Sen. Josh Hawley’s radical new bill would overhaul, empower, and politicize the Federal Trade Commission in the name of reeling in Big Tech — and it’s you, the user, who would suffer for it.
The Missouri Republican’s unprecedented legislation merges the FTC with the Department of Justice, while replacing its five commissioners with a single Senate appointee and giving state attorneys general the power to prosecute companies using FTC regulations. It’s the latest chapter in the populist crusade against the tech industry being waged by regulation friendly Republicans and Democrats alike, due to Big Tech’s perceived bias and alleged monopolistic, anti-competitive behavior.
“The FTC isn’t working,” Hawley claims. “It wastes time in turf wars with the DOJ, nobody is accountable for decisions, and it lacks the ‘teeth’ to get after Big Tech’s rampant abuses.”
Thus far, Hawley isn’t totally wrong.
The FTC and the DOJ do often waste time and resources squabbling over which agency is best equipped to pursue anti-trust lawsuits. Hawley’s bill offers an outcome that would resolve the delays. And while the FTC has levied hefty fines, such as its $5 billion settlement with Facebook last year over data and privacy violations, some have criticized these settlements for not denting companies’ bottom lines enough to drive change.
But turning the independent commission into a politicized lapdog of the executive branch of government isn’t the answer.
We’ve already seen the morass and partisanship prompted by Senate appointments to executive leadership roles. The current FTC structure of five independent commissioners helps keep politics out of the agency and ensure that it sticks with its mandate: to uphold consumer welfare while taking a sensible light touch regulatory approach that encourages innovation.
And while Hawley’s intent may be to reassert conservative interests, it’s in fact conservatives who have the most to lose from partisan appointments.
Democrats such as Joe Biden have repeatedly threatened social media sites with punitive legislation over their failure to adequately censor “fake news” — while almost exclusively citing examples of conservative content. And with five-year appointments, Hawley’s proposal would come back to bite conservatives as soon as a Democratic president takes power and empowers the FTC to punish conservative content.
The same goes for undermining the FTC’s independence by subsuming it under the DOJ and giving state attorneys general the power to use FTC regulations to pursue politically motivated cases. Politicians, including Hawley, already make it a point to notch up career wins by targeting the Big Tech bogeymen. Any costs borne by firms due to increased litigation or greater regulatory burdens are likely to be paid for down the chain by consumers and businesses reliant on digital services.
Rather than combating the biggest firms’ monopolies, this will just entrench them.
Tech giants are best equipped to weather protracted litigation and regulation, which disproportionately affects smaller firms and startups trying to compete. Some CEOs, such as Facebook’s Mark Zuckerberg, have even openly asked to be regulated more strictly. And a harsher regulatory environment will only deter investors from taking “risky bets” on new or smaller competitors, chilling innovation.
The FTC largely does a good job because of its independence and because it embraces the “consumer welfare standard” — that predominant market share alone doesn’t make a company bad, it’s only a problem if consumers are being harmed. Transferring responsibilities to state attorneys general, as Hawley proposes, would hand power over to those unconcerned with this standard. State attorneys general may benefit politically from merely appearing tough on Big Tech, regardless of whether their actions help or hurt consumers. They face dangerous incentives.
Yes, the FTC does have problems, and the tech industry isn’t perfect. But turning the FTC into another arm of the already overpowered executive branch isn’t the answer — and it would just backfire on conservatives, to boot.
Satya Marar (@MisterJEET) is a Washington DC-based Policy Analyst at Reason Foundation and a contributor to the Washington Examiner’s Beltway Confidential blog.
