The Commission works to advance government policies that promote competition and protect consumers.
The Commission continues to provide guidance and recommendations to government bodies and lawmakers on how to incorporate competition principles into proposed laws, regulations, or policies. Staff filed comments regarding consumer choice for electricity generation (Pennsylvania); occupational licensing for Canadian dentists wishing to practice dentistry in New York; restrictions on telehealth eye care (Washington); legislation requiring review of the competitive impact of the state’s licensing regulations and laws (Nebraska); and modifications to supervision requirements imposed on advanced practice registered nurse-certified nurse practitioners (Pennsylvania).
Staff continued, via testimony, to support the reform of certificate-of-need laws that limit competition in the health care sector (Alaska). The FTC also responded to a request by HHS for a comment with its Statement of the Federal Trade Commission to the Department of Health and Human Services Regarding the HHS Blueprint To Lower Drug Prices and Reduce Out-of-Pocket Costs. The FTC comment focused on misuse of Risk Evaluation and Mitigation Strategies (REMS) programs and biologic competition.
The Commission authorized staff to file five amicus briefs in 2018 in cases in which the agency believed that its experience and expertise would be useful to the court. In a brief to the U.S. Supreme Court, filed jointly with DOJ, the Commission argued that a district court decision denying a motion to dismiss on state action grounds is not immediately appealable under the collateral order doctrine. In another joint brief in Apple v. Pepper, the agencies argued that the appellate court misapplied the rule established in Illinois Brick Co. v. Illinois, 431 U.S 720 (1977), when finding that iPhone owners were direct purchasers of apps because Apple delivered the apps to them even though the commissions were first imposed on app developers who determined how much of the overcharge to pass on to consumers.
In a joint brief to the Federal Circuit, the FTC and DOJ addressed the scope of the Noerr-Pennington doctrine and argued that the doctrine does not exempt from antitrust scrutiny the unlawful acquisition of patents, even if the patents are later enforced through protected petitioning activity. The Commission also filed an amicus brief in Takeda v. Zydus, urging the district court to reject the argument that Hatch-Waxman patent infringement suits are categorically exempt from antitrust scrutiny as potential sham litigation, because the argument is contrary to the statutory text and case law.
The antitrust agencies also filed a joint amicus brief before the Rhode Island Supreme Court, advocating that the business of real estate closings should not be deemed the practice of law, and thus allowed to be performed exclusively by lawyers, but should instead be open to all qualified providers. The agencies had taken that same position in 2003, advocating to the Rhode Island legislature that it should not enact a law restricting the provision of closing services.
The Commission and its staff are often asked to share expertise on antitrust and consumer protection issues. In 2018, the FTC testified about its work to protect consumers and promote competition at four oversight hearings before House and Senate committees, and provided testimony to support the agency’s annual budget request. The Commission also testified about consumer protection issues related to robocalls, enforcement of the Fair Credit Reporting Act, and actions by payment processors that facilitate consumer fraud.
Hearings, Workshops, and Public Forums
In support of pursuing a vigorous policy and law enforcement agenda, for many years the FTC has engaged in substantial research to stay informed of market developments. This work helps shape the agency’s policy agenda and identify opportunities to develop the law consistent with the FTC’s enforcement authority. The FTC convenes events that bring together fellow regulators and enforcement partners, as well as industry representatives, consumer advocates, and academics for informative and often groundbreaking discussions of the challenges posed by current competition and consumer protection issues.
In 2018, Chairman Simons initiated the FTC’s Hearings on Competition and Consumer Protection in the 21st Century. This series of public hearings is examining whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy. As of March 2019, the Commission has welcomed over 266 participants in our hearing sessions, hosted 16 days of hearings – including 55 panel discussions, individual presentations, or remarks – and received more than 800 written comments.
The Bureau of Economics hosted its eleventh annual Microeconomics Conference, which featured keynote speeches by academic economists, policy-relevant panel discussions, and papers presented on topics such as online privacy, and price dispersion.
On the consumer protection front, the FTC held PrivacyCon 2018 to expand collaboration among leading privacy and security researchers, academics, industry representatives, consumer advocates, and the government. In addition, the FTC and the Federal Communications Commission (FCC) hosted a joint policy forum aimed at furthering the fight against illegal robocalls and caller ID spoofing.
The agency continued its efforts to educate consumers about cryptocurrencies and hold fraudsters accountable. The FTC hosted Decrypting Cryptocurrency Scams, a workshop that brought together consumer groups, law enforcement, research organizations, and the private sector to explore how scammers are exploiting public interest in cryptocurrencies, such as bitcoin and Litecoin, and to discuss ways to empower and protect consumers. Reported scams include deceptive investment and business opportunities, bait-and-switch schemes, and deceptively marketed mining machines.
Small businesses are an integral part of the U.S. economy. In 2018, the FTC held several roundtable discussions with small business owners to discuss the challenges they face when dealing with cyber threats and data security. In addition, the FTC’s Midwest Region, the Small Business Administration’s Illinois District Office, and the Chicago Better Business Bureau hosted Keeping Your Small Business Safe in the Digital Age, a half-day event to help small businesses protect against cyber threats and keep their data safe.
In September 2018, the FTC released the staff report Options to Enhance Occupational License Portability. Building on a roundtable that examined ways to mitigate the negative effects of state-based occupational licensing requirements, the report discussed ways to reduce the burden on licensed workers moving to new states or wishing to market services across state lines. The report looked at interstate compacts and model laws that states could use to improve the portability of occupational licenses and considered procedures that might be adopted to facilitate multistate practice by those who already hold a valid license in one state.
