in the early 1980s, a major transition in antitrust law and policy was just beginning. During that transition, the courts systematically modified antitrust rules, often tracking the policy views of commentators loosely associated with the University of Chicago. Over time, the less interventionist Chicagoan perspective became embedded in the law. 

Since the 1980s, as I worked in antitrust, industrial organization economists continued to develop better theoretical and empirical tools for understanding market power.  At the start of the 21^st century, it seemed reasonable to suppose that when firms engaged in conduct that would harm competition, the problem could be identified using those tools and successfully explained to judges—and that the prospect of antitrust enforcement would deter a great deal of anticompetitive conduct, including in new and innovative industries. After all, the D.C. Circuit’s unanimous en banc decision in 2001 upholding Microsoft’s liability for monopolization was joined by prominent antitrust conservatives on that court.

My supposition that late 20^th century antitrust was working well turned out to be incorrect. Recent economics literature increasingly finds that market power has been growing across the economy for decades, undeterred by antitrust law.  I now think that antitrust law needs to do more to deter anticompetitive conduct, even at the risk of chilling more procompetitive conduct. Our antitrust rules need to be strengthened. 

5. What motivated you to write your book, "The Antitrust Paradigm”?

I wanted to explain why antitrust had become less effective over time and why its rules need strengthening. And I wanted to look forward as well as backward: to identify the hurdles to strengthening antitrust and to suggest specific ways to make progress in revitalizing antitrust enforcement.  The book’s subtitle is “Restoring a Competitive Economy.”

6. What major concerns are addressed in your book?

The first half of the book is about the problems we face, including the surprising conjunction of increasing market power in major industries and seemingly strong antitrust enforcement institutions, and the faltering political consensus supporting antitrust.  The second half is about how to recalibrate antitrust rules, particularly with the information economy in mind.  It looks at ways to address competitive problems that include collusion generated by price-setting algorithms; exclusionary conduct by dominant platforms; threats to innovation from lessened competition, including from mergers; and ways that market power can harm suppliers, workers, and platform users as well as buyers.

7. What do you like about working in the field of antitrust law and what advice would you give to students who are entering it? 

Antitrust lets me use what I’ve learned about both economics and law to advocate policies that foster competition, which is important to our economy. I also like learning about new industries and business practices.  Antitrust touches on every type of business: I might learn about brewing or baby food one day and hospitals or digital platforms the next.

I would tell law students entering the field that they don’t need to have studied economics before law school to become successful antitrust lawyers. Economic ideas are unquestionably important in antitrust law today, but many of the most successful and influential antitrust lawyers have learned the economics they need to know simply by studying antitrust and working on antitrust cases.   

8. Where is your scholarship headed next?

My scholarship is not just concerned with bringing developments in economics to bear on antitrust law. Some of it is about the intellectual history of antitrust—how and why antitrust has changed over time.  A recent intellectual movement seeking to revive political concerns with concentration that predated the transition to the Chicagoan perspective has changed the antitrust policy debate, shaped the perspective of Biden administration enforcers, and raised the profile of antitrust law among the general public. I’m looking forward to writing about the extent to which that movement succeeds in shaping antitrust law. 

Professor V. Gerard Comizio, Associate Director of American University Washington College of Law Business Law Program, teaches courses on U.S. and international banking law, virtual currency law, regulation of financial institutions and U.S. business associations. As a leading authority on financial services regulatory, transactional, and compliance matters, Professor Comizio has written extensively about current issues in financial services regulation-and in recent years-virtual currency law. Professor Comizio discusses the emerging legal regulatory and policy framework governing virtual currency activities and other transformative financial technologies below.

1.  How did your work with virtual currency law begin?

I began to focus on this area as early as 2015 when both clients within the traditional financial services industry and new clients in the emerging crypto trading industry began to seek outside counsel to advise them on a wide range of new and unique legal, regulatory and compliance issues that virtual currency activities began to raise under existing banking corporate, securities, money transmission, anti-money laundering, tax, commercial and other financial services laws. A lot of the new players in the crypto industry – especially the crypto trading exchanges – were looking for traditional banking lawyers who knew how to deal with banking regulators that were subjecting these new activities to existing financial services law. I worked for a lot of interesting players in that space, including the Winklevoss brothers at Gemini, one of the first U.S. crypto trading exchanges. At the time I left private practice to join WCL in 2020, over sixty percent of my billable time had grown to work with this new and growing part of the financial services industry.

