Revive the Federal Trade Commission

Given how the Federal Trade Commission has been coopted in recent years, progressives may be inclined to just blow it up. Instead of going after giant corporations that corner the market for their products and services, the FTC has been targeting church organists, ice skating coaches, music teachers, public defenders, home health aides, ride-sharing drivers and other groups that seek to organize. But, as the legal director at the Open Markets Institute Sandeep Vaheesan argues in our new issue, the FTC has statutory powers that are hard to replicate. Progressives would be better advised to revive the FTC than to attempt to replace it.

What I enjoy about this article is that is provides an excellent history lesson. You might be surprised how interesting it is to learn about how antitrust efforts emerged and unfolded in the late-19th and early 20th centuries.

It’s a history that we at the Washington Monthly are continually trying to tell in new and relevant ways. This is primarily because we, as a country, built a healthy regulatory scheme that was backed by a bipartisan consensus and by the courts. This was then systematically undermined and largely dismantled beginning in the 1970’s and then with a new vengeance once Ronald Reagan came into office.

Much of it has survived, however, at least in theory. Vaheesan focuses a lot of attention on the Section 5 authority that the FTC still maintains in a dormant form.

…Congress in 1914 enacted two landmark statutes. First was the Clayton Antitrust Act, which updated the Sherman Act by explicitly outlawing a range of practices, including mergers that could reduce competition. Second was a law that created a powerful new agency called the Federal Trade Commission.

Governed by five commissioners who are appointed by the president and subject to Senate confirmation, the FTC was designed to make sure that judges would never again undermine anti-monopoly laws. Congress specifically gave the FTC the explicit authority not merely to prohibit “unfair methods of competition,” but also to define what counts as “unfair.” Under Section 5 of the Federal Trade Commission Act, the agency can use its broad investigatory capacity to build expertise on new business practices and industries and update its own powers over time…

…The agency’s expansive mandate, combined with well-established legal doctrine that instructs courts to defer to federal agencies that administer open-ended statutes, gives the agency effective legislative power to regulate and structure nearly every kind of market. Big business lobbyists and conservatives in Congress—and even Republican-appointed FTC commissioners—have long known this, which is why they have repeatedly demanded that the agency’s Section 5 authority be somehow curbed, if not by changes in law, then by the appointment of commissioners and staff who promise never to use it.

That’s enough of a spoiler because I want you to read the whole thing. If you do, you’ll learn how the House Democrats can begin the process of using the FTC to break up monopolies even in a divided Washington with a Republican president.

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Martin Longman

Martin Longman is the web editor for the Washington Monthly. See all his writing at ProgressPond.com