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Hearings on Competition and Consumer Protection in the 21st Century

The Commission invited public comment in stages throughout the term of the hearings.

  • The Commission invited comments on the topics covered in each hearing session. The FTC issued a news release before each session to inform the public of the agenda, the date and location, and instructions on submitting comment.
  • The Commission also invited public comment upon completion of the entire series of hearings.
  • Through August 20, 2018, the Commission accepted public comment on the topics identified in the announcement. Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects.

The Commission was especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.

Archive

The comment period for all topics has closed, but submitted comments are available for review below. Commenters were invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care, high-tech, or energy industries.

The Commission sought comments for Hearing #1 On Competition and Consumer Protection in the 21st Century - Sept. 13-14 at Georgetown University Law Center on the following topics:

  1. The current landscape of competition and consumer protection law and policy;
  2. Whether the U.S. economy has become more concentrated and less competitive;
  3. The regulation of consumer data;
  4. Antitrust law and the consumer welfare standard; and
  5. The analysis of vertical mergers.

The Commission sought comments for Hearing #2 On Competition and Consumer Protection in the 21st Century - Sept. 21 at the FTC’s Constitution Center on the following topics:

  1. whether the consumer welfare standard is the appropriate standard for antitrust law and, if not, whether other standards, including a total welfare standard, should be preferred;
  2. whether and, if so, how antitrust law should take into account additional public policy concerns such as income or wealth distribution, the bargaining power of large entities, or labor and employment considerations;
  3. the accuracy and relevance of recent research identifying increases in concentration across broadly defined economic sectors, as well as some recent studies suggesting changes in price-cost margins over time, and what influence, if any, this existing research should have on antitrust law and policy;
  4. what are the highest priority reforms that would improve U.S. antitrust enforcement policy;
  5. whether there are material differences between antitrust/competition policy and law in the United States and the rest of the world, and the effects of such differences;
  6. whether U.S. antitrust agencies should be involved in curbing the application to U.S. firms of foreign competition laws that may be inconsistent with international norms, and whether antitrust agencies should seek the assistance of the U.S. trade and foreign policy agencies in preventing or rectifying such situations;
  7. whether antitrust agencies and the courts pay too little or too much attention to the error costs of more or less antitrust enforcement;
  8. whether antitrust agencies and courts should balance procompetitive and anticompetitive effects across relevant markets in the analysis of mergers and acquisitions;
  9. the evidence of monopsony power in the economy, and whether it is more likely or prevalent in some sectors or markets;
  10. whether, and how, mergers create buyer power; if so, whether and how this is distinct from monopsony power; and what harms buyer power or monopsony power may cause to sellers and/or consumers in downstream markets; and
  11. whether the antitrust agencies give sufficient recognition to the potential for buyer power acquired through a merger to enhance competition by enabling the parties to exercise countervailing power, or to the potential for existing buyer power to inhibit merging sellers from exercising market power.

The Commission sought comments for Hearing #3 On Competition and Consumer Protection in the 21st Century held October 15-17, 2018 at Antonin Scalia Law School of George Mason University in Arlington, Virginia, on the following topics:

Multi-Sided Platforms (Oct. 15, 16, and 17):

  1. What are the defining characteristics of multi-sided platforms? Is there a way to distinguish between multi-sided and single-sided businesses? Are any adjustments to antitrust analysis necessary to account for any special characteristics of multi-sided businesses?
  2. How should the courts and agencies define relevant antitrust markets and measure market power for multi-sided platform businesses?
  3. What is the relevance of network effects (direct and indirect) in multi-sided platform markets?
  4. How should the courts and agencies evaluate exclusionary conduct by firms competing in multi-sided platform markets, including predatory pricing, vertical restraints, most-favored nation clauses, and actions to undermine rivals who depend on platform infrastructure?
  5. Are there unique procompetitive justifications for these types of conduct by firms competing in multi-sided platform markets?
  6. What is the relevant legal precedent for evaluating antitrust concerns related to multi-sided platform businesses?

Antitrust in Labor Markets (Oct. 16):

  1. Is a lack of competition among employers a significant contributor to observed macroeconomic trends in labor markets, such as the declining labor share and/or real wage stagnation? What are other explanations for these trends?
  2. How should the agencies approach defining relevant labor markets for purposes of antitrust analysis? What (if any) reliable evidence is available on the existence and effect of employer concentration in properly defined labor markets?
  3. Does available evidence suggest a causal relationship between employer concentration and labor market outcomes, such as wage? Does this evidence suggest a change in antitrust enforcement is needed?
  4. Should the agencies and courts apply the consumer welfare standard to the analysis of monopsonistic labor markets in which firms are buyers and workers are sellers?
  5. How should the agencies and courts resolve cases where evidence suggests output in the product market is likely to increase but employment and wages are likely to decline because of reduced competition in a properly defined labor market?

