Tom Hebert

Top FTC Aide Confirms The Left’s Antitrust Crusade Goes Beyond Big Tech

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Posted by Tom Hebert on Tuesday, September 14th, 2021, 2:08 PM PERMALINK

A top aide to Federal Trade Commissioner Lina Khan has confirmed the obvious – no industry is safe from the left’s antitrust crusade. 

In a May interview with The Marker, FTC attorney adviser Shaoul Sussman says that Congress has made its mind up when it comes to breaking up America’s largest companies. “All of these companies are going to be on the butcher’s table,” Sussman says, adding that “I’m not sure if they will be broken up in the next few years, but from the perspective of legislation, their judgment has been written.” 

Of course, the antitrust debate on Capitol Hill is far from over. The most recent antitrust legislation, spearheaded by Rep. David Cicilline (D-R.I.), limped out of a 29-hour markup with robust conservative and moderate Democrat opposition. A group of Democrats called on House Speaker Nancy Pelosi (D-Calif.) to slow down the Cicilline package, and House Majority Leader Steny Hoyer (D-Md.) said that the sloppily drafted legislation was far from ready for a vote on the House floor. 

In a subsequent interview published on Sunday, Sussman said that he hopes Congress makes sweeping changes to antitrust law that go beyond technology companies, specifically highlighting “monopolies in agriculture, health, and telecommunications” and calling for more “systemic legislation.” Sussman is currently one of Khan’s only antitrust advisers, and was conveniently exempted from the FTC’s agency-wide gag order because he gave the interview before he started advising Khan.

This is a stark confirmation that the left’s antitrust plot goes far beyond Big Tech. The left’s true goal is to give the Biden Administration sweeping new power to reshape entire industries. Instead of keeping antitrust law focused on harm to consumers, the left wants to weaponize it as a vehicle for their woke social agenda. 

As we head into the fall, Republican lawmakers should hold firm and reject any proposals that politicize antitrust law or give unelected bureaucrats even more power to control the economy. 

Photo Credit: Kurt Kaiser, CC0, via Wikimedia Commons


Far-Left Rep. Jayapal Forecasts Harmful Senate Antitrust Agenda

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Posted by Tom Hebert on Monday, September 13th, 2021, 12:22 PM PERMALINK

In an interview last week, far-left Rep. Pramila Jayapal (D-Wash.) forecasted possible Senate antitrust companion legislation to the Cicilline antitrust package that was drafted with little input from rank-and-file Republican members. 

The left’s antitrust agenda would vastly empower unelected Biden bureaucrats and screw up the goods and services Americans use every day. Senate Republicans should hold firm and reject any proposals that would politicize antitrust law. 

Jayapal talked at length about H.R. 3825, the “Ending Platform Monopolies Act,” legislation that would force the breakup of a company that operates a line of business that a bureaucrat determines is a “conflict of interest.” 

H.R. 3825 would ban targeted companies from producing private-label products and selling them on their own marketplaces, depriving shoppers of access to products they value that are often cheaper than brand-name goods. This makes just about as much sense as banning a grocery store from selling generic cereal. Raising prices on everyday household items is the last thing American families need as they attempt to dig out from under the pandemic. 

During the interview, Jayapal confirms that the left’s full-court, government-wide effort to weaponize antitrust law is in full swing: 

"They are supportive, actually. And you might have seen that they appointed some of our best people that we were pushing, (FTC Chair) Lina Khan, (National Economic Council deputy director) Bharat Ramamurti, (special assistant to the president) Tim Wu, many others. And even the Attorney General for antitrust, (Jonathan Kanter) great choice. We’re excited about him. So it’s looking very good."

Additionally, Jayapal confirms that the Senate bills will have the same language as the House bills, and that Democrat lawmakers are looking for Republican cosponsors: 

"The trajectory will be that the Senate will introduce the same House bills, ideally with bipartisan co-sponsorship again, and then we will try to move the bills through the house as quickly as we can. Obviously, we’re focused on reconciliation now. But my hope is that within the next three to six months, we could move those bills through the House."