My work in this area-whether you call it crypto, virtual currency, digital assets or fintech technology- is driven by this new industry’s growth, and the emerging legal and regulatory framework being created to govern virtual currency activities. As crypto investment and activities have exploded into a new financial “ecosystem” composed of non-government-based currency, crypto is creating a new and growing array of financial products, services, activities, and investments, presenting exciting new opportunities for business, investors, and consumers. And, significantly, crypto’s public blockchain technology ledger of transactions, which acts as a “peer to peer” payments system, is, by nature, designed to disrupt traditional bank and payments systems markets-and it is doing so.

At the same time, however, these exciting developments have raised unique, novel, and complex policy issues for governments and regulatory agencies regarding the legal, regulatory and compliance implications of virtual currency under existing laws that were not adopted with crypto in mind. Also, significant concerns have been raised regarding the use of crypto in money laundering and other illegal activities.

Some commentators consider these issues a matter of creating a level regulatory playing field-that is, where crypto activities share characteristics similar to other regulated financial activities, they should be subject to the same regulation. Critics argue that this approach is “putting a square peg in a round hole,” since these laws were not written with crypto in mind. And this debate will go on until the U.S. adopts a comprehensive federal legal and regulatory framework governing virtual currency. This framework may likely include a new or existing federal agency charged with or consolidated oversight of crypto activities.

The policy approach of other countries to crypto is interesting. Many countries are seeking to strike a balance- fostering innovative financial technologies, while at the same time adopting safe and sound levels of crypto regulation. Notably, the Biden administration recently issued an executive order on crypto regulation that espoused this approach-balancing the need for the US to be a global fintech and financial services leader with the need to pursue robust regulation of crypto activities designed to protect U.S. consumers, the economy and address national security considerations. In contrast, China and Russia have generally prohibited crypto trading.

I joined WCL just as I had completed my new book on virtual currency law. With the title Virtual Currency Law: The Emerging Legal and Regulatory Framework, I was attempting to capture the nature of this ongoing process-and debate- on U.S. and international regulation of virtual currency.

Even before the book was published and I joined WCL full time-I was previously an adjunct professor here for many years-I had added a module on virtual currency law to my International Banking Law course. Students, however, conveyed a great interest in learning more about the emerging law and regulation in this space, and requested more classes on the topic. This ongoing level of interest-at one point, a few students even met with me at my law offices specifically to request a course in this area- led me to put together the Virtual Currency Law course that I now teach – which is one of the first in the country covering the topic. This course has been part of a number or virtual currency and fintech law initiatives undertaken by the Business Law Program, ranging from a series of webinars featuring senior federal agency heads discussing emerging crypto regulatory issues, to highlighting amazing faculty scholarship in this area, such as our webinar interview of Professor Hilary Allen about her exciting new book, Driverless Finance.

Notably, these virtual currency law initiatives have gotten WCL very positive notice nationally. preLaw magazine for example, in recently rating WCL’s business law program as one of the top programs in the country, highlighted these initiatives as one of only five law school business law initiatives to receive a special mention from preLaw in the article accompanying the rankings.

2. What are the main challenges that you face working in an area that is constantly evolving and emerging?

Crypto is an exploding area, and whether you are a fan or a critic, it is one of the most transformative financial technologies of our lifetime, and it’s here to stay. Every minute of every day, there are new developments. For example, Goldman Sachs recently announced that it would for the first time accept crypto as collateral for loans. Within days, a number of U.S. and foreign banks made similar announcements.

In addition, the U.S. has become a major retail crypto investor hub. A recent Federal Reserve study indicated that almost 50 million Americans invest in crypto. In addition, almost 40 percent of millennials – prime demographics for the financial services industry – invest in crypto. This is the millennial stock market in some respects.

With a $3 trillion global market capitalization-and growing-crypto is continuing to force governments and regulators to address its existence, and, as a result, are adopting policies to address concerns, ranging from national security to day-to-day regulatory concerns. Clearly, government focus in the U.S. has definitely switched from “I’m not sure we like this and let’s hope it goes away” to “It’s here to stay, let’s seek to be a global fintech leader, and focus on how to best regulate crypto.”