Acquisitions of Nascent and Potential Competitors in Digital Technology Markets (Oct. 17):

  1. What is the appropriate antitrust framework to evaluate acquisitions of potential or nascent competitors in high-technology markets?
  2. Is current antitrust law sufficient for developing challenges to these types of acquisitions?
  3. How should the antitrust agencies evaluate whether a nascent technology is likely to develop into a competitive threat in dynamic, high-technology markets?
  4. What are some pragmatic approaches that the antitrust enforcement agencies could consider for enhancing their evaluation of these types of acquisitions?

The Commission sought comments for Hearing #4 On Competition and Consumer Protection in the 21st Century - Oct. 23-24 at the FTC’s Constitution Center on the following topics:

  1. Is there a role for the government in advancing or supporting innovation?
  2. What is the importance of intellectual property – all forms – in advancing, protecting, and supporting innovation? Does it differ because of industry-specific or other market-based factors, or because of the form of intellectual property?
  3. How does modern economic analysis and empirical literature view the relationship between intellectual property and innovation, and the role of government in advancing and supporting innovation? Are there differences that depend on the type of intellectual property, and the protections offered for that intellectual property?
  4. How can the FTC use its enforcement and policy authority to advance innovation? What factors should the FTC consider in attempting to achieve this objective?
  5. What are emerging trends in patent quality and litigation issues? Should these trends influence the FTC’s enforcement and policy agenda?
  6. How should the current status of copyright law and current business practices influence the FTC’s enforcement and policy agenda?

The Commission sought comments for Hearing #5 On Competition and Consumer Protection in the 21st Century - Nov. 1 at the Georgetown University Law Center in Washington, D.C:

  1. Should the U.S. antitrust agencies publish Vertical Merger Guidelines? What guidance should they provide regarding the assessment of the competitive effects of vertical mergers, including the substantive theories of competitive harm and the treatment of transaction-related efficiencies? Under what conditions, if any, should the guidelines recognize a presumption of anticompetitive harm? What showing should be required to overcome such a presumption? Under what circumstances, if any, should behavioral remedies be accepted to remedy the likely anticompetitive effects of vertical mergers?
  2. Is the “consumer welfare standard” the appropriate standard for evaluating compliance with the antitrust laws? What are alternative frameworks with which to evaluate compliance with the antitrust laws? What are their strengths and weaknesses? Is there empirical support for preferring one standard instead of another standard?

This session rescheduled the hearing session originally postponed on September 14 due to inclement weather.

The Commission sought comments for Hearing #6 On Competition and Consumer Protection in the 21st Century - November 6 – 8 at the American University Washington College of Law, in Washington, D.C.

The hearings examined the role that data play in competition and innovation and will also consider the antitrust analysis of mergers and firm conduct where data is a key asset or product.

The Commission invited public comment on these issues, including the questions listed below. If any entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, such funding and its source should be identified on the first page of any submitted comment.

  1. What is “big data”? Is there an important technical or policy distinction to be drawn between data and big data?
  2. How have developments involving data – data resources, analytic tools, technology, and business models – changed the understanding and use of personal or commercial information or sensitive data?
  3. Does the importance of data – or large, complex data sets comprising personal or commercial information – in a firm’s ordinary course operations change how the FTC should analyze mergers or firm conduct? If so, how? Does data differ in importance from other assets in assessing firm or industry conduct?
  4. What structural, behavioral or conduct remedies should the FTC consider when remedying antitrust harm in a market or industry where data or personal or commercial information are a significant product or a key competitive input?
  5. Are there policy recommendations that would facilitate competition in markets involving data or personal or commercial information that the FTC should consider?
  6. Do the presence of personal information or privacy concerns inform or change competition analysis?
  7. How do state, federal, and international privacy laws and regulations, adopted to protect data and consumers, affect competition, innovation, and product offerings in the United States and abroad?

To further its consideration of issues associated with the use of algorithms, artificial intelligence, and predictive analytics in business decisions and conduct, the agency sought public comment on the questions listed below, and welcomed input on other related topics not specifically listed here.

