Early August is an unpredictable time in the policy world. With Congress about to go on recess, one never knows if there will be a mad rush to get something done, or what that something may be. And it is, for many, a month of vacations and light schedules. Short staffing may delay work or allow mistakes to be made. And then there’s Alex Jones’s lawyer – for whom the best that can be said is that he will forever be known as “Alex Jones’s lawyer” than by his given name. The Roundup this week is brought to you by the letter unpredictability.
This week’s headline is antitrust labor issues. The week started off with news that a senior Republican staffer is leaving the Senate Judiciary Committee – a staffer who has reportedly been instrumental in drafting the American Innovation and Choice Online Act (AICOA) – to join Amazon as a lobbyist. As Politico suggests, this “move is particularly notable because the legislation he was working on – [AICOA] – is losing steam.” More on that in a moment.
The next bit of antitrust labor news is word of an FTC Inspector General report stemming from an audit of the FTC’s use of unpaid consultants and experts. As reported by Leah Nylen, the OIG report found that this practice, used in prior administrations by expanded substantially under current FTC Chair Lina Khan, “creat[es] potential legal and compliance risks, including conflicts of interest.” The report expressly notes that the “audit was not designed to determine whether unpaid consultant or experts were involved in activities prohibited by the federal policies … and [makes] no assertions on their involvement in those activities.” It then goes on to lay out various activities they were involved in that clearly violate federal policies. Oh my.
The big antitrust labor news of the week is, of course, that of Tim Wu’s quantum departure from his role as White House central competition czar. The story of his pending return to the ivory tower broke on Tuesday and spread fast to all corners. The next morning, the man himself reported that those reports were “greatly exaggerated.” He has not, however, said whether this means he’s sticking around in his current role for days, weeks, or months – though it bears note that the original report was merely that he would be returning to his teaching position “in the coming months.” One wonders whether his suggestion that he is not leaving is itself a great exaggeration.
Uncertainty over the fate of Wu evokes uncertainty over the state of AICOA – indeed, their fates could be intimately linked. Last week, around the time Wu might have made the decision to leave, it would have seemed AICOA was losing steam. With the Inflation Reduction Act taking all the Big Bill energy during the mad-dash to the August recess, even Senator Klobuchar (D-MN) was forced to admit that AICOA would not get a vote before the recess. Then came the report that Klobuchar has offered to amend the bill to address the concerns that Senator Brian Schatz (D-HI) and other democratic senators have that AICOA could limit platforms’ content moderation practices. (Side note: Ashley Gold is simply killing this beat this week.) This is a remarkable change in stance for Klobuchar, who has steadfastly refused to consider such an amendment – almost certainly because she knows it will cost needed Republican support for the bill. One wonders how many Republicans will be one board after such an amendment is made.
Turning the page, the next day Politico reported that Senate Majority Leader Schumer (D-NY) plans, but also may not plan, to bring AICOA to the floor after the recess. His plans are either more or less clear than Tim Wu’s plans to leave his position. It seems likely that Schumer is supporting Klobuchar’s efforts to get votes for the bill, but his support for bringing it to the floor may yet be contingent. The Politico report suggests that Schumer’s office may have backed off from saying he plans to bring it to the floor – and may even pressured prior reports to remove a statement that he would bring it to the floor.
So what’s going on with AICOA? I stand by my prior assessment that it’s dead. Actually, I think that it’s now worse than dead – it’s now a mere political football. Senator Manchin’s flip on Build Back Better has soured the likelihood of any bipartisan bills moving forward. The fact that Klobuchar is buckling to Schatz’s demand to address the bill’s threat to content moderation – the only thing that really excited Republicans about the bill – suggests that the current maneuver is to put forth a partisan Big Tech bill that will not pass but that may win some voters’ hearts in November.
This week’s FTC UMC Roundup ends with an FTC UMC question: Where’s the UMC in the Meta-Within challenge? Last week’s complaint alleges vanilla violations of Section 7 of the Clayton Act. While it mentions the FTC’s Section 5 authority, it does so in boilerplate language. The substantive bases alleged to satisfy the agency’s Section 13(b) burden to get an preliminary injunction against the merger all sound in the traditional language of mergers and Section 7 – that the effect of the merger “may be substantially to lessen competition, or tend to create a monopoly.”
This is interesting for a few reasons. Most notably, as many have noted (Ashley Gold again), the case is a real dog under traditional antitrust law. It’s hard to imagine the FTC not losing – likely at the PI stage and even moreso at trial. If the case is so weak under traditional antitrust law, why not argue this case under non-traditional antitrust law? FTC’s UMC authority is recognized to be broader than traditional antitrust law, precisely to enable the Commission to take action against anticompetitive conduct that falls outside the scope of traditional antitrust law.
Indeed, one of Chair Khan’s stated goals has been to explore the boundaries of the Commission’s UMC authority and to use it to reinvigorate antitrust enforcement. The expectation has been that this would come through the agency’s rulemaking authority – but the agency can develop new law through litigation just as much as through rulemaking. There is even a case, post-West Virginia v. EPA, that the case-by-case approach to expanding its UMC authority is a more viable path forward than to risk raising major questions through a rulemaking.
One wonders what the FTC’s calculation here is. It could simply be a case of boilerplate drafting. Perhaps there was some greater fight within the agency over how to draft the complaint. We know there was dissent from the staff over whether to bring the complaint at all – perhaps this left little time or energy to draft anything more than a standard complaint. Or, perhaps more cynically, the winning move is to lose on traditional antitrust grounds – and to use that as an example to demonstrate the FTC’s need to use its UMC authority in cases such as these.
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 firstname.lastname@example.org and/or email@example.com.