Senate Republicans should stay far, far away from companion legislation that mirrors the Cicilline package. The six antitrust bills limped out of a 29-hour House Judiciary markup with little conservative support. The package does absolutely nothing to stop Big Tech censorship of conservatives. Instead, it gives unfettered power to Biden bureaucrats to play smash mouth with American companies and advance their woke social agenda. 

As we head into the fall, Republican lawmakers need to hold the line and reject any change to antitrust law that would give more power to the Biden Administration. Doing so would stunt our economic growth and increase government abuse of conservatives. 

Photo Credit: AFGE, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons


FTC Letters Put American Companies In "Mother-May-I" Relationship With Unelected Bureaucrats

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Posted by Tom Hebert on Tuesday, August 3rd, 2021, 7:45 PM PERMALINK

The Federal Trade Commission has started sending letters warning certain companies engaged in mergers and acquisitions (M+A) to proceed “at their own risk” until the FTC weighs in, according to a blog post from Bureau of Competition Director Holly Vedova. 

This is yet another part of FTC Chair Lina Khan’s plan to put every company in a “Mother-May-I” relationship with the government. These letters will only serve to dissuade companies from engaging in future M+A activity, a massive driver of innovation and economic growth. 

The Hart Scott Rodino Act of 1976 requires companies engaging in M+A activity above a certain threshold to notify the FTC and Department of Justice, the two agencies that enforce antitrust law, before the transaction is consummated. After a company provides the FTC and DOJ with a detailed filing with information about the transaction, the agencies have 30 days to determine if the transaction is anticompetitive in nature. 

If a bureaucrat determines that the M+A activity under review will negatively impact competition in a relevant market, the FTC or DOJ can request more information or materials from the filing parties, also known as a “second request.” Generally, the reviewing agency then has another 30 days to examine the new information once the company fulfills the second request. 

If the reviewing agency believes that the transaction will harm competition, it can file an injunction in federal court to prevent the transaction from being consummated. If the reviewing agency does not challenge the transaction before the waiting period expires, the transaction goes ahead unimpeded.

In the letters, the FTC is warning companies against making deals even if the agency does not challenge the transaction before the waiting period expires. The letters threaten legal action and “aggressive enforcement” of antitrust law against companies that consummate a transaction after the waiting period expires and before the FTC weighs in. This could lead to deals being delayed for months or even years as companies wait for an FTC bureaucrat’s approval. 

Not only will the FTC’s aggressive posture likely lead to companies abandoning current pending deals, it will dissuade firms from engaging in innovation-driving M+A activity in the future.

Mergers generally increase efficiency that reduces production costs, leading to lower prices and increased output for shoppers. Acquisitions allow larger firms to quickly deliver innovative new products to consumers because they have the scale and infrastructure to do so. More than half of all startups say that their most realistic long-term goal is to be acquired by a larger firm, providing a key incentive for entrepreneurs to assume the massive risk that comes with starting a new company. M+A activity ultimately benefits all Americans with lower prices and greater access to innovative products and services. 

Ultimately, Khan’s tenure so far has created an enormous cloud of uncertainty for American companies, exactly the opposite of what the economy needs as we attempt to rebound from a pandemic-induced recession. These letters are just the latest example of Khan’s partisan weaponization of the FTC and will have a massive chilling effect on current and future M+A activity. 


Sen. Mark Kelly's Support for PRO Act's "Overall Goals" Spells Doom for Arizona Workers

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Posted by Tom Hebert on Thursday, July 22nd, 2021, 9:00 AM PERMALINK

Senator Mark Kelly (D-Ariz.) told a reporter that he is open to passing parts of the anti-worker “Protecting the Right to Organize” (PRO) Act through budget reconciliation and supports the "overall goals" of the bill. The PRO Act would impose a nationwide ban on Right to Work, forcing every Arizona worker to join a union whether they want to or not. 

