FTC UMC Roundup – Circular Firing Squad Edition

Gus Hurwitz —  17 June 2022 — Leave a comment

Welcome to the FTC UMC Roundup for June 17, 2022. This week’s roundup is a bit shorter – but only because your narrator would rather be out climbing mountains in Squamish, BC, than reading or writing about Sen. Amy Klobuchar’s (D-MN) pretty bad week. From where I sit, me climbing a multipitch 5.13 mountain looks quite a bit more likely than Sen. Klobuchar charting a path for the American Innovation and Choice Online Act (AICOA) to become law.

This week’s headline is the seeming demise of AICOA. That’s a surprising headline given where the week started: John Oliver’s (D-HBO) latest episode of Last Week Tonight focused on Tech Monopolies. And the weight of Oliver can make legislative initiatives such as this a fait accompli. My colleague Dirk Auer does a nice job dissecting the episode and discussing mistakes he sees in Oliver’s analysis. But Dirk, like Oliver, does miss perhaps the most important point. Oliver notes in the episode that AICOA is a bipartisan bill, and marvels at the novelty of seeing Sen. Josh Hawley (R-MO) co-sponsoring a bill with Sen. Klobuchar. If only Oliver had slightly better journalistic chops, he might have thought to ask “Why? Why in the world is Josh Hawley on team Klobuchar?

The answer to this question explains this week’s seeming collapse of AICOA. Hawley, along with most other Republicans who support AICOA, supports the bill because he believes it limits platforms’ ability to engage in content moderation. The bill’s Democrat champions have downplayed this concern. But with academics and activists alike drawing attention to this concern, it has now taken center stage. This week four Democratic Senators asked Senator Klobuchar to amend AICOA to expressly make clear that it does not limit content moderation practices.

The problem with this? Well, Republicans are making pretty clear that their real concern is with content moderation. A large group of Republican Senators, let by Sen. John Thune (R-SD) have introduce the Political BIAS Emails Act, which would prohibit platforms from “censoring or discriminating against political emails.” I have even heard some speculation that Republicans will push for the Political BIAS Emails Act to be merged with AICOA – but note the lack of a hyperlink to support that speculation.

In any event, Sen. Klobuchar seems to be in the center of a circular firing squad. Her Democratic allies demand she make clear that AICOA does not limit content moderation and her Republican frenemies demand that she maintain the possibility that it does. Given that she can’t lose many of either, it seems unlikely she can keep both. Of course, last time Sen. Klobuchar tried to fix problems with AICOA, transparently trying to buy support by excluding favored industries, she failed to address any of the bill’s substantive flaws

At the FTC

Senator Klobuchar’s bad week may be making FTC Chair Lina Khan feel better about her bad week. Last week was the Chair Khan press tour, with interviews given to a half dozen or so of the tipity-top of the tech reporting aristocracy. This week’s press coverage, however, focused on the management crisis facing the agency and the staff departures that have resulted. No matter your views on Chair Khan’s policies these are tragic stories. Almost all antitrust commentators want the FTC to be a successful agency, and – as with the rest of the government – that success is built upon the work and dedication of the career staff.

The substantive point to be made is to reflect on the different roles between the FTC and DOJ in “making law” through litigation. Chair Khan wants to use aggressive enforcement to make new law – even if that means asking staff to bring cases that believe are not supported by current law – but it is a legitimately hard question whether an agency empowered by Congress to enforce a statute authored by Congress should view itself as a common law enforcer that develops law through litigation. The common law may develop through litigation, but regulatory law is more a creature of legislation. At the same time, antitrust law is often thought of as one of the curious few remaining creatures of federal common law.

Some Quick Hits

Not all cases result in litigation. In the past weeks the FTC has announced that it would challenge multiple hospital mergers. This week, several of those mergers have been called off

Perhaps the biggest straight-up antitrust news this week was Qualcomm’s successful appeal of DG Comp’s billion euro fine for exclusive conduct. The court faulted DG Comp on both procedural and – more importantly – substantive grounds. As Nicolas Petit explains, the factual findings in the case showed that Apple had no alternative to using Qualcomm’s products – how then could Qualcomm have engaged in “exclusionary” conduct? Exclusionary of whom? Santa Clause? The Easter Bunny? For European readers, the Cadbury Bunny? Those are all fictional characters – and harm cannot be to a fictional party. 

Coming in somewhat below the radar is the Supreme Court’s opinion in American Hospital Association v. Becerra. Chris Walker has a nice write-up of the case at the Notice & Comment blog. This case had been framed to create an opportunity for the Court to substantially narrow the Chevron doctrine – an opportunity that the court seemingly did not take up. In the opinion below, the DC Circuit had affirmed an agency action on Chevron grounds, giving substantial weight to the policy rationale advanced by the agency to uphold the agency’s reading of its statute. The Supreme Court, in an opinion that didn’t mention Chevron or deference a single time, interpreted the statute on its own and came to a conclusion based on that reading of the statute. Arguably, this opinion leaves Chevron unscathed; arguably, this opinion narrows Chevron to truly ambiguous statutory language and not merely language that can be tortured to support tortured policy-motivated readings.

This week’s reads: It’s Friday. It’s not a Supreme Court opinion day. It’s not a January 6th Select Committee hearing day. If you’re looking for something to keep you busy on your lunch break, you could do much worse than reading Richard Pierce’s caution about abandoning antitrust principle to fight inflation. And Ben Brody takes a step back to offer a big picture piece on Khan’s FTC.

The FTC UMC Roundup, part of the Truth on the Market FTC UMC Symposium, is a weekly roundup of news relating to the Federal Trade Commission’s antitrust and Unfair Methods of Competition authority. If you would like to receive this and other posts relating to these topics, subscribe to the RSS feed here. If you have news items you would like to suggest for inclusion, please mail them to us at ghurwitz@laweconcenter.org and/or kfierro@laweconcenter.org.

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