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There is surely poetic justice in the fact that the Senate Commerce Committee has scheduled Valentine’s Day for a hearing on the Trump administration’s nominees for the Federal Trade Commission (FTC), which is long overdue for some love and affection. One can only hope the good feelings will continue and the Senate will move expeditiously to provide the FTC with a permanent chairman and a full complement of commissioners. There’s important work to be done.
With economywide authority and a broad mandate to police “unfair and deceptive acts and practices,” the FTC has certainly been known to engage in excessive regulation. The Carter-era “Kid Vid” investigation (which led The Washington Post to accuse the commission of acting like a “national nanny”) is perhaps the most famous episode of such overreach, but there are many others, including the Obama FTC’s efforts to impose liability for supposed privacy violations that caused, at most, “emotional impact.” (That case, against LabMD, began in 2013 and, remarkably, is still on appeal before the 11th US Circuit Court of Appeals.)
But the FTC is also capable of doing good. Under chairs such as Jim Miller (Reagan) and Tim Muris (George W. Bush), the agency has served as an effective advocate for market-based solutions within a consumer-welfare-based, benefit-cost analysis framework. Acting Chair Maureen Ohlhausen — whose honorable and effective service has now been deservedly rewarded with a nomination to the federal bench — has done everything in her power to restore the agency to its Miller-Muris roots, especially through creating an Economic Liberty Task Force that has called out the need to reform occupational licensing rules, which often serve mainly to protect incumbents and quash competition and innovation.
But with limits on her ability to appoint permanent staff and without a working majority on the commission, Chairman Ohlhausen has lacked the ability to throw the full weight of the commission into some of the hot-button issues it faces going forward. Those fall into three main categories.
First is the question of market power among internet platform companies. That’s a hydra-headed monster, to be sure, bound up with everything from progressive fears of big business in general (see “hipster antitrust”) to concerns about Russian election meddling and ideological prejudice in Silicon Valley. The FTC cannot and should not try to mediate those inherently political issues, but it can and should seek to steer an economically sound, empirically grounded course, focused on identifying and deterring conduct that harms competition and consumers without creating disincentives to entrepreneurship and innovation. A good place to start would be with a refresh of the Bush administration’s 2008 analysis of single-firm conduct under Section 2 of the Sherman Act — a serious effort to assess a difficult set of issues that was unjustifiably “withdrawn” by the incoming Obama team.
Second, and relatedly, the FTC needs to work to restore US leadership when it comes to international antitrust enforcement, an issue that was raised by several speakers at a Heritage Foundation conference I participated in last month. Leaving aside the merits of individual cases, the rise of antitrust enforcement in the EU, China, South Korea, and elsewhere has led to concerns that foreign governments are using antitrust to advance parochial interests. Those concerns are amplified by what appear to be significant procedural shortcomings in the way some foreign authorities investigate and prosecute antitrust violations. The FTC can and should be a strong advocate for procedural fairness and the rule of law in antitrust enforcement around the world and in the US.
Third, it is also important for the commission to restore and strengthen its leadership role in advancing a balanced approach to data security and privacy, especially in the face of the looming implementation of the European General Data Protection Regulation (GDPR). A real risk is that the GDPR will be enforced in a way that slows, or skews, the global flow of information that makes the modern digital economy function. (Indeed, the front page of the EU’s GDPR website warns ominously that, starting May 25, 2018, “Organizations in non-compliance may face heavy fines.”) Again, the FTC needs to serve as advocate for an economically sound, empirically grounded approach that balances the costs of intervention against the (often ephemeral) benefits.
Add to these items the continuation of the Economic Liberty Task Force and other initiatives already underway and the prospective new FTC members — Chairman Joe Simons, Republican Commissioners Noah Phillips and Christine Wilson, and Democratic Commissioner Rohit Chopra — will have plenty of work on their collective plates. In the spirit of the day, let’s hope the hearings are a lovefest that presages a long and mutually beneficial relationship for all involved.
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