The FTC in the Current Administration: Buckle Your Seatbelts

Administration Law & Regulation Practice Group, Corporations, Securities & Antitrust Practice Group, and Regulatory Transparency Project Teleforum

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The last few months have seen significant changes at the Federal Trade Commission. The new FTC has set an ambitious agenda that revives the agency, propelling it in directions we haven’t previously seen. The FTC is poised to engage in wide-ranging antitrust and consumer protection investigations, issue industry-wide rules, and blend antitrust and consumer missions for a better outcome.


  • Adam Cella, Attorney Advisor, Office of Hon. Christine Wilson, Federal Trade Commission
  • Debbie Feinstein, Partner and Chair, Global Antitrust, Arnold & Porter
  • Jessica Rich, Of Counsel, Kelley Drye; former Director, Bureau of Consumer Protection, Federal Trade Commission
  • Moderator: Svetlana Gans, former Chief of Staff, Federal Trade Commission

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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Event Transcript



Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at



Nick Marr:  Welcome, everyone, to this Federalist Society virtual event, as this afternoon, October 27, 2021, we’re discussing the "FTC in the Current Administration." The subtitle is "Buckle Your Seatbelts." I'm Nick Marr, Assistant Director of Practice Groups here at The Federalist Society. As always, please note that expressions of opinion on today's call are those of our experts. We’re very pleased to be joined by a terrific panel today. I'm going to just introduce our moderator. Many thanks to her for organizing this panel.


      We're joined this afternoon by Miss Svetlana Gans. She's a former Chief of Staff at the Federal Trade Commission, and she now serves on -- the sponsors of this event -- the Corporations, Securities, and Antitrust Practice Group, as well as the Regulatory Transparency Project. So, with that, Svetlana, the floor is yours.


Svetlana Gans:  Great. Thank you so much, Nick. And thank you to The Federalist Society for hosting this very informative and exciting and timely topic on FTC in the Biden administration. As Nick said, I'm Svetlana Gans. And the views I express here today are my own and not necessarily those of my employer or previous employers. I'm sure everyone will have the same disclaimer as we go through the event today.


      So I am pleased to welcome you all to this session. First, I will introduce our panelists, and then we will go to a moderated Q&A. I will be monitoring the chat feature of this call, so if you have a question, please put it in the chat and we'll try to get to it during the course of our event. And we also will have a few minutes at the end of the program to take audience Q&A as well.


      So, first, let me start with introductions. I'd like to introduce Debbie Feinstein. She is a partner at Arnold & Porter. Most recently, she served as the Director of FTC's Bureau of Competition under President Obama from 2013 to 2017. And, in that capacity, she oversaw the entire Bureau of Competition, including litigation and enforcement and policy matters. So, Debbie, welcome.


      Next, we have Jessica Rich. Jessica Rich served at the FTC for over 26 years. Most recently, she served as the Director of the Bureau of Consumer Protection, where she oversaw all of BCP's litigation and enforcement and policy matters, and also led the FTC Privacy Program. She's currently with Kelley Drye. Thanks, Jessica, for being here.


      Next, we have Adam Cella. He is an attorney advisor currently at the Federal Trade Commission working with FTC Commissioner Christine Wilson, where he advises her on antitrust litigation and policy matters. Previously, Adam was in private practice as an antitrust attorney. So, Adam, thank you so much for being here as well.


      So today's session will focus on the FTC in the Biden administration. Anyone reading the paper or the press knows that FTC has been very busy lately, both on the antitrust and consumer protection side. They have been aggressive in terms of enforcement, but also rescissions of several bipartisan policy statements on both the consumer protection and the competition side. They have also changed internal processes and procedures that we'll hear more about later today.


      While several of the priorities have come across multiple administrations, there are some new things at play at the FTC. And we will be discussing all of these new initiatives and priorities on the call today.


      So Debbie, let me first turn it over to you. Can you describe current FTC priorities on the competition side?


Debbie Feinstein:  Sure. Thanks. It's a pleasure to be here with this group. So thanks.


      It's an ambitious agenda. Chair Kahn put out a letter, basically, setting forth her priorities. I think the implementation of them is exactly what we're all trying to figure out: how some of these things will come about, what it is that it means in terms of specific cases. It's clear that there's concern about mergers in general, sort of across the board, across industries. And looking carefully at those is something that I think we can expect. We've already seen some of that.


      I think those of us in private practice have experienced an increase in the number of second requests issued. And we've seen letters issued at various times at the end of initial waiting periods, at the end of more fulsome investigations, reminding parties that they close at their risk, essentially reminding people that there is no statute of limitations on the government going after past transactions. Nothing new to that fact. That's been something that the agencies have, in fact, done before. But the spotlight on your deal when you get a letter is obviously something that people need to be aware of. So that's clearly one priority. Just the sort of concern about consolidation and dominance as they've set it in the industry.


      A second objective is this issue of dominant intermediaries. And exactly what that means -- and which industries, and what kind of entities within that -- I think is less clear, in terms of what it means in terms of the enforcement. One can certainly think of mergers in those kinds of industries. But whether it means other kinds of cases, whether it's monopolization cases or the like, is a bit unclear.


      And then the third is various kinds of contract provisions. Certainly, non-competes in employment contracts has been an issue in both government and private litigation for quite some time. How the focus on that will translate into enforcement is to be seen. But I think she's laid out an ambitious agenda. And I think we're all waiting to see how it actually gets effected in particular cases.


