The Antitrust Agenda: Bedoya Committee Vote Pushed to January 24; Khan Continues to Meet with Congressional Republicans; Biden Repeats Concerns Over Monopolies in Meat Processing, Shipping, Rail and Big Tech

Published on Jan 10, 2022

Bedoya hearing pushed to January 24. Originally, the Senate Commerce Committee’s re-vote on the nomination of Alvaro Bedoya, President Joe Biden’s choice to fill the FTC’s third Democratic seat, was tentatively set for January 12. But, according to a source, the vote has now been pushed back to January 24. That makes it more likely that Senate Majority Leader Chuck Schumer, D-NY, won’t schedule the floor votes necessary to confirm Bedoya until at least early February.

Politico’s Morning Tech first reported the new timing for a committee vote for Bedoya and FCC Commissioner nominee Gigi Sohn.

Calendars show Khan continuing to meet with House and Senate Republicans. FTC Chair Lina Khan has continued regular meetings with Republican members of the House and Senate, according to calendars FOIA’d by The Capitol Forum.

On the week of November 15, Khan met with Senator Marsha Blackburn, R-TN, and Representative Victoria Spartz, R-IN. Blackburn has been a vocal critic of Big Tech and introduced privacy legislation in 2021 that would have provided the FTC with additional funding and resources.

Despite the common area of agreement on Big Tech, Blackburn voted against Khan’s confirmation (Khan received support from 21 Senate Republicans). Spartz has co-sponsored legislation on merger filing fees, said America has a monopoly problem, and co-sponsored legislation to “strengthen security of the American supply chain and prevent the offshoring of America’s critical production to nations including China.” Also in November, Khan met with Representative Buddy Carter, R-GA, who introduced legislation combating scams during the pandemic, and is a long-time critic of the pharmacy benefit management industry.

Khan also met with multiple Congressional Republicans over the summer. In July, she met with Congressman Gus Bilirakis, R-FL, who at an FTC oversight hearing expressed concern about allegations that Khan had shut Republican commissioners out of decisions, but who also expressed interest in ransomware and fraud issues. Also that month she met with Senator Roger Wicker, R-MS, who has since introduced privacy legislation, and Senator Mike Lee, R-UT, who is ranking member of the Senate Judiciary antitrust subcommittee, and a frequent critic of Khan.

In June, the FTC chair met with Ken Buck, R-CO, ranking member of the antitrust subcommittee in the House, and Steve Womack, R-AR, who is on the appropriations committee and in August wrote a letter supporting Lockheed Martin’s (LMT) proposed $4.4 billion acquisition of propulsion supplier Aerojet Rocketdyne (AJRD).

Khan’s regular meetings with Republicans, including those who’ve criticized her, hint at an effort to build a long-term coalition of Republican support around a diverse range of priorities, ranging from Big Tech and privacy to consumer protection and fraud enforcement.

Biden to press for more competition in meeting with council, aims to end ‘exploitation.’ President Joe Biden said he’ll meet later this month with his White House Competition Council to push for further action to “increase competition across our economy, because healthy competition produces lower prices, higher wages, and more dynamic and innovative economies.” Biden was outlining his major economic initiatives, including to protect consumers from unfettered market power, in remarks after the January 7 monthly jobs report. “You’ve heard me say it before: Capitalism without competition isn’t capitalism; it’s exploitation. And I’m determined to end the exploitation.”

“In the last few decades, in too many industries, a handful of giant companies dominated the market in meat processing, railroads, shipping,” he said. “Too often, they use their power to squeeze out smaller competitors, stifle new entrepreneurs, and raise the prices, reducing options for consumers and exploiting workers to keep wages unfairly low…Just look at your grocery bill and the cost of meat. It’s not because the cattle farmers are getting rich. Matter of fact, it’s the exact opposite: It’s because fewer processors can charge grocery stores much more money for their ground beef, for example.”

Psaki: Biden wants more tech competition, encouraged by bills; ‘killer acquisitions’ alleged. President Biden believes more competition is needed in the tech industry and “is encouraged by bipartisan interest in Congress in passing legislation to address the power of tech platforms through antitrust legislation and to protect privacy,” said White House Press Secretary Jen Psaki, answering a question at a January 5 press briefing.