International Policy Initiatives
The FTC promotes sound approaches to competition, consumer protection, and privacy issues, building relationships with counterpart agencies around the world. Most recently, as part of Chairman Simons’ hearings initiative on Competition and Consumer Protection in the 21st Century, the FTC held a two-day hearing focused on the FTC’s international engagement. With input from competition, consumer protection, and privacy enforcers and experts from around the world, these sessions explored the FTC’s international role in light of globalization, technological change, and the growth of non-U.S. competition, consumer protection, and privacy enforcement regimes.
The FTC worked with colleagues from around the world, both bilaterally and in multilateral bodies, to promote convergence toward sound competition enforcement, policy, and procedures. Key areas of attention in 2018 concerned competition and the digital economy, the application of antitrust rules to intellectual property, the territorial scope of remedies, merger notification and procedures, and procedural fairness. FTC representatives held senior-level meetings with key counterparts, including from Australia, Brazil, Canada, China, the European Union, India, Israel, Japan, Korea, Mexico, New Zealand, and the United Kingdom. The FTC also continued to play important roles in promoting convergence toward sound policies in the International Competition Network (ICN) and the competition bodies of the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), and the Asia-Pacific Economic Cooperation (APEC).
In the ICN, the FTC continued to serve on the Steering Group and to co-chair the Merger Working Group, through which the agency leads a multi-year initiative to update and expand the ICN’s Recommended Practices for Merger Notification and Review Procedures and Merger Analysis. The FTC also serves as co-chair of the ICN’s implementation working group to promote the use of ICN recommendations and work product. Notably, the FTC led a project that resulted in the ICN’s 2018 adoption of guiding principles for procedural fairness in antitrust investigations, and the FTC continued its leadership of the ICN Training on Demand Project, which produces video training materials for newer competition agencies and staff. In the OECD, the FTC played a central role in developing the Competition Committee’s long-term projects on competition in the digital economy and market studies.
The FTC’s technical assistance work is critical to the agency’s convergence initiatives and helping young agencies apply their laws to support competitive markets and compatible analysis and outcomes in cross-border matters. During the past year, FTC staff conducted 24 technical assistance missions in 17 jurisdictions, including regional programs for Africa, Central America, and Eastern Europe, and placed resident advisors in the competition agencies of India and Ukraine. The FTC also worked with colleagues in other parts of the U.S. government, as appropriate, to accomplish the agency’s missions; for example: in dealing with issues that have arisen in the enforcement of some foreign antitrust laws; as part of the U.S. delegation that negotiated the competition chapter of the United States-Mexico-Canada Agreement; in shaping the G20 and G7 outcomes on digital economy issues; and serving on the U.S. interagency group that addresses U.S.-China economic and trade issues. The FTC used these opportunities to promote the Revised Antitrust Guidelines for International Enforcement and Cooperation, focusing on international cooperation and criteria for the use of extraterritorial remedies.
In the consumer protection area, the FTC’s international policy efforts concentrated on developing and promoting market-oriented policies and practices with foreign counterparts and international organizations and networks. The FTC provided policy input to U.S. governmental submissions to organizations such as the OECD, the G7, and the G20 on consumer protection issues relating to online advertising, artificial intelligence, sharing economy platforms, personalized pricing, and online ratings and review mechanisms. In particular, the agency advocated for global interoperability and strong enforcement of data privacy laws in the OECD, APEC, and the International Conference of Privacy and Data Protection Commissioners. One highlight was the FTC’s organization of the semi-annual meeting of the Asia Pacific Privacy Authorities (APPA) Forum in San Francisco. At the forum, the FTC and its partners reported on global privacy trends, exchanged ideas about how they approach privacy protection in their own countries, and sought opportunities for cooperation on education and enforcement activities across the Asia Pacific region.
The agency also continued its collaboration with the U.S. Department of Commerce (Commerce) on three key cross-border data transfer mechanisms for the commercial sector: the EU-U.S. Privacy Shield, the Swiss-U.S. Privacy Shield, and the APEC Cross-Border Privacy Rules (CPBR) System. The Privacy Shield framework (and its counterpart Swiss Privacy Shield) provides legal mechanisms for companies to transfer personal consumer data from the EU (and from Switzerland) to the United States with strong privacy protections. The APEC CBPR system is a voluntary, enforceable code of conduct designed to enhance the privacy and security of consumers’ personal information transferred among the United States and other APEC members. The FTC plays a significant role in enforcing companies’ privacy promises as violations of Section 5 of the FTC Act. This year, in addition to bringing five new enforcement actions under the Privacy Shield, the agency worked with Commerce in conducting a successful second Annual Review of the framework with the European Commission.
Finally, the FTC continued to build the capacity of other consumer protection and privacy agencies to develop market-oriented policies that promote consumer trust and to implement and enforce sound laws. Over the course of the year, FTC staff conducted 12 programs on consumer protection, privacy, and data security issues in countries such as Argentina, Colombia, Egypt, India, Mexico, Nigeria, Peru, the Philippines, and Singapore. One highlight was the Ninth African Consumer Protection Dialogue Conference, organized by the FTC and the Gambia Competition and Consumer Protection Commission, which brought together agencies from over 20 African countries for trainings and discussions on consumer protection law enforcement and consumer education on digital economy issues.