FTC hearing exposes rifts over Biden administration’s antitrust push

Federal Trade Commission US updates

Sign up to myFT Daily Digest to be the first to know about Federal Trade Commission US news.

A member of the Federal Trade Commission has criticised both US president Joe Biden and the regulator’s new Democratic leadership over their push to take on a bigger role in policing corporate power. 

The remarks from Noah Phillips, one of two Republicans on the five-member commission, laid bare the tensions created by the Biden administration’s plans to revolutionise the way in which US competition policy is enforced.

“​​In the last few weeks, the commission has repeatedly changed policy direction without giving the public any real notice or right to be heard and, without any serious consideration, removed guidance from the public and the business community alike,” Phillips said. “We can do better.”

In the past few weeks senior Democrats have laid out a blueprint for how they intend to upend decades of consensus on competition regulation and make it easier for federal regulators at the FTC and US Department of Justice to challenge the corporate power concentrated in large companies.

Biden signed an executive order earlier this month giving the FTC considerable authority to enact his vision. The president encouraged the commission to create a series of new rules, including stopping companies from preventing their employees from moving to rivals, and banning large drug companies from paying generic manufacturers to stay out of a particular market for a period of time.

Some legal experts have warned that the FTC is at risk of exceeding its legal authority if it engages in a flurry of new rulemaking — a concern Phillips said he shares.

“Much of [the president’s order] would replace consumer-driven market forces with government-supervised regulation, the opposite of the competition,” Phillips said. “And much of that appears to be based on authority we simply do not possess.”

Lina Khan, the commission’s new Democratic chair and a prominent critic of Big Tech, has begun her own reforms of how the regulator works, including making commissioners’ meetings public and giving the commission a broader remit to pursue companies over unfair methods of competition.

The decision to make meetings public has triggered a particularly strong response from the two Republican commissioners, who say they feel less able to discuss sensitive decisions with their Democratic counterparts.

In a separate statement to the committee, the commission as a whole complained about the restrictions it faces when pursuing companies such as Facebook over past behaviour. 

The FTC’s complaint against Facebook was dismissed last month, and the judge criticised the commission’s decision to pursue the social media company over its long-completed acquisitions of Instagram and WhatsApp. The FTC has until August 19 to submit a revised complaint if it decides to keep pursuing the case in the federal court.

Separately on Wednesday, a group of state attorneys-general, led by Letitia James from New York, announced that they were appealing against a decision by the same judge to dismiss their case against Facebook.

Additional reporting by Hannah Murphy