Biden’s view “is that, over the past 10 years, the largest tech platforms have, as they have acquired hundreds of companies, including alleged killer acquisitions meant to shut down a potential competitive threat, that’s not a healthy place for the system,” Psaki said. “The large platforms’ power gives them unfair opportunities to get a leg up on small businesses that rely on them to reach customers.” She also noted Biden called on “agencies like DOJ and the FTC to use their existing tools to tackle these problems” in a July competition executive order.

Merger vote this week: will Republicans vote for litigation in Lockheed/Aerojet deal? If you consider yourself a “pro-business” or “pro-big-business Republican,” would you vote against suing to block a merger pre-close that, if it’s subsequently consummated, will almost certainly be litigated post-close when a Democratic majority arrives at the FTC in February, creating the risk that the

acquirer ultimately has to divest a company for which it agreed to pay a 33% premium after years of litigation?

Further, it appears that a vote would be for litigation or bust, meaning that there is no consent order as an alternative for a vertical deal that almost certainly violates Section 7 of the Clayton Act. That could in turn create even more adamant third-party opposition to the deal, including from other behemoth defense companies who’ve complained about the proposed tie-up.

The vote on Lockheed/Aerojet could also create some interesting precedent—will it be the rare situation where the FTC goes its own way despite DOD’s support for the transaction? Will a complaint include labor monopsony evidence? We expect answers to all these questions in the next day or two.

Alcohol rules—what’s next? Our reporting and additional sources suggest that there’s no guarantee that the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), in its report on problems in the beer industry, will put forward a good faith effort to fully present concerns around distribution and vertical power. The TTB recently declined to provide an estimate on when its study would be complete (it’s over two months late already).

What should stakeholders expect? First, it’s possible that the TTB will actually write a comprehensive report that reflects the new priorities laid out by President Biden and anti-monopoly leadership. However, should the TTB issue a report favorable to large corporate alcohol industry players, the White House, DOJ, and FTC will then very likely fight with the TTB over the rulemaking process, which will involve a request for public comment.

In short, there is some expectation that the report, if it is inconsistent with the intent of the Biden executive order, could bring a fight among TTB, FTC, DOJ and the White House. We mentioned last week that rules at the Agriculture Department are now very likely to come out on the aggressive side, given how much of a priority meat industry pricing has become for the White House and DOJ, leaving Secretary Tom Vilsack with tremendous political vulnerability were he to cave to industry lobbying to issue weak rules. The alcohol issue is flying under the radar for now, but the recent White House press conference on meat pricing lays out a template for how the administration and its antitrust enforcers can effectively apply pressure to agencies in charge of rulemaking.

FTC calendars. The Capitol Forum has been receiving FOIAs back for calendars of FTC commissioners and bureau leadership, and will continue posting them in the Antitrust Agenda.

Calendars received this past week, for November 15-21, 2021:

· Chair Lina Khan (Calendar) · Bureau of Competition Director Holly Vedova (Calendar) · Bureau of Consumer Protection Director Sam Levine (Calendar) · Bureau of Economics Director Marta Wosinska (Calendar) · Executive Director David Robbins (Calendar)


· Hot Highlight: Khan met with Senator Marsha Blackburn.

· Hot Highlight: Khan met with Representative Spartz.

· Hot Highlight: Khan met with Bruce Reed, White House Deputy Chief of Staff.

· Wosinska met with the Bureau of Economics front office on executive order on racial equity. · Wosinska had a meeting titled “BE Seminar Series: Hunt Allcott.” Hunt Allcott “studies the intersection of behavioral economics and public economics” and “is a Senior Principal Researcher at Microsoft Research” and “a visiting instructor of economics at MIT.”

· Levine had an “FTC/ED Catch Up” meeting.

Personnel News

Wilmer Hale hires FTC Bureau of Consumer Protection acting deputy. Frank Gorman has joined Wilmer Hale as a partner, adding to its “cross-practice capabilities in representing clients contending with federal and state regulatory and enforcement agencies and consumer class actions,” the firm announced. He had been at the FTC for 24 years, most recently as acting deputy director of the Bureau of Consumer Protection.

