Senate Judiciary Members Tell FTC, DOJ to Avoid Turf Battles Over Probes
It’s key that DOJ and the FTC clearly divide tech industry investigations to avoid wasted resources and contradictory findings, Senate Judiciary Committee members said in recent interviews. The FTC confirms it’s investigating Facebook for potential antitrust violations, and DOJ is reportedly weighing its own probe of separate but related Facebook conduct. FTC Chairman Joe Simons and DOJ Antitrust Division Chief Makan Delrahim recently acknowledged the agencies wasted resources on interagency squabbling (see 1909170066).
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“We went from nobody looking [at big tech] to everybody looking,” Judiciary Chairman Lindsey Graham, R-S.C., told us. “I’d like to talk to both [agencies] and make sure we know what we’re doing here.” Graham shares concerns with Sen. Mike Lee, R-Utah, who warned the antitrust regulators against duplicative efforts.
DOJ is “entitled to get into it any time they see fit,” ranking member Dianne Feinstein, D-Calif., said, echoing remarks Facebook CEO Mark Zuckerberg made last year when he testified that social media regulation is inevitable. Many tech platforms deserve hard looks because the industry has “escaped any kind of regulation,” said Feinstein.
“They have to work together,” said Sen. Richard Blumenthal, D-Conn. “I’m concerned about overlapping and possibly contradictory investigation, but I’m assuming that they will resolve those issues.” One of the agencies, or both, should be probing for antitrust violations from platforms, he said. Blumenthal noted Simons and Delrahim sat at the witness table and “pledged to work together.”
DOJ preparing a Facebook investigation is “a very big deal,” said Sen. Josh Hawley, R-Mo. He noted the testimony from Simons and Delrahim about the agencies’ clearance agreement, which Simons conceded the two sides haven’t fully honored. Hawley’s curious to know who’s probing what, “but I’m glad they’re doing it.”
“They need to learn how to work together better and stop being so turf conscious,” said Sen. John Kennedy, R-La. “If the Congress has to get involved, neither side is going to like it in terms of the turf they have remaining.” He noted both agencies share common issues and objectives. Sen. Chuck Grassley, R-Iowa, shared concern about wasting government resources on turf battles, but said “the most important thing is to get the investigations done.”
Antitrust enforcement should work to prevent concentrated markets and increasingly large profit margins for companies, rather than surpluses being driven to consumers through competition, said ex-FTC Economics Bureau Director Howard Shelanski at a Georgetown University event Monday. The tech industry is part of the trend of growing market concentration and rising profit margins for fewer players, he said.
But high profit tends to be associated with innovation, which creates the most consumer welfare benefits, countered ex-FTC attorney-adviser Paul Yde. Promotion of innovation results in high profits, he said.
Panelists discussed whether antitrust officials have been active enough in enforcing the laws. Citing statistics from his research, Georgetown business and public policy professor John Mayo claimed the “propensity” to challenge a transaction has doubled in the past 30 years. “We can be a little more confident that there’s a willingness and propensity of antitrust enforcement agencies to challenge mergers,” he said.
It’s gratifying to hear research supporting the notion that enforcers have been “vigorous,” said ex-FTC Commissioner Terrell McSweeny. She noted antitrust enforcement can’t fully address concentration at the macro level because antitrust is best suited for micro-level economics. It can be part of the solution, she said. McSweeny is a partner at Covington and Burling, Shelanski is a law professor at Georgetown, and Yde is a partner at Freshfields Bruckhaus Deringer.