Svetlana Gans:  Great. Thank you so much, Debbie. Adam, where do you see antitrust priorities from your perch?


Adam Cella:  Sure. And thanks. Thanks Svetlana. And thanks for inviting me to this panel. And to Debbie and Jessica, I'm honored to be on a panel with such accomplished former FTC officials. And I should say my disclaimer. The views I express are my own, and not necessarily those of the commission or any individual commissioner.


      To be clear, only the Chair knows for certain what will be prioritized at any given time. Debbie's description of the priorities in the memo basically covers what we know about the priorities, at least publicly. The priority that most jumped out at me was the first that Debbie mentioned, regarding what the memo calls "rampant consolidation." This priority addresses the increase in HSR merger filings, or what commission leadership regularly refers to as "the merger wave."


      The memo makes clear that reviewing these filings is a priority over the work of offices of policy planning. And the office of international affairs, whose staff the memo mentions, has been working on merger review, instead of the work of their respective offices. The memo also states a key project will be revising the merger guidelines. Obviously, the vertical merger guidelines have already been rescinded, but the memo refers to the merger guidelines in general, suggesting that the horizontal guidelines are also on their way out the door.


      And, finally, on this consolidation point, the memo states the need to deter unlawful transactions, which may or may not be limited to anticompetitive transactions. But, also, the memo states that we need to reduce the burden associated with investigating and filing lawsuits. So we've already seen the foundation being laid in this deterrent strategy, through statements about prior approval and the, at least, increased use of pre-consummation warning letters, among other changes to merger review.


      To focus on Commissioner Wilson's concerns; first, the Chair -- not Commissioner Wilson -- sets the FTC agenda. But all commissioners can have a large impact on the FTC. Commissioner Wilson is certainly concerned about many actions being taken that may harm key aspects of sound antitrust enforcement. This includes undermining the HSR process, which allows the business community to follow rules and timelines for merger review, and allows the government to investigate mergers pre-consummation. Commissioner Wilson is also concerned about undermining the consumer welfare standard.


      These are all high-level points that deserve discussion. But one of Commissioner Wilson's biggest concerns that I really want to flag is for staff and the FTC as a whole. It doesn’t matter who is leading this agency, whether it is Chair Kahn. You could bring in Jonathan Kanter. It could be Justice Brandeis himself. None of that matters if leaders do not have the incredibly knowledgeable and capable career staff to carry out the agency's mission.


      And news reports have revealed that staff are largely not allowed to participate in public events. I'm lucky that I report to Commissioner Wilson and she allowed me to be here. But really you should be hearing from the staff in the merger shops, the conduct divisions, and the other offices and bureaus. It's those people that can inform the business community about illegal mergers and conduct, and the policies and practices of the FTC, so that businesses can follow the laws and avoid illegal actions in the first place.


      Commissioner Wilson wants to make this clear, so the FTC can continue to retain, develop and recruit lawyers and economists and other staff. If the FTC cannot retain its people, then it's not going to be a functional agency that can enforce the antitrust laws.


Svetlana Gans:  Thanks so much, Adam. That's a really great point about FTC staff. They are the lynchpin of the agency's good work. So thanks for noting that.


      Debbie, I wanted to turn it back to you. You served at the FTC during the Obama administration and set policies and worked on enforcement matters for the agency. Do you feel that the FTC in the Biden administration on the antitrust side is different than what you experienced in the Obama administration?


Debbie Feinstein:  Yes and no. I'll say it this way; so, the first time I was at the FTC, it was during the first Bush administration. And from then -- and then I came back some 20-plus years later to work in the Obama administration. And, I would say, for a very long period of time it was pretty consistent. And I don't think you'll find a commissioner who's ever served at the FTC who doesn't think we ought to stop bad mergers, we ought to worry about dominant firms, and we ought to worry about non-compete arrangements, just to pick a couple of things. I can't imagine that there is a commissioner who says, "Oh no. I didn't care about any of those things."


      So, at that level, I think there's quite consistency in this. I can point to recent commission actions before this administration in all of those areas. I think anybody who's ever sat in my chair will say that they tried to go after problematic transactions and agreements as aggressively as they could and as aggressively as the courts would allow.


      I think what's different is two things. One is the rhetoric, in terms of the way that these practices are talked about. And second, some of the process steps that are being implemented to try to address them. That's where I see a lot of the differences.


Svetlana Gans:  Great. Thanks for those views. Jessica, let me turn over to you to talk a little bit about the BCP area of focus of FTC, and the priorities there, and how they may be different from when you were there last at the FTC.


Jessica Rich:  Great. Well, thanks for having me. I echo the gracious remarks of everyone else being happy to be here with each other.


      So, on the consumer protection side, in many ways, the topic areas are quite similar. Privacy, the tech platforms, behavioral advertising, dark patterns, algorithmic decision-making, discrimination, deceptive endorsements, [inaudible 00:12:55] claims, for-profit schools. These were all priorities of past leadership which paved the way on these issues.


      So, I think the current leadership would be horrified to hear that, in many ways, they're standing on our shoulders. But, the big focus -- besides rhetoric, as Debbie mentioned -- is on using new and existing tools, new and maybe less used tools, both to get monetary remedies -- in light of the ruling in AMG, cutting back on redress -- and also to get stronger conduct requirements too, if they can.


