FTC Has Capacity for Multiple 6B Studies, Leaves Door Open for Tech

In March, the commission initiated such a study on broadband provider collection and sharing of user data (see 1903270055). The move drew questions about whether the agency should also target tech industry incumbents. The spokesperson wouldn’t comment on what additional studies the agency might conduct in the near future, but said multiple probes are historically possible. It depends on resources and priorities, the spokesperson said.

Commissioner Rebecca Kelly Slaughter called for an additional $50 million in annual funding Friday during the agency’s hearing, stating a need for more deal retrospectives. This would allow the agency to properly staff itself with attorneys and economists, Slaughter said. She noted Chairman Joe Simons also favors greater resources to protect consumer privacy (see 1903200048).

Current resources allow multiple 6(b) studies, but there are trade-offs, ex-FTC Chairman William Kovacic told us on the event's sidelines. If the FTC moves more resources to studies, it might need to pull resources from litigation or other monitoring and enforcement, he said. “Could you do them? Yes, but something else will get less resources if you give more resources to this. And there’s no point in doing them unless you do them well.”

The topic of Friday’s hearing was retrospectives. Simons called that critical to the success of the FTC’s merger enforcement program and an important asset in persuading courts to block anticompetitive combinations. Simons declined comment later.

Simons and Slaughter noted that retrospectives demand a lot of time and resources. Slaughter said that when she joined the agency, she met with staff across bureaus, and the “resounding refrain” was a lack of resources. Funding levels have remained relatively flat, despite an increasing workload due to deal filings, she said. Retrospectives help the agency handle new cases, and help determine “whether in a specific case, further enforcement action, such as unwinding a consummated merger or challenging anticompetitive conduct, is necessary to protect and restore competition,” she said.

A 6(b) study empowers the commission to get answers from industry in writing through a compulsory process, Competition Bureau attorney Angelike Mina said. Such a process allows issuance of subpoenas. The FTC can seek internal information that otherwise wouldn’t be available to the public. The agency recently launched a tech industry task force (see 1902260052), which will include review of past tech deals.

Many tech sector practices are difficult to analyze using traditional antitrust analysis techniques, Northeastern University economics professor John Kwoka told reporters, noting the industry’s behavior has been a source of controversy. Tech companies have had hundreds of M&A deals over the past 20 years, but people constantly question about a dozen or so, he said. Those include Facebook’s Instagram and WhatsApp; Apple’s Shazam; Microsoft’s LinkedIn and Skype; and Google’s YouTube. These are cross-market acquisitions that allow companies to leverage themselves into “dominance in some other market or functionality.” He suggested the purchases could make the acquired companies less likely to fully develop into real competitors.

Agencies should look back at “examples where arguably they may have not made the right decisions to see what they can learn about to do it better next time,” Kwoka said. “I don’t know whether those were errors at the time, whether they are errors now. I just don’t know, but they’re certainly questionable cases.” He noted support from both political parties for greater resources for enforcement, and the appropriations process will determine the reality.