The Choice for FTC Chair and the Rule of Law

President Donald Trump is likely to announce his choice for Federal Trade Commission chair soon, and according to the scuttlebutt the finalists include Utah Attorney General Sean Reyes and the FTC’s Acting Chairman, Maureen Ohlhausen. It should go without saying that the choice for this position should be determined by the candidate’s competence and whether his or her philosophical outlook is in line with the administration’s.

Unfortunately, what should go without saying seems to require saying this time around.

It’s no secret that interest groups and companies often favor particular candidates for high-level positions, and presumably they find ways of making their preferences known. It’s similarly not surprising, then, that some groups prefer Ohlhausen and others prefer Reyes. Presumably some groups perceive philosophical differences between Reyes and Ohlhausen on how antitrust enforcement should be practiced. However, at least according to published reports, much of the lobbying for Reyes is based on a desire for the FTC to take a hard line against a specific company — Google.

As the Wall Street Journal recently noted in an article headlined “Companies Seek to Sway Trump Administration on FTC Choice,” Reyes wrote a letter last year to the FTC urging the commission to reopen its investigation of Google, which the FTC closed in 2013 by unanimous vote. The Journal surmised that the push for Reyes is “a proxy battle” between Oracle and Google, which have been fighting over intellectual property used in Android. Ohlhausen voted with the rest of her colleagues in 2013 to close the investigation, but on other matters has voted against Google.

Choosing candidates because of their views on a specific company is not a good precedent for a law-enforcement agency that is supposed to make evidence-based decisions. It harms the integrity of the process and further encourages groups to try to influence such decisions in ways that disadvantage their competitors. It would taint Reyes if he is appointed and viewed as prejudiced in favor of the companies who are supporting him. Any decision to investigate Google, or to go easy on companies that supported him, may well be viewed as politically motivated. Ohlhausen, by contrast, is unlikely to open a case that she voted to close, but past experience suggests she would open a new case against Google if the facts warrant.

Antitrust regulators, at least in the United States, have a tradition of being skeptical of complaints by competitors. If Pepsi complained that Coke is engaging in anticompetitive activities, an antitrust official would likely be skeptical, and rightly so.  But if the official owed his job to lobbying by Coke that skepticism might raise eyebrows. Similarly, if the official owed his job to lobbying by Pepsi then the raised eyebrows might go even higher if the agency was sympathetic to the complaint.

Some proponents of Reyes are arguing that the FTC needs an outsider. However, the FTC leaders who have been most successful at moving the agency in a market-oriented direction, such as Jim Miller, Tim Muris and Bill Kovacic, have all had Washington experience, and, in the case of the latter two, extensive FTC experience. If the president is interested in an FTC chair in that tradition and focused on promoting competition, he could hardly do better than Ohlhausen.


Thomas M. Lenard is senior fellow and president emeritus at the Technology Policy Institute.

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