Advocacy Comments
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 allowing podiatrists to practice within the scope of their training (Massachusetts); the elimination of direct supervision of public health dental hygienists by a supervising dentist, which would allow the provision of clinical hygiene care in certain facilities (North Carolina); and against a proposed rule that would impose additional supervisory requirements on certified registered nurse anesthetists (Texas). Staff also provided testimony supporting the reform of certificate-of-need laws that limit competition in the health care sector (Alaska).
The FTC responded to the FDA’s request for public comment with its FTC Staff Comment to the FDA Department of Health and Human Services on Its Updated Guidance for Industry on the “Nonproprietary Naming of Biological Products.” The comment stated that the proposed “unusual naming convention,” which applied exclusively to a subset of new entrants, “likely would create consumer confusion and discourage use of newly introduced biosimilar and interchangeable products. Inconsistency of naming practices may thus diminish future competition.” Staff also raised competition concerns relating to provisions of a draft “information blocking” rule in response to a Notice of Proposed Rulemaking. Finally, the FTC filed a Statement of Public Interest to International Trade Commission Investigation No. 337-TA-109, explaining the chief administrative law judge’s Initial Determination was inconsistent with federal court decisions which treat SDO RAND commitments as contracts that are enforceable by third parties, and noting the decision/determination could have a negative impact on standard-setting.
In February 2020, the FTC issued special orders to Alphabet, Amazon, Apple, Facebook, and Microsoft to study prior acquisitions not reported under the Hart-Scott-Rodino (HSR) Act. The orders will help deepen our understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.
Amicus Briefs
The Commission authorized staff to file three amicus briefs in 2019 in cases in which the agency believed that its experience and expertise would be useful to the court. In a joint brief with DOJ to the Eleventh Circuit, the Commission argued in Leeds and SmileDirectClub v. Jackson that the district court properly declined to dismiss a case on state-action grounds under a proper application of the Supreme Court’s decision in North Carolina Board of Dental Examiners v. FTC. In another joint brief with DOJ in the Eleventh Circuit in a related case, SmileDirectClub v. Battle, we again argued that the district court properly declined to dismiss on state action grounds under North Carolina Board. Commission staff also filed an amicus brief in Staley v. Gilead Sciences Inc., an antitrust case pending in the Northern District of California, explaining that market definition is merely a tool to help courts determine whether the challenged conduct is likely to have anticompetitive effects; where multiple types of harm are alleged, multiple markets may be relevant to the analysis.
Testimony
Members of the Commission and FTC staff testified to the U.S. Congress on a variety of issues including: the antitrust agencies’ perspectives on online platforms and market power; competition in labor markets; abusive debt collection practices; the role of data and privacy in competition; protecting consumers and fostering competition; competition in digital technology markets; private sector data security; consumer reporting agencies’ data security practices; oversight of the federal antitrust laws; and funding and oversight of the FTC.
Hearings and Workshops
In support of pursuing a vigorous policy and enforcement agenda, for many years the FTC has engaged in substantial research to stay informed of market developments. This helps shape our policy agenda and identify opportunities to develop the law consistent with our enforcement authority. Hosting hearings and workshops on emerging business practices and technologies is another example of how the Commission advances its competition and consumer protection missions.
In June 2019, the FTC concluded its series of public hearings on Competition and Consumer Protection in the 21st Century 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. Over the course of the hearings, the agency hosted over 350 unique non-FTC participants throughout the 23 days of public hearings, and received more than 900 non-duplicative, germane written comments.
The FTC held a workshop to bring together state regulators and law enforcers, health policy experts, and academics to discuss practical experiences with Certificates of Public Advantage (COPA) in health care markets and to present research regarding the actual effects of COPAs. Informed by workshop testimony and public comments, the Commission issued special orders in October 2019 to five health insurance companies and two health systems under its 6(b) authority to obtain data to study the effects of COPAs recently approved for Ballad Health in Tennessee and Virginia, and Cabell Huntington Hospital in West Virginia.
The FTC hosted a number of workshops examining consumer protection issues, including Made in USA claims, small business financing, repair restrictions on consumer products, accuracy in consumer reporting, class action notices, online ticket sales, loot boxes in gaming, the COPPA Rule, voice cloning, and PrivacyCon 2019. In addition, the FTC hosted several Common Ground conferences that brought together consumer protection agencies and community groups.
Reports
Many comments received during the 21st Century Hearings called for the FTC and DOJ’s Antitrust Division to draft new Vertical Merger Guidelines. On January 10, 2020, the agencies issued draft 2020 Vertical Merger Guidelines and asked for public comments. The draft guidelines describe how the federal antitrust agencies review vertical mergers to evaluate whether the mergers violate antitrust law.
On the consumer protection front, the FTC issued Data Spotlights revealing the staggering financial losses caused by romance scams, the rise of government imposter scams, the different forms of fraud most frequently reported by millennials and consumers 60 and over, and the losses incurred from fake check scams. This year the FTC also introduced a new way to visualize and customize data: the agency’s interactive Tableau Public page.
International Policy Initiatives
The FTC promotes sound approaches to competition, consumer protection, and privacy issues by building relationships with counterpart agencies around the world.