Background on Algorithms, Artificial Intelligence, and Predictive Analytics, and Applications of the Technologies

  1. What features distinguish products or services that use algorithms, artificial intelligence, or predictive analytics? In which industries or business sectors are they most prevalent?
  2. What factors have facilitated the development or advancement of these technologies? What types of resources were involved (e.g., human capital, financial, other)?
  3. Are there factors that have impeded the development of these technologies? Are there factors that could impede further development of these technologies?
  4. What are the advantages and disadvantages for consumers and for businesses of utilizing products or services facilitated by algorithms, artificial intelligence, or predictive analytics?
  5. From a technical perspective, is it sometimes impossible to ascertain the basis for a result produced by these technologies? If so, what concerns does this raise?
  6. What are the advantages and disadvantages of developing technologies for which the basis for the results can or cannot be determined? What criteria should determine when a “black box” system is acceptable, or when a result should be explainable?

Common Principles and Ethics in the Development and Use of Algorithms, Artificial Intelligence, and Predictive Analytics

  1. What are the main ethical issues (e.g., susceptibility to bias) associated with these technologies? How are the relevant affected parties (e.g., technologists, the business community, government, consumer groups, etc.) proposing to address these ethical issues? What challenges might arise in addressing them?
  2. Are there ethical concerns raised by these technologies that are not also raised by traditional computer programming techniques or by human decision-making? Are the concerns raised by these technologies greater or less than those of traditional computer programming or human decision-making? Why or why not?
  3. Is industry self-regulation and government enforcement of existing laws sufficient to address concerns, or are new laws or regulations necessary?
  4. Should ethical guidelines and common principles be tailored to the type of technology involved, or should the goal be to develop one overarching set of best practices?

Consumer Protection Issues Related to Algorithms, Artificial Intelligence, and Predictive Analytics

  1. What are the main consumer protection issues raised by algorithms, artificial intelligence, and predictive analytics?
  2. How well do the FTC’s current enforcement tools, including the FTC Act, the Fair Credit Reporting Act, and the Equal Credit Opportunity Act, address issues raised by these technologies?
  3. In recent years, the FTC has held public forums to examine the consumer protection questions raised by artificial intelligence as used in certain contexts (e.g., the 2017 FinTech Forum on artificial intelligence and blockchain and the 2011 Face Facts Forum on facial recognition technology). Since those events, have technological advancements, or the increased prevalence of certain technologies, raised new or increased consumer protection concerns?
  4. What roles should explainability, risk management, and human control play in the implementation of these technologies?
  5. What choices and notice should consumers have regarding the use of these technologies?
  6. What educational role should the FTC play with respect to these technologies? What would be most useful to consumers?

Competition Issues Related to Algorithms, Artificial Intelligence, and Predictive Analytics

  1. Does the use of algorithms, artificial intelligence, and predictive analytics currently raise particular antitrust concerns (including, but not limited to, concerns about algorithmic collusion)?
  2. What antitrust concerns could arise in the future with respect to these technologies?
  3. Is the current antitrust framework for analyzing mergers and conduct sufficient to address any competition issues that are associated with the use of these technologies? If not, why not, and how should the current legal framework be modified?
  4. To what degree do any antitrust concerns raised by these technologies depend on the industry or type of use?

Other Policy Questions

  1. How are these technologies affecting competition, innovation, and consumer choices in the industries and business sectors in which they are used today? How might they do so in the future?
  2. How quickly are these technologies advancing? What are the implications of that pace of technological development from a policy perspective?
  3. How can regulators meet legitimate regulatory goals that may be raised in connection with these technologies without unduly hindering competition or innovation?
  4. Are there tensions between consumer protection and competition policy with respect to these technologies? If so, what are they, and how should they be addressed?
  5. What responsibility does a company utilizing these technologies bear for consumer injury arising from its use of these technologies? Can current laws and regulations address such injuries? Why or why not?

The Federal Trade Commission held the eighth session of its Hearings Initiative with a one-day hearing at the New York University School of Law in New York City on December 6, 2018.

Some recent econometric studies have concluded that when investors hold stock in competing firms, competition may be reduced among those commonly held competing firms. The Commission invited public comment on this issue, including on the questions listed below. 

