- The Federal Trade Commission under the Biden administration is reinterpreting federal law to expand its power to crack down on private businesses.
- Some advocates warn that the move will empower the agency to weaponize the law in order to promote political ends.
- “This newest rule is yet another example of how the FTC is being weaponized by this White House to advance political goals rather than focusing on its mandate to protect American consumers, and Congress must hold it to account,” NetChoice Vice President Carl Szabo said in a statement.
The Federal Trade Commission (FTC), under the leadership of Biden-appointed Chairwoman Lina Khan, is reinterpreting federal law to give itself expansive regulatory power over private businesses.
Section 5 of the Federal Trade Commission Act bans “unfair methods of competition,” and the FTC under the Obama administration enforced it using a “rule of reason” standard, which asked whether restraints on businesses were economically reasonable, according to the FTC’s press release. The agency’s new interpretation allows it to crack down on companies it considers “anticompetitive,” and experts warn the FTC could weaponize the law for political ends.
“This newest rule is yet another example of how the FTC is being weaponized by this White House to advance political goals rather than focusing on its mandate to protect American consumers, and Congress must hold it to account,” said Carl Szabo, president of NetChoice, a group that advocates for limited regulation of tech companies.
“The FTC essentially just handed itself the power to use the force of government to bring lawsuits under a subjective standard, without any guidance or delegation from Congress,” a NetChoice spokesman said. “This is a radical departure from the existing consumer harm focus of the FTC and must be investigated by Congress.” (RELATED: Enraged Biden Took Out Midterm Anger On Staffer: REPORT)
The FTC could become an activist agency and use the new guidance to enforce its bias against market concentration, Jeffrey Westling, director of technology and innovation policy at the American Action Forum, told the Daily Caller News Foundation. He was skeptical of claims that the FTC would weaponize Section 5 to penalize companies for explicitly political purposes, citing the role courts would play in keeping their enforcement on the rails.
“They’re definitely moving in an activist way with regards to the debate on antitrust. The current FTC and the chairwoman have a view that any kind of concentration in markets is bad, and they want to break up large companies because their view is that large companies are inherently a problem,” he told the DCNF. “Clearly Lina Khan wants to change up how they’re doing things, and to the extent that they’re going to be bringing cases against companies, it’s good to at least try to lay out how they think about doing that.”
“The problem is that this guidance isn’t really useful for businesses because it’s so vague,” he said. “They can’t change the law; they can’t go out and say ‘We want Section 5 to mean this even though courts have said it means the opposite.’ All they’re doing here is trying to say they’ll bring these cases and try to convince courts to consider these other factors that historically they haven’t.”
Khan said the new interpretation would help the agency punish companies engaging in what she called unfair competition.
“When Congress created the FTC, it clearly commanded us to crack down on unfair methods of competition,” she said. “Enforcers have to use discretion, but that doesn’t give us the right to ignore a central part of our mandate. Today’s policy statement reactivates Section 5 and puts us on track to faithfully enforce the law as Congress designed.”
The National Grocers Association praised the FTC’s move.
“In the generation that laws against economic discrimination have been ignored, dominant food retailers have grown bigger and bigger, taking advantage of their size to amass greater power, and in turn pressuring their suppliers and limiting customer options,” Senior Vice President of Government Relations Chris Jones wrote in a statement.
The FTC did not respond to the Daily Caller News Foundation’s request for comment.
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