Tuesday, September 18, 2012
Posted by D. Daniel Sokol
Tara Isa Koslov (FTC) explains Competition Advocacy at the Federal Trade Commission: Recent Developments Build on Past Successes.
ABSTRACT: Section 5 of the Federal Trade Commission Act broadly empowers the Federal Trade Commission ("FTC" or "Commission") to prevent the use of "unfair methods of competition in or affecting commerce." The Commission is primarily a law enforcement agency and, in fulfilling its competition mission, the agency targets its enforcement efforts against alleged anticompetitive conduct by private actors. But competition also may be affected by the actions of public entities, including regulators and legislators. As a resource-constrained government entity itself, the FTC recognizes how difficult it can be for any conscientious public actor-seeking in good faith to protect the interests of American citizens-to solicit, analyze, and weigh the views of myriad stakeholders. Despite widespread agreement that competition policy is a fundamental organizing tenet of the American economy, principles of competition sometimes appear to, or actually do, conflict with other public policy objectives. As an expert competition agency, we believe consumers are better off when competition perspectives do not get lost in complex policymaking debates.
Fortunately the Commission has multiple tools at its disposal, beyond litigation and enforcement, to share its competition expertise with other public actors. Section 6 of the FTC Act authorizes the FTC to "gather and compile information" and to "make public from time to time such portions of the information obtained by it . . . as are in the public interest." In part pursuant to this authority, the FTC has a long history of engaging in competition advocacy before federal regulators, state legislatures, courts, foreign enforcers, international multilateral organizations, and other decision makers whose actions may affect competition.
When engaging in competition advocacy to inform the decisions of others, the Commission and its staff do not pretend to have all the answers. But, in our experience, anticompetitive outcomes sometimes can be mitigated or prevented by encouraging policymakers to ask the right questions:
What is the likely competitive impact of the proposed regulation or other contemplated action, and how would this affect consumers? What justifications exist for any restrictions on competition? Are there alternatives that would protect consumers and fulfill other important public policy goals, without restricting consumer choice or unduly burdening legitimate business activity? Whatever the format and whomever the audience, all of our competition advocacy efforts share a common goal: to provide a framework for thinking about public policy issues from a competition perspective. In so doing, we seek to enhance understanding of the competitive process, and also to persuade decision makers to deliver the benefits of competition to as many consumers as possible.
The academic literature includes several comprehensive reviews of the theory and history of FTC competition advocacy, and Commission officials also have spoken and written about the value of competition advocacy, so I will provide only a brief overview of our competition advocacy philosophy and mechanics. I will then highlight two substantive areas-the competition/intellectual property interface, and health care-where, in the last few years, the Commission's competition advocacy program has been particularly active and successful.