Kelly has been one of three Democratic Senate holdouts on the PRO Act. If Kelly reverses course and supports the PRO Act, it would be a devastating blow to Arizona’s freelancers and franchises. 

The PRO Act would dismantle the franchise business model by expanding the definition of “joint employer,” increasing corporate control over mom-and-pop independent franchise locations. Franchises employ 7.6 million Americans nationwide. 

Arizona has 14,500 franchise businesses that support 153,300 jobs. Franchises provide $5.5 billion a year in payroll and contribute $8.2 billion a year to Arizona’s economy. 80 percent of Arizona voters view franchises favorably, and 71 percent of Arizona voters say that franchise businesses are a part of their everyday lives. 30 percent of franchises are minority owned, as opposed to 20 percent of non-franchised businesses. 

The PRO Act also endangers Arizona’s freelancers by codifying an onerous three-step test that would force independent contractors to reclassify as W-2 employees. Independent contractors come in all shapes and sizes – the Uber you took this week had a freelancer behind the wheel, and your favorite Etsy store is run by an independent contractor. Medical transcriptionists, court stenographers, nurse practitioners, comedians, ballroom dancers, interpreters, and architectural designers often work as freelancers.

Freelancers overwhelmingly prefer the freedom and flexibility of freelancing to the rigidity of traditional employment. According to the Bureau of Labor Statistics, fewer than one in 10 independent contractors want to reclassify as W-2 employees. The PRO Act would jeopardize the livelihoods of the 59 million Americans that engage in freelance work. 

Finally, the PRO Act would endanger the privacy of every Arizona worker. The PRO Act forces employers to hand over sensitive employee contact information – including shift information, home addresses, email addresses, and phone numbers – to union bosses during organizing efforts. This would allow union bosses to intimidate Arizona workers at home or workplaces at all hours of the day. 

If Kelly votes for the PRO Act, union bosses would win and Arizona workers would lose. 

Photo Credit: Gage Skidmore


Jonathan Kanter Would Abandon Consumer Welfare Standard As Antitrust Top Cop

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Posted by Tom Hebert on Tuesday, July 20th, 2021, 5:00 PM PERMALINK

President Joe Biden has nominated antitrust attorney Jonathan Kanter to lead the Department of Justice’s Antitrust Division. Kanter, who has slammed the long-held consumer welfare standard as “judicial activism,” is the wrong choice to lead the Antitrust Division. 

A chorus of leading Democrats immediately praised Kanter’s nomination. Sen. Elizabeth Warren (D-Mass.) tweeted that Kanter has been a leader in “[strengthening] competition in our markets.” Left-wing academic Zephyr Teachout said that Kanter is an “extraordinary choice.” Reps. Jerry Nadler (D-N.Y.) and David Cicilline (D-R.I.), leaders in the House effort to weaponize antitrust law, also praised his nomination. 

From day one, the Biden Administration and the Democrat Party have not dealt in good faith on antitrust policy, especially with nominations. Lina Khan was confirmed last month in a 69-28 vote, with 21 Republican Senators voting in favor of her confirmation. 

Khan’s confirmation was an unprecedented bait-and-switch operation. Biden nominated Khan to serve as an FTC commissioner, not as chair, and withheld that information throughout the entire nomination process. Hours after the confirmation vote, Biden elevated Khan to FTC Chair, blindsiding Republicans. 

Given this lack of transparency and good faith, no Republican should vote to hand the Biden administration another antitrust victory.  

The DOJ Antitrust Division shares antitrust enforcement authority with the FTC, and Kanter has called Khan a leader of a “new golden age of antitrust enforcement.” This is troubling given that Khan has worked aggressively to shed all bipartisan limits on the FTC’s antitrust authority with barely a month on the job. 

