The FTC and CFPB Target Big Tech, While the Chamber of Commerce Pushes Back

Footnotes for this article are available at the end of this page.

The first full year of the Biden Administration has seen an overhaul of the leadership of executive agencies, coupled with an intense focus on how big business affects the United States economy. Nowhere are these changes more apparent than in the new leadership and enforcement initiatives of the Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”). After a lengthy confirmation process, former Federal Trade Commissioner Rohit Chopra, previously one of the staunchest consumer advocates at the Commission, took over as the new head of the CFPB in October 2021. Meanwhile, in June 2021, Lina Khan, a former associate professor at Columbia University, legal fellow to Mr. Chopra and outspoken critic of big business, assumed the role of chair at the FTC. Through their respective organizations, Mr. Chopra and Ms. Khan have increased scrutiny of big technology companies, sometimes even without allegations that the companies have engaged in any wrongdoing.

For example, just three weeks after Mr. Chopra’s confirmation to the CFPB, on October 21, 2021, the CFPB ordered six large technology platforms — Google, Apple, Facebook, Amazon, Square, and PayPal — to turn over far-reaching information about their payments system technology.

According to a statement issued by Mr. Chopra: “Little is known publicly about how Big Tech companies will exploit their payments platforms . . . . Will small businesses feel coerced into participating in the payment platform out of fear of being suppressed or hidden in search or product listings? If these tech companies enter a market that competes with other providers on the platform, will these providers be removed or otherwise disadvantaged? The CFPB’s inquiry will help to inform regulators and policymakers about the future of our payments system. Importantly, it will also yield insights that may help the CFPB to implement other statutory responsibilities . . . . The CFPB’s orders build on the efforts of the Federal Trade Commission’s work to shed light on the business practices of the largest technology companies in the world.” The full statement is available here.

Just as Mr. Chopra suggested, the FTC has indeed focused on technological giants. Ms. Khan’s prior work with Mr. Chopra, coupled with the fact that FTC has continued to count Mr. Chopra’s votes in making policy even after his departure from the Commission, make the parity between the CFPB and FTC’s agendas unsurprising. Antitrust concerns are central to Ms. Khan’s agenda as the new FTC chair, and she has criticized the FTC as having missed opportunities to oversee the merger market and the consolidation of competitive companies. Her priorities at the FTC fall in line with the views she expressed in her 2017 article for the Yale Law Journal, which characterized Amazon as an exploitative monopoly, and her work as part of a House Judiciary antitrust investigation that concluded that Amazon, Apple, Facebook, and Google each help monopoly power.

Since taking the reins of the FTC, Ms. Khan has led an effort to streamline the FTC’s rulemaking processes by removing historical procedural safeguards. Among other things, the Democratic-led majority of the FTC voted to strengthen its rulemaking authority by eliminating the selection of an independent judge to oversee the rulemaking process and, instead, assigning that role to the FTC chair — Ms. Khan herself. The FTC’s new rulemaking process also abolishes the historical preparation of a report on intended rulemaking by FTC staff, which was available to the public. As part of the Republican minority of the FTC, Commissioner Christine Wilson voted against that initiative and penned a scathing dissent, opining that the majority intends “to embark on a sweeping campaign to replace the free marketing system with its own enlightened views of how companies should operate.”1

In another move to increase its oversight of the economy, on October 25, 2021, the FTC voted to reinstate what is known as a “prior approval” policy. With this change, the FTC will return to a practice it abandoned in 1995 of “routinely requiring merging parties subject to a Commission order to obtain prior approval from the FTC before closing any future transaction affecting each relevant market for which a violation was alleged.”2  In other words, any company censured by the FTC for engaging in anti-competitive merger activity will not be able to do any future deals without the FTC’s permission.

In the most recent step to strengthen the FTC, on November 19, 2021, the House of Representatives passed the Build Back Better Act. That Act would appropriate $500 million for 2022 to the Federal Trade Commission for the purpose of creating a bureau to protect data privacy. It would also authorize the FTC to impose first-time civil penalties on companies that engage in unfair or deceptive trade practices.

The same day the bill passed the House, the United States Chamber of Commerce sent letters to both Congress and the Federal Trade Commission raising concerns about “agency leadership’s continued overreach and lack of transparency.”3  Practices the Chamber specifically called out as objectionable included “counting votes from resigned commissioners, sending blanket enforcement statements to industry without proof of allegations, and consolidating rulemaking authority with little notice to the public.” The Chamber urged the rejection of provisions of the Build Back Better Act that would expand the FTC’s authority, arguing that this would undermine fairness and due process. The FTC responded to the Chamber of Commerce’s letter with a statement that it would not back down in the face of pressure from corporate lobbyists.

Having now passed the House, the Build Back Better Act will go to the Senate for consideration. Regardless of whether the bill ultimately becomes law, the FTC’s and CFPB’s scrutiny of the largest economic players is unlikely to abate. Regulatory skepticism toward new technology and how that technology uses consumer data may have the unintended consequence of slowing innovation and ingraining the economy in older technologies that are known quantities to regulators. On top of that, fledgling companies that have achieved early success and are hoping to be acquired by larger players may have their hopes disappointed, given the FTC’s increased scrutiny of merger activity and focus on stoking competition with a greater number of service providers.




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