  1. What is the state of the econometric and qualitative evidence for and against the proposition that such common ownership reduces competition?
  2. To what extent do the results suggest that this harm to competition extends to concentrated industries more generally? 
  3. Is any likely harm limited to concentrated industries or does it extend to holdings in unconcentrated industries?
  4. What are the potential mechanisms by which such stock holdings would lead to anticompetitive harm, and how likely are they to lead to anticompetitive results?
  5. To what extent do institutional investors have the incentive and opportunity to affect corporate governance, particularly regarding competitive decision-making? How is such influence exercised?
  6. What enforcement and policy responses should be adopted in light of the existing evidence?
  7. What additional research should be undertaken on this issue?
  8. What data would be most useful to answer the question of whether common ownership reduces competition in concentrated industries?

The FTC held a hearing on data security December 11-12, 2018 as part of the FTC Hearings on Competition and Consumer Protection in the 21st Century. The data security hearings included five panel discussions and additional discussion of research related to data breaches and data security threats. The first day’s panel discussions examined incentives to invest in data security and consumer demand for data security. Discussions on the second day focused on data security assessments, the U.S. framework related to consumer data security, and the FTC’s data security enforcement program.

FTC staff accepted comments on the data security hearing through March 13, 2019.

The Federal Trade Commission held the tenth session of its Hearings Initiative, focused on competition and consumer protection issues in broadband markets, on March 20, 2019.

The hearing examined developments in U.S. broadband markets, technology, and law since the FTC staff’s 2007 Broadband Connectivity Competition Policy report and the FTC staff’s 1996 Competition Policy in the New High-Tech, Global Marketplace report. Participants in the hearing discussed: (i) the evolution of broadband networking and broadband markets since the 2007 Broadband Report; (ii) the identification and evaluation of advertising claims by internet service providers with respect to the delivery speed of content; and (iii) the identification and evaluation of conduct by broadband market participants that may be exclusionary or anticompetitive. 

The Commission invited public comment on these issues, including the questions listed below.

  1. The FTC’s 2007 Broadband Report provided a technical background of broadband market issues relevant at that time. How should the Commission evaluate broadband technology issues now? Which technological developments are important for understanding the competitiveness of the industry? How would future technological developments likely to occur in the near future impact the competitiveness of broadband markets, or otherwise affect consumer interests?
  2. How should the Commission define relevant markets in this industry? How should the Commission identify and measure market power of content providers, content delivery networks, internet transit providers, internet service providers, and other relevant market actors?
  3. How should the Commission identify and evaluate conduct in this industry that may be exclusionary or anticompetitive, including but not limited to discounting and preferential pricing, contracts and agreements between firms in vertical relationships, and conduct that may undermine or discriminate against rivals? Under what conditions does such conduct harm consumers? Under what conditions is conduct that may exclude or discriminate against rivals also associated with short-run or long-run efficiencies or consumer benefits?
  4. Do existing local, state or federal regulations affect different market participants in ways that limit competition and innovation?
  5. What are the existing standards, if any, regarding how actual internet speeds correspond to advertised internet speeds? Are such standards relevant to an FTC analysis under Section 5?
  6. What tools, platforms, and research are used to measure the speed of broadband and related services? Are they adequate for the FTC’s analysis of speed claims? If not, what additional resources are needed? Do competitors rely on data from these sources in challenging each other’s speed claims?
  7. How can consumers or other stakeholders determine whether actual internet speeds match advertised speeds?
  8. Do existing methods of advertising internet speed adequately inform consumers about their choices for broadband and telecommunications services?

The 11th session of the Federal Trade Commission’s Hearings Initiative, “The FTC’s Role in a Changing World,” focused on the agency’s international work. The hearing took place in Washington, D.C. on March 25-26, 2019.

At the hearing, the FTC considered:

  • The effectiveness of FTC’s enforcement cooperation tools and approaches in light of new challenges in competition, consumer protection, and privacy matters;
  • Approaches to promoting international policy coordination and best practice development; and
  • Strategies for international enforcement and policy engagement given today’s dynamic global marketplace.

To deepen its understanding of these issues, the agency sought public comment on the questions listed below, and welcomed input on other related topics.

The FTC’s Tools and Approaches for International Engagement

  1. How effective are the FTC’s tools and approaches in addressing international investigative, enforcement, and policy challenges and opportunities?
  2. What strategies should competition, consumer protection, and privacy agencies use to achieve convergent or interoperable policies and consistent or complementary enforcement outcomes?
  3. How should the FTC engage internationally regarding its competition, consumer protection, and privacy enforcement priorities in light of changes in the economy, evolving business practices, new technologies, and international developments?