Additionally, Kanter is a longtime opponent of the consumer welfare standard that has undergirded antitrust law for over four decades. Under the standard, antitrust cases are generally only brought against companies that are harming consumers through tangible effects like high prices, reduced product quality, or lack of choice. Antitrust enforcers must also consider whether there is a procompetitive justification for the business conduct in question, and whether the conduct results in countervailing benefits to consumers and competition. 

The consumer welfare standard protects the competitive process, not individual competitors in a marketplace from being beaten by rival firms. This neutral application of antitrust law fosters the robust competition that delivers better prices and better choices for all Americans.

Kanter would abandon the consumer welfare standard, which developed through decades of common law and expert consensus, in favor of a European-style antitrust approach that ignores harm to consumers and focuses on harm to inefficient competitors. Kanter has slammed the consumer welfare standard as “judicial activism” and “central planning,” and argued that courts should not consider economic efficiency when ruling on antitrust cases. 

Antitrust law before the consumer welfare standard was an incoherent mess, and all manner of routine business conduct was considered presumptively unlawful. Enforcers attacked companies purely for their size while ignoring benefits they delivered to American shoppers. Philosopher-king judges handed down incoherent rulings designed to punish political enemies or reward political allies. Famously, Supreme Court Justice Potter Stewart remarked that the only consistency he could find in antitrust law was that “the government always wins.” 

The left wants to destroy the consumer welfare standard precisely because it is a bulwark against judicial activism. Without the standard in place, antitrust law would revert back to the broken tradition of the mid-20th century. Companies afraid of abusive antitrust litigation would pull their punches with competing with rivals, robbing us of the robust competition that delivers the best choices and lowest prices for all Americans. Government bureaucrats would win, American shoppers would lose. 

If confirmed, Kanter would work hand-in-glove with Lina Khan to attack the consumer welfare standard and turn the clock back decades on antitrust law. For these reasons, no Republican should vote to confirm Kanter.

Photo Credit: New America


$3.5 Trillion Democrat Spending Blowout Contains Anti-Worker PRO Act

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Posted by Tom Hebert on Thursday, July 15th, 2021, 10:30 AM PERMALINK

The $3.5 trillion spending blowout announced by Senate Democrats will include the job-killing “Protecting the Right to Organize Act,” according to media reports. 

The PRO Act would benefit Big Labor at the expense of the American worker. The PRO Act’s inclusion in the spending blowout gives further insight into the Senate Democrats’ proposal, the details of which are below: 

  • The PRO Act nullifies Right to Work laws across the country, which protect 166 million Americans in 27 states. Right to Work laws prevent employers from being able to force workers to join a union as a condition of employment. If Right to Work laws were banned, every American worker would be forced to choose between paying a union boss and putting food on the table.

  • The PRO Act enacts a stringent three-step test that would force independent contractors to reclassify as W-2 employees. This would jeopardize the livelihoods of the more than 59 million Americans that engage in freelance work.

  • Codify the NLRB’s disastrous 2015 Browning-Ferris Industries decision that muddled the definition of “joint-employer,” overturning decades of labor law precedent. If implemented, this would decimate the franchise business model that employs 7.6 million Americans in 733,000 locations.

  • Change union elections to allow union bosses to collect cards from workers to demonstrate support for the union, rather than holding a secret ballot election. If labor bosses fail to unionize a workplace via a secret ballot election, the union can appeal to the NLRB for a second chance to unionize the workplace.

  • Violate worker privacy by forcing employers to give union organizers sensitive employee contact information, including home addresses, cell phone, shift information and landline numbers, and email addresses. This would allow union bosses to intimidate workers into joining unions at homes or workplaces. 

In addition, the PRO Act would increase costs for employers, harming businesses and consumers. According to the American Action Forum, the independent contractor provision would impact 8.5% of GDP and cost between $3.5 billion and $12.1 billion annually. The joint employer provision would cost between $17.2 billion and $33.3 billion annually for the franchise business sector and affect 44% of private sector employees. Finally, the provision that restricts employers from replacing strikers permanently could cost employers an additional $1.9 billion every year.

