FTC hearing exposes rifts over Biden administration’s antitrust push

Federal Trade Commission US updates

Republican members of the Federal Trade Commission have criticised sweeping changes being made to how the body works as the Biden administration attempts to revamp US competition policy. 

Noah Phillips and Christine Wilson, the two Republicans on the five-member commission, said during a hearing before the House energy and commerce committee on Wednesday that recent FTC reforms had made the commission less accountable.

“​​In the last few weeks, the commission has repeatedly changed policy direction without giving the public any real notice or right to be heard and, without any serious consideration, removed guidance from the public and the business community alike,” Phillips said. “We can do better.”

Wilson said: “In recent weeks, longstanding norms and procedures have been jettisoned. Practitioners, academics and former enforcers across the political spectrum have expressed concern about the agency’s abrupt departure from regular order. I share these concerns.”

Democrats in Washington have recently laid out a blueprint for how they intend to upend decades of consensus on competition regulation and make it easier for federal regulators at the FTC and US Department of Justice to challenge the corporate power concentrated in large companies.

Since taking office last month, Lina Khan, the FTC’s new Democratic chair and a prominent critic of Big Tech, has begun reforming how the regulator works, including making commissioners’ meetings public and giving the commission a broader remit to pursue companies over unfair methods of competition.

The decision to make meetings public has triggered a particularly strong response from the two Republican commissioners, who say they feel less able to discuss sensitive decisions with their Democratic counterparts.

President Joe Biden signed an executive order earlier this month giving the FTC considerable authority to enact his vision. The president encouraged the commission to create a series of new rules, including stopping companies from preventing their employees from moving to rivals, and banning large drug companies from paying generic manufacturers to stay out of a particular market for a period of time.

Some legal experts have warned that the FTC is at risk of exceeding its legal authority if it engages in a flurry of new rulemaking — a concern Phillips said he shared.

“Much of [the president’s order] would replace consumer-driven market forces with government-supervised regulation, the opposite of the competition,” Phillips said. “And much of that appears to be based on authority we simply do not possess.”

Rohit Chopra, a Democratic commissioner, also called on Congress during the hearing to review a law which allows FTC staff to be paid by outside organisations to travel to conferences, where they sometimes take part in panel discussions that are not open to the public or media.

Chopra said: “Small businesses and the general public can’t easily access these private panel junkets, and don’t have the resources to organise to ensure equal access and fairness.”

In a separate statement to the committee, the commission as a whole complained about the restrictions it faced when pursuing companies such as Facebook over past behaviour. 

The FTC’s complaint against Facebook was dismissed last month, and the judge criticised the commission’s decision to pursue the social media company over its long-completed acquisitions of Instagram and WhatsApp. The FTC has until August 19 to submit a revised complaint if it decides to keep pursuing the case in the federal court.

Separately on Wednesday, a group of state attorneys-general, led by Letitia James from New York, announced that they were appealing against a decision by the same judge to dismiss their case against Facebook.

Additional reporting by Hannah Murphy

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