FTC, DOJ to Update M&A Guidelines, With EO

The FTC and DOJ will work to update mergers and acquisitions guidelines and begin interagency collaboration directed in President Joe Biden’s executive order, FTC Chair Lina Khan and Attorney General Merrick Garland responded to the EO Friday. Democratic senators and consumer groups welcomed Biden’s call for more vigorous and modernized antitrust. Industry groups shot back. See a news bulletin here and 2107090063 for the EO's telecom provisions.

Agencies must ensure guidelines “reflect current economic realities and empirical learning and that they guide enforcers to review mergers with the skepticism the law demands,” Khan said with DOJ acting Antitrust Division Chief Richard Powers. “The current guidelines deserve a hard look to determine whether they are overly permissive. We plan soon to jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law.”

DOJ will immediately implement interagency collaboration described in the EO, said Garland: “We look forward to helping our agency partners use their regulatory authorities to bring greater competition to the U.S. economy.” DOJ will “closely examine its antitrust guidelines and policy statements to better educate the public on its enforcement priorities,” he said: It will strengthen efforts to “prevent mergers that would result in excessive consolidations of purchasing power.”

“Competition policy needs new energy and approaches so that we can address America’s monopoly problem,” said Senate Antitrust Subcommittee Chair Amy Klobuchar, D-Minn. “That means legislation to update our antitrust laws, but it also means reimagining what the federal government can do to promote competition under our current laws.” The EO “takes critical steps to protect consumers and workers, strengthen antitrust enforcement, and tackle consolidation and anticompetitive practices across sectors,” said Sen. Elizabeth Warren, D-Mass.

Sen. Richard Blumenthal, D-Conn., credited the administration for addressing increasing consolidation and rising monopoly power: “I’ve long called on the FTC and DOJ to not only thoroughly scrutinize new acquisitions and mega mergers, but to also set clear competition rules and conduct a retrospective review to clean up the existing mess.”

After Biden’s appointment of Tim Wu as special assistant on tech policy, the EO is a sign the White House is “attempting to meddle into the work of federal antitrust agencies,” said Aurelien Portuese, Information Technology and Innovation Foundation antitrust and innovation policy director. “Instead of changing antitrust rules, the White House should ensure that agencies properly enforce existing antitrust laws.”

The Computer and Communications Industry Association agrees “consumers should be the main beneficiaries of competition policy and changes in policy shouldn’t impact goods and services that consumers enjoy,” said Vice President Arthur Sidney. “Consumer interest and welfare should be paramount in competition policy."

The mandate “smacks of a ‘government knows best’ approach to managing the economy,” said U.S. Chamber of Commerce Executive Vice President-Chief Policy Officer Neil Bradley. It’s “built on the flawed belief that our economy is over concentrated, stagnant, and fails to generate private investment needed to spur innovation,” he said. Public Citizen and Public Knowledge welcomed the EO. For digital platforms, it will “improve antitrust enforcement and push enforcers to take the power of Big Tech seriously,” said PK CEO Chris Lewis.

The order focuses on areas where dominant internet platforms are using their power to “exclude market entrants, to extract monopoly profits, and to gather intimate personal information that they can exploit for their own advantage.” Too “many small businesses across the economy depend on those platforms and a few online marketplaces for their survival,” the EO said. It directs DOJ and the FTC to “enforce the antitrust laws fairly and vigorously.” It says the FTC should use its rulemaking authority to address “unfair occupational licensing restrictions” and “unfair data collection and surveillance practices that may damage competition.” It’s the administration’s policy to enforce antitrust laws to meet the challenges of new industries, including the “rise of the dominant Internet platforms, especially as they stem from serial mergers, the acquisition of nascent competitors, the aggregation of data, unfair competition in attention markets, the surveillance of users, and the presence of network effects,” the EO said.

Right to Repair

Biden “encourages the FTC to issue rules against anticompetitive restrictions on using independent repair shops or doing" do-it-yourself repairs "of your own devices and equipment,” said the White House. Tech companies “impose restrictions on self and third-party repairs, making repairs more costly and time-consuming, such as by restricting the distribution of parts, diagnostics, and repair tools,” it said. The EO comes two months after the FTC reported it has “a number of authorities it can and should deploy to address repair restrictions and help open repair markets,” including by enforcing existing consumer protections in the 1975 Magnuson-Moss Warranty Act (see 2105060066).

The order “seems likely to be directed at the FTC to engage in rule-making, which is a long process,” emailed Repair Association Executive Director Gay Gordon-Byrne. “Since the FTC has already endorsed our R2R principles and state efforts, I'm very encouraged to see the attention. It should help us push multiple bills over the finish line.” Right-to-repair legislation is “active” in the Massachusetts and Pennsylvania state houses, “and we're only 6 months away from the 2022 sessions,” she said. CTA, which has defended tech company restrictions on independent repair, didn’t comment.

The order “recognizes what repair advocates have said all along: If you buy a product, you own it,” said iFixit U.S. Policy Head Kerry Sheehan. “You should be able to fix it however you choose -- either by yourself or with the help of an independent repair professional. We’re grateful that the administration is taking aggressive steps to protect everyone’s Right to Repair, and eager to see how the FTC takes up the call.”

The administration’s right-to-repair directive “will deliver direct benefits to consumers, researchers and innovation, and demonstrates the value it places on pro-consumer policies,” said Re:Create Executive Director Joshua Lamel. “The idea that copyright law can be abused to prevent Americans from doing perfectly legal activities shows the breadth and damage that can happen if left unchecked while powerful industries fight to prevent consumers from repairing their stuff. We urge the FTC to act in an expeditious manner to deliver these right-to-repair benefits to American consumers as quickly as possible.”