'Unlike anything I've seen at the FTC': Biden's chair makes her public debut

Thursday's videoconferenced session gave us a glimpse into what the agency, which is 106 years old, has in store. Its youngest ever chair was a Columbia University law professor who earned a reputation for her criticisms of tech giants such as Amazon. The excitement was shared by fellow tech critics.Jeff Chester, a member of the Center for Digital Democracy and a watchdog group, stated that more progress has been made than in the past quarter-century. He also said that the FTC has seen more progress since the 1990s. It is very important, and it's unlike anything I have seen at the FTC.Here are the takeaways of Khan's debut for POLITICO:Partisanship is backThe FTC has always been regarded as a bipartisan agency that is less susceptible to party-line votes than other agencies like the Federal Communications Commission and Securities and Exchange Commission.The FTC has a long history in bipartisanship. We work hard to continue that tradition," Joe Simons (a Republican) told a Senate panel.FTC Chair Joe Simons testifies at a hearing of the House Energy and Commerce Subcommittee on Capitol Hill. Susan Walsh/AP PhotoHowever, this spirit was not present Thursday as all items on the agenda were passed by a 3-2 vote of the party line. Republicans Noah Phillips, Christine Wilson and others repeatedly condemned the new approach and accused the Democrats of risking backlash from Congress by going beyond decades of precedent and agency's legal authority.This split was quite different than the usual partisan divisions of the agency, even though Republicans are more likely to support enforcement in high-profile antitrust case cases. Simons and the FTC's two Democratic Commissioners voted to approve a major antitrust lawsuit against Facebook as recently as December.Khan made her first public remarks as chair. She also outlined a different set of priorities than the Republicans. Khan stressed that the FTC's mandate is to protect workers, consumers, honest business owners, and promote a fair, thriving, and representative economy.The agency's primary goal has been defined by previous chairs and commissioners as consumer welfare. This standard approach examines how business conduct influences the way people buy goods and services. It is often translated into its impact on price. Progressives argue that it ignores other factors such as fairness, privacy, and transparency.Rewind to the '70s and '80sWilson warned that if we don't recognize the mistakes of our past, we will repeat them. He was referring to one of the Democratic-led actions items.She was referring back to 1970s when FTC Chair Michael Pertschuk attempted to establish rules for TV advertising directed at children. This became known as the KidVid scandal. The Washington Post's editorial board accused FTC of trying be the national nanny. Congress passed legislation under pressure from business groups and advertisers to severely curtail FTC's rulemaking power.The FTC has resisted rulemaking since then, even though the agency's founding statute explicitly calls for it to do so. (Read on).Wilson noted that the FTC suffered several court losses when it attempted to bring cases under its statutory authority in order to police unfair competition methods.She said that the FTC must acknowledge its losses in these cases. The FTC should not respond with a concerted effort to overstep its authority.Khan and her supporters argue, however, that Republicans are not paying enough attention to the wrong decade of antitrust history and the FTCs history. Reagan brought with him a young, passionate, and highly ideological cadre to the federal agencies that transformed antitrust into the corporate-friendly policy space it is today. This is the legacy that the Democrats want to erase, calling it a return of the principles that led to the creation of the FTC in 1914.She said that the FTC was created by lawmakers to provide greater oversight and accountability for illegal business practices than courts.There are new rulesA project by Democratic Commissioner Rebecca Kelly Slaughter, one of Thursday's most significant actions, sets the stage for active rulemaking.David Becker/Getty ImagesCongress passed legislation in 1980 to reduce the FTC's rulemaking power. The agency then adopted procedures that Slaughter claimed further limited the agency's ability to make rules. Slaughter, who was the agency's former acting chairman, stated that Thursday's proposal would eliminate these self-imposed requirements, while still allowing for ample transparency and public participation.One important change is to eliminate the FTCs administrative judge's role in presidencing over rulemakings. The FTCs chair, or another person of her choice, can now act as the presiding officers, supervising public hearings, and determining the facts behind the rule.Republicans opposed the change on grounds that the chair would be more neutral than the agency's in-house judge.Slaughter indicated that online ticket sales as well as data collection could be areas for potential rules. Khan stated that the FTC might consider writing its own definition for what constitutes unfair competition. This could enable the agency to sue companies for bad conduct not covered under antitrust law.More investigations are also possibleA commission decision also lowers the threshold that allows the FTC staff to initiate antitrust investigations. This could have major implications.The agency has demanded that its antitrust lawyers have the approval of the entire commission in order to open investigations for years. Contrary to this, the consumer branch attorneys of the agency often had greater freedom to subpoena companies and request documents from them, or to ask for interviews with employees. These are known as omnibus resolutions.Slaughter stated that the disparity has never made sense. However, the FTCs Republicans criticized the move to allow antitrust lawyers more freedom.Wilson stated that Wilson could not understand why the commission would suspend so much of its authority in such a crucial time.Antitrust staff now only need one commissioner's approval in order to subpoena certain types of information, such as those involving repeat offenders or technology platforms or pharmaceutical companies or hospitals. Staff requesting information about the Covid-19 pandemic, harms to labor, or small business will only require one commissioner's approval.Khan and her associates referred to the resolutions as streamlining investigations. However, the Democrats actually see them as having a greater strategic value.In the next few months, Rohit Chopra, the Democratic Commissioner, will likely leave because President Joe Biden nominated him as the Consumer Financial Protection Bureau's head. The FTC will remain split between Republicans, Democrats and Democrats after he leaves. Until Biden nominates or the Senate confirms a fifth member, it will continue to be evenly divided. Thursday's changes ensure that Republicans commissioners cannot block investigations that Democrats want to open.Transparency is not enough.Thursday's meeting was unique in that it was the first time FTC commissioners met publicly to vote for decades. It also marked the first time they had ever received public comments. The FTC holds hearings and workshops on a variety of topics. However, the commissioners are rarely present.Khan praised the meeting for bringing transparency to FTC's work through the establishment of a regular public forum.Wilson noted that, while the FTC published the meeting agenda one week before the actual meetings, Khan's office did not provide the text until Friday.Open commission meetings can be made transparent with sufficient notice, advance planning, input from our knowledgeable staff, and a strong dialogue between my fellow commissioners. The meeting today is not a success on all counts.Phillips stated that the public comment period was also set for the end of meeting. This meant that the commissioners were voting before anyone had a chance to discuss them.Transparency is essential, but I don’t believe the commission is living up that ideal with this, said he.Wilson and Phillips both offered proposals to have the FTC publish their proposals in the Federal Register. This would have allowed for public comment before commissioners voted. These motions were defeated by party-line votes.The agency released news releases after Thursday's meeting, highlighting each of the proposed proposals but not the actual text of the FTC's decision in at least one motion.