FTC Nominees Provide Views on Competition in Big Tech, Pharma, and Health Care Industries
On February 14, the Senate Commerce Committee held confirmation hearings for four nominees to serve on the Federal Trade Commission (FTC). Upon confirmation, the nominees would dramatically transform the FTC’s composition, replacing the only current commissioners, Acting Chairman Maureen Ohlhausen and Commissioner Terrell McSweeny. Chairman John Thune promised to move the nominees out of committee quickly, and the Senate is expected to confirm the nominees in the coming weeks. Recent media reports indicate that Rebecca Slaughter, chief counsel to Senator Chuck Schumer, likely will be nominated for the final commissioner position, although timing of that nomination is uncertain.
Joe Simons, Noah Phillips, Christine Wilson, and Rohit Chopra answered a wide range of questions from members of the Committee on issues that are front and center in competition and consumer protection policy. Each of the nominees committed to pursue vigorously the FTC’s mission of protecting consumers. They also offered some insights on specific policy issues and foreshadowed areas that may be priorities.
In response to growing press coverage about increased industrial consolidation in the United States, particularly in the tech sector, chairman designee Simons stated that “big is not always bad” but also noted that “big is not always good.” Chopra elaborated that tech companies such as Google and Facebook have an impact on broad swathes of the American economy beyond just the tech sector. Simons offered that the FTC should take a fact-specific approach to evaluating transactions and commercial strategies to determine whether they are likely to harm competition and consumers. Toward this end, Simons emphasized the importance of creating a merger retrospective program to review the FTC’s prior decisions to understand if the current enforcement practices are working or should be recalibrated. Wilson agreed with Simons on the importance of merger retrospectives to inform the FTC’s enforcement priorities.
These views are in line with the views of agency leadership under prior Republican administrations and suggest that we should not expect a more aggressive merger enforcement regime in the near future.
Simons and his fellow nominees also acknowledged the importance of staying abreast of rapidly evolving technologies, and remaining vigilant in identifying potential anticompetitive practices by the nation’s largest tech companies. Wilson noted that the antitrust laws are sufficiently flexible as currently written to adapt to new industries and business practices. Without specifically referencing Google, or the FTC’s 2013 decision to close its investigation of the company, she also agreed that it was appropriate for the FTC to reevaluate prior decisions to see whether, through the lapse of time or changes in technology, the underlying facts have changed.
The recent focus on concentration in the United States, and the growing importance of high tech firms in the modern economy, will require the new FTC to be much more sensitive to these issues going forward, not only in the context of evaluating proposed mergers and acquisitions, but also in investigating commercial strategies that may raise exclusive dealing, refusal to deal, and other issues under the Sherman Act.
Simons also signaled that under his leadership, the FTC would make competition in the pharmaceutical and health care industries a priority. Simons underscored his desire to ensure fair pricing practices in the pharmaceutical sector, and proposed establishing a drug price monitoring task force that would allow the FTC to react quickly to anticompetitive practices in the pharmaceutical industry or, if the concern is more regulatory in nature, to refer the issue to the FDA. He also promised to evaluate enforcement practices with respect to retail pharmacies. Phillips stated that the cost of health care is a significant issue for Americans, and noted that the White House has called for more action to reduce pharmaceutical prices. Phillips said he expects this to be an area in which there will be bipartisan action.