      And a key thing here is a statement that there's going to be a shift to rule-making -- more ruling making, maybe less enforcement -- which is interesting when you're an enforcement agency and not a regulatory agency. But we'll see how that goes. But the current leadership clearly wants to expand existing rules. They issued a new interpretation of the Health Breach Notification Rule. They didn't even use rule-making. They did it through a policy statement.


      Their COPPA, the Safeguards Rule, the Business Opportunity Rule, they're all pending. They could have come out already, some of those. But they're clearly working on them, I would say. There's also talk about creating new privacy rules under Mag-Moss, which is a tall order. But, again, a shift to rule-making. And part of that is because you can get money under rules.


      They're making aggressive use of civil penalty warning letters. Right now, there have been 1,800 that have gone out. And also making very strong demands for monetary relief and injunctive relief in negotiations. So far, I think we've seen lots of warnings, lots of rhetoric, lots of policy changes. But not a lot of cases on the consumer protection side. A really, very low number of cases on the consumer protection side. And, despite this idea of a Mag-Moss rule-making being talked about on the consumer protection side for years now, we haven't seen one. So that's very interesting.


      So, echoing what Debbie said, it's an extremely ambitious agenda, pushing the boundaries of their authority in certain ways. There are questions about what they can do with their existing authority and what they're going to do with their existing authority, but there will be much to watch in the coming months.


Svetlana Gans:  Great. Thanks so much, Jessica. Adam, let me turn it over to you. Both Jessica and Debbie spoke about procedural changes and process reforms at the agency and I was hoping you could elaborate a little bit more on what the agency is doing here.


Adam Cella:  Definitely. Well, starting off with the open commission meetings, that's probably been the most public process change. There's now been four open meetings, which have allowed the commissioners to give short speeches, one after another, about topics on the agenda. And then, the commissioners vote in public. Unfortunately, to avoid waiving a certain privilege, the commissioners and staff cannot have a dialog or debate, so the public is seeing more of a prepared show than a constructive meeting. But, on the clearly positive side, the public can sign up for a minute or two to speak to the commission. This part of the meeting has been incredibly informative and thought-provoking and helpful, as someone at the FTC.


      The last two meetings have also allowed staff to present their work on 6(b) studies. Specifically, the first presentation was on non-reportable acquisitions by five big tech companies. And the second was on privacy practices of six major ISP providers. I think it's been very beneficial for the public to be able to hear the results of those studies -- at least so far -- from the staff that actually did the work.


      One concern about the meetings is the timing. Commentators and some commissioners have pointed out that only following the statutory minimum for informing the public of the agenda items really limits the ability of the public to analyze the issues and prepare any comments for consideration. Tight timelines have also limited the commissioners' ability to collect information, ask questions of staff, and work together to try and reach a bipartisan consensus on most of the issues.


      So there are definitely process concerns with these meetings. And, as a result of the meetings, there have been process changes to the day-to-day functioning of the commission, for example, the broader use of omnibus resolutions, seven of which passed in an open-commission meeting. This has changed how compulsory process is used, and how commissioners receive -- or, I should say, do not receive -- information about investigations.


      Additionally, the potential for broader use of prior approval has the potential to put even more power in the hands of the Chair, procedurally, to block transactions without bringing an enforcement action, and to withhold information from certain commissioners. And, changes in procedure -- as Jessica just talked about with rule-making -- that were voted out at a commission meeting -- that will greatly impact the process, as the FTC dives into that arena.


      There are also process changes that have been publicly reported that have nothing to do with commission votes. For example, Commissioner Wilson publicly acknowledged that she was not able to get second requests internally. A new process was later implemented to facilitate sharing of information within the FTC. I'd say that new process is in the works.


      And one final example of process changes that we have spoken about already, or keep touching on, is the pre-consummation warning letters. This really single-handedly changes the HSR process from one with a 30-day waiting period -- or 60 days of the pull and refile, followed by second request and time agreements -- to a process where investigations will not follow statutory timing or other agreements, and instead create uncertainty through indefinite, open-ended investigations.


      Now, the antitrust agencies have the ability to challenge consummated mergers, so these letters are not creating a new authority. And, to the extent they've become regular, ultimately, it's unclear if this has changed the process. And it's unclear for the businesses and the practitioners and the public, if transactions that receive pre-consummation warning letters continue to actively be investigated or if there is really any real meaning to what these letters do.


Svetlana Gans:  Okay. Thank you so much. Super-helpful. Just to let the audience know, if you do have a question, please put it in the chat, and I will try to get to it.


      So, even though the FTC is an independent agency, the Biden executive order on competition did identify a few areas, encouraging FTC activity, both with respect to enforcement and rule-making. So I wanted to just throw it up to any of our panelists to opine on how the Biden executive order on competition may impact FTC priorities or missions. And, I guess -- since it has competition in its title -- I'll start with Debbie first, and then go to Adam, and then Jessica, if anyone wants to comment on that.


Debbie Feinstein:  Sure. So I think that the executive order reflects some of the issues that Chair Kahn and others have raised out in public, more generally. So I don't think it's just the executive order affecting the FTC. I suspect that some of the voices out there affected the executive order. Again, it's one thing to say, "I'm concerned about 'X.'" It's another thing to find a case before you where you can actually take action. So every bureau director is asked, "What are your priorities?" And the right answer probably ought to be, "To bring good cases and not bring bad cases." And, beyond that, to see what the Chair wants to do.