Enforcement Cooperation

  1. What has led to either more or less effective enforcement cooperation in consumer protection, privacy, and competition matters?
  2. How can cross-border enforcement cooperation be strengthened? What are the obstacles to such cooperation?
  3. How might the FTC use additional authority, tools, and approaches to ensure effective enforcement cooperation?
  4. How well have the U.S. SAFE WEB Act and the International Antitrust Enforcement Assistance Act served their international enforcement cooperation objectives? 
  5. Are there tools or approaches available to enforcement agencies in other fields or jurisdictions that might improve the FTC’s enforcement cooperation?
  6. What effects do data regulations have on cross-border information sharing, cooperation, and enforcement in competition, consumer protection, and privacy cases?

Policy and General International Cooperation

  1. What role should soft law (e.g., best practices/ guiding principles) play in promoting convergence or interoperability in policy approaches?
  2. How do differing views on the roles of government, self-regulation, and private enforcement affect policy development and enforcement cooperation?
  3. How do differences in institutional design affect agency enforcement and policy cooperation?

Engagement Regarding Emerging Technologies

  1. How can the FTC best work with foreign agencies to develop effective policies on competition, consumer protection, and privacy concerning emerging technologies, such as artificial intelligence?  What are the challenges?
  2. From a practical perspective, what are the consequences of having differing approaches internationally to competition, consumer protection, and privacy enforcement around artificial intelligence and other emerging technologies?

International Engagement in a Changing Global World

  1. What are the most important issues on which the FTC should engage with foreign counterparts and international organizations?
  2. How can the FTC continue to be a leader internationally, including on emerging issues?
  3. In light of international and technological developments, how can the FTC ensure the effectiveness of its technical assistance program?
  4. What tools or approaches of foreign competition, consumer protection, or privacy agencies could benefit the FTC’s international program?
  5. How should the FTC interact with other U.S. government agencies regarding issues raised by foreign competition, consumer protection, and privacy policy and enforcement?
  6. What roles can the private sector and civil society play in light of new challenges in competition, consumer protection, and privacy matters?
  7. How can the private sector foster accountability for international transfers of consumer data?

The 12th session of the Federal Trade Commission’s Hearings Initiative, on consumer privacy, provided the first comprehensive re-examination of the FTC’s approach to consumer privacy since 2012. The hearing took place in Washington, D.C. on April 9-10, 2019.

The Commission has long taken a case-by-case approach to privacy, with protections calibrated to the particular law enforced as well as the sensitivity and use of personal information. However, the current approach needs to be examined in light of potential gaps in the Commission’s existing authority, as well as new risks, new opportunities, and new knowledge. Relevant questions include whether current approaches sufficiently protect consumer privacy; whether certain approaches may have unintentionally hindered innovation, growth, or competition, to the detriment of consumers and the economy; whether other approaches might better serve consumers and competition; and, if so, what those approaches should be. Accordingly, the Commission invited comments on the topics listed below, some of which have been examined in prior Commission materials and are being re-examined as part of the 21st Century Hearings initiative. Comments that contain empirical evidence and data were encouraged.

