Your FTC reading list after today’s confirmation hearing
Today the Senate Committee on Commerce, Science and Transportation convened a full committee hearing to consider three nominees to the FTC after several months of the typically-bipartisan Commission operating without two minority commissioners. Ahead of this confirmation hearing, here’s what you need to know about the FTC’s and DOJ’s recent activities:
The FTC is shifting away from the consumer welfare standard and decades of antitrust precedent, potentially damaging the Commission’s credibility
– The FTC shift abandoning consumers is a destructive strategy — Policy and legal experts have noted that the FTC and Khan’s strategy to bring forth aggressive and meritless cases will damage the Commission’s credibility to enforce antitrust and consumer protection laws in a balanced and economically viable manner.
– FTC expected to file antitrust suit against Amazon retail practices – CCIA President Matt Schruers grapples with the FTC’s shift away from the consumer welfare standard, noting, “It’s difficult to understand why at a time when Americans are frustrated with rising prices, the FTC is prioritizing a case against a service that consumers love, which enables small and medium-sized sellers to reach customers worldwide.”
– FTC actions threaten consumer welfare –-Mark Jamison discusses how “the debate over Amazon’s breakup should be examined through a lens of innovation and consumer choice. Amazon has thrived by introducing transformative technologies and fostering retail competition. Perhaps the FTC should defer to customers, as they determine the true economic value of Amazon’s services and innovations.”
The Agencies’ overregulation of merger activity neglects present economic realities and poses harm to innovative businesses
– Wall Street and startups raise concerns of FTC M&A overregulation harming the economy — Wall Street experts remark on how FTC intervention and overregulation of merger activity will stymie the startup ecosystem and that the FTC’s interpretation of existing, functional antitrust law is unjustified and will lead to uncertainty.
– The FTC and DOJ’s drastic revision of the merger guidelines fundamentally misunderstands the economic realities of merger activity — M&A is a vital activity to economic movement and wellbeing, and merger guidelines are intended to help companies function within the bounds of existing law, not rewrite these laws. Instead, the FTC’s revision of merger guidelines will harm small-to-medium businesses and innovative companies, ultimately departing from a consumer-welfare incentive.
The FTC threatens to restrict innovation in new spaces, undermining competition and restricting choice for consumers
– FTC cloud RFI comments show competition in IT computing is thriving, but restrictive licensing practices threaten to lock-in customers – reducing choice — Experts, companies, and groups who submitted Cloud RFI comments celebrated the competition and inherent choice consumers have in the Cloud, proving how a robust Cloud ecosystem is vital for businesses and consumers alike, while also calling out restricting licensing practices that threaten competition in the ecosystem.
Agencies’ proposed changes to the premerger notification and reporting form (the “HSR form“) would result in higher costs and increased burden on all filing parties
– The FTC- and DOJ-proposed “dramatic“ and “sweeping“ changes to the HSR notification form are burdensome, time-intensive, and costly — Notable law firms have commented on the drastic and sweeping changes to the HSR form, crystallizing the burdensome nature of these proposed requirements. Merging parties would have to exhaust more resources, time, and labor, all of which would pose issues to businesses and consumers alike.
The FTC’s shift in focus away from consumer protection to overregulation also applies to other enforcement agencies, notably the DOJ
– Jonathan Kanter, Assistant Attorney General for the Department of Justice Antitrust Division, has discussed his intent to change the antitrust laws via enforcement actions—including by bringing cases not supported by existing law.
– In a keynote speech at the University of Chicago, Kanter preached that his plan to address antitrust enforcement was “to litigate, not settle,” “so that the law can develop,” nodding toward his intention to change existing antitrust law.
– Kanter also told a Financial Times reporter that, “[W]e’re seeing a once-in-many-generation shift in how markets function, and the need to update and adapt our antitrust enforcement to address new market realities.”
– In a recent op-ed, former White House National Economic Council member Tim Wu admitted that the DOJ’s lawsuit against Google is effectively intended to rewrite economic policy and antitrust laws. “[T]he verdict will effectively establish the rules governing tech competition for the next decade, including the battle over commercialized artificial intelligence, as well as newer technologies we cannot yet envision.” And that “ultimately, antitrust law’s most important function is to rebalance economic power, taming the excesses that are the inevitable consequences of a capitalist economy.”
– Carl Szabo, Vice President and General Counsel at NetChoice, responds to Wu: “They just said the quiet part out loud!! Biden’s former Antitrust head – Tim Wu – just admitted that the FTC’s suit against Meta and DOJ case against Google is NOT ABOUT LAW ENFORCEMENT or even protecting consumers. It’s about making law! Columbia Law School – which employs Professor Wu and formerly employed the FTC’s Lina Khan – understand the issue of separation of powers and how a bill becomes a law. The Executive Branch’s job is NOT to write the law or to create the law. Their job is to enforce the law.”
– Szabo continued: “This misunderstanding is probably why consumer fraud has increased 300% under FTC Chair Khan as the agency is forced to set protecting consumers to the side and instead advance progressive policies.”
– Economist Brian Albrecht responded: “Call me crazy, but I thought the case was about the facts and arguments about Google paying for default status.”