The PRO Act is a return on the investment of the hundreds of millions of dollars that Big Labor poured into the Democrat party's campaigns to capture the House, Senate, and White House. Employers will be able to force workers into unions as a condition of employment, and union bosses will have access to personal information to bully workers into compliance. Tens of millions of independent contractors would face losing their jobs.


Biden EO Kills Competition In The Name Of Saving It

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Posted by Tom Hebert on Tuesday, July 13th, 2021, 2:06 PM PERMALINK

Last week, President Joe Biden issued an executive order containing 72 new government mandates designed to spur competition in the American economy. 

The Biden EO gives a blueprint for agencies to target leading American industries with crippling new regulations. Instead of encouraging competition, this EO will kill competition by allowing Biden bureaucrats to reshape the economy in service of their liberal social goals. 

One of the EO’s stated goals is to address the supposed rise of monopolization in the American economy. While the left claims that market concentration is snuffing out competition, the data shows that our economy remains extraordinarily competitive. This EO is a solution in search of a problem. 

According to Census data compiled by the Information Technology and Innovation Foundation, only 4 percent of U.S. industries are highly concentrated, and the share of low-concentrated industries grew by 25 percent from 2002 to 2017. Industries with low levels of concentration were responsible for 80 percent of business output in 2017. 

The EO contains several antitrust provisions that would force American companies into a “Mother-May-I” relationship with the federal government.

One provision would increase government scrutiny of routine mergers and acquisitions. The EO hones in on so-called “killer acquisitions” made by technology companies, alleging that dominant firms are strangling small startups in the cradle to avoid competition. 

This misguided view ignores that M+A activity is a massive driver of economic growth and innovation. While technology companies have engaged in hundreds of acquisitions in recent years, only a few deals have come under scrutiny. American tech companies lead the world in R&D spending, not the behavior you'd expect from a monopolist unafraid of robust competition. 

Acquisitions allow larger firms to quickly deliver innovative new products to consumers because they have the scale and infrastructure to do so. More than half of all startups say that their most realistic long-term goal is to be acquired by a larger firm, providing a key incentive for entrepreneurs to assume the risk that comes with starting a new company. M+A activity ultimately benefits all Americans with lower prices and greater access to innovative products and services. 

The EO also targets “self-preferencing,” where platform companies promote their own private-label products next to name-brand products in their marketplaces. This is not a business practice endemic to the tech industry. Brick-and-mortar retailers promote generic goods on shelves next to brand-name goods, or with promotional devices like coupons, end-caps, and window displays. 

Banning platform companies from promoting their private-label goods would take away products and services that consumers value. Given that generic products are usually cheaper than brand-name goods, such a ban would raise the cost of basic household items for American families. Prohibiting Amazon from selling AmazonBasics products is about as ludicrous as banning Costco from selling their popular Kirkland products.

To implement the ban on self-preferencing, the Biden EO calls on the Federal Trade Commission to establish new rules banning “unfair methods of competition on internet marketplaces.” This is curious timing given that the Democrat-controlled FTC just voted to rescind bipartisan limits on its UMC authority. 

Ultimately, the competition EO is window dressing. None of its recommendations have the force of law, but the EO does reveal a few things. 

First, the left is engaged in a full-court, government-wide press to weaponize antitrust law in service of progressive social goals. The antitrust recommendations in this EO closely mirror the sloppy antitrust package the House Judiciary Committee marked up last month. Senator Amy Klobuchar (D-Minn.) is working on Senate companion bills to the HJC package and has an antitrust package of her own. Newly-anointed FTC Chair Lina Khan has already smashed bipartisan norms in her first few weeks on the job, and will certainly work overtime to expand her agency’s power to promulgate and enforce new antitrust policy at any cost. 