Another challenge – beyond staying ahead of the constantly evolving landscape – is trying to think about these issues from a varying perspective: policy, legal, regulatory, compliance and business. As an academic, the challenge is teaching a course that is current. In writing a law school textbook on crypto law that was published this year published this year, I already believe that I have to update it and expand it by at least 5 chapters.

I start each of my virtual currency law classes with a “current events” segment-new crypto policy, legal, regulatory, compliance and business issues. The items we discuss, usually recent news stories, articles, or government or legal developments, are often suggested by students for discussion. The hardest part each week is simply culling down the sheer amount of current and fast breaking developments. For example, the Ukraine war – all of the sudden, crypto policy focus in the U.S. shifted in a matter of days from regulatory issues to a national security issue when news coverage began to focus on whether crypto is being used by Russia to circumvent the U.S. and global sanctions regimes.

3. What are the main challenges faced by private industry in grappling with this emerging area of law and regulatory framework?

Exploding compliance. Corporate and financial institutions’ compliance work generally has exploded in recent years, and regulatory compliance with respect to crypto and blockchain activities has also exploded. Right now, you can potentially work in a corporation that engages in crypto activities and need to understand that it implicates a dizzying array of business laws, including securities offering, broker-dealer and asset management; commodities and derivatives; banking, payments systems and money transmission; anti-money laundering and terrorist financing; financial technologies, data privacy and cybersecurity; tax, commercial, consumer financial and even U.S. constitutional law. It is important to understand the rules, interpretations and guidance-and enforcement actions-involving the nature and scope of crypto regulation by the SEC, the CFTC, CFPB, the IRS, the Treasury Department, state regulators and international regulation that touches crypto activities. It is imperative that companies engaging in any type of virtual currency activities have strong and robust compliance programs and expert outside and in-house legal counsel advising on these issues. Similarly regulatory and law enforcement agencies are cultivating and growing legal staff with crypto regulatory expertise.

4. In your view, what are the prospects for a more unified federal approach to virtual currency in the short and long term?

In the short term, we need legislation that creates comprehensive federal policy and framework for crypto regulation. This would potentially benefit both financial services industries and the government. State and federal agencies and regulators are already regulating crypto on an ad hoc basis, based on their respective regulatory jurisdiction. The real question is whether it’s time for a more comprehensive approach.

My real concern is the old adage that government tends not to get in front of potential complex and problematic issues or potential crisis; they are better at coming in after and cleaning up. The postmortems on recent U.S. crises-for example the 9-11 terrorist attacks and the 2008 financial crisis-both implicated as causes the fact that federal agencies were not “talking to each other” about potential issues, threats and problems. The U.S. government needs to stay out front on crypto policy and ensure a “whole of government” approach to everything from day-to-day regulatory issues to identifying and addressing existential threats that crypto may present to the U.S. economy and financial stability.

On a more metaphysical level, we will continue to have a discussion about what crypto actually is, since it appears to be uniquely ubiquitous-in a given context it can be money, securities, commodities, collateral, a money transmission vehicle or a utility token. By the same token-pun intended- we’ve reached a point where almost 100 governments – including the United States – have decided that the government should be looking into issuing a central bank digital currency. Many countries have also recently made crypto a legal form of tender. Stablecoin, a unique crypto backed by government-backed currencies, is now legal tender in the UK. In viewing these developments, as I’ve said, the challenge for the US will be to maintain a somewhat delicate balance between encouraging financial technology development and innovation with U.S. companies positioned as global leaders, while at the same time, creating a good, strong, credible level framework of regulation that will protect consumers and the economy.

5. What are the prospects for a more unified global approach to this issue? How do you see this impacting U.S. foreign policy in the long term?

On a global basis, there are very different approaches in terms of government response. For example, you have nations like El Salvador, which has mandated that all crypto is legal tender and must be accepted. On the other end of the spectrum, you have major nation-states that have both banned crypto transactions. Notably, in connection with Russia’s invasions of Ukraine, it is the first time we have seen crypto mentioned so many times in connection with a war. In addition to the headlines highlighting potential concerns about whether Russia can use crypto transactions to evade sanctions, the Ukrainian government announced it had set up websites to accept crypto as aid. In a short period of time, they have received almost 200 million dollars in crypto; as a result, President Zelensky recently signed legislation legalizing bitcoin as legal tender in Ukraine. This reflects a wide range of approaches – from outright prohibition to some regulation or taking an active role to endorse certain cryptos as legal tender.