General Questions

  • What are the actual and potential benefits for consumers and to competition of information collection, sharing, aggregation, and use? To what extent do consumers today, or are consumers likely to, realize these benefits?
  • What are the actual and potential risks for consumers and to competition of information collection, sharing, aggregation, and use? To what extent do consumers today, or are consumers likely to, realize these risks?
  • The use of “big data” in automated decisionmaking has generated considerable discussion among privacy stakeholders. Do risks of information collection, sharing, aggregation, and use include risks related to potential biases in algorithms? Do they include risks related to use of information in risk scoring, differential pricing, and other individualized marketing practices? Should consideration of such risks depend on the accuracy of the underlying predictions? Do such risks differ when data is being collected and analyzed by a computer rather than a human?
  • Should privacy protections depend on the sensitivity of data? If so, what data is sensitive and why? What data is not sensitive and why not?
  • Should privacy protection depend on, or allow for, consumer variation in privacy preferences? Why or why not? What are the appropriate tradeoffs to consider? If desired, how should this flexibility be implemented?
  • Market-based injuries can be objectively measured—for example, credit card fraud and medical identity theft often impact consumers’ finances in a directly measurable way.  Alternatively, a “non-market” injury, such as the embarrassment that comes from a breach of sensitive health information, cannot be objectively measured because there is no functioning market for it. Many significant privacy violations involve both market and non-market actors, sources, and harms. Should the Commission’s privacy enforcement and policy work be limited to market-based harms? Why or why not?
  • In general, privacy interventions could be implemented at many different points in the process of collecting, processing, and using data. For example, certain collections could be banned, certain uses could be opt-in only, or certain types of processing could trigger disclosure requirements. Where should interventions be focused? What interventions are appropriate?
  • Should policymakers and other stakeholders attempt to improve accountability for privacy issues within organizations? Why or why not? If so, how? Should privacy risk assessments be mandated for certain companies? Should minimum standards in privacy protections be required?
  • How can firms that interface directly with consumers foster accountability of third parties to whom they transfer consumer data?
  • What are the effects, if any, on competition and innovation from privacy interventions, including from policies such as data minimization, privacy by design, and other principles that the Commission has recommended?
  • Do firms incur opportunity costs as a result of increased investments in privacy tools? If so, what are the tradeoffs between functionality, innovation, and security and privacy protections at the design level?
  • If businesses offer consumers choices with respect to privacy protections, can consumers be provided the right balance of information, i.e., enough to inform the choice, but not so much that it overwhelms the decisionmaker? What is the best way to strike that balance and assess its efficacy?
  • To what extent do companies compete on privacy? How do they compete? To what extent are these competitive dynamics dictated or influenced by consumer preferences, regulatory requirements, or other factors?
  • Some academic studies have highlighted differences between consumers’ stated preferences on privacy and their “revealed” preferences, as demonstrated by specific behaviors. What are the explanations for the differences?
  • Given rapidly evolving technology and risks, can concrete, regulated technological requirements – such as data de-identification – help sustainably manage risks to consumers? When is data de-identified? Given the evolution of technology, is the definition of de-identified data from the FTC’s 2012 Privacy Report workable?  If not, are there alternatives?
  • What should the role of the Commission be in the privacy area? What would define successful Commission intervention? How can the Commission measure success?

Questions About Legal Frameworks

  • What are existing and emerging legal frameworks for privacy protection? What are the benefits and drawbacks of each framework?
  • What are the tradeoffs between ex ante regulatory and ex post enforcement approaches to privacy protection?
  • The U.S. has a number of privacy laws that cover conduct by certain entities that collect certain types of information, such as information about consumers’ finances or health. Various statutes address personal health data, financial information, children’s information, contents of communications, drivers’ license data, video viewing data, genetic data, education data, data collected by government agencies, customer proprietary network information, and information collected and used to make certain decisions about consumers. Are there gaps that need to be filled for certain kinds of entities, data, or conduct? Why or why not?
  • Other than explicit statutory exemptions, are there limitations to the FTC’s authority to protect consumers’ privacy? If so, should they be removed? Why or why not? Should more limitations be implemented? Why or why not?
  • If the U.S. were to enact federal privacy legislation, what should such legislation look like? Should it be based on Fair Information Practice Principles? How might a comprehensive law based on Fair Information Practice Principles account for differences in uses of data and sensitivity of data?
  • Does the need for federal privacy legislation depend on the efficacy of emerging legal frameworks at the state level? How much time is needed to assess their effect?
  • Short of a comprehensive law, are there other more specific laws that should be enacted? Should the FTC have additional tools, such as the authority to seek civil penalties?
  • How should First Amendment norms be weighed against privacy values when developing a legal framework?

The Federal Trade Commission held the 13th session of its Hearings Initiative, focused on the agency’s merger retrospective program, on April 12, 2019, at FTC Headquarters in Room 432.

This Hearing gathered information from experts to help guide the FTC’s future merger retrospective research program. The Hearing will consist of four sessions. In the first session, a panel will summarize the findings of existing studies, then discuss the requirements for informative retrospective studies. The second session will examine how the findings from merger retrospectives can be used to improve enforcement agencies’ prospective merger enforcement programs, including merger simulation tools and design of merger remedies. The third session will be a panel discussion of how, or if, merger retrospectives can be used to evaluate and guide antitrust policy. In the final session, an expert panel will discuss how the FTC should focus its resources on merger retrospectives in the near future.

The Commission invited public comment on these issues, including the questions listed below:

Session 1: What have we learned from existing merger retrospectives?

  1. What are the requirements of successful merger retrospective studies, both in terms of data and in terms of the ability to reasonably compare actual merger outcomes with credible estimates of market outcomes that would have been realized absent the merger?
  2. Are there industries well- or poorly-suited to study using conventional merger retrospective techniques?
  3. What types of questions are merger retrospectives likely and unlikely to successfully address?
  4. Can merger retrospectives be used to measure merger-induced changes in quality, innovation, or investment?

