FTC Biweekly UMC Roundup – 88 mph Edition

Gus Hurwitz —  23 September 2022 — Leave a comment

We’re back for another biweekly roundup – and what a biweekly it’s been! The JCPA rode, died, and rides again. Yet AICOA is AWOL. FTC Chair Lina Khan went to Congress and back to (Fordham) law school, making waves wherever she went. DOJ added to the agencies’ roster of recently lost cases. And the FTC is here to help gig workers get real jobs. All that and more, in this edition of the FTC UMC Roundup.

This week’s headline is, without a doubt, FTC’s Chair Lina Khan’s remarks at Fordham Law School’s Conference on International Antitrust Law & Policy, where she announced that the Commission is currently considering a new policy statement on use of the Commission’s Unfair Methods of Competition authority.

It comes as no surprise that the Commission will be issuing this statement, though the details and exact timing have yet to be disclosed. Khan’s remarks do shed some light on what can be expected – though again there are no surprises. She “believe[s] it is clear that respect for the rule of law requires [the Commission] to reactivate [its] standalone Section 5 enforcement program,” and that the statement must “reflect[] the statutory text, our institutional structure, the history of the statute, and the case law.” 

Earlier in her remarks, Khan points to standalone UMC claims the Commission litigated in the 1940s through 1970s – “invitations to collude; price discrimination claims against buyers not covered by the Clayton Act; de facto bundling, tying, and exclusive dealing; and a host of other practices.” This reads like a menu of claims that will be embraced by the new statement, for which she has found support in the history of the statute and case law.

In addition to her trip to New York, back home Khan also visited the Senate for an antitrust oversight hearing. Khan’s statement champions the Commission’s departure from longstanding antitrust principles and celebrates its more active enforcement efforts. Very unusually, her statement prompted a dissenting statement from Commissioners Phillips and Wilson. Phillips and Wilson note that under Khan the Commission has actually seen less enforcement activity, call out the myriad inaccurate factual assertions in Khan’s statement, and raise concern about too-aggressive efforts to push the Commission beyond its statutory authority.

Cristiano Lima has more coverage of the oversight hearing. After a bit over a year at the helm of the agency this was Khan’s first oversight hearing. From the tone of the questioning, she may wish that it was her last. But in the likely event that Republicans take the House in the midterms, it will likely just be the first, and the easiest, of many future trips to Congress.

In other news, Senators Amy Klobuchar (D-MN) and Ted Cruz (R-TX) show us that strange bedfellows do weird things in bed. That’s right, I’m talking about the Journalism Competition and Preservation Act (JCPA), sponsored by Klobuchar. The JCPA is an attempt to preserve competition in media markets by allowing cartelization in media markets. A couple of weeks ago, Sen. Klobuchar abruptly withdrew the JCPA (her own bill) from committee consideration after a surprise amendment from Sen. Cruz that was intended to limit platforms content moderation practices. In a legitimately surprising turn of events, Senators Klobuchar and Cruz agreed to compromise language that allows news outlets to collectively bargain with platforms and will “bar the tech firms from throttling, filtering, suppressing or curating content.”

Back on the FTC front, the Commission released a new Policy Statement on Enforcement Related to Gig Work. The statement explains that “Protecting these workers from unfair, deceptive, and anticompetitive practices is a priority, and the Federal Trade Commission will use its full authority to do so.” It is a curious policy statement for a number of reasons, not least of which is the purported use of the Commission’s consumer protection authority for employee protection – we have a National Labor Relations Board for that. More subtle, the statement refers throughout to “unfair, deceptive, and anticompetitive practices,” suggesting a hybrid approach to these issues that draws separately from the Commission’s consumer protection and antitrust authorities. This move is increasingly common in the Commission’s recent regulatory efforts.

Time for some quick hits. This week’s puzzler has got to be Commissioner Bedoya calling for a revitalization of the Robinson-Patman Act. But as with all things FTC, these days the new ideas seem to be the ones found in the back seat of a Delorean.

Alden Abbott draws our attention to the upcoming Axon case. To be argued in the Supreme Court on November 7th, this case raises both procedural and substantive challenges to the Commission’s constitutional structure. Abbott notes in passing the Commission’s recent losses before its ALJ in the Altria-JUUL  and Illumina-Grail mergers – and we can add the DOJ’s recent loss in its effort to block UnitedHealth’s acquisition of Change Healthcare to the agencies’ growing list of recent losses.

Charles Sauer takes a look at ongoing discussion of potential Republican nominees to fill Commissioner Phillip’s seat when he steps down from the FTC, asking Why Are Conservatives Intent On Cloning Lina Khan? He rightly argues that Republicans should not consider nominating someone who shares Khan’s disregard for the rule of law and sound economics, or who would embrace unchecked administrative power. Even if used to pursue valid goals, such abuses of regulatory authority are anathema to good government and basic conservative principles. Any Commissioner should put faithful execution of the Commission’s statutory mandate above their own policy preferences, including a commitment to acting pursuant to clearly expressed Congressional intent instead of through constitutionally-dubious administrative fiat.

What’s on tap for next week? The White House is convening its Competition Council on Monday. And for those wondering whether I forgot to discuss AICOA after mentioning it in the opening graf, no need to worry. It got just as much attention as needed.

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