Second, the left’s antitrust plan will destroy the consumer welfare standard that has undergirded antitrust law for over four decades. Under the consumer welfare standard, antitrust enforcers only act against companies that are harming consumers through tangible effects like higher prices, lack of output, or reduced quality or innovation. The standard prevents unelected bureaucrats or judges from weaponizing antitrust law and disregarding consumer harm to advance unrelated social goals, precisely why the left wants to destroy it. 

Third, the left’s antitrust plan goes way beyond Big Tech. The EO hits industries of all stripes, including finance, pharmaceuticals, agriculture, meat processors, real estate, alcohol manufacturers, railroads, and airlines. 

If the left succeeds, American companies in every industry will lose their competitive edge both in the United States and abroad. Companies fearful of abusive antitrust litigation will pull their punches when competing with rival firms, robbing us of the robust competition that delivers the best choices and lowest prices for all Americans. Reverting to a European-style competition policy would deliver Europe’s low levels of innovation and economic growth. The heavy hand of government will crush successful companies with costly regulations, which historically has driven whole industries (like railroads and airlines) to the brink of extinction. 

Ultimately, the Biden EO is the wrong approach to competition policy as we grapple with runaway inflation and an economy still trying to recover from the pandemic-induced recession. If the ideas in the competition EO were implemented, policymakers would kill competition in the name of saving it. 

Photo Credit: Gage Skidmore


David Weil Will Kill Franchises and Jobs in Senate HELP Committee States

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Posted by Tom Hebert on Friday, July 9th, 2021, 12:04 PM PERMALINK

The Senate Health, Education, Labor, and Pension Committee is holding a hearing next week on David Weil’s nomination to lead the Department of Labor’s Wage & Hour Division. 

Weil is a radical academic with no private sector experience that is anti-free enterprise to his core. If confirmed, Weil will work overtime to destroy the franchise business model that employs 7.6 million Americans nationwide. 

Here is the breakdown of the number of franchises and jobs in each state represented by the Senate HELP Committee. 

  • Alaska (Sen. Lisa Murkowski, R) – 1,800 franchises employing 14,600 people

  • Alabama (Sen. Tommy Tuberville, R) – 12,200 franchises employing 124,900 people

  • Colorado (Sen. John Hickenlooper, D) – 15,600 franchises employing 150,400 people

  • Connecticut (Sen. Chris Murphy, D) – 7,200 franchises employing 85,000 people 

  • Indiana (Sen. Mike Braun, R) – 16,500 franchises employing 189,000 people

  • Kansas (Sens. Roger Marshall and Jerry Moran, R) – 9,200 franchises employing 89,600 people

  • Kentucky (Sen. Rand Paul, R) – 12,700 franchises employing 145,700 people

  • Louisiana (Sen. Bill Cassidy, R) – 11,400 franchises employing 115,900 people

  • Maine (Sen. Susan Collins, R) – 2,800 franchises employing 27,100 people 

  • Minnesota (Sen. Tina Smith, D) – 15,200 franchises employing 152,500 people 

  • North Carolina (Sen. Richard Burr, R) – 24,900 franchises employing 294,400 people

  • New Hampshire (Sen. Maggie Hassan, D) – 3,100 franchises employing 26,900 people 

  • New Mexico (Sen. Ben Ray Lujan, D) – 4,900 franchises employing 54,800 people

  • Nevada (Sen. Jacky Rosen, D) – 4,800 franchises employing 44,800 people 

  • Pennsylvania (Sen. Bob Casey, D) – 26,600 franchises employing 270,400 people 

  • South Carolina (Sen. Tim Scott, R) – 12,300 franchises employing 130,000 people 

  • Utah (Sen. Mitt Romney, R) – 6,500 franchises employing 63,300 people 

  • Virginia (Sen. Tim Kaine, D) – 22,300 franchises employing 238,200 people

  • Vermont (Sen. Bernie Sanders, socialist) – 1,500 franchises employing 11,300 people

  • Washington (Sen. Patty Murray, D) – 14,500 franchises employing 136,500 people

  • Wisconsin (Sen. Tammy Baldwin, D) – 14,300 franchises employing 149,500 people

The Senate HELP Committee should reject David Weil. 


