CCIA Appreciates Congressional Focus On Antitrust Oversight

June 9, 2010

The Senate Antitrust Subcommittee will hold a general oversight hearing this afternoon on the two federal antitrust enforcement agencies charged with protecting consumers — the Department of Justice’s Antitrust Division and the Federal Trade Commission’s Bureau of Competition. It will be Chairman Kohl’s chance to ask questions about mergers he has expressed concern about such as the Comcast-NBC proposal.

The following statement can be attributed to President & CEO Ed Black:

“We are very happy that Chairman Kohl and the rest of the subcommittee are paying close attention to antitrust enforcement. It is good to see that the antitrust cops are back on the beat at the federal agencies with this administration – but we wouldn’t necessarily want them looking into everyone’s windows. We need middle ground, balanced competition policy. Smart enforcement protects competition and consumers, but too much untargeted enforcement could harm companies.

“Congress needs to make sure these agencies have the right tools for targeted enforcement that goes after dominant players when they use that power to crush competition. There is much legitimate debate over how and when antitrust laws should be applied, but making sure the FTC and DOJ have all the tools necessary to do so, which includes Section 5 of the FTC Act, is unquestionably necessary to foster competitive and healthy markets high-tech markets.

“To a greater extent than most markets, high-tech and internet-centric industries are characterized by a heavy reliance on complicated patent portfolios, network effects, economies of scale, standardization and interoperability. These inherent features can often make anticompetitive actions difficult to detect, harder to remedy, and more detrimental to innovation and venture capital allocation. Section 5 is an important and necessary component in preventing anti-consumer business practices in many of these areas.”

Additional background:

Although the DOJ and the FTC have similar responsibilities when it comes to protecting consumers from anticompetitive business practices, their tools are not identical and each has its own unique competitive advantages. The DOJ can levee steep fines and enforce criminal antitrust violations, while the FTC has less severe, more prescriptive remedies but can enforce a broader range of anticompetitive actions using Section 5 of the FTC Act, which seeks to prevent “unfair or deceptive” trade practices. Both roles are essential to cover the broad spectrum of anticompetitive business behavior, particularly in the technology industry where certain harmful practices, such as patent ambush in the standard setting process, have been judged to be outside the scope of traditional antitrust law.

 

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