Joseph Murgida

Khan Promises FTC Bipartisanship, But Her Record Proves Otherwise

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Posted by Joseph Murgida on Wednesday, August 4th, 2021, 5:11 PM PERMALINK

Last week, the House Energy and Commerce Committee had its first opportunity to ask newly-anointed FTC Chair Lina Khan questions regarding her plan for running the FTC. Congressman Gus Bilirakis (R-FL) questioned, if Khan would “commit to [run the FTC] in a bipartisan fashion where you will consult and coordinate with all commissioners and ensure that they have the resources of the commission available to them on all pending business.” Khan answered affirmatively, stating that she would be “happy to find shared areas of agreement” at the FTC.

What a wonderful sentiment, if only Khan meant it. So far, Khan has launched one of the most partisan crusades in the history of the FTC. She has taken advantage of her temporary 3-2 majority to steamroll consequential changes and smash long-held bipartisan norms. 71 percent of proposals during the Open Commission Meetings have been pushed through with this 3-2 majority. Some of these proposals overturned enforcement principles previously agreed to with bipartisan support. One example is the 2015 “Statement of Enforcement Principles Regarding ‘Unfair Methods of Competition Under Section 5 of the FTC Act,” which was written to limit the FTC’s “standalone” authority over unfair methods of competition when addressing anticompetitive conduct outside of the scope of the Sherman or Clayton Acts. Another example is the Policy Statement on Prior Approval and Prior Notice Provisions in Merger Cases, which essentially functions as imposing a decade-long merger tax on corporations.

Even though Khan said that “staff is always available to provide analysis and assessment and commissioners are routinely requested that analysis from staff and staff is providing it,” FTC commissioners from the Republican minority have disagreed with that description. Commissioner Christine Wilson has discussed that the loss of “full consultation with staff through oral briefings,” along with “comprehensive memoranda” and “a robust dialogue amongst the commissioners” has harmed her ability to make fully informed decisions, as they only give monologues that are “akin to theater.”

We may not know for a long time the perspective of staffers on the impacts of this half-fast procedural approach due to an agency-wide gag order. Jen Howard, Khan’s chief of staff, has put a “moratorium on public events and press outreach.” The internal and external silencing of FTC staffers under Khan is troubling. Thankfully, Khan has been unable to silence commissioners that have emphasized her careless changes to long-standing procedures.

House Republicans, including House Energy and Commerce Committee Republican Leader Rep. Cathy McMorris-Rodgers (R-Wash.), Rep. Jim Jordan [R-Ohio], and James Comer [R-Ky.], wrote a letter to the FTC denouncing these radical reforms. They noted that “reports suggest radical changes at the FTC may be damaging morale and having significant negative effects on experienced FTC staff.”

Khan reckless pursuit of “reforming” the FTC appears to be willingly ignoring the commissioners outside of the temporary Democrat majority and the perspectives of other scholars. Despite Khan’s words promising bipartisanship, her actions promote a partisan transformation of the agency.

Photo Credit: New America


The FTC’s Integrity Crumbles Under Chair Khan’s “Leadership”

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Posted by Joseph Murgida on Thursday, July 22nd, 2021, 4:28 PM PERMALINK

In the first month of Lina Khan’s surprise tenure as chair of the FTC, she has extended false olive branches of transparency while working overtime to smash bipartisan limits on the agency’s enforcement authority. If gone unrestrained, Khan’s aggressive pursuit of radical partisan goals will harm the intellectual integrity of the FTC.

Khan’s decision to hold open FTC meetings may seem like a positive development, but the actual transparency is illusory at best. Even though the public has the opportunity to submit comments before the meetings, the comments are only considered after the commission already voted. Khan ignores the public’s concerns in her quest to fundamentally reshape the FTC. 

The only actual effect of the public meetings, as Commissioner Christine Wilson pointed out during Wednesday’s meeting, is forcing the commissioners to “avoid both staff participation and a dialogue among the commissioners.” Instead, she recognized that the commissioners “are left to deliver monologues with no interaction making these events more akin to theater than the reasoned decision-making that should characterize the FTC.” FTC commissioners are losing oral briefings, robust conversations or detailed memoranda describing the consequences of the proposals in the meetings. Wilson justifiably fears that these losses are crippling the FTC’s ability to fully understand the analytical impacts of the changes. 

