FTC, Not So Fast


FTC

For the past seven months, the Federal Trade Commission has gotten the hang of running on a skeleton staff with just two commissioners. The agency pressured Walgreens and Rite Aid to reshape their deal, pushed DraftKings and FanDuel to drop a merger and sued to keep competing North Dakota hospital systems from combining.

That’s a good thing because the prolonged wait for a fully-stocked five-member FTC may continue, even though President Trump appears poised to name a new chairman. And, there’s a lot of work to do. Mergers to review. Conduct to check.

As early as next month, the White House could name Joseph Simons as permanent leader, according to Bloomberg News. Other names are reportedly in the pipeline to fill out the remaining three empty spots, which would put the FTC at full capacity for the first time since in two years.

Yet another seat will open when Democrat Commissioner Terrell McSweeny’s term ends in September, although agency rules say she can stay on for as long as it takes to install a replacement.

FTC nominees could face a rough road on Capitol Hill. Consider the drawn-out nomination of Makan Delrahim, Trump’s pick to lead the Justice Department’s antitrust division. He was nominated in March but was left off the list of 69 nominees that Democrats allowed a fast-track confirmation before the August break. Delrahim has received bipartisan support – his nomination was approved by the Senate Judiciary Committee 19-1 – so the holdup is unusual.

The delay on Delrahim could signal that the normally routine appointment of enforcers has come at a turning point in antitrust politics. Democratic leaders are rallying around populist enforcement ideas in a new way through their “A Better Deal” plan launched last month.

This populism could lead Senate Democrats to drag out the confirmation of Trump’s planned FTC nominees if they see them as too pro-Wall Street. Instead, they might insist that nominees stand up for issues the agency deals with, consumer protection and competition, which have potential to resonate with 2018 midterm voters.

Complicating the confirmation process, the president has muddied the longstanding line of separation between the White House and enforcement agencies, prompting lawmakers to ask for repeated promises of independence from Justice Department nominees.

Lawmakers could apply the same treatment to Simons and other FTC nominees as Delrahim. The most recent obstacle delaying Delrahim’s move to the DOJ has been put up by Sen. Elizabeth Warren (D-Mass.). By blocking his nomination, the confirmation can’t go through the Senate on a voice vote, a normal procedure for a mid-level nominee.

If Warren has a problem with a candidate like Delrahim, uncontroversial and qualified for the job, she could also take issue with other mainstream picks.

Scheduling a stand-alone vote on a nominee takes time, and it almost never happens for sub-Cabinet positions. It may be several weeks after the Senate returns on Sept. 5 for Delrahim to be formally considered. Fall, or even winter, could be in full swing by the time Delrahim sets up his office in the antitrust division.

Time is short. The Senate has just two months of legislative working days before the end of the year and a lengthy to-do list.

It’s not much of a surprise that Trump may pass over acting chairman Maureen Ohlhausen, a Republican, for the permanent position. The longer he took to name an FTC chairman, the clearer it was that he was going to find someone from the outside. If he wanted Ohlhausen, he would have named her immediately, as he did for FCC Chairman Ajit Pai, who was already a Republican FCC commissioner.

Deadlines to Watch

Given that Walgreens and Rite Aid’s revamped deal was announced June 29, the companies’ antitrust lawyers should be on alert for word on whether the drugstores got an early approval or second request for more information. That should come any day now if they filed their Hart-Scott-Rodino Act paperwork immediately.

That also goes for Amazon andWhole Foods. Their deal was made public June 16, and the companies pulled HSR paperwork July 24 with the intent to refile by July 26. A decision from the FTC could be soon.

Allegiance Health Trial Pushed Back, Again

A trial start for the DOJ’s lawsuit against the marketing practices of a Michigan hospital has been kicked down the calendar several times this year. The latest scheduling order issued Aug. 10 moved arguments to December 18, if the case makes it that far. U.S. District Judge for the Eastern District of Michigan Judith Levy moved the date to clear time to consider whether a government settlement with another provider of the same charges makes the case moot.

Quote of the Week 

“There are serious questions about embarking on wholesale change in the U.S. antitrust regime. What is needed right now is assurance that the antitrust laws will be vigorously enforced within the bounds of the mainstream consensus and that political interference from the White House on particular antitrust cases is unacceptable,” said Diana Moss, president of the American Antitrust Institute, of Democrats’ proposal to shake up enforcement.

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