Nomination of Simons as FTC Chairman Seen Unlikely to Mean Major Policy Shifts From Ohlhausen

The leadership shift from Ohlhausen to Simons won't mean a move away from the policy stances Ohlhausen put in place when her chairmanship began in January. There are questions about how renewed skepticism within the federal government toward tech companies will manifest with a full FTC complement, lobbyists said.

Trump plans to nominate Simons, former Consumer Financial Protection Bureau Assistant Director Rohit Chopra; and Noah Phillips, chief counsel to Senate Majority Whip John Cornyn, R-Texas; a White House spokeswoman said. The White House formally announced Trump's intent to nominate Chopra and Simons Thursday. A formal announcement on Phillips is pending but “I am not aware of the timing,” the spokeswoman said. Simons was an FTC antitrust official during President George W. Bush's administration. Phillips was formerly a lawyer with Steptoe & Johnson and Cravath Swaine. Chopra is now a Consumer Federation of America senior fellow.

Senate Commerce Committee members' reactions were generally restrained before a formal nomination of the trio. Trump's selections are “what we expected,” said Senate Commerce Committee Chairman John Thune, R-S.D. “We'll do our best to process them" because "those are positions that need to be filled.” Senate Commerce consideration of the nominees will depend on the timing of nominations being sent to the Senate and their completion of required paperwork, a committee spokesman said.

Senate Commerce ranking member Bill Nelson, D-Fla., declined to comment on the nominees pending further review. Sen. Amy Klobuchar, D-Minn., told us she looks “forward to meeting” Simons. Senate Minority Leader Chuck Schumer, D-N.Y., recommended Chopra, an ally of Sen. Elizabeth Warren, D-Mass., to fill the vacant Democratic seat (see 1705090048). Chopra “has dedicated his career to advocating on behalf of average American consumers, not the wealthy and powerful,” Schumer said in a statement.

House Commerce Committee Chairman Greg Walden, R-Ore., and House Digital Commerce Subcommittee Chairman Bob Latta, R-Ohio, said Simons' nomination means “we are closer to a full complement of leadership at the commission.” Sen. Orrin Hatch, R-Utah, called Simons a “steady hand that the moment requires, and that the market, the bar, and consumers expect.” Chopra “is widely regarded as a leading expert in the protection of consumers and the fairness of our markets,” Hatch said. “This is a bipartisan package that every Senator should be eager to support.”

FCC Chairman Ajit Pai and Commissioner Mike O'Rielly both tweeted in praise of Simons' nomination to lead the FTC. O'Rielly also called Phillips a “wonderful choice."

Policy Implications

Nothing is immediately obvious in the nominees' backgrounds that would indicate anything other than an easy Senate confirmation vote, though the process could kick up further debate on a range of tech sector-related policy issues on which both parties have become more vocal over the past year, several industry lobbyists and officials said. Some lobbyists cited recent calls for the FTC to reopen the antitrust investigation into Google that it closed in 2013 amid progress with EU's ongoing work. Others noted criticisms of the FTC's quick approval earlier this year of Amazon's buy of Whole Foods and the debate over amending Communications Decency Act Section 230 to combat online sex trafficking.

Consideration of Simons could spark a battle similar to what recently confirmed DOJ Antitrust Division head Makan Delrahim faced earlier this year “since there is an expectation among some that the FTC should investigate big tech companies,” said cybersecurity consulting firm Providence Group Chairman Dan Caprio, who has known Simons for many years.

The tech sector is facing “range of issues” on Capitol Hill now, including legislation filed Thursday by Klobuchar and Sen. Mark Warner, D-Va., to regulate online political ads (see 1710180027 and 1710190054), a tech sector lobbyist said. “But I think one of the good things about an independent regulatory agency is that they can focus on the facts in front of them” rather than bow to political pressure. A full, majority-GOP FTC could be a positive for the tech sector if it continues to follow the “specific harms” doctrine that Ohlhausen favored, the lobbyist said.

The FTC's role will become "more important than ever" if the FCC rescinds its 2015 reclassification of broadband as a Communications Act Title II service, said Free State Foundation President Randolph May. A telecom lobbyist pointed to the likely looming debate within the FTC over how to grapple with a regulatory gap on broadband if the FCC rescinds 2015 net neutrality rules and Title II reclassification of broadband. A three-judge 9th U.S. Circuit Court of Appeals panel ruled last year that the common-carrier exemption means the FTC can't regulate telecom companies. The court reheard the case en banc in September (see 1608290032, 1611020031 and 1709190025).

Status Quo?

It's unlikely a Simons' takeover would shift policy priorities already favored under Ohlhausen, Caprio and others said.

There would be a “seamless and orderly” transition, Caprio said. Former FTC attorney Julie O’Neill, now a Morrison Foerster lawyer, doesn’t know Simons but anticipates the commission probably will look the same as now. Ohlhausen “has stressed the need to focus resources on where there is actual harm, and I would expect any other Republican chair to take a similar, somewhat business-friendly, position,” she said.

Ohlhausen "would have made an excellent permanent chairman," May said. It's unclear whether Ohlhausen herself will remain on the commission if the Senate confirms Simons, lobbyists said. An FTC spokesman didn't comment. “I am honored that the President asked me to serve as the Acting Chairman of the FTC, which has allowed me to lay the groundwork for the Commission’s efforts to protect economic liberty, support small businesses and military consumers, fight fraud, promote vigorous competition, and refocus agency enforcement where it best serves the public,” Ohlhausen said. Her term as commissioner ends in September 2018. McSweeny's term expired in September.