I think it will take many years for international harmonization of policy and regulatory approaches to crypto. In the meantime, the US, EU and many African and Asian countries may be looking to international collaborative groups such as the Basel Committee on Banking Supervision and the Financial Action Task Force to establish buy-in on global minimum standards of regulation and supervision.

6. What advice would you give to students who are interested in entering this area of law?

Obtaining a broad understanding of corporate, securities and financial services law is important because this area is emerging within government and law firms as a cross-department practice. You can be advising your securities law practice one day, and your commodities, banking, asset management, tax or UCC practice the next day on how certain legal and regulatory scenarios play out with crypto. The Business Law Program’s Compliance and Ethics Certificate program would be a great place to start for students: the elective clusters in both the Corporate and Financial Institutions concentrations are great places to get a well-rounded feel for some major areas of business law that are increasingly incorporating crypto law and regulation.

7. Where is your scholarship on this issue headed next?

After finishing up the virtual currency book, I’ve written a number of editorials on crypto-related issues for Bloomberg and other publications, but in the corner of my computer, I have the first two chapters of a novel based on some op-eds I’ve written about the “quantum threat” to the blockchain based on the real concern being raised by an increasing number of experts, including in the computer industry – that hostile nation states such as China and Russia are developing supercomputer technologies that, as crypto becomes embedded in Western economies, have the capacity to hack into the blockchain and alter or delete the crypto ownership ledger. In the not-so-distant future, this could have catastrophic results on the US and global economy. I’ve started with a prologue and first chapter; not a spoiler alert, but I’m hoping our heroes, a dedicated government lawyer and a talented computer consultant, work together to find a way to head off the blockchain attack and global economic chaos by the last chapter.

For more about Professor Comizio’s work on the emerging legal regulatory and policy framework governing virtual currency activities and other transformative financial technologies, visit:

• https://news.bloomberglaw.com/in-house-counsel/cryptocurrency-ukraine-crisis-shows-ur gency-for-federal-reform
• https://www.americanbanker.com/opinion/the-cyber-threat-looming-over-virtual-currenci es
• Virtual Currency Law: the Emerging Legal and Regulatory Framework, Wolters Kluwer (2022).

On June 30, 2021, Hilary J. Allen, Professor of Law, testified in front of the House Subcommittee on Consumer Protection and Financial Institutions on “Addressing Climate as a Systemic Risk: The Need to Build Resilience within Our Banking and Financial System.” Recognizing that climate change presents significant, complex risks to the global financial system, the hearing sought to explore reforms to address the ongoing threat.

In her written testimony, Professor Allen advised: “Tackling climate-related threats to financial stability will require a coordinated and interdisciplinary approach from our financial regulatory agencies.” This will include, Professor Allen argues, a robust precautionary principles-based approach to supervising financial institutions.

Professor Allen proposed several reforms to make the financial system more robust to physical and transition risks, including a “new form of macro-operational regulation that can respond to the systemic dimensions of operational risks.” Professor Allen also stressed the need for a robust financial regulatory architecture to support any reforms moving forward.

Professor Allen is a nationally recognized expert on financial stability regulation, having testified before the House Financial Services Committee and authored more than 15 law review articles on the subject (recent articles have appeared in the Boston College Law Review, the George Washington Law Review, and the Harvard Business Law Review). Professor Hilary J. Allen joined the American University Washington College of Law faculty in 2018.  She previously held appointments at Suffolk University Law School and Loyola New Orleans College of Law, and has been a Visiting Professor at the University of Sydney (Australia), UC Davis School of Law and Brooklyn Law School.  She teaches courses in Banking Law, Securities Regulation, Financial Regulation, Corporate Finance and Business Associations, and has also taught classes on international and comparative financial regulation in Austria and Brazil.

ABOUT PROFESSOR ALLEN

In her work, she stresses the importance of financial stability by underlining the human consequences of financial crises, and considers a variety of existing and evolving threats to financial stability.  Her recent work has focused on threats arising from climate change and the increasing prevalence of fintech (she has authored a book “Driverless Finance: Fintech’s Impact on Financial Stability”, which is forthcoming from Oxford University Press).  Professor Allen is also actively involved in presenting scholarly publications at roundtables and conferences, and regularly contributes blog posts and podcasts on the subject of financial regulation.