Karl Herchenroeder

The Senate Commerce Committee advanced Lina Khan’s FTC nomination to the Senate floor, with four Republicans opposed (see 2105070062). The committee also approved the Endless Frontier Act (S-1260) 24-4 during Wednesday’s markup.

Senate Commerce Committee Chair Maria Cantwell, D-Wash., and ranking member Roger Wicker, R-Miss., agreed on a substitute amendment filed for Wednesday’s markup on the Endless Frontier Act (see 2104130068), according to documents we obtained. Introduced by Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Todd Young, R-Ind., S-1260 is aimed at increasing domestic semiconductor manufacturing. The $112 billion bill has seven Republican co-sponsors. Commerce pulled S-1260 from an April markup after members filed more than 230 amendments (see 2104270045).

Expect the FTC's new rulemaking group to actively work to fill gaps left in its authority by a recent Supreme Court decision (see 2104270086), former officials said in interviews. Some anticipate more administrative litigation over consumer protection cases.

Despite changes to patent, copyright and criminal law, China remains one of the top countries the U.S. is targeting for weak intellectual property protections, said the Office of the U.S. Trade Representative Friday in its annual special 301 report (see 2004290059). China needs to strengthen such protection and enforcement, fully implement IP measures, stop forcing technology transfers to Chinese companies, open its market to foreign investment, and “allow the market a decisive role in allocating resources,” USTR said. “Severe challenges persist because of excessive regulatory requirements and informal pressure and coercion to transfer technology to Chinese companies, continued gaps in the scope of IP protection, incomplete legal reforms, weak enforcement channels, and lack of administrative and judicial transparency and independence.”

It’s important the U.S. government fund research for novel science and technology that industry isn’t willing to invest in, said Eric Lander, President Joe Biden’s nominee for Office of Science and Technology Policy director, during his Senate Commerce Committee confirmation hearing Thursday. Sen. Mike Lee, R-Utah, questioned whether the Endless Frontier Act (see 2104270045) is a misguided attempt to outspend China in R&D. If the government is willing to spend $100 billion, Lee said, why not put up $250 billion or $1 trillion? He asked if there’s a point at which government spending becomes counterproductive. Lander, a Massachusetts Institute of Technology professor, said it’s appropriate to be developing ways to move things from fundamental research into industry by filling the gaps between the two. In opening remarks, Sen. Tammy Duckworth, D-Ill., and ranking member Roger Wicker, R-Miss., questioned things that have surfaced from Lander’s past. Duckworth said she’s troubled by claims of his “downplaying” contributions of female Nobel Prize laureates; his “toasting” of James Watson, a scientist criticized for racist, misogynistic and anti-Semitic views; and his attending lunch meetings with Jeffrey Epstein, who was charged with sex trafficking. Lander said he met Epstein “briefly” at two separate events over three weeks in 2012: "Epstein was an abhorrent individual, and my heart goes out to his victims. I chose to have no association whatsoever with him." If confirmed, Lander said OSTP staff will look like the U.S., with a diverse mix of talented women and minorities. Lander has a degree in mathematics from Princeton and a doctorate from the University of Oxford, where he was a Rhodes scholar. He received a MacArthur “Genius” award in 1987 and helped lead the Human Genome Project. Introducing him, Sen. Elizabeth Warren, D-Mass., called him a scientist “to his bones,” who believes in data. Sen. Ed Markey, D-Mass., called him one of MIT’s most “beloved” teachers. Sen. Amy Klobuchar, D-Minn., asked Lander if the U.S. needs to better train its cyber workforce. He responded that the U.S. doesn't "have enough people trained in [cybersecurity] to be able to both defend and then think about how to construct systems that are less hackable.”

Senate Intelligence Committee Chairman Mark Warner, D-Va., and Rep. Lisa Blunt Rochester, D-Del., will reintroduce legislation banning large online platforms from using deceptive designs “to trick consumers” into offering personal data, they told an FTC virtual workshop on dark patterns Thursday (see 2104090042).

Congress should be cautious about legislative proposals that threaten to ban transactions from companies of a specific size, FTC Commissioner Noah Phillips told a U.S. Chamber of Commerce livestream Wednesday. Citing $100 billion in market capitalization as a recent example (see 2104120033), he said such bans could end up applying to companies attempting to compete with those often cited in antitrust conversations. Phillips also criticized attempts to ban Hart-Scott-Rodino mergers, acquisitions and transactions due to the pandemic. The stated rationale was an increase in filings, he said, with the expectation that agencies would be “overwhelmed” and anticompetitive deals would go unnoticed. “The strong would prey upon the weak, and the government would sit there and watch it happen,” he said. When economic fortunes decrease, equity values decrease, companies have less money, and they spend less on M&A, he said, meaning less work for the FTC. “The notion of the overwhelmed agency and the wave of mergers and acquisitions simply wasn’t true,” he said. “It speaks volumes to the kinds of extreme skepticism that certain aspects of our political class apply to M&A generally.”

Representatives from Facebook, Twitter and YouTube denied their business models are based on maximizing user engagement, during a hearing Tuesday in which members of both parties raised concerns. The power of social media companies over people’s lives is “of great concern” to a wide number of legislators, Senate Privacy Subcommittee Chairman Chris Coons, D-Del., told us. “Exactly what statutory, regulatory or voluntary measures can best address it, I think it would be premature after the first hour of our first hearing to say I have an endgame in mind.”

Congress should clarify FTC Act Section 13(b) and “revive” the agency’s “ability to enjoin illegal conduct and return to consumers money they have lost,” all four commissioners wrote in a statement that acting Chairwoman Rebecca Kelly Slaughter delivered to the House Consumer Protection Subcommittee.

The Senate Commerce Committee will “mark something up shortly” in response to the Supreme Court’s decision in AMG Capital Management v. FTC, Chair Maria Cantwell, D-Wash., told us Thursday (see 2104220068). House Commerce Committee Republicans said the high court’s unanimous decision shows the FTC exceeded its FTC Act Section 13(b) authority. They expressed frustration that Democrats “prevented” the full commission from testifying Tuesday, when acting Chair Rebecca Kelly Slaughter will appear before the House Consumer Protection Subcommittee.