In a Feb. 14 column in the Wall Street Journal, Commissioner Christine Wilson announced her intent to resign her position on the Federal Trade Commission (FTC). For those curious to know why, she beat you to the punch in the title and subtitle of her column: “Why I’m Resigning as an FTC Commissioner: Lina Khan’s disregard for the rule of law and due process make it impossible for me to continue serving.”
This is the seventh FTC roundup I’ve posted to Truth on the Market since joining the International Center for Law & Economics (ICLE) last September, having left the FTC at the end of August. Relentlessly astute readers of this column may have observed that I cited (and linked to) Commissioner Wilson’s dissents in five of my six previous efforts—actually, to three of them in my Nov. 4 post alone.
As anyone might guess, I’ve linked to Wilson’s dissents (and concurrences, etc.) for the same reason I’ve linked to other sources: I found them instructive in some significant regard. Priors and particular conclusions of law aside, I generally found Wilson’s statements to be well-grounded in established principles of antitrust law and economics. I cannot say the same about statements from the current majority.
Commission dissents are not merely the bases for blog posts or venues for venting. They can provide a valuable window into agency matters for lawmakers and, especially, for the courts. And I would suggest that they serve an important institutional role at the FTC, whatever one thinks of the merits of any specific matter. There’s really no point to having a five-member commission if all its votes are unanimous and all its opinions uniform. Moreover, establishing the realistic possibility of dissent can lend credence to those commission opinions that are unanimous. And even in these fractious times, there are such opinions.
Wilson did not spring forth fully formed from the forehead of the U.S. Senate. She began her FTC career as a Georgetown student, serving as a law clerk in the Bureau of Competition; she returned some years later to serve as chief of staff to Chairman Tim Muris; and she returned again when confirmed as a commissioner in April 2018 (later sworn in in September 2018). In between stints at the FTC, she gained antitrust experience in private practice, both in law firms and as in-house counsel. I would suggest that her agency experience, combined with her work in the private sector, provided a firm foundation for the judgments required of a commissioner.
Daniel Kaufman, former acting director of the FTC’s Bureau of Consumer Protection, reflected on Wilson’s departure here. Personally, with apologies for the platitude, I would like to thank Commissioner Wilson for her service. And, not incidentally, for her consistent support for agency staff.
Her three Democratic colleagues on the commission also thanked her for her service, if only collectively, and tersely: “While we often disagreed with Commissioner Wilson, we respect her devotion to her beliefs and are grateful for her public service. We wish her well in her next endeavor.” That was that. No doubt heartfelt. Wilson’s departure column was a stern rebuke to the Commission, so there’s that. But then, stern rebukes fly in all directions nowadays.
While I’ve never been a commissioner, I recall a far nicer and more collegial sendoff when I departed from my lowly staff position. Come to think of it, I had a nicer sendoff when I left a large D.C. law firm as a third-year associate bound for a teaching position, way back when.
So, what else is new?
In January, I noted that “the big news at the FTC is all about noncompetes”; that is, about the FTC’s proposed rule to ban the use of noncompetes more-or-less across the board The rule would cover all occupations and all income levels, with a narrow exception for the sale of the business in which the “employee” has at least a 25% ownership stake (why 25%?), and a brief nod to statutory limits on the commission’s regulatory authority with regard to nonprofits, common carriers, and some other entities.
Colleagues Brian Albrecht (and here), Alden Abbott, Gus Hurwitz, and Corbin K. Barthold also have had things to say about it. I suggested that there were legitimate reasons to be concerned about noncompetes in certain contexts—sometimes on antitrust grounds, and sometimes for other reasons. But certain contexts are far from all contexts, and a mixed and developing body of economic literature, coupled with limited FTC experience in the subject, did not militate in favor of nearly so sweeping a regulatory proposal. This is true even before we ask practical questions about staffing for enforcement or, say, whether the FTC Act conferred the requisite jurisdiction on the agency.
This is the first or second FTC competition rulemaking ever, depending on how one counts, and it is the first this century, in any case. Here’s administrative scholar Thomas Merrill on FTC competition rulemaking. Given the Supreme Court’s recent articulation of the major questions doctrine in West Virginia v. EPA, a more modest and bipartisan proposal might have been far more prudent. A bad turn at the court can lose more than the matter at hand. Comments are due March 20, by the way.