FTC privacy veteran joins rating group for video games, mobile apps. The Entertainment Software Rating Board, which provides age and content ratings for video games and mobile apps, announced that Stacy Feuer has become senior VP, Privacy Certified, a leading online mobile privacy compliance program. Feuer left the FTC in December after 22 years, the last 16 as assistant director for international consumer protection & privacy.

FTC seeks technologists, researchers, engineers, others. The FTC tweeted that it’s “seeking “#technologists, researchers, engineers, UX designers, and others!” (details). It’s also seeking to fill three consumer education specialist positions in the Bureau of Consumer Protection’s Division of Consumer & Business Education.

Copyright Office taps ex-Disney official as general counsel. The U.S. Copyright Office named Suzanne Wilson as general counsel and associate register of copyrights, the agency announced. She was a Disney deputy general counsel from 2011 to 2020.

Top Events

Wednesday-Thursday, January 12-13 at 8 a.m. EST. National Association of Attorneys General legislative conference in Washington, D.C. (closed to public).

Thursday, January 13 at 10 a.m. EST. The Capitol Forum hosts a conference call with Matt Stoller, Director of Research at the American Economic Liberties Project, to discuss his recent writing on Inflation and Antitrust.

Upcoming Events

Monday, January 10 at 11 a.m. EST. Lexology, GCR, FTI Consulting webinar, “Competition Authorities Increase Data Scrutiny in Technology Industry Transactions,” with speakers including Marc Zedler, EC deputy head of unit.

Monday, January 10 at noon EST. American Bar Association (ABA) webinar: “The State of Healthcare Antitrust: A Briefing with State Enforcers,” with state enforcers from Wisconsin, California and Pennsylvania.

Monday, January 10 at 5:30 p.m. EST. Senate cloture vote planned, which could clear the way for final vote on the nomination of Alan Davidson to be assistant secretary of commerce in charge of the National Telecommunications and Information Administration.

Tuesday, January 11 at 10 a.m. EST. Information Technology & Innovation Foundation webinar, “What a National Strategic-Industry Policy Should Look Like.” Speakers include Sree Ramaswamy, Commerce Department senior policy advisor; Michael Brown, Defense Department director, Defense Innovation Unit; and Brad Markell, AFL-CIO Industrial Union Council executive director.

Tuesday, January 11 at 10 a.m. EST. Senate Banking Committee hearing on the nomination of Federal Reserve Board Chairman Jerome Powell to another term.

Tuesday, January 11 at 12:30 p.m. EST. ABA webinar, “Google Shopping: Transatlantic Gap on Exclusionary Practices.” EU’s second-highest court affirmed Google’s $2.8 billion fine for favoring its own shopping services over those of rivals hosted on its platform, with the holding creating a new category of abusive behavior. Experts to discuss an analysis of exclusionary practices, efficiencies and markets in the EU and whether U.S. law might converge in the future.

Wednesday, January 12 at noon EST. ABA webinar, “Understanding FTC’s Penalty Offense Authority and Other Developments.”

Wednesday, January 12 at 1 p.m. EST. BakerHostetler webinar, “Nationalizing Competitiveness and Noncompete Law: Criminal Antitrust and Federal Efforts to Curtail No-Poach and Noncompete Agreements.”

Thursday, January 13 at 9 a.m. EST. Senate Judiciary Committee meeting to consider nominations, including of Katherine Vidal, to be undersecretary of commerce for intellectual property and director of the U.S. Patent and Trademark Office

Thursday, January 13 at 10 a.m. EST. Senate Banking Committee hearing on nominations of Lael Brainard to be Federal Reserve Board vice chairman and Sandra Thompson to be Federal Housing Finance Agency director.

Thursday, January 13 at 11:30 a.m. EST. ABA webinar, “EU Antitrust Policy Review.” Speakers include Inge Bernaerts, EC director for policy and strategy, discussing the commission’s competition work.

Friday, January 14 at noon EST. ABA webinar, “Robinson Patman Enforcement: Dead Letter or Dormant Anti-Monopoly Sword.”

January 19 at 11 a.m. EST. Lexology, GCR webinar, “Recent developments in EU and UK merger control – Strategic opportunities for third parties,” giving an overview of key developments in the merger control regimes in the EU and the UK, with a focus on how merger review creates opportunities for third parties—competitors, customers, or suppliers—to protect and advance their own strategic interests.

