Wonderful news about Federal Trade Commission, under new management of FTC Chair Lina Khan!
New Chairman, and new Directors of FTC Bureau of Competition and Bureau of Consumer Protection.
I am pondering filing several FTC complaints.
I am inspired by Chair Lina Khan and her 3-2 Democratic majority.
In 1890 and 1914, Congress enacted the Sherman Antitrust Act, Clayton Antitrust Act and Federal Trade Commission Act, making "every contract, combination and conspiracy in restraint of trade" illegal, and a felony, and providing for FTC to investigate and adjudicate antitrust and unfair trade practice issues.
Former Senate Judiciary Committee Chairman Joseph Robinette Biden, Jr. swore to "preserve, protect and defend" our Constitution and laws, as did his appointees.
President Joe Biden meant it.
So do his appointees.
"Fiat justitia, rust ceaelum." ("Let justice be done though the heavens fall."
Evocative photo below is of a Dublin, Ireland police station, adjoining an Irish court, Photo credit: from website of McGarr Solicitors.
‘Unlike anything I’ve seen at the FTC’: Biden’s chair makes her public debut
Under Biden nominee Lina Khan, the agency met in public for the first time in decades — and split along party lines on an aggressive enforcement agenda.
FTC Commissioner nominee Lina M. Khan testifies.
The Federal Trade Commission's first meeting under new Chair Lina Khan broke decades of precedent by taking place in public. | Graeme Jennings-Pool/Getty Images
By LEAH NYLEN
07/01/2021 08:49 PM EDT
The Federal Trade Commission's first meeting under new Chair Lina Khan broke decades of precedent Thursday by taking place in public — something unheard-of for the notably secretive antitrust and consumer protection agency.
Then it pushed through a series of actions on progressive Democrats' wish list: Fines for companies that lie about products being "Made in America." Greater latitude for launching antitrust probes and lawsuits. And a wider door to writing new regulations — something else the FTC hasn't done much of in decades.
All this came despite fierce objections from the commission's two Republicans, in a sign that partisan rancor is also back in vogue at the Biden-era FTC.
Thursday's videoconferenced session was the first public glimpse of what may lie in store for the 106-year-old agency under its youngest-ever chair, a former Columbia University law professor who made her reputation as a critic of tech giants like Amazon. And fellow tech critics were particularly thrilled.
“More progress was made today than in the last quarter-century,” said Jeff Chester, of the watchdog group Center for Digital Democracy, who has done work before the FTC since the 1990s. "Its very, very important and it’s unlike anything I’ve seen at the FTC."
Here are POLITICO's takeaways from Khan's debut:
Partisanship is back
The FTC has long touted itself as a bipartisan agency, less prone to the party-line votes that characterize much of the business at bodies like the Federal Communications Commission and the Securities and Exchange Commission.
“The FTC has a long history of bipartisanship, and we work hard to maintain that tradition,” then-Chair Joe Simons, a Republican, told a Senate panel in 2018.
Then FTC Chair Joe Simons testifies during a House Energy and Commerce subcommittee hearing on Capitol Hill. | Susan Walsh/AP Photo
That spirit was absent Thursday, however, as every item on the agenda passed in a 3-2 party line vote. Republicans Noah Phillips and Christine Wilson repeatedly decried the new approach, accusing the Democrats of risking a congressional backlash by overstepping decades of precedent and the agency's legal authority.
The split was notably different from the agency's usual partisan divides, even though Democrats have typically been more likely than Republicans to favor enforcement in high-profile antitrust cases. As recently as December, Simons joined with the FTC's two Democratic commissioners to approve a major antitrust suit against Facebook.
In her first public comments as chair, Khan also voiced a much different set of priorities from the commission's Republicans, emphasizing that the FTC has a mandate to protect “consumers, workers and honest business owners” and “to promote a fair and thriving economy that is representative of all Americans.”
Previous chairs and commissioners have defined the agency’s primary focus as promoting consumer welfare. That standard look at how businesses' conduct affects the ways people purchase goods and services, often translated as its influence on price. But progressives say it undervalues other considerations such as fairness and privacy.
Back to the '70s … or '80s
“If we don't acknowledge the mistakes of the past, we are doomed to repeat them,” Wilson warned while arguing against one of the Democratic-led action items.
She was referring to the 1970s, when the FTC under then-Chair Michael Pertschuk sought to create rules on TV advertising directed at children, in what came to be known as the KidVid controversy. The Washington Post's editorial board accused the FTC of trying to be the “national nanny,” and Congress, under pressure from advertisers and business groups, passed legislation to significantly curtail the FTC’s rulemaking authority.
Since then, the FTC has shied away from rulemaking, even where the agency’s founding statute expressly calls for the commission to make regulations. (More on that below).
The FTC also suffered a series of court losses in the early 1980s when it tried to bring cases under its statutory authority to police “unfair methods of competition,” Wilson pointed out.