      But, on the margin, there were things that I would have liked to do when I was there -- find the right case to talk about what inappropriate information-sharing was and wasn't in pre-merger due diligence, because it's something that people worry about every day. But there just wasn't a case out there to bring. You can't magically find the merger in front of you to basically bring a new theory, or that sort of thing.


      I think what it will translate into is just an extra focus on those sorts of issues in really being extra careful. And that's what I hear a lot, that at both agencies -- both DOJ and the FTC -- everyone's just taking another look at things to make absolutely sure they're not missing anything. And, again -- whether it translates into different kinds of cases -- monopolization cases are hard to bring. And lots of leaders have come in.


      There was an AAG who famously said she wanted to bring 100 monopolization cases during the tenure there, and I remember talking to staff at the time, who said, "I'm not sure I can identify 100 monopolies. Where do I start, in terms of figuring out whether they're a monopoly and whether they're taking action that is monopolistic?" You can't just say, "I've found the monopoly; I challenge you." You have to basically find something that is a violation under section 2.


      So, I think that it will impact sort of the general thinking. Whether it will impact a particular case, or cause somebody to bring a case that they otherwise might not have brought, that's a much harder question to me.


Svetlana Gans:  Okay, thanks. Adam, any views on the EO?


Adam Cella:  Sure. As Debbie said, it's a little hard to know if the executive order is impacting the FTC, or if other people impacted the executive order before it was released. But, apart from enforcement -- which I think Debbie was really focused on -- there are many areas where the executive order calls for rule-making or guideline reconsideration, or both.


      For example, we've already seen this start to play out in merger world, where the guidelines have been rescinded in the vertical merger guidelines, and there's been statements about reconsidering the horizontal merger guidelines. This was called for in the executive order -- at least reconsideration, new examination, of those guidelines. The executive order also called for examining and using your power to go after consummated mergers and, again, we see an increased use of these pre-consummation warning letters.


      I think it's also interesting, though -- as Debbie spoke about enforcement, it's informative that the executive order downplays enforcement a bit, at least in certain topics. Hitting on the guidelines issue again, the executive order asks the FTC to look into the antitrust guidance for human resource professionals from 2016, and also calls for rule-making to protect American workers. The executive order really downplays that those guidelines from 2016 made clear that naked no-coach and similar agreements are per se illegal. It doesn't discuss the work of state attorneys general who have protected their citizens from illegal no-coach and non-compete agreements. And the actions of state attorneys general in one state impacts the entire country in many of these circumstances.


      Now, all of this is just to say that the executive order is pushing rule-making and new guidelines, while at the same time downplaying the role of investigations and enforcement actions.


Svetlana Gans:  Great. Thanks for that. Jessica, the EO does -- even though it says, competition -- it does talk a little bit about consumer protection, especially in the privacy area. What are your views on the impact of the EO on the BCP side?


Jessica Rich:  Well, when I saw it, I assumed, like my colleagues, that the FTC had a hand in writing it. And, in fact, two of the notable consumer protection issues they overlapped with competition -- one of them does. Privacy and right to repair are focused on. And those were already something that the FTC was focusing on. But, interestingly, per Adam's comment, what the executive order calls for is rule-makings in both areas. And the FTC has not launched either yet. They've done some policy stuff in right to repair, but they haven't launched rule-makings in either area. So that's kind of interesting.


Svetlana Gans:  Great. Let's go back to enforcement a little bit. So, Adam, in his remarks, talked about the new resolutions that the FTC voted out, with respect to identifying several key enforcement priorities, and potentially broadening the universe of conduct that could be investigated during the resolution CID process. So, Debbie, I wanted to turn to you, just to give more context to these resolutions and what's the news there. How is it different than kind of what FTC has been doing earlier?


Debbie Feinstein:  Yeah. So, usually, it was a case-by-case decision whether or not to issue process. The commission had to vote on whether or not to issue process, and you had to have a majority to do it. And it meant that the Chair was somewhat limited in priorities if he or she couldn't get additional commissioners on board. The only omnibus resolution I recall during my time was to basically get certain data from states for hospital mergers. Everyone knew you needed that data. So if you want to look at a hospital merger, you don't have to come to us to get a vote to basically get data we know that you're going to ask for in every case.


      And I think the reason the commission always had that was two-fold. One, to make sure that there was bipartisan consensus on bringing a case forward, so that, if not, one could discuss it. Because administrations change, and it's not often great to bring forward an investigation that's either going to be hotly disputed or that, if there's a flip of the administration, staff will have spent a lot of time and effort on something that might not come to fruition. So that was one reason.


      The second was to give visibility. It gave visibility to the minority commissioners and all the commissioners as to what kinds of cases were going on. Now, basically, it seems like, with an omnibus, staff can do it and get subpoenas issued without that involvement of the additional commissioners. So it just takes that step out of the process. It's particularly relevant now, when you've got a two-two commission, where some of these things might have had to wait otherwise if they were hotly contested.


      One would hope that there weren't very many of those. And, I would say, in the time I was there, it was rare to have an investigation opened with compulsory process that all the commissioners didn't agree on. It might take some persuading. It might take some discussions. It might take some, "Yes. I would support a case if…" Those were all really helpful things to know as staff. Because you want to know whether or not you're going to get a 5-0 vote, or whether you're not going to get a 5-0 vote. One can debate about how much that might influence a court. I had 3-2 decisions out of the commission in cases I won, and 5-0 decisions out of the commission. And the one case I lost when I was there, that didn't get reversed on appeal, was a 5-0 vote from the commission.


