Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Brill discusses the role of the modern FTC in shaping and enforcing antitrust policy, (Jan 30, 2015)

By Linda O’Brien, J.D., LL.M.

In her January 29 speech before the New York State Bar Association’s 2015 annual meeting in New York City, FTC Commissioner Julie Brill discussed a few of the competition issues that occupied the FTC in 2014 and are likely to remain at the top of the agency’s agenda in 2015.

Brill began her keynote address, entitled “Picasso, Cubism, and Antitrust: Welcome to the Modern Federal Trade Commission,” by stating that the FTC celebrated its centennial last September and it has been fascinating to study the changing times in which the agency was created.

The founders of the FTC, such as President Woodrow Wilson and Justice Louis Brandeis, gave the agency a variety of tools to approach its mission: the authority to suggest and make policy, to research, to educate, and to enforce laws related to consumers and competition. They also defined the agency’s role as advocate for not just one set of participants in the marketplace, but for all. By ensuring fair and efficient competition, the FTC ensures markets works for businesses, the consumers they serve, and the greater economy.

Healthcare market. In view of the healthcare market’s impact on consumer quality of life and ascendancy in the economy, the healthcare market, it was no surprise that the FTC devoted considerable resources to investigating and, where appropriate, challenging mergers among health care providers that would result in higher prices. Both the FTC Act and the Affordable Care Act share the common goal of promoting high quality and cost-effective health care. While the vast majority of health care provider mergers do not attract antitrust scrutiny, the FTC will challenge mergers that would likely result in higher rates and reduced incentives to compete on clinical quality or patient satisfaction, according to Brill.

Pharmaceutical industry. Pharmaceutical mergers are another area in which the FTC combines research, analysis, and enforcement actions to support competition. The agency has conducted several significant investigations into pharmaceutical company mergers, resulting in eight announced consent orders in calendar year 2014 alone, Brill noted.

Patent issues. Brill next described the multipronged approach that the agency has taken with regard to its work on patent assertion entities (PAEs). PAEs are firms that attempt to generate profits by purchasing patents, then either licensing them to companies already using the patented technology or litigating against those businesses. The FTC first started examining PAE activity in workshops leading up to its 2011 report on the IP marketplace and followed that up with a joint workshop with the Department of Justice Antitrust Division in 2012. Currently, the FTC is in the midst of an extensive review of PAE activity, a so-called 6(b) study, named after the statutory provision that gives the FTC authority to undertake the project.

According to Brill, there has been suggestion that enacting legislation that addresses some of the patent issues should wait until the FTC 6(b) study is done. However, Brill disagreed. Various provisions in bills proposed in Congress will most certainly help to further discourage frivolous lawsuits and improve patent quality, actions the FTC has long encouraged. She noted that she was looking forward to the findings of the FTC’s PAE study, which should shed light on the more complex issues at stake. The fact that the agency was still in the middle of the study did not present a barrier to appropriate law enforcement action.

Conclusion. The FTC is shaping and enforcing policy in many 21st century hotspots—health care competition, pharmaceutical prices, patent assertion entities—not to mention advertising, mobile payment systems, data security, data brokers, and the Internet of Things. The founders of the FTC expected the agency to use all the tools it has to pursue its mission of protecting competition as it shapes the economy and consumers as they navigate the markets, Brill concluded.

News: Antitrust FederalTradeCommissionNews