This morning I came across not one but two article about the Federal Trade Commission. The first, by Massachusetts politician Hank Naughton at RealClearPolicy, is about the FTC’s discouraging corporate mergers and acquisitions which Mr. Naughton characterizes as “the best thing Biden is doing”:
Anyone alive in America knows that over the last few decades, the rate of corporations buying each other has gained steam. Statistics also bear out this fact. This occurred because lawyers, corporate executives, and investment bankers made massive profits and the government regulators – who were supposed to be looking out the for the American people – looked the other way. Both Democratic and Republican administrations were guilty of being soft on antitrust violations.
But there is a new sheriff in town at the Federal Trade Commission (FTC), and her name is Commissioner Lina Khan. Having served in that role just over a year, Khan has singlehandedly shot down massive mergers and has created a chilling effect across America’s corporate boardrooms. This is not an anti-business position. Rather, the Commissioner is preventing companies from stifling their competition; creating a more dynamic economy and protecting consumers.
He goes on to specifically call out the proposed acquisition of Spirit Airlines by JetBlue and a potential investigation of the Sprint/T-Mobile merger.
In the second article as might be expected in an article in the Wall Street Journal J. Howard Beales III and Timothy J. Muris are concerned about resurgent activism at the FTC:
FTC leaders should have learned from the past. To avoid the mistakes of the 1970s, the Commission must use processes that guarantee scrutiny of its proposals, provide for an inquiry into their facts, and ensure a critical evaluation of proposed remedies and their likely effects. Congress sought to establish just such a process when it first codified rulemaking authority.
Instead, the Biden FTC’s changes are all about accelerating the progressive agenda. The Commission’s explanation doesn’t say the goal is writing better rules or avoiding mistakes. The new rules will produce greater political control of rulemaking and less public input, violating both the agency’s statutory authority and sound public policy. For example, the changes remove the statutory requirement that the Commission explain its reasons “with particularity,†allowing instead a general statement of reasons. The many critiques of 1970s rulemaking identified the Commission’s failure to articulate clear legal and substantive theories as a root cause of the problems.
The new rules subvert the independence of the presiding officer, who oversees the rulemaking, and eliminate the public staff report, which summarizes the often extensive record and makes final recommendations. With no staff report, there will be no opportunity for public comment on the staff’s final recommendations, which have often changed substantially from the initial proposal. In prior rulemakings, both outside parties and reviewing courts have relied heavily on this report.
Clearly, the Biden Administration’s FTC is getting attention. Whether its actions are good, bad, or some of both (my bet) remains to be seen.