      So you can't always predict. But people want bipartisan consensus when they can get it. And that early warning system of whether commissioners are concerned about an investigation from the get-go used to be really helpful to have. The one thing that differentiates the FTC from DOJ, I think, is that built in red -- I always used to call some of the commissioners "my built-in red team." Why that's helpful is I always felt that if there were certain commissioners that I could convince to bring a case, I felt really good about my chances to convince a federal court judge. And, not always true. But it certainly was helpful.


      And I think it's that process is one of the reasons that you see the commission fare so well in the courts so often. So many Supreme Court decisions on antitrust, on conduct cases, have been brought by the FTC. And I think it's because of that bipartisan kind of working to get a case that we're able to go forward.


Svetlana Gans:  Thanks so much, Debbie. So, Adam, Commissioner Wilson dissented when the resolutions were voted on at one of the first open meetings. Can you describe what Commissioner Wilson's concerns are and what you've been seeing -- to the extent you can share on that issue -- since, I believe it was the July 1 meeting, or one of the meetings.


Adam Cella:  Sure. Definitely. Well, first, Commissioner Wilson's dissent noted that some of these omnibus resolutions may have had merit, but there were various issues with the resolutions and the process for the votes. For the first seven that came up for a vote, Commissioner Wilson was given fewer than five business days to consider their scope and content, and to discuss with staff.


      The Commissioners were also forced to vote on the resolutions as a package -- seven in July, and eight in September. So, even if there was only one resolution that raised concerns, the only way to vote against it was to vote no on all of them. And Commissioner Wilson made clear that she was concerned that, in aggregate, these omnibus resolutions removed a lot of commissioner oversight from investigations, without adequate justification.


      And I think Debbie's point was spot-on here: that having commissioners see the investigations -- or at least the idea -- and vote early on in the process, should not be something that harms investigations. It actually will probably help strengthen the investigations to bring the ideas from five different people into the picture early on, especially people from different political parties. And Commissioner Wilson noted all of this, and she let everyone know what her open questions and concerns were.


      These questions included how investigations would be closed under this process, whether the language of the resolutions will lead to investigations outside the bounds of judicially recognized antitrust principles, and would these resolutions actually help staff conduct more efficient investigations. And, just to hit that last point -- justification for the resolutions was the increase in merger filings that the agency is currently processing. But an increase in the workload did not seem like the right time to remove commissioner oversight. The opposite is probably true. Oversight can help ensure that work is done in an efficient manner. It's still unclear how omnibus resolutions have made investigations more effective or efficient. But it does mean less input and oversight from individual commissioners.


Debbie Feinstein:  I think it's pretty important to talk about it on the consumer protection side, because it's different. So, on the consumer protection side -- as you know, Svetlana -- the agency uses omnibus resolutions routinely. And I think maybe the difference just may be that there's many more cases on the consumer protection side, many of which involve routine fraud and not deep policy issues.


      So you've got telemarketing, do not call, various different kinds of fraud, deceptive advertising and substantiation, different rules that are being reviewed, privacy. So regular use of omnibus resolutions, the issuance of these -- they may have had-- were different topics, but it's really not a different process than the FTC has followed routinely.


      What the resolutions did do, though, was flag some new priority areas, or at least existing priority areas that Kahn and the majority were highlighting. So, order enforcement; platforms; cases involving armed services veterans, kids, small business; bias in algorithms and biometrics; repair restrictions, and some others. So it highlights some priority areas.


Svetlana Gans:  Great. Thank you so much. So I wanted to stick with enforcement. And I want to be mindful of time, because we have a lot of topics here. Both Debbie and Adam mentioned the rescission of the vertical merger guidelines. Interesting that only the FTC rescinded and DOJ did not. Adam mentioned maybe future work in the area of horizontal merger guidelines. I guess, from Debbie and Adam's perspective, what is the sense on what these vertical merger guidelines or potential horizontal merger guidelines -- what are they going to say? And how will they change the course of antitrust practice going forward?


      Debbie, I don't know if you want to take that. And then Adam. Up to you guys.


Debbie Feinstein:  Adam, do you want to go first? Or do you want me too?


Adam Cella:  Go ahead. Go ahead, Debbie.


Debbie Feinstein:  Okay. So, on the vertical merger guidelines, it was no surprise, given the dissents of Commissioners Slaughter and Chopra. We all knew that this was coming and, I think, had been advising our clients accordingly for quite some time. I think what you'll see in the vertical guidelines is something that looks much more like what their concerns were in the dissents: no safe harbor, taking out the concept that most vertical mergers are pro-competitive, and further refinement of the circumstances in which the elimination of double marginalization ought to be counted. So, I think -- and perhaps some discussion of remedies, and what appropriate remedies are in vertical mergers. I think that's probably the issues that are being thought about.


      In horizontal mergers, I suspect that much of the thought will be whether or not the concentration levels are too high, and whether they should be going back to the numbers in the 1992 merger guidelines, or even yet different numbers. I think there could be -- based on what folks are talking about -- more on whether there's a trend to concentration in the industry, more on how many competitors ought to be in a market -- along with just HHI members -- just as a general sense that there's been this movement too far.