January 19-20 at 9:30 a.m. EST (3:30 p.m. CET). Concurrences’ Cartels Workshop: “An advanced seminar on substantive and procedural EU developments.” Speakers include Maria Jaspers, director of DG Comp’s cartel directorate; Dirk Van Erps, adviser to DG Comp’s deputy director-general for antitrust and cartels; senior U.K. and Spanish competition authority officials; and legal secretaries of the EU Court of Justice.

January 20 at noon EST. ABA antitrust webinar, “Recent Developments in Healthcare & Pharma Q4 2021.”

January 21. Initial FTC administrative law judge decision due in administrative case on FTC antitrust complaint that Altria Group-JUUL Labs deals, including for Altria to buy a 35 percent stake in JUUL, eliminated competition in the market for closed-system electronic cigarettes.

Recent Event

January 5. American Antitrust Institute podcast, “Efficiencies in Horizontal Mergers: 2020 Jerry S. Cohen Award Winners for Antitrust Scholarship, Nancy Rose and Jonathan Sallet, Unpack the Debate in Merger Enforcement with Guest Host Roger Noll”

Recent Developments

Unclear if supply chain pressures have peaked despite gains, port envoy says. Parties are making progress in addressing supply chain bottlenecks, but uncertainty remains, said John Porcari, the port envoy to the White House Supply Chain Task Force at the January 5 press briefing. “It’s hard to tell if the supply chain pressures … have peaked,” he said, answering a question. “What is clear is the pandemic laid bare what was the underlying reality, which was the supply chain was stressed even before the pandemic. And we clearly have changes to make to build a more durable, resilient supply chain.” He said the recently enacted bipartisan infrastructure act will help with upgrades, and he cited remedial actions of Biden administration and others and the gains they’re making, which were also highlighted in a blog and by Biden in his January 7 remarks.

Warren, Jayapal urge Google to cease efforts to “bully” Kanter into recusal. Two lawmakers called on Google to stop pushing for DOJ antitrust chief Jonathan Kanter’s recusal on matters affecting the company. “These efforts to bully regulators and avoid accountability are untethered to federal ethics law and regulations, and we urge you to cease them immediately,” wrote Senator Elizabeth Warren (D-MA) and Rep. Pramila Jayapal (D-WA) to Google CEO Sundar Pichai on January 5. “Google should focus on complying with antitrust law rather than attempting to rig the system with these unseemly tactics.”

Google claims Kanter’s “extensive experience opposing Google in past antitrust matters should, paradoxically, disqualify him” on related matters, they wrote, calling Kanter “eminently qualified to lead” DOJ’s antitrust division as assistant attorney general. They suggested Google’s “efforts to sideline key federal regulators—like similar actions by Facebook and Amazon—simply serve as further evidence that you will go to all lengths to ward off necessary scrutiny of your immense market power.”

Asked for comment, Google forwarded a statement it released with its November letter asking DOJ to examine Kanter’s past role and possible recusal: “We have requested that [DOJ’s] Ethics Office examine whether AAG Kanter should be recused from the Department’s litigation and investigations regarding Google. Mr. Kanter’s past statements and work representing competitors who have advocated for the cases brought by the Department raise serious concerns about his ability to be impartial.”

Corporate breakups a useful option, argued Kwoka, now Khan’s top economist. Breaking up consummated mergers and dominant firms can be “an effective tool” for antitrust enforcers, wrote Economics Professors John Kwoka of Northeastern University and Tommaso Valletti of Imperial College London in a January 4 commentary (based on an earlier academic article). There are many examples of successful corporate breakups—from Standard Oil to AT&T and other cases—despite arguments to the contrary, they wrote. Kwoka, now FTC Chair Lina Khan’s chief economist, told The Capitol Forum that the commentary was written before he joined the commission in mid-November.

“To be clear, we are not advocating that any particular firm be broken up, let alone all firms that are large,” but that “competition agencies should view breakups as a viable and useful policy option under certain circumstances,” they wrote. “In the case of dominant tech companies, breakups address a crucial source of their growth and competitively problematic behavior. Experience with breakups of consummated mergers reveals a record of considerable success, whereas efforts to find alternatives to breakups in both cases—mergers and tech company conduct—have regularly failed.”

