Ramirez Talks Antitrust Enforcement, Big Data as Sallet Warns on Vertical Consolidation
A debate over whether antitrust enforcement hasn't gone far enough or gone too far is a "healthy" one, FTC Chairwoman Edith Ramirez told attendees Thursday at an American Bar Association antitrust forum that also featured prominent DOJ officials. While antitrust is important in promoting competition and advancing consumer interests, its application also "ought to be limited," she added. After her talk, Ramirez declined to answer a reporter's question about her future with the agency with the incoming Trump administration. Her term expires in April.
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During her discussion with Kelley Drye antitrust attorney William MacLeod, Ramirez touched on several issues including the antitrust debate, enhancements to the agency, state regulations and big data. In continuing her talk about antitrust enforcement, she pointed out that the FTC is a law enforcement agency, not a regulatory one, meaning that the agency at times encounters competitive concerns that it won't be able to address via antitrust laws: "The limits of our authority need to be appropriately recognized." She said that everything that the FTC does must be grounded in careful analysis and it must review factual circumstances so it can prove its case in court.
It's important to address any perceived concern about greater concentration in the economy, said Ramirez. "Big doesn't necessarily mean that it's bad," she said. "We also need to recognize that greater concentration and greater consolidation [may be] beneficial for consumers if that consolidation produces economies of scale and other efficiencies that can lead to lower prices." But she said the agency needs to be open to "new theories of harm" and be open minded about market changes such as the sharing economy, which the FTC released a report about Thursday (see 1611170017)
Ramirez said that an agency priority has been to foster a culture of learning and of research as a way of staying on top of changing business models and markets and in all areas that it covers. She said it's also a way to ensure that past agency decisions have been effective. The FTC is looking back and evaluating a number of decisions and orders and "whether we feel we did the right thing." She said the commission is studying almost 90 different consent orders from 2006 to 2012 and whether it achieved the objectives sought. She said the agency hopes to issue something on those reviews in the next several weeks.
On big data, which the FTC issued a report on earlier this year (see 1601070002), Ramirez said antitrust-related matters arise when it comes to the use of personal data. She said it's important for enforcers to take a close look at how big data is being used today. She also said the FTC has weighed in on state regulations and laws if they "potentially immunize anticompetitive provider consolidation." She said the agency has submitted comments when it sees proposed legislation and explains to policymakers potential consumer harm and will continue to monitor such transactions and take appropriate actions when necessary.
Several DOJ officials also spoke at the forum including Acting Assistant Attorney General Renata Hesse and Deputy Assistant Attorney General-Antitrust Division Jon Sallet. That a transaction is vertical doesn’t automatically say anything about whether it would help or hurt competition, said Sallet in prepared remarks. The former FCC general counsel laid out in his address an array of potential competitive harms that can come in vertical integration, such as input foreclosure, which raises rivals’ costs; the effects on innovation; and the damage to interbrand competition by facilitating coordination.
Sallet also said vertical mechanisms of harm are potential even when takeovers don’t involve a combination of vertically related assets. Behavioral conditions aren’t always available or enough, Sallet said. If a foreclosing competitors’ access to critical inputs or customers carries big enough risks, the deal may need to be blocked, he said. Some have said the AT&T’s proposed buy of Time Warner may not face as much regulatory challenge as other recent big media combinations because it is vertical in nature (see 1610240046). Sallet said his speech wasn’t aimed AT&T/TW.
Hesse talked about partnering with states in promoting a competitive environment and said states should be considered essential parts of the process. She said antitrust enforcement isn't generally an area where the federal government and states diverge, but it has also taken "constant nurturing and attention" at all levels over the years to foster productive working relationships. In the Apple e-book antitrust case (see 1506300067), she said it was the Texas attorney general's office that opened the investigation against the company. Some testimony from the early depositions by Texas and Connecticut proved to be very important during the liability phase of the trial. She also said a staff attorney from the Arkansas attorney general's office found a document that provided evidence of the conspiracy to raise e-book prices.