A Fireside Chat with Former FTC Chairs Tim Muris and Maureen Ohlhausen

[Music]

 

Emily Manning:  Hello, everyone, and welcome to this Federalist Society virtual event. My name is Emily Manning, and I’m an Associate Director of Practice Groups with The Federalist Society. Today, we’re excited to host a Fireside Chat with former FTC Chairs Timothy J. Muris and Maureen K. Ohlhausen. Our moderator today is Svetlana Ganz, partner at Gibson, Dunn and former Chief of Staff at The Federal Trade Commission. If you’d like to learn more about today’s speakers, their full bios can be viewed on our website, fedsoc.org.

 

      After our speakers give their opening remarks, we will turn to you, the audience, for questions. If you have a question, please enter it into the Q&A function at the bottom of your Zoom window, and we will do our best to answer as many as we can. Finally, I’ll note that, as always, all expressions of opinion today are those of our guest speakers, not The Federalist Society. And with that, thank you for joining us today, and Svetlana, the floor is yours.

 

Svetlana Gans:  Great. Thank you so much, Emily and also Nate, for all your help with today’s program. As Emily said, my name is Svetlana Gans. I’m a partner at Gibson, Dunn and also the Co-chair of The Federalist Society Corporation Securities and Antitrust Executive Committee. I am humbled today to moderate this Fireside Chat with two former FTC Chairs, Tim Muris and Maureen Ohlhausen. We’re going to discuss the state of the Federal Trade Commission today.

 

      First, I’ll provide brief introductions, and then we’ll dive in with some questions. And then, as Emily said, we’ll take questions from the audience.

 

      Tim Muris is a Senior Counsel at Sidley. He served as the Chairman at the FTC from 2001 - 2004, where he oversaw the creation of the National Do Not Call Registry, increased antitrust scrutiny of IP issues, and challenged fraudulent and deceptive advertising in health claims to protect U.S. consumers. Prior to being elevated to Chairman, Tim was the Director of the Bureau of Consumer Protection and the Director of the Bureau of Competition. He is the only person to head both of the agency’s enforcement bureaus.

 

      Maureen is a partner at Baker Botts, where she Chairs the firm’s Antitrust Practice Group. She served as Chairman and Commissioner of the FTC, as well as the Director of the Office of Policy Planning. Maureen is the only commissioner to have received the Robert Pitofsky Lifetime Achievement Award in recognition of her knowledge and contributions to the Commission.

 

      Welcome to you both, and thank you for being here.

 

Timothy Muris:  Thank you.

 

Maureen Ohlhausen:  Thanks for having me.

 

Svetlana Gans:  Great. So to kick off this panel, I wanted to turn to Maureen first and then to Tim with this first question. The FTC and other Biden administration pronouncements reveal that they are making sharp departures from the decades-long approach that they had inherited. It will soon be three years since the president took office. Can you please comment on the progress they have made to date?

 

Maureen Ohlhausen:  Well, thanks, Svetlana. Delighted to be here with you and with Tim and to address one of my favorite topics: the Federal Trade Commission. So the current leadership -- they have very much signaled their desire to make a sharp change, and they’ve undertaken, I think, a substantial number of actions to attempt to do so. So lots of policy statement have come out, rulemakings, unfair deceptive acts or practices rulemakings, most notably -- also an unfair method of competition rulemaking to essentially prohibit nationally noncompete agreements, proposed changes to merger guidelines, to the HSR Act. So they’ve really launched a lot of initiatives. But they, so far, really haven’t landed any of them. Some of them are quite time-consuming to do so, and the merger challenges that they’ve brought under their new aggressive theories have not been successful thus far.

 

      So the question is, where have they really, so far, made a difference -- is they’ve really focused on using the process to try to get changes to behavior in the market. So we see continued “don’t allow early terminations,” a lot more uncertainty in merger review, not wanting settlements, things like that. So, so far, they’ve been active, they have a lot on their to-do list, but for lasting policy changes, not really something that has been taken up in the courts or implemented in Congress to make those kinds of changes.

 

Svetlana Gans:  Tim, what are your thoughts?

