Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Ohlhausen encourages response to government restraints of trade, (Jun 29, 2015)

By Greg Hammond, J.D.

FTC Commissioner Maureen K. Ohlhausen offered her view on government restraints of trade, at home and abroad, in her June 27 remarks at the Antitrust Enforcement Symposium 2015, in Oxford, England. In her prepared remarks, entitled “When Regulation Protects Privilege Instead of People: Government Restraints of Trade—A Competition Enforcer’s Perspective,” Ohlhausen focused on how the FTC is using its research, advocacy, and enforcement tools to advance free market principles and employing antitrust economics to address government restraint of trade.

There are two categories of undesirable government restraints of trade, according to Ohlhausen: (1) free-standing government restraints established in nominal deference to some perceived social good, such as health, national security, or safety, but which actually function primarily to restrict socially beneficial competition; and (2) competition enforcement actions guided, expressly or implicitly, by non-competition factors like industrial policy.

“In this era of dynamic global innovation, competition agencies like the FTC need a multi-faceted response” to unnecessary market intervention by government and the use of competition laws to favor local players, Commissioner Ohlhausen stated in her prepared remarks. “At home, we need to take the lead in tackling domestic restraints that favor inefficient incumbents. Abroad, we need to be an unswerving voice for politically neutral, analytically sound competition enforcement that benefits consumers.”

In discussing the historical influence of industrial policy on competition enforcement, Commissioner Ohlhausen noted that the United States learned early about the weakness of mixing industrial policy with antitrust. Specifically, she discussed how U.S. courts and policy makers spent decades interpreting the 1890 Sherman Act and “our famously open-ended competition laws” to include various social and political objectives. However, the Commissioner also noted that over time there was a shift to the empirically-grounded approach to antitrust laws used in the United States today, which has shaped a “remarkably stable” federal antitrust enforcement program across multiple government administrations.

Today, the FTC is working aggressively to tackle domestic public restraints, Ohlhausen said. For example, the FTC has been litigating against abuse of state action immunity and attempting to better define the contours of the doctrine. In addition, the Commission has been advocating against restrictive state laws and licensing requirements that unjustifiably protect inefficient local incumbents, she said, noting the FTC’s enforcement work in Phoebe Putney—with regard to Certificate-of-Need Laws—and North Carolina Dental—with regard to unwarranted government restraint of trade concerning state licensing of professionals.

A “second and even more controversial area of concern for market participants and policymakers is the potential for national governments to use the competition laws to promote industrial policy objectives,” Ohlhausen said. “In this regard, our work is focused more on education, engagement, and soft advocacy, particularly because many of the issues prompting concern will require legislative or executive action that is beyond the control of the overseas competition agency.”

News: Antitrust FederalTradeCommissionNews