      Now, what's interesting is, will the courts accept it? Right? They're the wild card in all of this. And, over time, the courts have -- to some extent -- followed the merger guidelines. It often takes them a little while. It's not an immediate reaction. But, over time, on the other hand, there's lots of debate over what the market is, and how to measure shares. And all of those things are going to continue, even if the guidelines change.


      At the end of the day, a federal court judge has to be persuaded that a transaction is anticompetitive. And the guidelines alone won't enable those cases to be made if the other evidence isn't there. But I do think there's going to be a move to kind of move back to some of the older antitrust cases, which required much less, lower levels of concentration, to be challenged.


Adam Cella:  And I'll just, real quickly -- on the vertical merger guidelines, it will be fascinating to see. I think Debbie accurately described all of the issues on the margins that are up for debate between both sides of this debate. But it will be interesting to see how much further the eventual guidelines go beyond what current case law says. Professor Salib has proposed vertical merger guidelines that he really likes to tweet about. I suggest everyone check to see what maybe is a possibility. They're out there for people to read.


      And then, on the same point, on the horizontal merger guidelines, it will be fascinating to see what happens there. Some people have proposed and discussed looking at the 1968 merger guidelines. If you haven't read those recently, I think you should. There's many thresholds in there. One of the thresholds is challenging acquisition in a less highly concentrated market.


      If a firm with five percent market share is going to acquire another firm with five percent market share, that would be an extremely different posture for the agencies to take. But, as Debbie noted at the end of her comments just then, the 2010 guidelines have had an extreme impact on courts. And they've been very influential. We'll see if new guidelines that might have incredibly low thresholds will ultimately have the same impact on enforcement.


Svetlana Gans:  Great. Thanks so much, Adam. Let me just turn to you on the consumer welfare standard. I think one of the major motivations of pulling the "unfair methods of competition" policy statement was its focus on consumer welfare. And, can you discuss a little bit about Commissioner Wilson's views on consumer welfare? And, maybe, Debbie -- just briefly -- kind of what the practical ramifications are for companies if the agency kind of moves beyond consumer welfare and its enforcement. So, Adam, let me turn to you first.


Adam Cella:  Sure. I'll just highlight two points on the consumer welfare standard. And that's that it's administrable, and it's not all about prices. Those are the two points that are consistently misconstrued by critics of the standard. There's a desire to insert non-competition issues into antitrust analysis right now, inserting goals that should generally be important for the government to worry about; like preserving jobs, focusing on sustainability, helping small businesses. That will all make antitrust less administrable and less predictable.


      If we want to have antitrust enforcement that protects competition, we can't bring non-competition goals into this analysis. That's because the pursuit of multiple goals will always require tradeoffs. And tradeoffs will allow antitrust enforcers to weigh the goals in a subjective way, leading political winds, and influence politicians to dictate antitrust considerations.


      For example, what do you do with a merger that will increase innovation and lower costs to consumers of their concerns about the impact on the environment? Or what do you do with a merger that will decrease innovation and raise costs, but the merger will create a lot of jobs? These other goals should be left to the appropriate sectoral regulators, or to democratically elected representatives to address those problems.


      And my second point, the consumer welfare standard is not only a consideration of low prices. The consumer welfare standard seeks to maximize consumer surplus. Any judge or enforcer can apply the standard. If prices increase for an otherwise unchanged product, consumer welfare is harmed. If quality decreases, lowering the amount a consumer is willing to pay, consumer welfare is harmed. If innovation is stalled and a consumer will be delayed in buying new product, consumer welfare is harmed.


      I could go on with these examples. Ultimately, the consumer welfare standard works to keep prices low, increase output, promote competition, increase innovation, and protect consumers. If you bring non-competition concerns into the picture, the balancing of goals that will ensue will lead to unpredictable results.


Svetlana Gans:  Great. Thank you. Debbie, what are you seeing on the counseling practical side on kind of deviating from the consumer welfare standard?


Debbie Feinstein:  I think we don't know how it will be done yet. So, right now, I agree that what I've encouraged clients is to recognize that consumer welfare is broader than just, "Will prices go up?" And it does have things like, will there be oligopsony effects on employees? I hear that question a lot. I always ask the question. I have yet to see the hypothetical.


      The only thing I've ever heard an enforcer say is, "Imagine a situation where you've got two plants that hire some kind of specialized labor in Hawaii. And the market for the output of those plants is a nationwide market, but they're the only two employers on the island who hire that kind of employee. You could imagine that there's no downstream harm. But there is upstream harm, because maybe for a five percent reduction in salary, people aren't going to move off the island."


      That's a great hypothetical. It feels a little bit like a law school exam. Not sure how much real world application it has, but I do tell clients to think about it and be prepared to get a lot of questions on it. Beyond that, I agree. I don't know how to make the tradeoffs. And the agencies have been quite clear in telling other jurisdictions around the world that they should not let these kinds of policy considerations in.


      You go look at OECD papers that the Department of Justice and FTC have written, and speeches that have been given about China and whether industrial sorts of goals should filter into antitrust, and how difficult that makes it. When I was at the agency, I worried that we didn't have labor economists. You'd have to have a completely different kind of workforce to address some of the questions that are being addressed, if you're going as far as basically saying we're going to make these tradeoffs. That's very different than saying, "Hey, look. If a particular merger is going to reduce competition along privacy dimensions, along innovation dimensions, along data dimensions, absolutely. Those are all fair game. And I think there's a lot of room.