 

Timothy Muris:  Well, again, I want to echo -- thanking you and Maureen and The Federalist Society, and I also want to make clear that my views are mine and not my two employers’—the State of Virginia, and I also -- the Sidley Law Firm.

 

      To echo Maureen, I attended UCLA long ago, during John Wooden’s remarkable 10 basketball championships in 12 years. And he famously said, “Do not mistake activity for achievement,” and he could have been talking about today’s FTC.

 

      Let’s start at the beginning, and that’s the FTC that the Biden team inherited. GCR publishes an annual star ranking of about 40 competition agencies. In this century, the FTC was the only—the only—five-star agency every year pre-Biden. Now there’s nothing wrong with demanding change, but you would’ve thought that before you demand change, you need a consensus that the agency was failing. Yet President Biden announced that this widely acclaimed agency was instead an “experiment fail.” Now, the Biden change is to return to policies long abandoned. Take the thoroughly repudiated Robinson-Patman Act. Like some bad Halloween joke, Robinson-Patman is arising from the grave.

 

      More broadly—another example—there was an early surprising change in the FTC’s strategic planning. The Commission had long stated something that seemed obvious and innocuous, and that was it would enforce its laws “without unduly burdening legitimate business activity.” What happened? That phrase was deleted. What seemed self-evident—that you wouldn’t want to burden legitimate businesses—was deleted. No explanation was given, but the message of hostility to business, especially big business, was obvious. The new leaders call themselves Neo-Brandeisians, and an anecdote about the Neo-Brandeisians in the original Brandeis is especially telling for today.

 

      In 1936, President Roosevelt, to launch his re-election campaign, echoed the original Brandeis, and he attacked what he called the economic royalists who were causing “economic slavery.” Four and a half years later, the world and his language were much different. He said -- not economic royalist anymore but “the arsenal of democracy.” So these bad people had become the saviors of the world. Had the original critics had their way, would the arsenal of democracy even existed to have such a central role in winning World War II?

 

      So ask yourself, in today’s dangerous world, if the Neo-Brandeisians had controlled policy in those 40 years that they condemn, would the technology leaders they decry have been allowed to succeed? Now it’s that industrial strength that the United States needs in today’s suddenly—what seems suddenly, but it’s not if you’ve been paying attention—very stormy international waters.

 

Svetlana Gans:  Thank you. So one response to this critique that has been voiced is that this new approach reflects the true law as Congress had anticipated when they drafted the statutes at issue. Section five of the FTC Act, for example, provides FTC broad authority to ascertain unfair methods of competition and unfair and deceptive trade practices. So Tim, what is your response to that claim that the current administration holds true to the original intent of the FTC?

 

Timothy Muris:  Well, this is a -- this is a favorite theme of the Biden FTC, especially in mergers and in the—as Maureen mentioned—new unfair methods of competition focus. But the law to which they’re faithful is usually ancient, and it’s well before the so-called failed 40 years. Now, to the contrary, the truth is that the experiment that failed is that old law, which was long repudiated by the Supreme Court and the lower courts. Now, I’m sure we’re going to discuss the substance of things like mergers, but if you look at merger law and other ancient law, it’s relevant on this fidelity issue.

 

      In that ancient law, consumers were so irrelevant that companies did not dare claim they were acting to lower prices because if they did so, they would increase their market share, and that would harm their competitors, and that was at risk of being illegal. Into the 1970s, the government almost always won cases, even if the courts had to create markets that existed only on paper. Now, in this world, the courts used business progress to condemn business practices. In the ‘60s, with mergers specifically, the Supreme Court, three times, found a merger in an unconcentrated market illegal, with a single-digit combined market share, including the often-cited Brown Shoe. Now, these are what Chair Khan has called controlling precedence. If she really meant that, that would be the cases that are controlling.

 

      But the law has changed. The Supreme Court clearly has changed. It began the change in mergers in 1974. There’s been decision after decision based upon the consumer welfare standard that they claimed that they abandoned. And an example of the change—a stunning example, which is too often ignored—is the FTC’s case record in the 1970s. In cases filed in the latter part of the 1970s, the FTC, relying on the so-called controlling law of the ‘60s, won 13 of 35. In mergers, it was 8 of 22. Now, that’s better than the Biden administration’s record, but that’s still terrible. And that’s a far cry from the government always wins that was in the ‘60s.

