Friday, February 23, 2018

Hot Rumor: The Federal Trade Commission May Be Coming Back To Life


This week, the Open Markets Institute reported some good news, namely that the Federal Trade Commission may be about to "waken from it's anti-trust slumber." Hard to imagine.
For the last few years, the Federal Trade Commission all but vanished as a major player in anti-monopoly enforcement. In part, this was due to a lack of staff. For much of the last year, the FTC had only two sitting commissioners. Mainly, however, it was due to ideology.

Two of the most influential recent commissioners-- Maureen Ohlhausen and Josh Wright-- were strong proponents of libertarian competition philosophy, with its strong pro-monopoly bent. Further, even many recent Democratic appointments tended to take a highly permissive approach to economic power.

But a Senate Commerce Committee hearing on February 14 provided strong signals that the FTC may soon be back in the business of promoting competition in the United States. All five FTC commissioners are being replaced more or less at the same time, which means the character of the agency has the potential to change dramatically. And among both senators and nominees, the libertarian thinking that has long held sway in the Commission appeared to be decidedly out of fashion.
Sen. Ted Cruz (R-TX), a former director of policy planning at the FTC, has in the past largely opposed government regulations, including net neutrality. But at the hearing last week, Sen. Cruz expressed deep concern about the immense power wielded by Google and Facebook, citing a cover story in Esquire that calls for the break-up of big tech. Sen. Cruz appeared especially concerned about the anti-competitive implications of Facebook and Google's dominance, saying that their "market power, size, and control of public discourse is unprecedented."

Sen. Richard Blumenthal (D-CT) urged the nominees to use the "new populism…sweeping the country" as a mandate to invigorate enforcement and advocacy. "Going beyond the FTC being a resource, I'd also like you to be a champion," he said. "You have the bully pulpit. You can bring zeal and passion to consumer issues that no one else will do at the federal level." Sen. Blumenthal also submitted a statement from the Congressional Antitrust Committee into the hearing record.

Joe Simons, nominated by President Trump to chair the agency, said he wants to scrutinize dominant firms that wield market power and review the Commission's enforcement record. “At a high level, I don’t believe that big is necessarily bad,” he said. But he added, “Companies that are already big and influential can sometimes use inappropriate means, anti-competitive means, to get big or to stay big.” In particular, Simons said he was "very concerned" about drug pricing and would explore convening a drug pricing monitoring task force to track anti-competitive price spikes and enable prompt investigations and enforcement actions.

In discussing extreme consolidation in agriculture with Sen. John Tester (D-MT), Simons further explained that even when bad mergers cannot be easily unscrambled, the agency can investigate dominant industry players for anti-competitive conduct and target their power through injunctions. Coupled with his written comments, Simons’ remarks suggest he intends to target abusive actions by dominant companies.

The only Democratic nominee at the hearing, Rohit Chopra, expressed interest in reviewing barriers to entry in monopolized markets. In particular, he noted that consolidated control over data creates hazards both for consumers and independent businesses. He said, "Data breaches impose great deals of costs on small enterprises. The Equifax data breach led to significant losses for community banks, credit unions, and other financial institutions."

A fifth slot on the Commission, reserved for a Democrat, still lacks an official nominee. Senate Minority Leader Chuck Schumer (D-NY) has recommended to the White House that it nominate his chief counsel, Rebecca Slaughter, for the position.
The founding members of the House AntiTrust Caucus are some of the House's most progressive members: Ro Khanna (CA), Mark Pocan (WI), Rick Nolan (MN), David Cicciline (RI), Keith Ellison (MN) and Pramila Jayapal (WA).

Austin Frerick has made fighting monopolies a key part of his platform, so it was no surprise when he told us that the Antitrust Caucus will be the "first caucus I will join. Also as an Iowa congressman, I plan to make antitrust a central requirement for my endorsement in the 2020 caucuses."

Derrick Crowe, the progressive running for the open seat in the Austin/San Antonio corridor told us he "would absolutely join the Congressional Anti-Trust Caucus. The rise of monopoly power threatens our bank accounts, worsens inequality, and undermines our political liberties. Busting trusts is defending democracy."

Goal ThermometerLisa Brown, the economist who served as Chancellor of Washington State University, Spokane and is currently busy campaigning to replace Paul Ryan lieutenant Cathy McMorris Rodgers that us "it’s a basic tenet of Econ-101 that concentrated economic power in a market, in which only a few producers  dominate, has adverse outcomes for consumers. Higher prices and less consumer satisfaction generally result from oligopoly and monopoly power. Effective federal regulation can counter these results. It’s encouraging that some members of Congress are getting  more active in this arena and I would welcome the opportunity to join them."

And we'll leave the last word for Lillian Salerno, former Obama deputy secretary of Agriculture, who is running a vigorous campaign in north Dallas that takes on monopolization head on: "Concentrated corporate power is out of control," she often says, "and it's time for Congress to step up with a renewed focus on anti-monopoly rules and investigations. That's what I'll do when I get there."

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At 1:51 PM, Anonymous Anonymous said...

Lord Trump will not bestow his Imperial imprimatur upon this effort to harm his corporate subjects. He will declare war.


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