Now comes a missive from the House Judiciary Committee, along with multiple subcommittees, about the noncompete NPRM. The letter opens by stating that “The Proposed Rule exceeds its delegated authority and imposes a top-down one-size-fits-all approach that violates basic American principles of federalism and free markets.” And “[t]he Biden FTC’s proposed rule on non-compete clauses shows the radicalness of the so-called ‘hipster’ antitrust movement that values progressive outcomes over long-held legal and economic principles.”
Ouch. Other than that Mr. Jordan, how did you like the play?
There are several single-spaced pages on the “FTC’s power grab” before the letter gets to a specific, and substantial, formal document request in the service of congressional oversight. That does not stop the rulemaking process, but it does not bode well either.
Part of why this matters is that there’s still solid, empirically grounded, pro-consumer work that’s at risk. In my first Truth on the Market post, I applauded FTC staff comments urging New York State to reject a certificate of public advantage (COPA) application. As I noted there, COPAs are rent-seeking mechanisms chiefly aimed at insulating anticompetitive mergers (and sometimes conduct) from federal antitrust scrutiny. Commission and staff opposition to COPAs was developed across several administrations on well-established competition principles and a significant body of research regarding hospital consolidation, health care prices, and quality of care.
Office of Policy Planning (OPP) Director Elizabeth Wilkins has now announced that the parties in question have abandoned their proposed merger. Wilkins thanks the staff of OPP, the Bureau of Economics, and the Bureau of Competition for their work on the matter, and rightly so. There’s no new-fangled notion of Section 5 or mergers at play. The work has developed over decades and it’s the sort of work that should continue. Notwithstanding numerous (if not legion) departures, good and experienced staff and established methods remain, and ought not to be repudiated, much less put at risk.
Oh, right, Meta/Within. On Jan. 31, U.S. District Court Judge Edward J. Davila denied FTC’s request for a preliminary injunction blocking Meta’s proposed acquisition of Within. On Feb. 9, the commission announced “that this matter in its entirety be and it hereby is withdrawn from adjudication, and that all proceedings before the Administrative Law Judge be and they hereby are stayed.”
So, what happened? Much ink has been spilled on the weakness of the FTC’s case, both within ToTM (you see what I did there?) and without. ToTM posts by Dirk Auer, Alden Abbott, Gus Hurwitz, Gus again, and I enjoyed no monopoly on skepticism. Ashley Gold called the case “a stretch”; Gary Shapiro, in Fortune, called it “laughable.” And as Gus had pointed out, even the New York Times seemed skeptical.
I won’t recapitulate the much-discussed case, but on the somewhat-less-discussed matter of the withdrawal, I’ll consider why the FTC announced that the matter “is withdrawn from adjudication, and that all proceedings before the Administrative Law Judge be and they hereby are stayed.” While the matter was not litigated to its conclusion in federal court, the substantial and workmanlike opinion denying the preliminary injunction made it clear that the FTC had lost on the facts under both of the theories of harm to potential competition that they’d advanced.
“Having reviewed and considered the objective evidence of Meta’s capabilities and incentives, the Court is not persuaded that this evidence establishes that it was ‘reasonably probable’ Meta would enter the relevant market.”
An appeal in the 9th U.S. Circuit Court of Appeals likely seemed fruitless. Stopping short of a final judgment, the FTC could have tried for a do-over in its internal administrative Part 3 process, and might have fared well before itself, but that would have demanded considerable additional resources in a case that, in the long run, was bound to be a loser. Bloomberg had previously reported that the commission voted to proceed with the case against the merger contra the staff’s recommendation. Here, the commission noted that “Complaint Counsel [the Commission’s own staff] has not registered any objection” to Meta’s motion to withdraw proceedings from adjudication.
There are novel approaches to antitrust. And there are the courts and the law. And, as noted above, many among the staff are well-versed in that law and experienced at investigations. You can’t always get what you want, but if you try sometimes, you get what you deserve.