This year, the FTC continued to work bilaterally and in multilateral bodies to promote convergence toward sound competition enforcement, policy, and procedures. Key areas of attention concerned procedural fairness, competition in the digital economy, the application of antitrust rules to intellectual property rights, and the territorial scope of remedies. FTC representatives held senior-level meetings with key counterparts, including from Australia, Canada, China, the EU, India, Japan, Korea, Mexico, New Zealand, and the U.K. on these and other competition policy issues. For example, we continued engagement with counterparts in China to discuss procedural fairness, enforcement of monopolization laws, and the antitrust treatment of the exercise of intellectual property rights. The FTC also played important roles in promoting convergence toward sound policies in the ICN and the competition bodies of the Organization 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 serves on the Steering Group where it works with international counterparts to advance best practices in competition law and policy. In 2019, the FTC continued to lead groundbreaking initiatives to improve the fairness of competition agency procedures around the world, culminating in the adoption of ICN Recommended Practices for Investigative Process. The practices reflect broad international consensus and provide comprehensive and detailed high-level standards and guidance for competition agencies on the use of investigative tools, transparency, engagement with parties, decision-making safeguards, and protection of confidential information. The FTC also played a key role in drafting the 2019 ICN Framework on Competition Agency Process, which sets minimum standards for procedural fairness and provides a mechanism for agency-to-agency dialogue on procedural concerns. The Commission will continue its leadership on procedural fairness issues, focusing on promoting international understanding and implementation of these important benchmarks.
In view of the increasing importance worldwide of issues at the intersection of competition, consumer protection, and privacy law and policy, the ICN Steering Group approved a project to exchange experience in this area. The FTC introduced this project and will play a key role in its development. The FTC continued to lead the ICN’s Promotion and Implementation and Working Group, which promotes use of ICN work by member agencies. The FTC also led the ICN Training on Demand Project, which continues to build a comprehensive curriculum of training materials that serve as a virtual university on competition law and practice for competition agencies. The FTC will have further opportunities to promote convergence toward best practice and showcase U.S. approaches to critical competition issues of our day, such as competition in the digital economy, as the co-host of the ICN’s 2020 annual conference.
The FTC also continued to help lead the work of the OECD Competition Committee, playing a key role in developing long-term projects on competition in the digital economy and market studies, as well as collaborating with the OECD Secretariat on strategic projects on procedural fairness and the application of competition laws to intellectual property rights.
The FTC’s technical assistance program plays an important role in the agency’s convergence initiatives by helping young agencies apply their laws to support competitive markets and conduct analyses that lead to compatible outcomes in cross-border matters. During the past year, FTC staff conducted 29 technical assistance missions in 19 jurisdictions, including regional programs for Africa and Eastern Europe. As an example, our work with the Philippine Competition Commission focused on three goals: agency capacity building, outreach to build a culture of competition, and regional convergence. The FTC led training workshops not only for Commission staff, but also to introduce competition law to clerks of the Philippine Supreme Court, and trained regional ASEAN members on IP issues. The FTC makes a major commitment to international training by seconding long-term expert advisors to other agencies, including this past year to the competition agencies of Brazil and Ukraine.
The FTC also continued to work with other U.S. government agencies to address competition issues that implicate broader U.S. policy interests. For example, the FTC participated in interagency groups that developed G7 and G20 statements on issues involving competition in the digital economy.
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 on U.S. government submissions to organizations such as the OECD, the G7, the G20, and APEC on consumer protection issues relating to influencer advertising, artificial intelligence, online platforms, personalized pricing, online ratings, and review mechanisms. For example, the agency developed three good practice guides in the OECD for businesses—on online advertising, consumer ratings and reviews, and consumer data—and is playing a leading role on long-term OECD empirical work relating to consumer understanding of online pricing and measuring the benefits of consumer protection. The FTC also actively engaged in consumer protection issues related to the Internet Corporation for Assigned Names and Numbers (ICANN), the organization that deals with Internet domain names, including issues relating to Whois data and privacy laws. The Commission 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. On the consumer education front, the FTC and U.S. charities regulators joined with partners around the globe for the second time to promote wise giving during International Charity Fraud Awareness Week. As part of that initiative, the FTC ran a social media campaign featuring cybersecurity and data security tips for nonprofits, as well as tips for consumers.
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 Switzerland) to the United States. 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 U.S. and other APEC members. Under these mechanisms, the FTC enforces companies’ privacy promises as violations of Section 5 of the FTC Act. This year, in addition to bringing 12 new enforcement actions under the Privacy Shield, the agency worked with Commerce to conduct a successful third Annual Review of the framework with the EC.
Finally, the FTC continued to help 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. During the past year, FTC staff conducted 11 programs on consumer protection, privacy, and data security issues in countries including Argentina, Brazil, Ecuador, El Salvador, India, Nigeria, Paraguay, Peru, the Philippines, Tunisia, and Zambia. One highlight was the 10th African Consumer Protection Dialogue Conference, which brought together 80 officials from African agencies responsible for enforcing consumer protection laws in nearly 20 countries, along with representatives from regional bodies and multinational organizations. Participants reaffirmed their commitment to the 2013 African Dialogue Principles on Cooperation in Consumer Protection Enforcement, and pledged to continue to implement these international enforcement best practices.
The FTC’s overall international engagement was the topic of a two-day hearing conducted as part of the agency’s Hearings on Competition and Consumer Protection in the 21st Century. Featuring 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 hearing produced several key takeaways, including widespread, bipartisan backing for Congressional reauthorization of the U.S. SAFE WEB Act and support for pursuing mechanisms for enhanced information-sharing and investigative assistance in antitrust investigations. Other significant recommendations included expanding initiatives to build strong relations with counterparts, including through the FTC’s technical assistance and International Fellows programs; recognizing the FTC’s role in formulating broader U.S. government policies that involve international issues within the agency’s mandate; and continuing the FTC’s international leadership on policy and enforcement.