Wilson: FTC Chair Is Learning ‘Hard’ Lessons About Enforcement

FTC Chair Lina Khan is starting to recognize the agency’s limited resources and jurisdictional boundaries in the face of declining antitrust and consumer protection enforcement under her watch, Commissioner Christine Wilson told a George Mason University event Wednesday.

Given the progressive criticism about a perceived lack of enforcement under former-Chairman Joe Simons, one would expect increased enforcement under Khan, Wilson said. She noted the agency took 31 actions against mergers in 2020, compared with 12 in 2021. Though she noted the transition from acting Chair Rebecca Kelly Slaughter to Khan, Wilson also noted that Republicans didn’t vote against transactions under Democrats.

Consumer protection enforcement also declined in 2021, Wilson said: The FTC filed 79 consumer protection complaints in 2020, compared with 31 in 2021. Staff activity didn’t decline by 50% in 2021, she said: “Criticizing is easy, but governing is hard. I think current leadership is coming to understand this lesson.”

Wilson highlighted other competition statistics: There were three lawsuits brought against deals in 2021, compared with nine in 2020. The FTC entered into five consent orders to remedy anti-competitive transactions in 2021, down from 12 in 2020. Four transactions were abandoned in 2021 after the FTC opened investigations, compared with 10 in 2020. This all occurred while Hart-Scott-Rodino filings more than doubled from about 2,000 in 2020 to more than 4,000 in 2021, she said.

Wilson urged Congress to pass privacy legislation. Members have contemplated funding a new FTC privacy bureau (see 2111190042). A new bureau would be “constructive,” but it must be tethered to a new privacy law that outlines jurisdictional boundaries and how the new money is allocated, said Wilson. If Congress doesn’t act, the agency should consider issuing a privacy rulemaking to help inform the process, she said.

The current FTC sees rulemaking as a potential method for “charting a new path” for antirust, said ex-acting Chairman Maureen Ohlhausen, now at Baker Botts, on a separate panel. She argued the agency doesn’t have this authority. FTC Commissioner Noah Phillips made the same argument Tuesday (see 2201250059). It raises a lot of issues for the FTC about its ability to issue rulemakings and its constitutionality as an agency, Ohlhausen said. When the agency turns away from enforcement in favor of rulemaking, it can stretch the bounds of its authority, she said: One example is AMG Capital Management v. FTC (see 2104220068), in which the Supreme Court ruled unanimously that the agency had been exceeding its authority under FTC Act Section 13(b) to seek equitable monetary relief like restitution or disgorgement. The AMG decision will and should limit the kinds of cases the FTC can bring until Congress acts, said Wilson.

A former deputy director in the competition bureau questioned whether process changes under Khan have helped the agency become a more effective enforcer. Given the FTC’s limited resources, the changes could be overwhelming agency staff with documents and tasks that consume more resources than necessary, said Barry Nigro, chair of Fried Frank’s antitrust department. Getting rid of early termination (see 2108050055) is one example calling into question whether the agency is properly using its resources, he said: It can lead to spending agency time on transactions that obviously don’t have any “substantive antitrust issues.” The agency didn't comment.