Conflict arises as new FTC chair sets investigative priorities for next decade
Less than a month after being confirmed as chair of the Federal Trade Commission, Lina Khan gained approval on a partisan vote for the regulator to proceed via a series of resolutions authorizing investigations into key law enforcement priorities for the next decade.
And one of those priorities could have a strong connection to automotive since it’s been so active on the merger-and-acquisition front so far this year.
The FTC said in a news release that it instructed its resolutions direct agency staff to use “compulsory process,” such as subpoenas, to investigate seven specific enforcement priorities, including repeat offenders as well as technology companies and digital platforms.
Furthermore, at a time when the FTC said merger filings are surging, the agency added that it is ramping up enforcement against illegal mergers, both proposed and consummated.
In remarks delivered during an open meeting, Khan noted that the approved resolutions represent an “important step” in rethinking the work of the FTC. Instituting new cross-agency, investigatory resolutions will promote a more holistic use of the FTC’s enforcement authorities to stop bad actors across markets, according to the new chair.
“For many years, the commission has routinely adopted compulsory process resolutions on a wide range of topics. For example, in 1980, the Commission voted on a resolution to authorize staff to investigate violations of the FTC’s Franchise Rule. This resolution is still in effect today, over 40 years later. Many of these resolutions cover specific industries, like the automobile industry or the post-secondary education industry, while others involve business practices that cut across sectors, like privacy or the targeting of older Americans,” Khan said.
“The reforms are designed to ensure that our staff can comprehensively investigate unlawful business practices across the economy,” Khan continued. “They will help relieve unnecessary burdens on staff and cut back delays and ‘red tape’ bureaucracy when it comes to advancing our commission’s law enforcement priorities. This is particularly important given that we are in the midst of a massive merger boom.
The resolutions gained just a 3-2 approval with the Republican appointments voting against the actions. Commissioner Christine Wilson offered this pushback.
"American consumers are best served when policy decisions are made with input from a variety of stakeholders,” Wilson said in her dissenting statement. “The FTC has a laudable history of seeking this input by issuing for notice and comment draft policy statements and other initiatives; holding workshops and hearings on policy issues; and preparing thoughtful and thorough reports. Our staff who host these proceedings, and who work each day to fulfill our mission, have developed significant expertise. The work of the Commission is enhanced when staff is available to present recommendations and answer questions. And I benefit from staff recommendations prepared by career professionals who have thought deeply about the issues and who will be tasked with implementing the initiatives on which we are voting. I am certainly better equipped to opine on matters for which I have received staff analyses.
“Unfortunately, the format the chair has chosen for this meeting omits our knowledgeable staff and precludes a dialogue among the commissioners,” Wilson continued. “A bipartisan and collaborative approach has been the hallmark of the FTC for years and would be welcome today, particularly given the importance of the matters being considered. We have arrived at the consumer welfare standard, a rulemaking process that respects objectivity and public input, and an appreciation for our limited jurisdiction for very specific reasons. Those reasons are worth discussing, but that requires a thoughtful process. And when we have chaos instead of a thoughtful process, it is the American consumer who will suffer.”