DOJ: Three Amazon market sellers plead guilty to price fixing; probe continues. Three men pleaded guilty to price fixing of products they sold on the Amazon Marketplace, the DOJ announced on January 7. Morris Sutton, Emmanuel Hourizadeh and Raymond Nouvahian were charged with conspiring with others to fixing the prices of DVDs and Blue-Ray Discs, according to court documents filed in Knoxville, Tennessee. “As American consumers increasingly turn to e-commerce, it is critically important to deter, detect and prosecute crimes that prevent fair and open competition in online marketplaces,” said Jonathan Kanter, DOJ antitrust chief.

FTC raises top civil penalties for violating Clayton Act, other laws, adjusting for inflation. The FTC is increasing the maximum civil penalties for violations of 16 statutory provisions it enforces, under an inflation-adjustment formula mandated by a 2015 act. The maximum penalty will increase from $43,792 to $46,517 for violating Section 7A(g)(l) of the Clayton Act and certain FTC Act provisions, among other hikes, the agency announced on January 6. It said commissioners voted 4-0 to publish a notice with proposed text for the Federal Register, which noted Clayton Act Section 7A(g)(1), 15 U.S.C. 18a(g)(1), covers premerger filing notification.

FTC warns companies to fix Log4j software vulnerability or risk legal action. The FTC urged companies to remediate security flaws in a ubiquitous Java Log4j software package used in products, in order to prevent consumer harms and avoid FTC legal action. “The FTC intends to use its full legal authority to pursue companies that fail to take reasonable steps to protect consumer data” due to Log4j or similar known vulnerabilities, said a January 4 blog. The FTC said it’s considering a broader set of structural issues surrounding open-source services as it seeks to address security “root issues.” FTC Chair Khan and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra also tweeted about Log4j (here, here).

Chopra cites ‘oligopoly’ as CFPB finds less consumer relief due to credit bureau changes. The CFPB announced it found that complaint process changes by the big three credit-reporting

firms yielded “fewer meaningful responses and less consumer relief.” Last year, “Equifax, Experian, and TransUnion together reported relief in response to less than 2% of covered complaints, down from nearly 25% of covered complaints in 2019,” the agency said on January 5. “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” said CFPB Director Chopra. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

N.Y. governor aims to bar many non-compete and all no-poach deals limiting workers. New York Governor Kathy Hochul (D) will seek to “ban agreements that limit workers’ ability to move and work freely.” As part of an action plan to protect workers, Hochul “will propose legislation to eliminate non-compete agreements for workers making below the median wage in New York State and to explicitly ban all ‘no-poach’ agreements under State antitrust law,” said p. 69 of her 2022 State of the State report, which she highlighted in a January 5 address.

U.S. ITR rules Google violated law on imported audio products, given Sonos patent claims. The U.S. International Trade Commission found Google violated U.S. tariff law by importing or selling “certain audio players and controllers, components thereof, and products containing the same that infringe one or more claims” of various Sonos patents. The ITC imposed “a limited exclusion order and a cease and desist order against Google,” and “set a bond in the amount of 100 percent of the entered value of the infringing products imported during the period of Presidential review,” said a January 6 commission notice.

A Google spokesperson emailed: “While we disagree with the decision, we will ensure our shared customers have the best experience using our products and do not experience any disruption. We will seek further review and continue to defend ourselves against Sonos’ frivolous claims about our partnership and intellectual property.”

Indian regulators probing Google platform, Apple App Store practices. The Competition Commission of India (CCIA) ordered an investigation into Google internet platform practices in response to a Digital News Publishers Association complaint. The CCI is of the “prima facie” (first impression) view that Google is “dominant” in the Indian markets for “online general web search services” and “online search advertising services” and that it has a “significant position in the market for online digital advertising intermediation services.” Given that, the CCI is of the prima facie view that Google has violated certain Competition Act provisions, meriting further investigation, said the January 7 CCI notice, ordering its director general to report back within 60 days. Google did not immediately comment on the CCI action in response to a The Capitol Forum query.

The CCI also ordered an investigation into Apple App Store practices after coming to the prima facie view that they violated Competition Act provisions, said a December 31 commission notice, responding to Together We Fight complaint. The CCI ordered its director general to report back within 60 days. Apple did not immediately respond to a The Capitol Forum query for comment.