Ex-FTC Democrats Urge Caution on Agency Antitrust Rules

The FTC should be “careful” in drawing up potential competition rules that might not withstand judicial scrutiny, former Democratic officials told an antitrust conference Wednesday in Washington.

Chair Lina Khan led efforts to streamline rulemaking procedures at the agency shortly after taking office (see 2107010081) and signaled her intention to pursue competition rules (see 2206270057). “I would proceed very carefully or strategically if I were the current commission,” said Georgetown law professor Howard Shelanski, who was director of the FTC Economics Bureau in the Obama administration, during a conference hosted by LeadershIP. There are real questions about what FTC authority exists for competition rules, and it might not be a “healthy thing” for the FTC to “very broadly exercise a regulatory authority they arguably don’t have,” said Shelanski.

Shelanski noted he provided legal advice to Meta/Facebook and other large platforms on antitrust matters. Failed rules could make it more difficult to get targeted authority from Congress, if lawmakers suspect regulatory abuse from commissioners, he said. Courts haven’t embraced broad competition rulemaking authority for the FTC, so the agency needs to “be careful,” said Brookings Institution fellow Bill Baer, who was Competition Bureau director during the Clinton administration.

“I’m happy [Khan] has reoriented the discussion on antitrust, but there needs to be more clarity about how the consumer welfare standard applies to tech markets,” Heritage Foundation Tech Policy Analyst Will Thibeau told us after the panel: There’s concern about how Khan is potentially weaponizing the FTC to “achieve liberal social aims,” he said. Legislation that targets specific abuses would be more effective than tech policy dictated by agency rulemakings issued by unelected bureaucrats or policy shifts driven by whistleblowers and podcasts, he said during the panel.

The House is to consider three pieces of antitrust legislation this week, according to House Antitrust Subcommittee ranking member Ken Buck, R-Colo. (see 2209260060). Offices for House Speaker Nancy Pelosi, D-Calif., House Majority Leader Steny Hoyer, D-Md., and House Antitrust Subcommittee Chairman David Cicilline, D-R.I., didn’t comment Wednesday. The bills are dividing House Republicans. House Judiciary Committee ranking member Jim Jordan, R-Ohio, spoke Tuesday against a bill that would increase merger fees for DOJ and the FTC. “Do you trust they won’t use the money to target conservatives?” Jordan tweeted. “Do you think Joe Biden, Merrick Garland, and Lina Khan have your best interests at heart? No, No, No.” The account for House Judiciary Republicans issued a similar tweet Tuesday, while Buck cited support from Rep. Paul Gosar, R-Ariz.

The antitrust discussion is going through a “healthy,” “uncomfortable” phase where policymakers are asking whether they need to “erase the board and start again,” said Shelanski. He noted enforcers are injecting new values into the debate, citing a recent speech from FTC Commissioner Alvaro Bedoya, who argued there’s an overemphasis on efficiency, when there should be more focus on “fairness.”

Consumer price and high output aren’t the only determining factors for enforcing antitrust law, said Shelanski, noting impacts of political power, leverage over workers and environmental threats. Tech platforms are “fairly young companies,” he said. The FTC was once worried about AOL’s dominance over instant messaging, and in the early 2010s, some thought iTunes would perpetually control the market for digital music, he said: “That doesn’t mean we should assume that these digital monopolies will crest and fall. They may not, but there has to be some evaluation about how these markets work” and the impact of legislation in potentially further entrenching dominant companies.