Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Commissioner Ohlhausen speaks about the benefits of a competitive economy, (Aug 7, 2013)

By Jeffrey May, J.D.

In a speech delivered to the China Competition Policy Forum in Beijing last week, FTC Commissioner Maureen K. Ohlhausen discussed the characteristics of a successful competition regime and the economic benefits a successful competition regime can bes ...

By Jeffrey May, J.D.

The July 31 speech, entitled “Nurturing Competition Regimes: Evaluation and Evolution,” outlined five major goals that competition agencies should aspire to achieve:

(1) being focused on competition-based factors as opposed to non-competition factors, such as industrial policy, national security, and employment;

(2) making decisions based on the science of industrial organization economics and the promotion of consumer welfare;

(3) abiding by commonly-accepted timing requirements, merger reporting thresholds, and other best practices in merger notification and review;

(4) being transparent with parties in terms of agency analysis and process and with the public in terms of disseminating data about its enforcement decisions (including notified, cleared, blocked, and conditionally-approved transactions); and

(5) engaging with other agencies through international cooperation.

According to Ohlhausen, a competitive economy has yielded many benefits for the United States over the last century. She was hopeful that the same would be true for China.

Harm to competition can come from the actions of private parties and from the government, Ohlhausen warned. Quoting former FTC Chairman Timothy Muris, Ohlhausen said: “It is a pyrrhic victory to break a cartel if its members successfully lobby for the authority to set prices collectively.”

Unfair Methods of Competition Authority. Ohlhausen explained how the FTC continues “to modify [its] practices to best ensure fair competition in American markets and protect consumers while not unduly burdening legitimate, procompetitive business activity.” She reiterated the six factors that she believes should guide the agency whenever it reviews conduct beyond the antitrust laws under the Commission's unfair methods of competition (UMC) authority. These six factors were previously identified in remarks, entitled “Section 5: Principles of Navigation,” delivered by Ohlhausen on July 25 at the U.S. Chamber of Commerce in Washington, D.C.

She again offered for “thought and discussion” these six factors to be taken into account when considering non-antitrust actions under the FTC’s UMC authority:

(1) the FTC should use its UMC authority solely to address substantial harm to competition or the competitive process, and thus to consumers;

(2) the FTC should challenge conduct as an unfair method of competition only where there is a lack of procompetitive justification for the conduct; or the conduct results in harm to competition that is disproportionate to its benefits;

(3) the FTC should avoid conflict with other institutions, including most notably the Department of Justice;

(4) the FTC should rely on robust economic evidence that the challenged conduct is anticompetitive and reduces consumer welfare;

(5) the FTC should consider addressing a competitive concern via its many nonenforcement tools; and

(6) the FTC must provide clear guidance and seek to minimize the potential for uncertainty in the UMC area.

According to Ohlhausen, the FTC should proceed under a philosophy of “regulatory humility”—meaning great caution and careful consideration—when investigating conduct outside the antitrust laws.

News: Antitrust FederalTradeCommissionNews