The FTC “needs to acknowledge the commission's losses in those cases,” she said. The response “should not be a new concerted effort by the commission to exceed the FTC’s authority.”
Khan and her supporters, though, argue that Republicans are paying attention to the wrong decade in antitrust and the FTC’s history. When Ronald Reagan became president in 1981, he brought to federal agencies a young, enthusiastic and highly ideological cadre who remade antitrust into the corporate-friendly policy realm it is today. That's the legacy the Democrats are now trying to undo, calling it a return to the principles behind the FTC's creation in 1914.
“Lawmakers created the FTC to police unlawful business practices with greater expertise and democratic accountability than courts provided,” she said.
Rules are coming
One of the most important actions Thursday — a project of Democratic Commissioner Rebecca Kelly Slaughter — sets the stage for a return to active rulemaking.
After Congress passed legislation in 1980 to cut back on the FTC’s rulemaking, the agency adopted procedures that Slaughter said even further curtailed the agency’s ability to propose rules. A proposal adopted Thursday aims to eliminate those “self-imposed” requirements while still allowing “ample transparency and opportunity for public participation,” said Slaughter, the agency's former acting chair.
One key change would eliminate the role of the FTC’s administrative law judge in presiding over rulemakings. Instead, the FTC’s chair or a person of her choosing can act as the presiding officer, overseeing public hearings and determining the factual record behind the rule.
Republicans opposed the change, on the grounds that someone selected by the chair would be less neutral than the agency’s in-house judge.
Slaughter suggested that online ticket sales and data collection are two potential areas for possible rules. Khan also said the FTC would probably consider writing its own definition of what conduct amounts to an “unfair method of competition” — an idea that could allow the agency to sue businesses for bad behavior not covered by traditional antitrust law.
So are more investigations
The commission also lowered the threshold for the FTC's staff to launch antitrust probes, a move that could have huge implications.
For years, the agency has required its antitrust attorneys to get the full commission's approval to begin investigations. In contrast, attorneys from the agency's consumer branch often have had wider latitude to send out subpoenas and document requests to companies or ask for interviews with business employees, under so-called “omnibus” resolutions.
Slaughter said the disparity "has never made sense.” But the FTC’s Republicans assailed the move to give antitrust lawyers a freer hand.
“I cannot understand why the commission would abrogate so much of its authority at such a critical time,” Wilson said.
Now, antitrust staff will need only one commissioner's approval to subpoena information for certain kinds of investigations, including those that involve repeat offenders, technology companies or digital platforms and pharmaceutical companies or hospitals. Cases where staff are seeking information on the Covid-19 pandemic or harms to labor or small businesses will also only need one commissioner’s approval.
While Khan and her allies styled the resolutions as “streamlining” investigations, they actually have a more strategic value for the Democrats.
Democratic Commissioner Rohit Chopra is likely to leave in the coming months because President Joe Biden has nominated him to head the Consumer Financial Protection Bureau. Once he departs, the FTC will be equally split between Republicans and Democrats until Biden nominates and the Senate confirms a fifth member. Thursday's change ensures that the Republican commissioners can’t block investigations the Democrats want to open.
More transparency, but only so much
Thursday’s meeting was the first of its kind — the first time the FTC’s commissioners have met publicly to vote in decades, and among the first times ever they have accepted public comments. (The FTC often holds workshops and hearings on various topics, but the five commissioners rarely attend.)
Khan heralded the meeting as bringing needed transparency to the FTC’s work by “establishing a regular public forum.”
The Republicans were less enthused, with Wilson noting that while the FTC released the meeting’s agenda a week in advance, Khan’s office didn’t provide the text of the items under consideration until Friday.
“With sufficient notice, advanced planning, input from our knowledgeable staff and a robust dialogue among my fellow commissioners, open commission meetings could facilitate” transparency, she said. “Today's meeting falls short on all accounts.”
The public comment period was also scheduled for the end of the meeting, which meant the commissioners were voting on items before anyone got a chance to speak about them, Phillips said.
“Transparency is important, but I don't think the commission is living up to that ideal with this,” he said.
Both Phillips and Wilson offered proposals that would have seen the FTC publish its proposals in the Federal Register for public comment before the commissioners voted on them. (Those motions failed on party-line votes.)
After Thursday’s meeting, the agency issued news releases heralding each of the proposals — though not the actual text of what the FTC adopted in at least one of the motions.
FILED UNDER: FTC, ANTITRUST, CONSUMER FINANCIAL PROTECTION BUREAU, JOE BIDEN,
FTC Chair Lina M. Khan Appoints Directors of Bureau of Competition and Bureau of Consumer Protection
Holly Vedova will serve as Director of Bureau of Competition; Samuel A.A. Levine will serve as Director of Bureau of Consumer Protection
FTC press reelease: