FTC Debates Consumer Welfare as Part of Potential Antitrust Policy Shift
EU antitrust enforcers have different standards, but monitoring their activity helps U.S. regulators decide if changes are needed here, FTC Commissioner Rebecca Kelly Slaughter said Friday during the agency’s second round of hearings on antitrust and consumer protection policy (see 1809130057). She cited Chairman Joe Simons’ call for regulators to keep an open mind as the agency fields policy suggestions through this year.
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Commissioner Maureen Ohlhausen argued a competitive market is a welfare-enhancing market for consumers, after one economist questioned the effectiveness of the agency’s consumer welfare standard. Given the concentration of power, the U.S. has entered an “era of agitation” similar to that of President Theodore Roosevelt’s antitrust efforts more than 100 years ago, she added. The FTC needs to continue its “singular focus” on consumers, which has been a linchpin of policy coherence, Ohlhausen said.
Slaughter cited concerns that markets are becoming increasingly concentrated and tech-dependent, saying competition and consumer protection issues shouldn’t be considered in isolation. “We can think carefully and radically at the same time,” she said. Others also are concerned (see 1809210035).
If at the end of the hearings the FTC appears to be patting itself on the back for maintaining the status quo, the process was a failure, Slaughter said. The agency can do better with its existing toolbox, but it can always look to supplement it with additional authority, she said, citing Congress’ role. NetChoice tweeted in response that if open-mindedness is the goal, the agency should be open to the possibility that the status quo is working.
Computer & Communications Industry Association CEO Ed Black in a statement accused “a few big tech companies” of demonizing and harassing “their popular competitors.” “These hearings help regulators gather the facts from experts to better understand U.S. industry and how it’s working for consumers and the economy,” he said.
Having an economy rife with market power reduces opportunity and creates an uneven playing field, said Columbia University Business School economist and Nobel laureate Joseph Stiglitz. Current antitrust and competition laws aren't capable of ensuring a competitive market, and the consumer welfare standard isn't necessarily working, he suggested. In the past 25 years, concerns about market concentration and monopoly power have magnified, he said. Boston University antitrust law professor Keith Hylton expressed skepticism there are realistic alternatives to the consumer welfare standard, warning against biases being introduced when weighing “externalities.”
There has been inadequate coordination between U.S. antitrust enforcers, from the FTC to DOJ and state attorneys general, said ex-FTC chairman William Kovacic, now a professor at George Washington University Law School. He suggested a framework more in line with enforcers in the EU and the U.K. AGs meanwhile may meet soon with DOJ (see 1809210047).
Observers shouldn't confuse success with antitrust violations, said University of Chicago economist and ex-DOJ official Dennis Carlton. The key is to make sure firms like Google and Amazon aren't maintaining their dominance illegally, he said, warning against trying to solve social issues through antitrust action.
On data privacy, former FTC Competition Bureau Director Debbie Feinstein, now an Arnold & Porter antitrust attorney, said there are “tools” to deal with that at the agency. Kovacic said the commission has tools like information gathering to handle data privacy concerns.