Remedy Negotiation Practices Called Big Deal for FTC, as Judge Seeks Better Procedures
The FTC will have to continue adapting to the globalization of the economy for monitoring and enforcing consumer protection, and its approach to negotiating transaction remedies may need to improve, said former FTC and Department of Justice officials Friday at an event for the FTC's 100th anniversary. A U.S. Court of Appeals for the D.C. Circuit judge said the FTC can improve its remedy procedures, while a commissioner said the agency has been trying to look to the future in its decisions.
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The globalization of the economy has affected consumer protection, said Ronald Stern, a former DOJ official. There used to be a limited number of jurisdictions that were active in the antitrust and competition area, he said. “That changed dramatically in the 1990s, and continues to change.” Competition authorities began to address the issue by forming the International Competition Network, he said. The DOJ Antitrust Division deserves a lot of credit for creating that organization of competition authorities, he said.
The FTC is doing a good job of modernizing the application of the antitrust laws with the licensing of intellectual property, Stern said. The FTC and Antitrust Division worked together over the years to achieve this, he said. The FTC reached a milestone in 1995, when it provided guidance for businesses to develop sound IP licensing approaches, he said. Self-regulation and law enforcement go together, Stern said: The antitrust division and FTC accomplishments include providing guidance "so that businesses can essentially take actions that avoid problems."
The FTC realized that it must “look over the horizon and see what issues are going to be coming down the road,” to help it develop an understanding about these issues ahead of time, said Commissioner Maureen Ohlhausen, referring to her tenure as head of the FTC Office of Policy Planning. Since then, the FTC issued a report looking at net neutrality issues from an antitrust and consumer protection vantage point, she said. It also held a 2002 workshop on barriers to e-commerce, she said.
The FTC's approach to transactions and remedies has evolved, some former FTC staff members said during a later panel. There have been some good efforts to try to learn from remedies, including through the FTC's divestiture studies, said Ken Heyer, FTC Bureau of Economics deputy director. It can be helpful if the FTC looks harder at whether the remedy maintained competition, he said: “That's the point of it all.”
There is room for improvement in the commission's remedy procedures, said D.C. Circuit Judge Douglas Ginsburg. Consumers clearly are worried about data security, he said. When the FTC designs a solution to a security issue, it's unclear what the actual standards are, and what is expected of a company, he said. “There's a great deal of uncertainty out there of what security practices are deemed reasonable." The problem is exacerbated by the commission's recent practice of appointing a third party to set standards that have to be met in every individual case, Ginsburg said.
Ginsburg bemoaned the outcome of the HTC security case, which required the company to undergo security assessments for the next 20 years. That term seems inappropriate in high-tech industries with very fast turnover in product design, he said: “Twenty years of supervision over that kind of evolution strikes me as completely unfounded.”