FTC vs. Facebook Dismissal Does Not Justify Weaponizing Antitrust Law

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Posted by Tom Hebert on Wednesday, June 30th, 2021, 4:11 PM PERMALINK

On Monday, U.S. District Judge James Boasberg in Washington dismissed the Federal Trade Commission’s complaint against Facebook, alleging that the technology company abuses its monopoly power to squash its competitors. The FTC has until July 29 to file an amended complaint.  

Boasberg, appointed by former President Obama, dismissed the complaint because the FTC had no evidence to prove its assertion that Facebook had in excess of 60 percent of the market the FTC calls “personal social networking services.” 

In his dismissal, Boasberg says: “The FTC’s complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market. It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist.” 

In response, some lawmakers seized on the dismissal as justification for a drastic rewrite of antitrust law. Senator Amy Klobuchar (D-Minn.) tweeted that the dismissal is proof that “our antitrust laws need to be updated after years of bad precedent.” Several other lawmakers renewed the call for weaponizing antitrust law in the face of the dismissal. 

Translation: “the government lost an antitrust case, so we need to rewrite antitrust law to make the government win every time.” 

Klobuchar’s “Competition and Antitrust Law Enforcement Act” would flip the burden of proof in certain monopolization cases from the plaintiff to the defendant, meaning that courts would presume companies guilty of alleged anticompetitive conduct until proven innocent. 

The bill also relieves antitrust enforcers from defining the relevant market a company is ostensibly monopolizing. The FTC’s paper-thin case couldn’t properly define the social media market that Facebook supposedly dominates, which is probably why Klobuchar wants to release antitrust enforcers from having to do so.

Worst of all, none of the left’s antitrust plans address real and legitimate conservative anger over Big Tech censorship. They would simply give Biden bureaucrats sweeping new power to pick economic winners and losers to the detriment of American shoppers. 

The dismissal of the FTC’s complaint against Facebook gives us a few takeaways. 

First, the FTC’s complaint was dismissed because enforcers could not provide evidence for its claim that Facebook dominates 60 percent of the social media market. This is not evidence that antitrust law needs to be rewritten, it is evidence that the FTC was unprepared for court. 

Second, Article III judges are a huge obstacle to the left’s plot to rewrite antitrust law, even judges appointed by liberal presidents. This is a big reason why the left wants to shift crucial antitrust enforcement decisions from neutral judges to partisan bureaucrats. 

Third, the dismissal proves that antitrust law is working as intended, not broken. Consumer welfare remains the priority when assessing alleged anticompetitive conduct. Breakups are a tool of antitrust enforcement, not a goal. It should be difficult for the government to break up companies, especially considering the acquisitions the FTC seeks to undo happened with FTC approval almost a decade ago.

Ultimately, the FTC’s complaint against Facebook fell apart because enforcers could not get their facts straight, not because antitrust law is broken. Conservatives should continue to reject efforts to weaponize antitrust law for Democrat political gain.

Photo Credit: APK


ATR Submits Comments Urging FTC To Keep Bipartisan Limits On Antitrust Enforcement Authority

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Posted by Tom Hebert on Wednesday, June 30th, 2021, 11:42 AM PERMALINK

Americans for Tax Reform, the Open Competition Center, and Digital Liberty today submitted comments to Federal Trade Commission Chair Lina Khan urging the Commission to leave a 2015 bipartisan agreement in place that limits the FTC’s antitrust enforcement authority. 

Section 5 of the FTC Act outlaws “unfair methods of competition or in commerce” (UMC), but does not list specific business practices that fall under the UMC definition. Instead, the statute allows the FTC to make that determination on a case-by-case basis.  