Session 2: How can merger retrospectives be used to improve prospective merger analysis?

  1. A number of analytic and empirical tools have been developed to forecast the price impact of mergers. How can merger retrospectives be used to evaluate the efficacy of these tools? What does existing evidence from merger retrospectives tell us about the ability of these tools to forecast post-merger prices? What are good future avenues for research?
  2. Some retrospective analyses rely on both quantitative and qualitative data to evaluate past enforcement decisions. What kinds of questions can be addressed with qualitative data (e.g., customer surveys) that cannot be addressed with traditional quantitative analyses?
  3. What are the limitations on using merger retrospectives to evaluate enforcement tools? Are there certain types of economic models that cannot be evaluated with evidence from merger retrospectives? What weight should be placed on the findings from merger retrospectives?

Session 3: Should the findings from merger retrospectives influence horizontal merger policy and, if so, how?

  1. All merger retrospectives are case studies. Can the findings from these studies be generalized to inform policy? What are the limitations on applying findings from one industry to another?
  2. The set of existing retrospective studies is a selected, non-random sample from the population of all consummated mergers. Most studies have analyzed mergers drawn from a handful of industries (e.g., airlines, banking, hospitals, and petroleum). What, if any, inferences can be drawn from this literature about the industries that have not been studied?
  3. Merger retrospectives can only look at consummated mergers. It is not possible to observe how the mergers that were deterred might have affected market outcomes. How should these “deterred mergers” be included in an analysis of the efficacy of merger enforcement?
  4. Should merger restrospective studies influence case law? If so, are there particular topics where the courts could benefit from further empirical evidence?

Session 4: What should the FTC’s retrospective program be over the next decade?

  1. Are there specific mergers or industries that have not been studied where the FTC should focus its attention?
  2. Should the FTC use its subpoena power to collect information for merger retrospectives, and if so, what kinds of information should be gathered?
  3. Should the agency focus on measuring market outcomes in specific industries or, instead, focus its resources on evaluating the efficacy of the methodology used to investigate proposed mergers?
  4. Should the FTC increase its work with outside researchers to accelerate these research projects? How would this collaboration work best?
  5. Should the FTC conduct more research to evaluate its past enforcement actions even if that means reducing the resources devoted to prosecuting cases? How should the FTC make this tradeoff?

The Federal Trade Commission sought public comments for the 14th session of its Hearings Initiative, which took place at Creighton University School of Law in Omaha, Nebraska on June 12, 2019. This will conclude the FTC’s Hearings on Competition and Consumer Protection in the 21st Century.

The hearing will begin in the morning and will include a series of roundtable discussions with State Attorneys General on important consumer protection and antitrust issues. Attorneys General Jeff Landry (Louisiana), Doug Peterson (Nebraska), Jason Ravnsborg (South Dakota), and Herbert Slatery III (Tennessee) are expected to participate. Additionally, senior staff from the Attorney General Offices of Arizona, the District of Columbia, Iowa, Mississippi, New Jersey, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington are expected to participate.

Participants will discuss areas of commonality and divergence between state and federal enforcers. The consumer protection panels will address big data and privacy, platforms, challenges unique to state enforcers, and federal/state collaboration. The competition panels will discuss the state of antitrust enforcement including big data and technology issues, multi-sided platforms, federal/state cooperation, monopsony, and occupational licensing.

Comments relating to the discussion with the State Attorneys General were accepted through June 30, 2019.

 

 

Comments relating to optimizing consumer protection remedies were accepted through June 30, 2019.

 

 

 

Comments relating to error-cost considerations in antitrust enforcement and policy were accepted through June 30, 2019.

 

  1. The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings;
  2. Competition and consumer protection issues in communication, information, and media technology networks;
  3. The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses;
  4. The intersection between privacy, big data, and competition;
  5. The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters;
  6. Evaluating the competitive effects of corporate acquisitions and mergers;
  7. Evidence and analysis of monopsony power, including but not limited to, in labor markets;
  8. The role of intellectual property and competition policy in promoting innovation;
  9. The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics;
  10. The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices; and
  11. The agency’s investigation, enforcement and remedial processes.

 

1. The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings

Of particular interest to the Commission:

  1. the continued viability of the consumer welfare standard for antitrust law enforcement and policy;
  2. economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions;
  3. the identification of new developments in markets and in business-to-business or business-to-consumer relationships;
  4. the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and
  5. the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection agencies outside the United States, when such efforts have a direct effect on important U.S. interests.