      But, if you're going beyond that, then I think you're taking about sort of the moral equivalent of a domestic CFIUS. Which you could certainly -- if the White House wanted to say, "I'm going to do something like the telecom task force, or like we do CFIUS, which is a committee that brings together people, a committee that brings together the FTC and the Labor Department and the like to opine collectively on whether a merger is problematic. That's absolutely something for Congress to decide. I think it's hard to do that all within a single agency.


Svetlana Gans:  Great. Thanks. Jessica, let me turn over to you. Debbie mentioned kind of the interplay between competition and consumer protection. And there was a recent staff memo that Chair Kahn distributed, saying that she's hopeful to break down the silos between BC and BCP and integrate them more within the commission's work. And I was just curious on your take on the practical implications of that staff memo.


Jessica Rich:  So, I personally agree with the goal, at least in the privacy and technology areas, where the issues are either intertwined or actually in conflict. And they need to be at least explained, because there's a lot of confusion -- as we were just talking about -- about whether you should address some of these noncompetition issues in competition. So I think the agency has a rare ability, with both the competition side and the consumer protection side, to at least bring it together and provide greater clarity to the public. And I wrote about this in Bookings last March.


      However, breaking down the silos has been a really elusive goal for, like, decades. And, unless Kahn is planning to do some sort of structural changes or organizational changes, this is going to be really hard. And, also, it's going to be hard anyway. This is hard, because there are -- competition has one set of laws and consumer protection has another. And you can't just throw the laws together and conflate the remedies. And I think there's a lot of that going on.


      And, even Kahn, in the memo where she laid this out, was talking at cross-purposes about the issue. On the one hand she condemned privacy practices that block data collection by competitors. She said, "Oh, there's privacy practices that are used as a pretext for anticompetitive behavior." And, on the other hand, she condemned commercial surveillance. And those goals are kind of in conflict. And she just put one in one part of the memo, and the other in another part of the memo.


      So, I think this is challenging. But I do agree with the overall goal.


Svetlana Gans:  Debbie, did you want to say a few things?


Debbie Feinstein:  Yeah. I would add -- this is something that every Chair has hoped, that we would talk to each other, and make sure that we were aligned in things. And, certainly, Jessica and I did. We had known each other before we were at the commission. So it gave us -- and we had both worked as staffers -- Jessica continuously, I for a brief stint. But we had both been staffers, then later, managers. And so we were more than happy to have opportunities to be in a room together and to talk about these issues.


      And you do have to recognize that there are some conflicting goals. My favorite was, I think, the first time I was at the FTC. I remember my boss saying, "You've got to go figure out what BCP is doing, because I just heard they're going to get a bunch of competitors in a room and agree not to do a certain kind of advertising. And I'm not so sure that's something that ought to be happening in this building. Go figure it out."


Jessica Rich:  That's self-regulation.


Debbie Feinstein:  Right. And there's a way to do it, and there's a way not to do it. But it's just an example of where is the line between self-regulation and an anticompetitive agreement not to compete. Where are those lines drawn? BCP might have been perfectly happy for an anticompetitive agreement on limiting advertising to occur, while the competition side might not have been so happy. How do you deal with those kinds of clearly conflicting goals?


      And then, the second thing is, there are different laws. And I think there's a sense of trying to add ornaments on the Christmas tree equivalent of provisions in a consent -- when you don't have a legal basis to do so -- is something that is troubling to folks.


      So, simply because you have a merger involving a company that has basically violated a consumer protection law, are you going to be able to add certain fencing-in kinds of provisions that you might like to get for the consumer protection side, if you know that a judge would never order that? If the matter were to go to litigation, how hard do you push it?


      Those are the kinds of considerations you have to think about. Even if everybody on both sides agrees that is a laudable goal, there's a lot of implementation issues that you have to think about as well.


Svetlana Gans:  Great. Thanks so much, Debbie and Jessica. I did have a question from the audience. And I know we're close to time and I had a few more questions. But, Debbie or Adam, the question from the audience is, "Can you please comment on the demise of the HSR early termination period? When will we ever see it again?"


Adam Cella:  I'll go first, because I'll be brief. Because the easy, short answer is, I don't know when early termination will come back. I think it's almost nine months now. We were told it was brief and temporary, so it's sounding more permanent, or at least not brief and temporary. We don't know when it will come back. And, of course, as we've all mentioned -- at least Debbie and I have both mentioned -- the pre-consummation warning letters even start to question that 30-day time period. So, yeah, I think the question as to the demise of the HSR process -- we're all sitting, waiting to get more information about the fate of HSR.


Svetlana Gans:  Debbie, anything to add to that? All right.


Debbie Feinstein:  Adam said it perfectly.


Svetlana Gans:  All right. So, wait and see, I guess. Jessica, let me turn over to you. You started to say in your introductory remarks the fact that the FTC is starting to use some underutilized tools in its toolshed. And one specific thing you mentioned was the Civil Penalty Offense Authority, which might be new to a lot of folks on the call today. So I was wondering if you could elaborate more on what that authority is, and how the FTC is using that authority.


Jessica Rich:  So, with, as you note, the curtailment of redress in the wake of AMG, and the fact that the FTC already has very limited civil penalty authority, the FTC is trying to revive one of its lesser-used tools, which is, under Section 5(m)(1)(B), the FTC can get penalties against companies that have actual knowledge their practices were found illegal in a prior litigated administrative action against another company. And the FTC establishes knowledge by sending warning letters to companies with copies of these prior litigated orders and summaries.


