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FTC approves resolutions that allow it to expedite investigations in key antitrust areas

While the changes were approved to streamline investigations, some believed that it could also reduce the agency’s oversight.

The US Federal Trade Commission (FTC) on September 15 approved a series of resolutions that will “enable the agency staff to efficiently and expeditiously investigate conduct in core FTC priority areas over the next ten years,” a statement issued by the Commission said.

“Companies engaging in conduct implicated by these resolutions should be forewarned: the FTC looks forward to aggressively using these resolutions and will not hesitate to take action against illegal conduct to the fullest extent possible under the law,” said Holly Vedova, Acting Director of the Bureau of Competition.

How do these resolutions help streamline investigations?

The eight new compulsory process resolutions passed by the FTC allow its staff to use compulsory process and issue civil investigative demands and subpoenas when carrying out investigations.

Compulsory process refers to the issuance of demands for documents and testimony, through the use of civil investigative demands and subpoenas. The FTC Act authorizes the Commission to use compulsory process in its investigations. Compulsory process requires the recipient to produce information, and these orders are enforceable by courts. — FTC statement

Previously, the Commission was only authorised to issue a subpoena or make a demand for information after it was signed by a Commissioner acting pursuant to a Commission resolution.

Do these resolutions reduce Commission oversight?

Three of the five FTC Commissioners (Chair Lina Khan and Commissioners Rohit Chopra and Rebecca Kelly Slaughter) voted to approve the resolutions, while two of them, Commissioners Noah Joshua Phillips and Christine S. Wilson dissented saying that the resolutions removes the Commission’s oversight and “create less accountability and more room for mistakes, overreach, cost overruns, and even politically-motivated decision making.”

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“Congress gave the Commission, not a single commissioner or staff, the authority to bless compulsory process in its investigations, but the 15 sweeping resolutions [includes previous ones] have undone that legislative delegation of authority for essentially all antitrust investigations, and many others. Now, in all of these matters, the application of the FTC’s considerable investigative power no longer requires an informed and deliberated decision by all commissioners; unilateral approval from the Chair or his or her chosen commissioner is sufficient,” the dissenting Commissioners claimed.

“But these claims neglect the fact that a Commissioner must always sign off on any subpoena that staff seeks to issue,” FTC Chair Lina Khan said in her statement. “Commissioners can—and do—receive briefings on the state of investigations at the agency, and no enforcement action can proceed without support from a majority of the Commissioners,” she added.

What are the areas of interest to the FTC?

The FTC has authorised compulsory process resolutions in the following areas:

  1. Acts or Practices Affecting United States Armed Forces Service Members and Veterans
  2. Acts or Practices Affecting Children: “Harmful conduct directed at children under 18 has been a source of significant public concern, now, FTC staff will similarly be able to expeditiously investigate any allegations in this important area,” the Commission said.
  3. Bias in Algorithms and Biometrics: The FTC staff will now be able to investigate allegations of bias in algorithms and biometrics. The Commission had earlier published a post on AI best practices.
  4. Deceptive and Manipulative Conduct on the Internet: Extends a previous resolution that “enabled the FTC to develop investigations and bring cases in a variety of areas including day trading services, tech support scams, the BOTS Act,  payment processing,  and the deceptive marketing of goods and services online.” Additionally, it now covers the manipulation of user interfaces,  such as dark patterns—a term used to describe potentially manipulative user interface designs used on websites and mobile apps. “For example, some sites sneak extra items into a consumer’s online shopping cart, or require users to navigate a maze of screens and confusing questions to avoid being charged for unwanted products or services,” the FTC cited in a separate post.
  5. Repair Restrictions
  6. Abuse of Intellectual Property
  7. Common Directors and Officers and Common Ownership
  8. Monopolisation Offenses: “Market power abuses by tech companies and other large companies are rightly a source of bipartisan concern. This omnibus will allow staff to more expeditiously investigate market power abuses by dominant firms that are precluding businesses and entrepreneurs from being able to compete, particularly in digital markets,” the statement read.

Why has FTC passed these resolutions?

“Streamlining and improving efficiency at the agency is vitally important given the increased volume of investigatory work created by the surge in merger filings. Having already doubled between 2010 and 2020, the number of mergers filed with the antitrust authorities this year hit a record-setting pace of 2,067 acquisitions for the first seven months alone.  With these resolutions in place, the FTC can better utilize its limited resources and move forward in earnest to quickly investigate potential misconduct,” the Commission said.

“Omnibus resolutions remove bureaucratic hurdles that slow down the agency staff’s ability to expeditiously move matters along,” FTC Chair Lina Khan said.

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