In September, the Federal Trade Commission (FTC) began a series of hearings titled “Hearings on Competition and Consumer Protection in the 21st Century.” The aim of the hearings is to examine “whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy.” The first of the hearings was held on September 13 at the Georgetown University Law Center. A second hearing took place on September 21 at the FTC Constitution Center in Washington, D.C.
The first hearing included introductory remarks by FTC Chairman Joseph Simons and panels on “The Current Landscape of Competition and Consumer Protection Law and Policy,” “Has the U.S. Economy Become More Concentrated and Less Competitive: A Review of the Data,” and “The Regulation of Consumer Data.”
After the initial hearing, the Open Markets Institute, which promotes awareness of the economic and political dangers of monopolization, wrote that “despite growing alarm on Capitol Hill about the economic and political effects of concentration — especially by platform monopolies like Amazon and Google — none of the first-day speakers rejected the philosophy of law and economics movement undergirding antitrust law since the 1970s.” It also pointed out that while the panel comprised antitrust lawyers, some of whom have represented the tech companies, “conspicuously absent from the proceeding were farmers, workers, independent business owners, hospital patients, book authors, musicians, journalists, or any other individual who has actually suffered harm from today’s massive consolidation of power.”
In advance of the hearing, the FTC called for public comments. The Institute for Local Self-Reliance (ILSR) submitted a comment that highlights the steep decline in small business formation over the past few decades and argues that “this drop is at least partly due to anticompetitive behavior by dominant corporations.”
ILSR additionally criticized the consumer welfare standard for antitrust intervention adopted in the 1980s. This standard permits big mergers and acquisitions to take place if they do not directly harm consumers, namely by raising prices, without taking into account total public interest. According to ILSR’s comment, “The FTC’s narrow focus on economic efficiency when reviewing mergers and enforcing antitrust laws does not protect competition or the public interest, and has resulted in the concentration of economic power in fewer and fewer hands.”
A comment submitted by FTC Commissioner Rohit Chopra echoed these concerns and called for the hearings to serve as a forum to evaluate ways that the FTC can bolster antitrust enforcement, including considering breaking with recent tradition: “As the FTC engages in this period of introspection into how the agency advances its competition policy and enforcement goals, a key aim of this exercise should be to examine our full set of tools and authorities — not only those that we have traditionally relied upon.”
During the second hearing, economist Joseph Stiglitz offered an opening address in which he argued that the consumer welfare standard is misguided and called for new approaches to determining market power: “Our economy has changed and our understanding of economics has changed….What is clear is that competition law, as it’s been interpreted over the last several decades, quarter century, has not kept up with the changes in our economy, has not kept up with the innovations in the ability to extend and amplify market power, and has not kept up with changes in our understanding of basic economics. So today, competition and consumer protection law needs to be broadened to incorporate the realities of the 21st century and the insights of modern economics.”
Following remarks by Stiglitz as well as by FTC Commissioner Rebecca Slaughter and George Washington University Law School’s William E. Kovacic, sessions were held on “The State of U.S. Antitrust Law” and “Monopsony & Buying Power.”
Four more hearings are currently scheduled, for October 15–17, October 23–24, November 6–7, and November 13–14. A total of 15 to 20 hearings will be held over the next several months.