Democratic-controlled FTC votes to expand regulatory powers

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The Federal Trade Commission voted Thursday to expand the limits and powers of the agency, particularly when it comes to policing corporate conduct.

In a 3-2 vote, the independent agency's three Democratic commissioners voted to rescind a 2015 policy statement regarding regulating “unfair methods of competition” under Section 5 of the FTC Act. The two Republican commissioners voted to keep the policy in place.

The policy, adopted in 2015 by then-Democratic FTC Chairwoman Edith Ramirez, required the agency to focus on the “promotion of consumer welfare” and “business justifications,” restricting its Section 5 enforcement to anti-competitive behavior that cannot be addressed by the two major antitrust laws, the Sherman and Clayton Acts.

However, the Democrats at the commission said the policy restricted the agency from living up to its statutory obligations from Congress and made it more difficult to challenge anti-competitive conduct.

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“In practice, the 2015 statement has doubled down on the agency's long-standing failure to investigate and pursue unfair competition,” said Lina Khan, the new progressive chairwoman of the Federal Trade Commission, appointed by President Joe Biden last month.

“Withdrawing the 2015 statement is only the start of our efforts to clarify the meaning of Section 5 and apply it to today's markets,” Khan said at the commission's open meeting Thursday, adding that in coming months the trade commission will consider issuing new guidance saying which business practices will “warrant scrutiny.”

For the past few decades, antitrust laws have focused on protecting consumers from anti-competitive mergers and business practices, and the two Republican commissioners at the agency say the repeal of the policy could take the commission away from this consumer-focused tradition and lead it to overstep its bounds.

Republican commissioner Christine Wilson said Thursday that the policy repeal removes “even the modest constraint” that Section 5 enforcement focus on consumer welfare and, therefore would lead to enforcement that is more politically influenced.

Wilson added that she wants the Democrats at the commission to clarify what kind of cases the trade commission would need to bring under Section 5 that it is unable to under the existing antitrust laws.

She added that she wanted to know if the Democrats plan to replace the policy statement with a new one.

“If not guided by protecting consumers’ interest, whose interest will guide?” Wilson said.

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The other Republican commissioner, Noah Phillips, said Thursday that policy repeal reduces clarity within antitrust law and gives new and expansive regulatory powers to unelected bureaucrats within the commission.





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