FROM HUMPHREY'S EXECUTOR TO SEILA LAW: ENDING DUAL FEDERAL ANTITRUST AUTHORITY.
|Cox, Alyson M.
In the summer of 2019, the Department of Justice and Federal Trade Commission announced that they would be dividing the investigations into four of the biggest American tech firms, with the DOJ investigating Google and Apple and the FTC investigating Amazon and Facebook. Senator Mike Lee was among the decision's many critics; he argued that the "splitting of this tech antitrust review across two federal agencies, despite the many similar competition issues that will be investigated, illustrates the absurdity of having two federal agencies handling civil antitrust enforcement." (1) But even this "brokered peace didn't last long," (2) and it soon became clear that the DOJ and FTC, would be conducting overtopping investigations. (3)
The DOJ and FTC have shared civil antitrust enforcement since the early 1900s, (4) and although their authority is not identical, "the core of the agencies' jurisdiction is congruent." (5) This dual enforcement structure has been continuously challenged for the better half of the last century by both academics and government actors, (5) although conventional wisdom holds that elimination of either agency's civil antitrust authority would be politically costly. (7) There are well-recognized efficiency costs to the dual enforcement structure, including the expensive and time-consuming merger-clearance process. (8) The two agencies often compete in "turf wars" over cases, (9) and have even filed amicus briefs against each other in federal court, (10) raising serious questions of government efficiency and procedural and substantive fairness.
But in addition to the well-worn complaints about efficiency and fairness, there are significant, mounting reasons to subject this dual enforcement authority to constitutional evaluation, especially in light of recent doctrinal shifts regarding the constitutionality of independent agencies. Last term, the Supreme Court held in Sella Law that the independence of the Consumer Financial Protection Bureau (CFPB) was an unconstitutional violation of the separation of powers, shrinking Humphrey's Executor down to a very thin, very wobbly protection of the FTC's constitutionality. Aggrieved parties are already challenging FTC actions on a range of constitutional grounds, (11) and the majority opinion in Seila Law provides a roadmap for doing so.
This Note catalogues and proposes solutions to both the traditional concerns of efficiency and fairness and the modern constitutional problems posed by the current dual enforcement structure. Part I will compare the two antitrust agencies on the basis of their structures, accountability, statutory authority, and enforcement procedures, as well as evaluate potential concerns with vesting either agency with the sole authority to enforce civil antitrust laws. Part II will evaluate the perils of the current dual enforcement structure, exploring both the traditional arguments about efficiency and fairness and the modern constitutional challenges. Part III will evaluate potential legislative solutions to the problem of dual antitrust enforcement authority in the United States. The constitutionality of the FTC's status as an independent agency is again under serious question; it is time for Congress to seriously rethink and restructure civil antitrust authority accordingly.
COMPARISON OF THE AGENCIES
Although the DOJ and FTC's overlapping jurisdiction is heavily criticized, there are potential problems posed by giving either agency the exclusive authority to enforce civil antitrust laws. This Part will analyze those concerns, starting with each agency's structure, accountability, statutory authority, and enforcement procedures.