Commissioner Noah Phillips also highlighted the procedural concerns of Khan’s leadership. He pointed out that, for the second time this month, Khan has given “the minimum notice required by law” for the meeting’s agenda, without adequately opening up the items for public comment. On top of all that, Khan is using a partisan, temporary 3-2 majority to undo bipartisan previous FTC enforcement standards. Although this majority will disappear once current FTC Commissioner Rohit Chopra transitions to his new role as the Director of the Consumer Financial Protection Bureau, for the indefinite future it looks like Khan will jam through as many changes as possible. Continued erosion of long-held enforcement principles will cause businesses to pull their punches when competing with rivals, robbing us of the robust competition that delivers the best prices and best choices for American consumers. 

Khan’s reckless pursuit of “reforming” the FTC likely is guided by her belief that the agency needs “bold leadership willing to use the full breadth of its expansive authority.”  The “bold” approach that she has theorized about for over five years turns out to be a cold disregard for bipartisan limits on government power. Khan’s blind pursuit of her radical agenda is willingly ignoring the commissioners outside of the temporary Democrat majority, the perspectives of other scholars, and the will of the public. In this pursuit, the FTC’s integrity is crumbling before our very eyes.

Photo Credit: New America


The Threat of Labor Actions in Democrat-Controlled State Governments

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Posted by Joseph Murgida on Wednesday, July 14th, 2021, 4:35 PM PERMALINK

 The Biden administration continues advocating for the PRO Act to increase Big Labor’s power at the expense of jobs for workers and opportunities for small businesses. Despite the numerous threats on the federal level, serious pro-union damage has been occurring at the state and local level to the detriment of the American people.

One of the biggest pro-big labor pushes, for example, is occurring in Illinois. Next November, voters will vote on a so-called “Worker’s Rights Amendment” that ironically eliminates the rights of workers by banning “right-to-work.” Effectively this law will force Illinois workers to choose between paying off a union boss and putting food on the table. 

The 27 states that have implemented right-to-work laws have generally seen positive economic outcomes. Economic output from 2001-2016, for example, rose by 38 percent in right-to-work states compared to 21 percent in non-right-to-work states. This had a beneficial effect on workers, as from 2001-2016, personal income in right-to-work states increased by more than 10% compared to non-right-to-work states. Based on household survey data from the Bureau of Labor Statistics, from 2007-2017, the percentage of growth in the number of people employed in right-to-work states was 8.8% compared to 4.2% in forced-unionism states. Additionally, the growth in total private sector employment increased by 13.0% in right to work states compared to 10.1% in forced-unionism states. The Illinois constitutional question essentially would cap the capacity for states to take measures to enhance the rate of economic progress for workers and businesses.

This amendment would crush Illinois workers. All the surrounding states to Illinois, besides Missouri, qualify as right-to-work states. The states that Illinois competes with most economically have the exact right-to-work laws that the Worker’s Rights Amendment will permanently abolish. Historical data supports these trends as, according to the Bureau of the Census, the growth in the number of residents aged 35-54 was 1.6% in right-to-work states compared to a 7.4% decline in growth in forced-unionism states. More businesses will develop outside of Illinois than within the state, due to the immense, unchecked power granted to labor unions, permanently harming their economy. Due to the geographically convenient and beneficial surroundings for businesses, there is a unique ease of access for businesses to move outside Illinois. 

If the Worker’s Rights Amendment removes rights from workers or employers, then who gains rights from this amendment? Big Labor. By giving Big Labor the right to force workers to enter unions, their power in workplaces increase. They also would receive more money from more workers as workers would be forced to pay union dues, even if they normally would prefer to keep their paycheck over any potential union benefits. This money many times also gets spent for partisan purposes. In the last election cycle, over 85% of the Laborers Union PAC donations went to Democratic political candidates. Furthermore, the Illinois Policy Institute pointed out that unions gave $15.1 million to the Illinois lawmakers who pushed to put this amendment on the ballot. Even if an employee identifies as a Republican, their paychecks may go to increasing the electoral chances of Democratic candidates without their consent or awareness. Under the Worker’s Rights Amendment, unions would have the right to greater control over workers and their paychecks, while workers lose the right to opt out of this disastrous arrangement. 

