Shifting Antitrust Attitudes Deserve ‘Serious Attention,’ FTC Chairman Says
Evidence suggests the U.S. economy has become more concentrated and less competitive in the past 20 to 30 years, and that trend deserves “serious attention,” FTC Chairman Joe Simons said Thursday. This correlates with the shift to a less enforcement-oriented antitrust policy beginning in the early 1980s, he said, opening the agency’s first day of hearings on antitrust and consumer protection policy (see 1809120040). Friday’s was postponed due to weather concerns, as was a congressional hearing (see 1809130035).
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Without mentioning President Donald Trump or DOJ’s upcoming antitrust meeting with state attorneys general (see 1809110041), Simons said basing antitrust enforcement on an ideological viewpoint would be a “mistake.” Decisions should be based on the best evidence and analysis, he said. He noted calls for antitrust enforcement to go beyond the consumer welfare standard and address inequality, labor issues and excessive political power. Broad antitrust consensus that has existed for about 25 years is being challenged, Simons said.
Yale University economist Fiona Scott Morton, a former DOJ antitrust official, discussed the network effect of social media companies. It occurs when a platform’s value increases with every new user on the network. This creates a winner-takes-all market, in which firms are competing, not within the market, but for the market itself, she noted. The smaller firms are the only ones making the incumbent “pedal faster,” she said, so antitrust enforcement against such companies should focus on barriers to entry.
Consumers have gotten “enormous benefits” from these new technologies, so the agency needs to be careful about pursuing heavier regulation to avoid stifling future technologies and innovations regulators are unable to predict, Commissioner Maureen Ohlhausen said. She also discussed privacy, saying the FTC’s approach should be to promote values like consumer sovereignty and protect consumers from substantiated injury.
The agency’s most important consumer protection issues concern technological advances, namely data privacy and artificial intelligence, Simons said. Former Consumer Protection Bureau director David Vladeck, now a professor at Georgetown Law Center, warned against “tyranny by algorithm,” given how much personal data tech companies hold. Virtually everything the agency touches somehow is related to technology, he said. Two major challenges for the FTC, he said, will be: finding effective tools to understand big data and rapid growth of algorithmic decisionmaking. Vladeck said he’s not a huge fan of human decisionmaking, so machine-learning could help.
Harvard economist Jason Furman said studies, some from the FTC, show increasing levels of concentrated power across various sectors. Sometimes, increased concentration is good for consumers, but the U.S. should be concerned about declining dynamism, he said. Former FTC chairman Tim Muris, now an antitrust attorney at Sidley Austin, cautioned against “misguided calls” to regulate tech companies like utilities. Janet McDavid, a Hogan Lovells antitrust attorney who advised the Clinton, Bush and Obama administrations, said adjusting antitrust law to fit populist views, a recent trend, would replace clear legal standards with amorphous concepts of bigness and fairness.