 

      But don’t try to say that those controlling precedents have anything to do with today’s law. That was a fantasy today, was a fantasy even decades ago, and if you don’t believe that, just ask the FTC, circa 1980.

 

Maureen Ohlhausen:  So let me build on what Tim said and particularly in the—I know we’re going to talk more about merger law -- but this issue of going back to these 50-year-old Supreme Court precedents and saying, “Well, that is the true law for mergers,” and what is really not been explored is why hasn’t there been much Supreme Court case law on mergers in the intervening 50 years? It’s because the way mergers get reviewed changed.

 

      We had the Hart-Scott-Rodino Act passed in 1976, where there was pre-merger notification, so if there was an issue with a merger, it can get challenged before it was consummated. Previously, we had the Antitrust Expediting Act. Things were quickly passed up to the Supreme Court. So the idea that somehow the Supreme Court came to the ultimate realization of what merger law should be in Brown Shoe, I think, overlooks the fact that because the review process has changed—and changed for a good reason, which was the idea that we wanted to preserve the ability of the agencies to prevent an anticompetitive merger, to not have the eggs be scrambled -- so the really important case law on mergers is at the circuit level, who all interpret those Supreme Court cases. Right?

 

      So I think that is a little bit of a dodge to say, “Oh, we’re just going back to the old case law, and the Supreme Court case law controls.” And you see in the merger guidelines a failure to acknowledge or wrestle with that circuit case law, which has been super -- very, very important in putting a gloss, I think, on some of these cases and making sure they’re not being overread. 

 

      One other area about fidelity with the law is on the Unfair Methods of Competition Policy Statement. The FTC tried four times, previously—in modern era—to try to push forward with aggressive freestanding UMC—meaning it’s not a Sherman or Clayton Act violation—and lost in the courts: three times in the appellate court and once in district court. And those cases had guidance about what UMC should be—showing an impact on competition, having to assess, take into account, business justifications—and the UMC policy statement simply elides over that. It doesn’t really talk about it.

 

      One other thing about that is it goes back to the old, old case law that is -- I mean, to the legislative history, and kind of cherry picks without really exploring the fact that while it was maybe meant at the time, or clearly meant at the time, to go beyond where the Sherman Act was—the Sherman Act then had been interpreted in a much more constrained way. Right? So as the Sherman Act boundaries got expanded, what happened to the boundaries of unfair methods of competition? Does that mean that it’s always five miles beyond the boundaries of the Sherman Act? Right? I think the UMC policy statement doesn’t deal with that with that issue.

 

      So those are two areas I think that -- fidelity with the law, you have to look at what the law is today across the board, not just picking and choosing a few favorable terms or statements that you like.

 

Svetlana Gans:  Okay. So before we leave the merger topic, I’m not sure if either of you had any additional comments on mergers and maybe a little bit on merger process. Maureen, you mentioned earlier that a lot of what they’re doing is process reform, and I know that you were -- did a lot of process reform initiatives when you were chair to streamline the process to make it easier for both the FTC and parties to produce relevant information to get investigations done in more streamlined fashion while still preserving the FTC’s ability to get what it needed to do its job. But Maureen, maybe we’ll start with you in terms of the merger review process. Anything you’d like to say on the HSR revisions or proposed revisions to the merger guidelines?

 

Maureen Ohlhausen:  Yeah. So there’s been a lot of attention paid to the changes -- to the proposed changes to the merger guidelines. All this focus on -- just one thing that stands out to me is this proclamation that antitrust law prefers organic growth over acquisition. Well, it prefers it not having substantial impact on competition. Right? It should be agnostic, whether -- if it’s not having an impact, whether it is through organic or not.