The sweeping pro-union boss anti-worker effort in Illinois presents an example of developments that threaten workers and businesses at the state level, even if the PRO Act has received more national attention.

Photo Credit: Harry Carmichael


The Harms of Proposed Antitrust Reforms on Consumers

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Posted by Joseph Murgida on Wednesday, July 14th, 2021, 9:09 AM PERMALINK

Antitrust policy has long been focused on promoting consumer welfare. In sharp contrast to this decades-long tradition, the sloppy House Judiciary Committee antitrust package includes sweeping changes to antitrust law that effectively bans “covered platforms” from certain products or enter certain industries in ways that often benefit American consumers through better choices and lower prices. Modern conveniences that we take for granted will be eliminated in favor of higher prices and less variety of choice. Chamber of Progress CEO Adam Kovacevich presented a list of 15 different ways that consumers will be harmed by this weaponization of antitrust law. 

Amazon

Currently, Amazon offers many resources to help save consumers money, making affordability a key element of their business model. For example, Amazon voluntarily gives discounts based on socioeconomic disadvantages, such as providing EBT and Medicaid cardholders 50% off Amazon Prime subscriptions. Amazon also includes features to help consumers purchase the cheapest available version of a particular product, such as the Amazon Buy Box and offering AmazonBasics products. This service can be assigned to sellers that offer a product for the cheapest price and if a third-party verified seller offers a product for a cheaper price, Amazon “reserve[s] the right not to feature [the buy box].” Kovacevich points out that the Cicilline antitrust package will ban these consumer-friendly services.

The American Innovation and Choice Online Act, sponsored by Rep. David Cicilline (D-R.I.), bans “self-preferencing,” where a platform promotes its own private label goods next to name-brand products just as brick-and-mortar retailers do. This bill prevents Amazon from extending the buy box option to any seller, eliminating a key motivator for businesses to price items cheaply on the online marketplace. It would also ban AmazonBasics products from being sold on Amazon. These products are often cheaper for consumers and encourage competition among online sellers to lower prices.  These measures make it harder for consumers to find cheap prices for products and disincentivizes businesses from providing cheaper prices. 

Apple

Apple prioritizes security and privacy measures for their products. Kovacevich, however, points out two key ways that the Cicilline antitrust package undermines Apple’s commitment to protecting consumers. The App Store has been critical to securing the iOS system by allowing Apple engineers to screen apps for malware or hacking before enabling users to download them onto their devices. The Ending Platform Monopolies Act, however, would force Apple to sell off the App Store. Courts are already deciding whether Apple has engaged in anti-competitive practices through the App Store, so lawmakers should let those cases play out. Forcing Apple to sell off the App Store could create security risks and reduce usability of Apple devices. The American Innovation and Choice Online Act would ban Apple from pre-installing apps on new devices, including iMessage, FaceTime and Find My. These users greatly benefit from select apps being pre-installed on iPhones. If a person does not know how to download apps, they would have a heightened barrier of access for certain essential apps. This would make an iPhone more difficult to use out of the gate. 

Google

Kovacevich also recognizes that similar conveniences would disappear in a consumer’s use of Google products. Users would not be able to locate Google Maps in their search results when looking for a location. Google would also be prevented from displaying YouTube videos when searched. 

The government should not decide the algorithm of Google’s search engine. If Google’s methods alienate consumers, then people can simply use another search engine. At the moment, however, consumers prefer Google to meet their search needs. Similar to Amazon’s inability to show users the cheapest product through the Amazon Buy Box, Google would also be unable to show people the highest reviewed restaurants, shops, etc. on their search results. The elimination of this feature advantages services that appeal less to consumers regarding the quality of their service/products and their pricing. 

Conclusion

The Cicilline Antitrust Package poses a significant threat to the modern economy that will not just hurt big business, but also hurt middle class consumers. Republicans should reject these bills to preserve the conveniences American shoppers use every day. 

 

 

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