FTC Wants to Ensure Consumer Protection, Free Innovation in Antitrust Enforcement, Chairman Says
The FTC is making an effort to build its expertise on antitrust policy and enforcement concerning the technology industry, said Chairman Jon Leibowitz. “As the American economy and FTC portfolio become more and more focused on technology and e-commerce, our need for expertise is greater still,” he said Thursday during a Washington forum by the American Bar Association Antitrust Law Section. Technological platforms have come to play a central role in the economy, he said: Although they create great value, they raise “complex consumer protection and competition issues."
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The commission tries to handle technology-related antitrust investigations carefully, Leibowitz said. In the case of high-tech industries, “facts on the ground can change rapidly, often during an investigation, and mistakes in these markets can change the direction of these young industries for years,” he said. The commission came close to issuing a complaint against Google’s purchase of AdMob, he said, but the FTC decided to close the investigation when Apple developed its mobile ad network. The agency decided that “given developments in mobile platforms, competition between platforms was likely to become a dominant mechanism for competition generally in the mobile space,” he added.
Resolving antitrust investigations in a more timely manner is another goal of the commission, Leibowitz said. “I think we often took too long on complex investigations, particularly in the high-tech area.” The FTC will continue looking hard at the high-tech market “to ensure that consumers are well-served and that companies continue to remain free to develop products and services,” he said. It also plans to obtain expertise early in such cases “so they can be resolved quickly and correctly,” he added.
Some antitrust policy experts challenged the degree to which antitrust fosters innovation. There are laws governing price competition; however, there is no law that governs innovation competition, said Susan DeSantis, FTC policy planning office director. “Antitrust cases that explicitly address innovation are relatively few and far between,” she said during a panel discussion covering online markets. Innovation is an important issue in antitrust policy, and antitrust is needed to foster innovation, said Jonathan Baker, antitrust law professor at American University in Washington. Antitrust does a good job “of addressing the innovation effects of firm conduct,” he said. It’s possible that the antitrust laws can do more for innovation, said Tim Wu, senior policy adviser in the commission’s policy planning office.
The current rules and antitrust enforcement reasonably target appropriate industries and practices in order to promote innovation, Baker said: A firm facing competition in its products “has an incentive to develop new products in order to escape that competition.” Also, firms can “discourage rivals from innovating through their own investments in” research and development, he said. Therefore, antitrust laws promote innovation by “targeting types of industries and types of conduct where protecting product market competition in general will encourage pre-innovation product market competition without making much difference to post-innovation product competition,” he added.
Current antitrust laws would be different if they were designed with innovation as a first priority, Wu said. Antitrust “would fundamentally be concerned about conduct that tends to keep out market entry, either by firms in nearby industries or startups,” he said: It would follow the idea that the “price of exclusion is very closely linked to the rate of innovation in an industry.” To continue to keep the American economy strong, policy and antitrust officials must “continually see what we can do to make sure antitrust is promoting innovation,” he added.