FTC and Justice’s Antitrust Division Will Continue Focus on Tech Sector, Officials Say

The FTC and the Department of Justice’s Antitrust Division will continue to devote significant resources to examining competition issues in the technology sector, officials from both agencies said Tuesday during a Practising Law Institute seminar. FTC Chairman Edith Ramirez has been “very explicit” about her expectation that her agency will continue to focus on the high-tech sector, as well as the healthcare and energy markets, said Richard Feinstein, director of the FTC Competition Bureau. Those are areas where the agency has devoted most of its resources over the last decade, and no one should “expect that to change in the near term,” he said.

William Baer, chief of the Antitrust Division, thinks the division is in good shape, and said he intends to have the group continue to focus on delivering results that will improve conditions for consumers, said Renata Hesse, deputy assistant attorney general for criminal and civil operations within Antitrust. “He is really focused on demonstrating to people that taxpayer dollars are well spent” within the agency, she said. Over the last five years, the division has obtained an annual average of about $785 million in fines on an average $79 million appropriation from Congress, Hesse said. Those actions can also directly impact consumer prices, as happened following the department’s settlements with Hachette, HarperCollins, Macmillan, Penguin Group and Simon & Schuster over e-book pricing, she said. The average price of top-selling e-books dropped following the settlement, from $11 down to $8, Hesse said. Although Penguin settled with Justice, it and Apple face a June 3 trial, she said. Penguin still faces state-level charges and a class-action lawsuit.

Both agencies will also continue to work with standards-setting organizations to help them better define what constitutes fair, reasonable and non-discriminatory terms; the definition is not really clear, Feinstein said. The agencies hope that work is a “constructive, voluntary process to fix this problem,” Hesse said.

The agencies are also continuing to “work closely” with partners at the state level, said Patricia Conners, Florida’s associate deputy attorney general in charge of antitrust issues. Like the federal agencies, state-level enforcement has focused on the technology, financial services and healthcare sectors, she said. Florida has been involved in several federal antitrust cases, including the failed AT&T/T-Mobile merger, Conners said. Florida is also working closely with Justice on the e-books pricing case, she said. Like the federal agencies, Florida is seeking damages in the form of customer refunds, as well as change in the companies’ distribution models and the termination of certain agency agreements to allow more pricing flexibility, Conners said.