 

      But putting that aside, I think it’s really important not to lose sight of the fact that one of the ways that -- Lina Khan has talked about this, Jonathan Kanter have talked about this -- is deterrents. They keep touting how they’ve deterred mergers, and that’s been their success. Right? Maybe they haven’t been able to stop them in courts, but they’ve stopped them from even moving forward at all, being proposed. And when you look at the proposed changes to the HSR filing forum—which are incredibly, incredibly extensive, will be very, very difficult to comply with, very extensive—of mergers that are reviewed -- like, when the HSR Act was passed, Congress struck a balance because Congress has never said that mergers are bad or that mergers should be overall deterred across the board. They tried to strike a balance for the agencies to have an ability to review and not burden legitimate business, as Tim mentioned.

 

      So the new merger HSR changes are having very wide data collection for 100 percent of mergers that are notifiable and we know that only about 5 percent of mergers ever really get -- most mergers are fine. They don’t raise any concerns whatsoever. They will be burdened. Ninety-five percent of those mergers who never get another look will have these burdens in place. For the five percent that maybe gets a deeper look and that two -- well, roughly two or two and a half percent that ever get challenged. And I really think this is part of this kind of approach to say, “Well, if we can’t get Congress or the courts to change the standard for what we think is an illegal merger, we’re just going to kind of put a burden on mergers overall.” And I think keeping an eye on how that’s really going to operate through the proposed HSR changes is really important. 

 

Svetlana Gans:  Tim?

 

Timothy Muris:  Sure. A couple of points. On the law, I wrote a long tome that, if nothing else, might help with your insomnia. It’s on aei.org. It was published in June. It’s about Neo-Brandeisian antitrust and subtitled, “Repeating History’s Mistakes”—and there’s an earlier editorial in the Wall Street Journal. On the process, the hostility to business is especially relevant here. The first Biden director of the Bureau of Competition was asked at the ABA spring meeting to identify a single positive attribute of mergers, and she couldn’t. The Neo-Brandeisians should read Maureen’s excellent paper that summarizes -- the many papers that show the positive attributes.

 

      Instead, what’s going on here—and Maureen has mentioned this—now, is the idea of raising the cost of mergers through process. It’s what Scott Barshay, who’s the chair of the Paul, Weiss Corporate Department, said is an in terrorem campaign to create uncertainty and delay that results in many fewer mergers. Now, this is the opposite of good government, and it increases the hostility that’s already great toward Washington. As Maureen indicated, the HSR system is ripe for abuse. I’m going to throw out some statistics, which are on a different -- a little bit different baseline than Maureen’s but quite similar.

 

      In the 28 years, ending in 2021, either agency requested clearance to investigate. That doesn’t mean they did anything serious, but they thought about it in 13.7 percent of the transactions. They issued a second request in only about three percent and a challenge in only about two percent. Now, there are multiple ways to increase delay, and this administration is experimenting with seemingly all of them, from abandoning early termination, to expanding the scope of second requests to warning letters, to increasing administrative litigation, to avoiding settlements, except perhaps beyond the last minute, like in the Amgen v. Horizon case.

 

      And now—and this is what Maureen is talking about—it’s proposed to increase requirements on all mergers, even that overwhelming majority in which it has no interest. And this is a game changer. And to add to Maureen’s point, this cannot pass muster under a faithful reading of the Paperwork Production Act, which requires that information is “necessary for the proper performance of the function of the agency and its practical utility.” 

 

      Now the FTC -- the government’s change in HSR has to be reviewed in OMB—where I was present decades ago at the creation of the office in OMB which will review this—and if they’re faithful, and one hopes they are, [inaudible 23:30] duty, the proposed change is in trouble. If not, the new requirements, if they’re adopted, are a formal mechanism to allow the government to increase delay with the accompanying uncertainty about the timing and ultimate disposition of the mergers.

 

      Like those informal mechanisms I just ticked off a minute ago, these changes are going to be a tax on mergers and that -- when you increase the cost, you decrease the supply, and that’s apparently what they desire. And it’s imposed without regard to the likely competitive effects, and it ignores the potential benefits that are laid out in Maureen’s paper through lower prices and more innovative products. And again, it is the antithesis of what good government should do.  