The Antitrust Division of the Department of Justice
Structure and Accountability
The Antitrust Division of the Department of Justice is headed by an Assistant Attorney General, who reports to the Associate Attorney General and is ultimately accountable to the President. (12) All officers in the DOJ serve at the pleasure of the President; no removal restrictions protect the Attorney General, Associate Attorney General, or the officers of the Antitrust Division. (13) As such, the policy positions and enforcement actions of the Antitrust Division are properly attributed to the Attorney General and the President. The Antitrust Division is divided into several sections that report to the Assistant Attorney General, including Givil Sections, Criminal Sections, Economic Analysis Group, and other offices such as the International Section. (14)
Antitrust Enforcement Authority & Procedures
The Antitrust Division is empowered by the Sherman and Clayton Acts, which give the Division authority to enforce both civil and criminal antitrust laws. (15) All enforcement of antitrust laws by the Division must take place in the federal courts. (16) The Division must prove violations of antitrust laws to a federal judge, "who will examine the matter without deference to the Division's views." (17) Accordingly, enforcement proceedings are governed by either the Federal Rules of Civil Procedure or the Federal Rules of Criminal Procedure. (18) Failure to abide by the applicable procedural rules results in the exclusion of evidence and potential sanctions against the Division. (19) In civil cases, the Division can issue information compulsory requests through subpoenas, "[s]econd [r]equests," and Civil Investigative Demands (CIDs); CIDs and subpoenas are subject to judicial review, while second requests can only be appealed internally. (20)
The Division also shares jurisdiction with the FTC for mergers subject to notification and review under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). (21) This statute provides the two agencies only thirty days after notification to investigate the merger; if either agency determines that more time or information is needed, the agency can issue a second request. (22) During that same thirty days, the Division and the FTC must decide which agency will evaluate the transaction at issues through the "clearance" process. (23) When the Division decides to challenge anticompetitive mergers, it seeks both preliminary and permanent injunctions in federal district court. (24)
Potential Problems with Sole Enforcement Authority
One persistent concern with lodging any, let alone all, antitrust enforcement power in the DOJ is the fear that antitrust statutes will be used by the President for political purposes. The DOJ has, recently and historically, been criticized as such. (25) This criticism has been directed toward the Trump administration, in light of the President's public distaste for CNN, when the Division sought to enjoin the merger of AT&T and CNN's parent company, Time Warner. (2)' (1) Most recently, the Antitrust Division was accused of improperly investigating cannabis mergers. Obama's Assistant Attorney General, Bill Baer wrote that the investigations "reek[ed] of an effort to use law enforcement to burden an industry Barr dislikes" in a Washington Post op-ed. (27) A whistleblower from inside the Division testified to Congress that the investigations "were motivated by the fact that the cannabis industry is unpopular 'on the fifth floor,' a reference to Attorney General Barr's offices in the DOJ headquarters building." (28)
The Division's enforcement is also criticized for its use of nonexpert, generalist federal judges as adjudicators in complicated economic cases. This was a major reason why the FTC was established in the first place--the FTC was meant to serve as an "expert body to resolve what are essentially questions of economic policy" (29) that some thought could not properly be resolved in front of "conservative federal judges [who] were not the ideal guardians of consumer welfare." (30) The problem of nonexpert judges was resurfaced in a very public way by the Division itself in the 2018 AT&T-Time Warner case when the DOJ criticized the federal district court judge for "erroneously ignoring fundamental principles of economics and common sense." (31) But the D.C. Circuit affirmed the district court's judgment, (32) in part because findings of fact in such cases are reviewed under the "clearly erroneous" standard. (33) This deference to the trial court's findings of fact makes the identity of the assigned district court judge massively important to the DOJ's ability to enjoin anticompetitive mergers. Ernest Gellhorn and his coauthors raised this concern in 1990, writing that
[a]lthough (he FTC system of administrative litigation has its drawbacks, the placement of all antitrust enforcement in the federal courts is not necessarily a panacea. The federal judiciary has been very uneven in its sophistication regarding antitrust issues. By the luck of the draw, judges with no prior economic, regulatory or antitrust experience whatsoever can be thrust into the role of deciding questions of major economic significance. (34) A more recent, albeit indirect, criticism of the Division's antitrust authority is that it is divorced from consumer protection. Bill Kovacic, who served as a Commissioner for the FTC from 2006-2011, (35) noted in a recent speech that part of what makes the FTC's model successful is that more than half of modern competition agencies are tasked with "something other than competition law," most frequently consumer protection. (3)' (1) He noted that this pairing is "a decided advantage" and offered that the FTC should "consider perhaps as a priority how to work in particular with agencies with a similar configuration with the aim of exploiting the full value inherent in the multidimensional mandate." (37)
The Federal Trade Commission
Structure and Accountability
The Federal Trade Commission is an independent federal agency within the executive branch charged with enforcing both competition and consumer protection laws. The FTC is led by five Commissioners, one of which is chosen by the President to act as...
To continue readingRequest your trial
COPYRIGHT GALE, Cengage Learning. All rights reserved.