Tech firms to draw antitrust scrutiny as FTC chief takes reins

Register now

(Bloomberg) -- Technology giants will be scrutinized as part of a broad U.S. Federal Trade Commission review led by its new chairman, who promised tough enforcement of competition and consumer-protection laws on his watch.

“Vigorous enforcement -- that’s the key thing. That’s the mantra,” FTC Chairman Joe Simons said. “We want to go after cases that matter.”

Simons, who has been on the job for just under two months, met with reporters at the FTC’s headquarters in Washington to outline his vision for the agency, which has a mandate to enforce antitrust laws and protect consumers from deceptive practices. His first move will be to take a close look at some of the hottest issues in competition policy by holding a series of hearings this fall.

A former antitrust lawyer at Paul Weiss Rifkind Wharton & Garrison LLP, Simons said one of his main interests is to examine the online economy and whether tech giants including Alphabet Inc.’s Google, Facebook Inc. and Inc. are undermining competition.

“There’s a range of tech platforms of course,” Simons said. “There are the big ones we all know about, and there are also small ones, so we’re interested in the full range.”

European Scrutiny

The internet giants are already under intense scrutiny in Europe, while the FTC and the Justice Department, which also enforces antitrust laws, have been largely hands-off the companies since the FTC closed an investigation into Google in 2013.

That could be changing. Makan Delrahim, the head of the Justice Department’s antitrust division, said in April that antitrust officials should be “open and receptive”’ to evidence that some tech companies may be engaging in exclusionary conduct to gain control of a market.

Simons, who was head of the agency’s competition bureau in the George W. Bush administration, said he decided to hold the sessions after hearing repeated concerns that antitrust enforcement hasn’t been tough enough as markets from beer to airlines to crop-protection chemicals become increasingly concentrated due to megamergers.

Even though antitrust enforcement has been remarkably consistent from administration to administration, regardless of the party in the White House, it’s time to take a look at whether fresh thinking is needed, Simons said.

“Important questions have been raised recently about that pre-existing approach and whether change is warranted,” he said. “I think it would be a mistake to merely adopt the policy of continuity without some serious reflection and evaluation.”

The FTC hearings, to be held from September to January, will look at issues like market power of the tech companies, barriers to competing against them, the interaction between data privacy and competition, and how algorithms affect consumers.

Other matters for the hearings include the state of antitrust and consumer-protection law and enforcement; the intersection between privacy, big data and competition; the competitive effects of mergers; and the role of intellectual property and competition policy in promoting innovation.

Bloomberg News