Phillips: FTC Lacks Authority to Make Competition Rules
The FTC doesn’t have the authority to make competition rules, FTC Commissioner Noah Phillips said Tuesday during a U.S. Chamber of Commerce livestream. It wasn’t Congress’ intent to give unelected bureaucrats on the commission the power to pass rules that affect “virtually the entire economy,” which is “very much contemplated” in President Joe Biden’s executive order on competition, he said. “These are legislative judgments, and even if Congress wants to make a mistake, those are mistakes for Congress to make.”
The EO has positives, but much of the conversation involves imposing regulation on competition, said Phillips: “A lot of regulation doesn’t favor competition. ... Moving to a model where we replace innovation, competition, low prices with regulation, just for the sake of it, I think that’s the wrong path.”
Phillips said the public should participate in an FTC-DOJ review on joint merger guidelines (see 2201180073). Some areas of the document might warrant change, he said, including how enforcers study acquisitions of nascent competitors. But agencies “don’t need a fundamental rewrite,” he said. “And I don’t think we should start from a place where we look at all mergers as negative.” The point of antitrust statutes is to allow the government to stop “bad mergers,” he said, not to “throw sand in the gears of merger markets generally.”
Phillips supports “vigorous enforcement” of the Clayton Act. The law is designed to stop transactions that are “most likely to be bad,” he said. But most deals are either pro-competitive or neutral, said Phillips.
Phillips said he’s “increasingly seeing” agencies “not closing investigations” of transactions, leaving entities without answers. “I worry about wasting precious government resources on mergers that are unlikely to be problematic,” he said, calling it a bad use of resources or taxpayer dollars. The agency didn’t comment.
Phillips warned Congress against passing proposals aimed at zero-price markets that may have the effect of raising prices, which would be bad for the consumer, he said. Antitrust “reformers” are “very focused” on corporate power, whether big companies are “good for consumers or not,” he said. Consumer welfare should be the guide, he said: “We are in an inflationary environment. The poor are hurting the most. People can’t pay their bills. Taking the focus off of price right now is the wrong direction.”