 

Svetlana Gans:  So Tim, I guess one response that the FTC majority might have, in terms of the justifications for the changes, were reflected in their statement, stating that the HSR reforms are meant to fill key gaps that FTC staff most routinely encounter, such as inadequate information about deal rationale or the details of how a particular investment vehicle is structured. They also pointed to the fact that several international merger regimes already call for this information. So what would your response be to that justification?

 

Timothy Muris:  Well, again, the FTC -- Hart-Scott-Rodino was -- if you look at what the people who wrote the act -- at what they said, instead of applying the something like 60,000 filings in the time period I talked about -- they said it was going to apply to something like -- to under 10,000. So it’s wildly overinclusive, and the international systems that you’re talking about, I believe, are not anywhere near as overinclusive as ours. And as Maureen was talking about, there are scores of filings that are overinclusive that nobody cares about. And even if the current people are twice as aggressive or three times as aggressive, they’re still massively overinclusive, and that is -- that cannot pass muster under the cost-benefit test of the Paperwork Production Act.

 

Svetlana Gans:  Okay. So we have just a few moments left. I want to ask one question and a question I received from the audience, with Tim and then Maureen, in terms of being bold, with respect to FTC initiatives. Tim, you were bold with the Do Not Call Registry, and Maureen, you were bold with numerous initiatives, including the Economic Liberty Initiative, among others. So is there a problem with being bold? You certainly had great initiatives in your tenure. Or why is it a bad thing to try to implement new policies and even to change course radically? Tim, I’ll turn to you and then Maureen.

 

Timothy Muris:  Well, look. 2020 was like 1968 and 1980, in that a new administration came in and said we need to change course. But the difference is there’s no wide -- there was no widespread consensus of failure. As I mentioned, the FTC was the only five-star agency. Instead, what happened is the new chair came in, replaced the acting chair—who was a democrat—replaced her people entirely with Commissioner Chopra’s staff, and Commissioner Chopra had strong views that were open and notorious. He believed in the deep state. He and Donald Trump were simpatico, believing that there was something wrong with the FTC career staff. And what they did quite quickly was a series of insults.

 

      They first ordered all of public appearances canceled, and they ordered them to lie about why they were being canceled. They said they were canceled because of pressing matters at the FTC. Two weeks later, they had a public meeting that was unprecedented. They adopted new matters—important new Commission steps with no participation in this public meeting from the career staff. I’ve been involved almost 50 years with the FTC, and I’ve never seen anything like that.

 

      Shortly after that, with Chair Khan at his side, the president of the United States announced to the world that what this five-star agency had been doing for 40 years was a failure. The FTC staff reacted. They voted with their feet, and they also voted in a survey where they had previously said the FTC leadership was the best among those many surveyed to the worst, and that’s not a way to run a railroad. If you want to make change, you need to take organizational and leadership steps that were done following the ’68 and ’80 election, and they haven’t done that.   

 

Svetlana Gans:  Maureen, what do you think? Weren’t the most recent results more positive than the earlier results? What would you say to that, in terms of the viewpoint surveys?

 

Maureen Ohlhausen:  So let me address the viewpoint survey briefly but then turn back to the change -- to the change point. Yes. So they went up slightly, and that is on a different cohort of people. Right? So you had many, many -- a big exodus from the FTC of very knowledgeable career staff, and Chair Khan has brought in people who, I assume, presumably see the world the way that she does and still did not receive, overall, that positive of a rating. So yes, maybe it’s gone up a little bit. A lot of unhappy people have left, and a few supporters have been brought in.

 

      But on the change point -- look, it’s perfectly fine to try to use the authority Congress has given you in a way that is bold, that fits what the powers that are allowed to an independent agency in the U.S. But we have a system of limited government. We have three branches of government, and it is not appropriate to simply say, “We couldn’t get the changes we wanted through Congress. We couldn’t get them through the courts, so we’re just simply going to impose them as, essentially, acting in a legislative capacity.” And may I add one that decided that it could preempt all contrary state laws. Right? That’s what it did. That’s what it said the FTC could do in the noncompete ruling. Right? So I think that’s a little surprising.

