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Federal Trade Commission expands antitrust powers in Chair Lina Khan’s first open proceeding

The first open business meeting of the Federal Trade Commission in more than 20 years

Chair Khan, appearing at the hearing via Zoom

In an open meeting on Thursday, the Federal Trade Commission passed a pair of pivotal measures expanding its power to regulate anti-competitive business practices, setting the stage for a more aggressive enforcement approach from the embattled agency.

Announced last week, Thursday’s proceeding is the first open business meeting of the commission in more than 20 years, as commission proceedings have traditionally been closed to the public. Chair Lina Khan plans to hold public meetings on a monthly basis going forward.

The meeting paved the way for an aggressive antitrust approach from the agency, with three separate measures expanding the commission’s power to prosecute anti-competitive business practices.

In the most aggressive effort, the commission voted to rescind a 2015 “Statement of Enforcement Principles” that restricted the FTC Act’s prescriptions on “unfair methods of competition” to explicit violations of existing antitrust law (specifically the Sherman and Clayton Acts). The vote proceeded along party lines, passing 3-2 with Democrats in the majority.

“In practice, the 2015 statement has doubled down on the agency’s longstanding failure to investigate and pursue unfair methods of competition,” said Khan, introducing the motion.

Without that restriction, the FTC will be free to pursue lawsuits against misconduct that might not violate classical antitrust law. The commission is still considering whether to replace the statement with blanket guidelines or an array of more specific rulemaking against particular practices.

Rescinding the 2015 order remains controversial among pro-business groups and is likely to face a legal challenge.

“A clear majority of the Supreme Court has expressed their intention to revive the non-delegation doctrine, which holds that only Congress may make laws,” said the pro-business think tank TechFreedom in a statement in advance of the vote. “The FTC might well wind up as the first test case for that long-dormant doctrine if it departs from the clear principles developed by the courts under antitrust law.”

In another 3-2 vote, the FTC moved to simplify the rulemaking process for “prohibiting unfair or deceptive acts or practices.” Introduced by Commissioner Rebecca Kelly Slaughter, the changes are broadly procedural, lifting a number of self-imposed bureaucratic restrictions on the commission, allowing it to respond more efficiently to perceived misconduct.

“We want to send a signal that today’s FTC is ready to take on the challenge of the modern economy,” said Slaughter at the hearing. “I hope that with these streamlined procedures, we can tackle cutting-edge issues.”

A third 3-2 vote passed a series of resolutions to streamline FTC investigations, including enabling individual commissioners to launch staff investigations into specific industries and conduct. Introducing the measure, Khan said she believed there were a number of industries where such an investigation would be appropriate, “including technology platforms, healthcare, and pharmaceuticals.”

Expanding FTC powers has long been a goal of antitrust activists and has been the subject of several proposals from Congressional Democrats. But it’s been met with intense pushback, including from tech companies themselves. An FTC complaint against Facebook was dismissed in court earlier this week, and it remains unclear how well Khan’s agenda will fare against judicial challenges.