Podcast- The FTC's Mission: Competition and Antitrust
In this episode of his "Clearly Conspicuous" podcast series, "The FTC’s Mission: Competition and Antitrust," consumer protection attorney Anthony DiResta explores something that's not in the consumer protection wheelhouse, but is part of the FTC's mission regarding competition and antitrust. Mr. DiResta highlights the Merger Filing Fee Modernization Act that Congress was able to pass, which will increase filing fees for many transactions, including a new maximum fee. The filing fees will be used to increase resources for both the FTC and U.S. Department of Justice's (DOJ) Antitrust Division. He also breaks down how aggressive and progressive the FTC is from a regulatory standpoint and the regulation needed to control markets.
Good day and welcome to another podcast of Clearly Conspicuous. As we've noted in previous sessions, our goal is to make you succeed in this current aggressive regulatory environment, make you aware of developments and what's going on and try to give you practical tips for success. It's a privilege to be with you today. Today, we talk about something that's not in the consumer protection wheelhouse, but is part of the FTC's mission: competition and antitrust. Thus, to fully understand what's going on at the commission, it warrants a discussion.
FTC and DOJ's Aggressive Steps to Reform Antitrust Enforcement
So today's topic is antitrust and the FTC agenda. But let's begin with the Biden Administration's priorities and the reactions from the FTC, as well as the Justice Department. From the outset, the Biden Administration has been focused on broad antitrust enforcement. President Biden's July 2021 executive order directed agencies to adopt a whole of government competition policy and to increase enforcement actions. The FTC and DOJ's Antitrust Division have led the charge, taking aggressive steps to reform antitrust enforcement by rethinking long-established policies. President Biden's order of antitrust officials, which includes FTC Chair Khan, White House Competition and Technology Counsel Tim Wu and DOJ Assistant Attorney General for Antitrust Jonathan Kanter have all advocated for a return to the early 20th century views of antitrust policy, specifically rejecting the, quote, "Chicago school," close quote, in favor of a more populous approach. Under Khan's leadership, the FTC has taken more direct aim at Big Tech. The FTC has aggressively pursued its case against Facebook, block mergers between major semiconductor manufacturers and open price fixing investigations against major retailers. Shortly after Chair Khan took the helm, the FTC announced changes to its prior approval provisions in merger orders. This order repeals a 1995 policy statement, which some critics believe severely constrains the FTC's ability to review and approve mergers. The new policy requires all parties that enter into a merger consent agreement to agree that the parties will, for at least 10 years, seek and obtain prior approval from the FTC before closing any future transaction affecting each relevant market for which a violation was alleged. The policy statement also establishes that the FTC may require companies entering into merger consent orders to agree to a prior approval provision that covers product and geographic markets beyond those impacted by the merger. When making such determinations of additional relief in the future, the commission's policy statement indicates that the agency will consider several factors, including the following:.
1) the nature of the transaction
2) the level of market concentration
3) the degree to which the transaction increases concentration
4) the degree to which one of the parties had market power pre-acquisition
5) the parties' history of acquiring MIS and acquisitiveness
6) evidence of anti-competitive market dynamics
The FTC Scuttled the 2020 Vertical Merger Guidance
The FTC also scuttled the 2020 vertical merger guidance. In the majority’s decision to rescind the guidelines, the commissioners call the guidelines unsound economic theories that are unsupported by the law or market realities. Similarly, the DOJ has said that it will review the vertical merger guidelines and work closely with the FTC to draft updates. With respect to the congressional outlook, despite a flurry of activity last year, the House and the Senate were only able to enact modest antitrust reform legislation. Specifically, Congress was able to pass the Merger Filing Fee Modernization Act, which will increase filing fees for many transactions, with a new maximum fee of $2.25 million compared to the previous maximum of $280,000. The filing fees will be used to increase resources for both the FTC and DOJ's Antitrust Division. All other antitrust-related legislation, especially legislation targeting Big Tech, was tabled at the end of the 117th Congress.
So today was a substantive diversion away from consumer protection, and I acknowledge that. But it shows how aggressive and progressive the FTC is from a regulatory standpoint, and it demonstrates the philosophical approach that regulation works and that regulation is needed to control markets. So stay tuned to further programs as we identify and address the key issues and developments and provide strategies for success. I wish you continued success in a meaningful day. Thank you.