 

      Did Congress, in Section Five of the FTC Act, specifically say the FTC could preempt all state laws? That struck me as a surprise. When you look at, like -- for example, in COPPA—the Childrens’ Online Privacy Protection Act, which does preempt state laws—Congress said it. So I think there’s nothing wrong with acting boldly within the parameters of our three-part government with limited powers where Congress is the grantor of those powers and where the courts are the arbiters of what those powers really should be -- or have been granted, I should say. 

 

Svetlana Gans:  All right. So I did get a few questions, and we could just run through them quickly, and then we could call it a day. So, Maureen, I guess I’ll turn to you on this one. There are some who appear to embrace a Neo-Brandeisian antitrust view, both who are politically on the right because of their dislike for large corporations and politically on the left who are willing to bet on the consumer welfare standard as they believe it has led to the corporations having too much power, particularly cultural power. What concerns do you have with conservatives embracing the weaponization of antitrust enforcement to target what some of them consider political enemies?

 

Maureen Ohlhausen:  So I would say be careful what you wish for, for you may get it because if then antitrust becomes simply a tool to disfavor, harm, slow down, kind of hamstring your people that don’t agree with you politically, you may not like the outcome when someone else is pulling the strings—when someone else is deciding that. But even more -- and that’s concerning in the U.S. But even more importantly is what does that signal around the world?

 

      We’ve spent many, many years across administrations in a bipartisan way talking about how antitrust should be focused on consumers, that it’s not industrial policy, that it’s not meant to be a way to punish competitors who are competing hard with national champions. But we’ve really lost, I think, that high ground now by saying, “No. It can be this multifactorial decision of like, well, maybe it’s supposed to favor people we agree with politically, or maybe it’s supposed to favor other constituencies other than consumers.” We really may not like how that’s wielded against, not just a few tech companies that people might have some beefs with, but once that starts being wielded against American industry overall. And I really have serious concerns about the -- the current leadership will move on, new people will come in, but those statements will have continuing ramifications in the future.

 

Svetlana Gans:  Tim, how about you?

 

Timothy Muris:  I agree with not weaponizing antitrust. But the five-star FTC—which I hope could still be retrieved in the next administration—there’s a role for it in the nonenforcement area. Let me give you -- when the FTC was trusted. Let me give you an example of what happened following Columbine. The president asked the FTC to study the impact of violence in the media on youth, and the FTC wasn’t looking to do enforcement, it was looking to find facts. And then the FTC did a very good study, and it recommended some disclosure.

 

      What bothers conservatives a lot about these big companies is they think that they discriminate in speech, and that’s something the FTC could have studied. The problem now is a study from this current FTC -- there’s a lot of people who just wouldn’t believe it the way that the FTC, which had bipartisan support, was believed before. But the FTC has a long history of doing important reports, and I hope it’s not too late for the FTC to retain that role.

 

Svetlana Gans:  One other question we received is something concerning the challenges to FTC structure and authority in the wake of the Axon decision. What are your thoughts? Do these challenges pose real risks, and what might the courts do in response to those challenges?

 

Maureen Ohlhausen:  Well, we’re in a very interesting period because the FTC is acting quite, you said, boldly—that’s a good term -- quite boldly and asserting these very broad powers at a time when the courts are moving in this direction to really have a very skeptical view of the administrative state. Right? The FTC lost 9-0 in the AMG case where it had long claimed to have redress authority. That’s not just a right-wing view, when you lose 9-0 in the Supreme Court with the Axon case. So they’re under this very intense scrutiny at a time when the agency is really trying to expand its authority and its powers. So it does seem like there’s going to be some collision. They’re already happening, I think, and I think it’s not going away. It’s definitely not going away.

 

Timothy Muris:  I certainly agree that it’s not going away, and, look, AMG is a good example. I had long argued and helped create the idea that the FTC had a very narrow authority to get redress. When the FTC in the Obama administration said it could get redress from anybody, I, with Howard Beales, wrote an article in 2013 and said, “You’re jeopardizing the whole program.” Unfortunately, our prediction turned out to be true. I think humility among regulators, which Maureen so eloquently talked about when she was in government, is the order of the day, and humility in this administration do not belong in the same sentence.

