FTC votes to expand antitrust enforcement powers

The Federal Trade Commission (FTC) on Thursday voted to expand the regulatory agency’s enforcement powers, a signal of Democratic commissioners’ willingness to crack down on alleged anti-competitive behavior. 

The Democratic-controlled commission voted 3-2 along party lines to repeal a 2015 policy statement that blocked the regulatory agency from challenging “unfair methods of competition” that don’t violate existing antitrust laws. The update comes at a time when federal and state regulators are sinking their teeth into investigations of the market power of tech giants. 

“In practice, the 2015 statement has doubled down on the agency’s long standing failure to investigate and pursue unfair methods of competition,” Chair Lina Khan said at the meeting, the first under her charge. 

The guidance had “only hindered the agency’s enforcement efforts,” she said. 

Fellow Democrats on the commission, Rohit Chopra and Rebecca Slaughter, voted with Khan in repealing the Obama-era policy statement, while Republican commissioners Christine Wilson and Noah Phillips opposed the measure. 

Wilson argued that without the guidance in place, antitrust enforcement will “reflect political motivations.” 

“Enforcement based on political motivations rather than economic analysis would produce outcomes that are unpredictable and lack credibility,” Wilson said. 

Tech industry groups had also urged the FTC against repealing the 2015 policy statement. 

The group Chamber of Progress, which lists Amazon, Facebook and Google among its corporate partners, wrote in public comments to the FTC encouraging it to “amend rather than revoke” the policy statement. 

“Given the level of scrutiny the tech industry currently faces from regulators and the public, clear guidelines around the application of Section 5 should be public and transparent. It’s important for regulators and regulated companies to understand the same rules and act in good faith according to those rules,” Koustubh “K.J.” Bagchi, Chamber of Progress’s senior director of federal public policy, wrote. 

Similarly, the group Tech Freedom called for the FTC not to rescind the policy statement without public comment on the matter. 

The commission on Thursday also voted in a 3-2 party line vote to streamline procedures for rules prohibiting unfair or deceptive acts or practices. 

Slaughter said the update would provide the commission with “greater accountability and control” to take on challenges of the “modern economy.” 

And the commission voted, with opposition from the two Republicans, to approve a series of resolutions that aim to streamline investigations by commission staff into specific industries or conduct. 

The FTC’s Thursday meeting came just days after the agency faced a setback in its antitrust case against Facebook. 

A federal judge on Monday dismissed the FTC’s complaint, arguing the commission provided insufficient evidence to prove that the social media giant controls more than 60 percent of the market share, as the lawsuit alleges. The FTC has roughly a month to file an amended complaint. 

The FTC, however, may face more roadblocks ahead depending on who joins the commission after Chopra, whom President Biden has nominated to serve as director of the Consumer Financial Protection bureau (CFPB), though the Senate has not yet confirmed his nomination. 

Another key antitrust position, the head of the Department of Justice’s antitrust division, has also yet to be named by the Biden administration. 

The uncertainty of who will be nominated to the key positions also comes as Congress is looking to give more power to the enforcement agencies. 

The House Judiciary Committee last week advanced six bipartisan bills that aim to revamp antitrust laws and target tech giants, but they face an uncertain road ahead with some opposition from both sides of the aisle.