 

 

 

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2. Competition and consumer protection issues in communication, information, and media technology networks

FTC staff’s 1996 Competition Policy in the New High-Tech Global Marketplace report discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff’s 2007 Broadband Connectivity and Competition Policy report addressed similar issues in the broadband internet access service market.

Of particular interest to the Commission:

  1. whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports;
  2. the welfare effects of regulatory intervention to promote standardization and interoperability;
  3. the application of the FTC’s Section 5 authority to the broadband internet access service business; and
  4. unique competition and consumer protection issues associated with internet and online commerce.

 

 

 

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3. The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses

Of particular interest to the Commission:

  1. whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and
  2. whether and how the presence of “network effects” should affect the Commission’s analysis of competition and consumer protection issues in these markets.

 

 

 

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4. The intersection between privacy, big data, and competition

Of particular interest to the Commission:

  1. data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market;
  2. competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users;
  3. whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor ad-supported;
  4. the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection;
  5. the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and
  6. competition and consumer protection implications of use and location tracking mechanisms.

 

 

 

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5. The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters

Of particular interest to the Commission:

  1. the efficacy of the Commission’s use of its current remedial authority; and
  2. the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security.

 

 

 

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6. Evaluating the competitive effects of corporate acquisitions and mergers

Of particular interest to the Commission:

  1. the economic and legal analysis of vertical and conglomerate mergers;
  2. whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat;
  3. the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies;
  4. the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation;
  5. the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and
  6. empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems).

 

 

 

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7. Evidence and analysis of monopsony power, including but not limited to, in labor markets

Of particular interest to the Commission:

  1. the analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets;
  2. evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets;
  3. the exercise of monopsony power through collusion, including in labor markets through employer collusion; and
  4. the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws.

 

 

 

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8. The role of intellectual property and competition policy in promoting innovation

The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law:

  1. antitrust enforcement against harmful business conduct involving intellectual property; and
  2. competition advocacy regarding the development of intellectual property law.

The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property and 2007 Antitrust Enforcement and Intellectual Property Rights report. The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: the 2003 To Promote Innovation report, the 2011 Evolving IP Marketplace report, and the 2016 Patent Assertion Entity Activity report. Of particular interest to the Commission:

  1. the adoption and utilization of novel business practices (beyond those addressed in the Commission’s prior guidance and actions) with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws;
  2. identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy;
  3. evaluation of intellectual property litigation in competitive effects analysis; and
  4. evaluation of efficiencies and entry considerations in technology markets in merger analysis.

 

 

 

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9. The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics

Of particular interest to the Commission:

  1. the welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns;
  2. the welfare implications associated with use of these technologies in the determination of a firm’s pricing and output decisions; and
  3. whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models.

 

 

 

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10. The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices

Of particular interest to the Commission:

  1. whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and
  2. whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes.

 

 

 

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11. The agency’s investigation, enforcement and remedial processes

Of particular interest to the Commission:

  1. whether the agency’s investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct;
  2. the extent to which the Commission’s Part 3 process facilitates timely and efficient administrative litigation;
  3. the efficacy of the Commission’s current use of its remedial authority; and
  4. willingness of affected parties to cooperate with the Commission in conducting post-investigation and enforcement retrospectives.

 

 

 

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How to Submit Public Comments

Interested parties may submit written comments on the topics listed above to the FTC. Electronic submission is preferred; comments in paper form are also accepted. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1, using this link. For this stage of the public comment process, comments will be accepted until August 20, 2018.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. If you prefer to file your comment on paper, write “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue, NW, Suite CC-5610 (Annex C), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street, SW, 5th Floor, Suite 5610 (Annex C), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.

Because your comment may be placed on the publicly accessible FTC Website, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else’s Social Security number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “trade secret or any commercial or financial information which . . . is privileged or confidential” – as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2) – including, in particular, competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on the public FTC Website – as legally required by FTC Rule 4.9(b) – we cannot redact or remove your comment from the FTC Website, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

If any entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, such funding and its source should be identified on the first page of any submitted comment.

Visit the FTC Website to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. For this stage of the comment process, the Commission will consider all timely and responsive public comments that it receives on or before August 20, 2018. The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy.

Final comments for the Hearings on Competition and Consumer Protection in the 21st Century were accepted through June 30, 2019.

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