      So the FTC has now used these letters in 1,800 instances. Yesterday was a whole other 1,100 -- in for-profit schools, in deceptive endorsements, and, now, in deceptive earnings claims. And I think these letters haven't been used for a bunch of reasons. I think the main reason the letters hadn't been used so much is that the FTC, until AMG, thought it had 13(b) authority. And, of course, redress is always the first choice. You want to give money back to consumers, rather than get it as penalties and send it over to treasury.


      So, as long as the FTC had this authority, it didn't need to look that much for other opportunities for money. But there's also a lot of legal concerns raised by this approach. First, will the Supreme Court that just struck down the redress authority in AMG, view this as an attempt to circumvent rule-making, which is the main way the FTC establishes standards across the industry -- remember, we're talking 1,800 letters, here -- and get civil penalties.


      So, I think there's a strong argument this is an attempt to get around rule-making authority. Some of these warning letters are from the 1950s. Some of them may actually be earlier. And is that sufficient, to put companies on notice of what practices are illegal today? You know a lot has changed in the law, including, by the way, there's a deception and unfairness statement got written, which have now been picked up in the law. And some of the cases that have been summarized in these letters don't have findings, and the law requires they have specific findings.


      And then, finally, when the commission litigates these cases, it's going to need to show that whatever conduct the current companies are engaged in is the same conduct that's cited in these letters. And, of course, the FTC is going to have to investigate a whole lot of companies. These are warnings. They're not cases yet. So all of that -- there's a whole lot here to watch as we move forward.


Svetlana Gans:  Great. Thank you. We did want to hit on rule-making, but, given the time -- and we do have one audience question. If folks on the phone are interested in FTC rule-making, I will be moderating another panel next Tuesday at noon, specifically focused on FTC rule-making, both on the consumer protection and the competition side. So please register for that event.


      But, given the time, I do want to ask an audience question. I guess, Adam, let's see if you could answer this. And, if not, we'll turn it over to Debbie. The question is, is BC staff reviewing all prior PNO HSR informal interpretations? Anything you could let us know about that would be great.


Adam Cella:  Well, I'll go quickly again. And happy to send this one to Debbie, if she can opine on it. I assume this question is in response to the -- I believe it was a blog post that talked about using -- considering debt in HSR filings, and threatening, warning HSR practitioners not to follow those informal interpretations, and then commented about the risk of following informal interpretations and mentioned that there would be a review.


      Debbie started this entire panel talking about very ambitious goals and visions for this agency. Add reviewing all informal interpretations and deciding whether they're good or bad to that very ambitious agenda. I wouldn't hold my breath for all of those to be reviewed. I think it's smart to trust staff in the PNO who are experts, and to let them guide HSR practitioners to make this a very efficient process so that we get mergers filed that actually need to be filed. But, with that, I'll pass it to Debbie to comment on the HSR process.


Debbie Feinstein:  Yeah. There have been a number of withdrawals, and indications that things are under consideration. The good news is that the PNO staff does respond pretty quickly to them, but I think there is some sorting out to do on certain topics. But I don't have the sense that they're going back and looking at every one. It has long been PNO lore that you rely on an overly long ago informal interpretation at your peril. And so it's been regular practice for people just to slip a quick note, "Hey, is informal interpretation 973 still a good interpretation?" And the coaching staff will tell you yes or no.


      And, sometimes, legitimately, there are reasons that things change. So I think they're trying to work through it. I do have the sense that they've been asked to look to see whether there are some loopholes that are not requiring filings that should be made.


Svetlana Gans:  Great. Thank you. So, given that I am a BCP attorney at heart, I will have the last question go to Jessica. So, we talked a little bit about FTC rule-making. Obviously, there's been a lot of changes on the procedural side, with respect to Mag-Moss procedural reforms at the agency. And I just wanted to turn to you, Jessica. If you could kind of talk to us about your reading the tea leaves on what might be in que, in terms of FTC, BCP-related rule-making at the FTC.


Jessica Rich:  Well, as I mentioned, there are COPPA, and safeguards are actually pending. There's reviews of health breach of notification, and business opportunity, and probably others. And those are APA rules, and the FTC should have the -- it's probably likely to want to push out APA rule-making. There is talk about a broad privacy rule under Mag-Moss, which, frankly, I think is just impossible. Mag-Moss is a very cumbersome process for each mandate within a rule, and for a broad privacy rule, there could be hundreds. They have to prove unfairness, deception, prevalence. And then there's all sorts of procedural obstacles. And no deference in court review.


      So, if the FTC does rules in privacy, I would think they would tackle narrower issues that are priorities: dark patterns, algorithmic decision-making, data security -- which is broad, but there's precedent there. What the FTC is calling commercial surveillance is just behavioral advertising. It would still be tough under Mag-Moss, but much more manageable than some broad privacy rule that would really be impossible.


Svetlana Gans:  Great. So, with that, I wanted to thank everyone for a magnificent program today. Debbie, Adam, Jessica, it was so great to be with you again on this zoom. Thank you for being here. Thank you for sharing your words of wisdom. And thanks, again, for Nick Marr, for all his work. And The Federalist Society for hosting us today. So, with that, I think we will adjourn this session.




Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at