The bipartisan 2015 statement limits the FTC’s “standalone” UMC authority in three crucial ways when addressing anticompetitive conduct that violates the spirit, if not the letter, of the Sherman and Clayton Acts. 

Revoking this important agreement will send two troubling signals. First, that the FTC is moving towards a European-style antitrust approach that props up inefficient competitors and disregards consumer harm. Second, that the FTC is actively working to shed all limits on its authority when it comes to antitrust enforcement. 

For these reasons, ATR, OCC, and Digital Liberty urge the FTC to leave the 2015 bipartisan statement of principles in place. 

You can read the full letter here or below. 

The Honorable Lina Khan
Chair, Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580

Re: Comment on the Federal Trade Commission’s Possible Revocation of the “Statement of Enforcement Principles Regarding ‘Unfair Methods of Competition’ Under Section 5 of the FTC Act”

Dear Chair Khan,

We write to express concern over the Federal Trade Commission’s vote to revoke the “Statement of Enforcement Principles Regarding ‘Unfair Methods of Competition’ Under Section 5 of the FTC Act” at the July 1, 2021 Open Commission Meeting. If the Commission rescinds this bipartisan agreement, it would be a significant blow to consumer welfare and will hinder our economic growth as we recover from the COVID-19 pandemic.

Section 5 of the Federal Trade Commission Act outlaws “unfair methods of competition or in commerce.” Section 5 does not list specific business practices that qualify as unfair methods of competition (UMC), instead leaving that determination to the FTC to evaluate on a case-by-case basis.

The Statement of Enforcement Principles is designed to limit the FTC’s “standalone” UMC authority when addressing anticompetitive conduct outside of the scope of the Sherman or Clayton Acts. The agreement was approved by the FTC in 2015 in a 4-1 vote, with all three Democratic commissioners voting in support.

The agreement articulated the limits on the FTC’s UMC authority in three ways.

First, the agreement emphasized the agency’s commitment to prioritizing consumer welfare when applying antitrust law. The long-held consumer welfare standard has anchored antitrust law for over four decades. Under the standard, enforcement action is only taken if consumers are being harmed through tangible effects like higher prices, decreased quality, or lack of choice. The consumer welfare standard prevents judges and regulators from using antitrust law as a vehicle to advance unrelated social priorities.

Second, the statement said that Section 5 enforcement should target “harm to competition or the competitive process,” but must consider whether there is a procompetitive justification for the conduct in question and whether it results in a countervailing benefit to consumers or competition. This is a key element of antitrust law under the consumer welfare standard, which protects the competitive process and consumers instead of protecting individual competitors in a marketplace. Robust competition among companies delivers better prices and better choices for all Americans.

Third, the agreement states that the FTC would be less likely to challenge business conduct as an unfair method of competition if “…enforcement of the Sherman or Clayton Act is sufficient to address the competitive harm arising from the act or practice.” This is an important limit that ensures that the FTC exercises its standalone UMC authority only when business conduct violates the spirit, if not the letter, of the Sherman or Clayton Acts.

Rescinding this bipartisan agreement would send two troubling signals. First, that the FTC is moving towards a European-style antitrust approach that props up inefficient competitors and disregards consumer harm. Second, that the FTC is actively working to shed all limits on its authority when it comes to antitrust enforcement.

Taken together, these changes will hamper economic growth as we attempt to rebound from the pandemic. Companies fearful of predatory antitrust litigation would pull their punches when competing with rivals, reducing choice and access to goods and services for shoppers across the country. Bureaucrats would win, American shoppers would lose.

For these reasons, we urge the FTC to leave the 2015 Statement of Section 5 Enforcement Principles in place.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

Tom Hebert
Executive Director, Open Competition Center

Katie McAuliffe
Executive Director, Digital Liberty

Photo Credit: Kurt Kaiser


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