FTC Testifies Before Senate Antitrust Subcommittee on Commission's Work to Promote Competition and Benefit Consumers in a Dynamic Economy

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In testimony today before the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights, the Federal Trade Commission detailed its work to promote competition and benefit consumers, such as ending “pay-for-delay” pharmaceutical agreements, preventing anticompetitive mergers, revising the guidelines that the FTC and the Justice Department use to assess horizontal mergers, and using its authority under Section 5 of the FTC Act to combat unfair methods of competition and protect consumers.

Testifying on behalf of the Commission, FTC Chairman Jon Leibowitz told the Subcommittee that the FTC’s aggressive antitrust enforcement agenda is designed to protect consumers by removing obstacles to competition.

“Years of experience have proven that competitive markets work better than anything else to bring consumers lower prices, greater innovation, and more choices among products and services,” Leibowitz said.

With broad jurisdiction over the U.S. economy, the agency maximizes its impact by focusing on areas that directly affect consumers and businesses, such as health care, energy, emerging technologies, real estate, and retail. The FTC’s competition work falls into three broad categories: merger review, investigations of anticompetitive conduct, and competition policy analysis.

According to the testimony, one of the FTC’s top competition priorities is stopping pay-for-delay agreements between brand-named drug companies and their generic competitors. These anticompetitive agreements keep low-cost generic drugs off the market and cost consumers $3.5 billion a year.

The testimony also outlines the FTC’s recent work to stop anticompetitive mergers. The number of mergers requiring FTC review increased over the past year, and the agency continues to review transactions for potential anticompetitive effects, challenging mergers when appropriate. In fiscal year 2009, the FTC challenged 19 mergers, and during the first half of 2010 the FTC has brought 11 enforcement actions, in markets including pharmaceuticals, funeral services, fertilizer, and chemicals.

The testimony also describes a joint FTC/Department of Justice effort to update the Horizontal Merger Guidelines, to increase transparency and clarify to courts, businesses and antitrust lawyers how the agency analyzes transactions and makes enforcement decisions.

In addition, the testimony focuses on how the agency could strengthen antitrust enforcement by making greater use of Section 5 of the FTC Act, which empowers the agency to prevent unfair methods of competition beyond the federal antitrust laws.

“We are confident that Section 5 will prove to be an effective mechanism to block anticompetitive behavior, and will allow the Commission to aggressively protect consumers without sparking concerns in the courts,” Leibowitz said in the testimony.

The testimony concluded by describing the FTC’s work in the energy sector and outlining the Commission’s efforts to protect consumers in financial distress and to protect consumer privacy.

The FTC vote approving the testimony and its inclusion in the formal record was 5-0.

Copies of the Commission’s testimony are available from the FTC’s website at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

(FTC File No. P859910)
(Antitrust Testimony.final.wpd)

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