​​FTC to forge ahead on antitrust with Democratic majority

The Federal Trade Commission’s (FTC) newly confirmed Democratic majority is poised to push forward with an aggressive antitrust agenda after months of delays in the Senate that left Chairwoman Lina Khan with a split board.

Now, with FTC Commissioner Alvaro Bedoya confirmed, the commission can pursue the Democratic majority’s priorities.

At Thursday’s FTC meeting, the first time the agency had a full five members in seven months, the board voted unanimously on two measures. But rifts are already forming in other areas, as Khan seeks to boost the agency’s budget by 30 percent to staff up as it takes on tech giants and handles a record number of mergers.

That boost is crucial to hire more full-time employees, Khan told the House Committee on Appropriations Wednesday.

With the increase, the agency could hire 215 additional full-time employees, she said.

“We anticipate that the majority of this increase would go towards expanding our enforcement teams and litigators who are on the front lines of fighting unlawful business practices,” Khan told the House panel while testifying about the budget request. “We would also use the funds to continue building in-house expertise, including technologists, economists and financial analysts, and others who can help ensure that our tools and skill sets are keeping pace with changing market realities.”

The agency would also look to leverage its regional offices and hire within the eight locations across the country to “expand the talent pool,” especially given the competitive market in Washington, D.C., for lawyers and economists, she said.

Staff and resource limitations are one of the biggest roadblocks for the FTC as it goes up against powerful corporations, including Meta, the parent company of Facebook.

Meta is the subject of one of the most high-profile antitrust cases the agency is bringing. The agency voted 3-2 to bring the case against Facebook, which targets the company’s acquisitions of Instagram and WhatsApp, in December 2020, before Khan joined the board. Then-Chairman Joseph Simons, a Republican, voted with two Democrats to proceed with the lawsuit.

Republican Commissioners Noah Phillips and Christine Wilson, who are still on the commission, both voted against proceeding with the case.

Meta has sought to get the case dismissed, but the FTC was successful in securing an opportunity to proceed with the case. Facebook has denied allegations of anticompetitive behavior.

Khan pointed to the recent success in proceeding with the case as a way funding increases provided by Congress have helped the agency carry out its duty.

The FTC’s antitrust agenda is not solely focused on reining in tech giants, either: Khan faced questions from the House panel about the infant formula shortage and the meat packing industry as well.

The boost in funding is also necessary amid a surge in mergers, Khan said.

“We’ve had to triage, we’ve had to really make difficult decisions about what are the mergers we’re investigating, what are the mergers we’re not investigating,” she said.

The increase would also help the agency as it seeks to revise its merger guidelines, as part of a joint inquiry launched with the Department of Justice in January, and its HSR form, which merging parties use when filing a deal, Khan said.

Phillips and Wilson are opposing the proposed increases led by the agency’s Democrats.

“The accompanying Congressional Budget Justification provides no roadmap for effectively deploying the dramatic increase in resources it purports to justify, and no assurance that the agency will abandon its present course of deviating from sound legal precedent and the Commission’s established jurisdiction. For these reasons, we cannot embrace this budget request,” the Republicans said in a statement issued at the end of March.

The FTC chairwoman has wasted no time, even under current budgetary constraints, in using the agency’s authority to bring about the change she advocated for during her confirmation process — particularly when Democrats previously held a majority on the commission at the beginning of her tenure.

Before the seven-month stretch when the board was split 2-2, when Democratic Commissioner Rohit Chopra served before leaving to lead the Consumer Financial Protection Bureau and Democrats held a majority, Khan led the board to rescind a 1995 policy statement that ended the practice of requiring companies that had violated the law in previous mergers to obtain prior approval by the FTC for any transaction.

Phillips and Wilson voted against the measure.

The Republicans also voted against a measure at the first meeting held under Khan as chair to repeal a 2015 policy statement that blocked the agency from challenging “unfair methods of competition” that don’t violate existing antitrust law. But since Democrat’s outnumbered the two GOP commissioners, the vote was still successful.

The commission voted unanimously during the meeting on a policy statement that announces the agency’s prioritization of enforcing COPPA, the Children’s Online Privacy Protection Rule, as it applies to the use of education technology.

The agency also voted unanimously to open a request for public comment on amendments to an endorsement guide on the use of endorsements and testimonials in advertising.

But even on some measures that have unanimous support, such as the vote on the policy statement of COPPA enforcement, Republican members voiced some pushback to the process and strategy the majority was proceeding with.

Wilson said she welcomes the potential for the policy statement reiterating “already existing guidance” to push companies to heighten children’s privacy protections, but is concerned it gives the “illusion of taking action” without breaking new ground.

“Rather than moving on quickly after the flurry of press coverage that will discuss the commission’s new policies on ed-tech and children’s privacy, I hope we turn to the important task of completing the COPPA rule review. I encourage Chair Khan and the leadership of the Bureau of Consumer Protection to prioritize our work on this rule and to devote the necessary resources to completing it swiftly,” Wilson said.

The move was, however, cheered by advocacy groups.

“We are pleased that the FTC signaled its intention to crack down on the gold rush for student data that is taking place in America’s schools,” Josh Golin, executive director of Fairplay, said in a statement.

“We are glad that the FTC agrees that no student should be compelled to surrender their sensitive and valuable data in order to participate in school-mandated activities, and we hope the Commission will build on its important policy statement with enforcement actions against EdTech platforms whose business model is student surveillance,” Golin added.

Data security is another area the FTC will focus on moving forward, Khan said. Concerns specifically relating to how data security concerns relate to access to information about people seeking abortion care were raised during Wednesday’s hearing.

Bedoya brings a breadth of knowledge in the data security field to the commission, having served as the founding director of Georgetown Law’s Center on Privacy & Technology.

The FTC is also still seeking to have its ability to obtain monetary relief for victims of illegal scams restored after its power to do so under Section 13(B) was stripped in a Supreme Court decision last year.

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