 

Svetlana Gans:  Okay. One other question --

 

[CROSSTALK]

 

Maureen Ohlhausen:  And let me just add -- sorry. Let me just add one thing on to that, which is I’m—and I know Tim is—a big supporter of all the great things the FTC can do. I don’t say this with a glee, like, “Oh, let’s get -- let’s have the FTC run itself off of a cliff.” I think that would be a real shame and a real loss for American consumers and American business. Tim mentioned a lot of the great stuff the FTC has done. So my, certainly, offer these -- I offer these remarks in the spirit of wanting a successful, effective FTC to continue.

 

Svetlana Gans:  Okay. Last question, then we will wrap up. Both Jonathan Kanter and Lina Khan often note in interviews that if you asked five people what the consumer welfare standard is, you’ll get six answers. But have they proposed an alternative to the consumer welfare standard or at least one that can be applied in a way that doesn’t devolve in what former Commissioner Wilson has said, “I know it when I see it standard?” Tim, I’ll start with you, and then Maureen, you could wrap things up.

 

Timothy Muris:  Well, look. Again, we’re dealing with people who are interested in activity and clicks and not real achievement, as I think that quote indicates. And the merger guidelines are the perfect example. The former directors of the Bureaus of Economics and the head economist at the Justice Department have just sent a letter, and the letter makes the very important point that by turning the merger guidelines into a legal advocacy document, they are threatening to remove its force as a document that both provided guidance and got judicial credibility.

 

      There was, again, this long -- the 40 years couldn’t have existed as something to be criticized unless it had coherence, and the coherence couldn’t have been as incoherent as they claim. They can’t have it both ways. And the reality is, of course, that the consumer welfare standard could result in disagreement in individual cases, but it was -- involved people who, in retrospect—I think we can all see it now—were mostly arguing between the 40-yard lines—to use a football analogy—and we now see what real disagreement looks like. And it’s radical, it’s unsettling, and it’s anti-consumer.

 

Svetlana Gans:  Maureen?

 

Maureen Ohlhausen:  Yeah. Look. I don’t think it’s that hard -- I mean, who are they asking, the man on the street? Yes. Antitrust is a rather challenging doctrine. It can be, sort of, economically -- because it’s driven by economics. But at heart, what the consumer welfare standard is, is does this behavior—does this thing that we’re looking at—increase output or decrease output? Does it increase prices, or does it decrease prices? Does it increase choice for consumers or decrease choice for consumers? Does it improve quality or not improve quality? And we need to look at that dynamically over time. And is it doing something in a way that is foreclosing a competitor from succeeding on the merits, on the merits. Right?

 

      And so, one of the challenges that I think that we have with whatever standard they want to put in its place is whose interest is being served. Is it the consumer or is it a competitor who says, “Well, yeah. You’re going to have a cheaper product, and that’s going to make it harder for me to compete, ergo it’s anticompetitive,” or “I want access to your facilities”—the essential facilities doctrine—“because that’ll make it easier for me to compete.” But we’re going to totally ignore whether anyone is going to invest in creating those facilities to begin with, if then they have to share them. Once they’re successful, they have to share them with competitors on whatever terms the government decides to set is the fair terms.

 

      So personally, it’s not something -- yes, sometimes there may be factually complex or economic modeling that needs to be done, but as a concept, I don’t think the consumer welfare standard is that difficult. I think it’s actually rather straightforward and clarifying versus having some sort of like eight-part balancing test based on this, sort of, hodgepodge of factors that they seem to -- labor, competitors, environmental -- I don’t know what else might go into it. 

 

Svetlana Gans:  All righty. Well, I think we’re at time, and I don’t see any additional questions. So I wanted to thank you both for being here, for your views, thank, again, Emily and Nate at The Federalist Society for hosting us and the audience. And Emily, do you want to take it away from here?

 

Emily Manning:  Yes. On behalf of The Federalist Society, thank you all for joining us for this great discussion today. And thank you also to our audience for joining us. We greatly appreciate your participation. Check out our website, fedsoc.org, or follow us on all major social media platforms @fedsoc to stay up to date with announcements and upcoming webinars. Thank you once more for tuning in, and we are adjourned.