Senator Wants DOJ to Absorb FTC to Tackle Big Tech Firms

(Bloomberg) -- Republican Senator Josh Hawley released a proposal Monday to absorb the Federal Trade Commission into the U.S. Justice Department as a way to push back on Big Tech companies such as Alphabet Inc.’s Google and Facebook Inc.

The plan, from one of the GOP’s loudest tech opponents, reflects concern among Republicans about conflicts arising from the agencies’ overlapping responsibility to enforce competition law, as well as frustration with what many critics say is the FTC’s failure to rein in big companies in and out of tech before they become dominant.

Hawley’s proposal came in a white paper. If formalized into a bill and passed into law, it would eliminate the five commissioners who run the FTC in favor of a Senate-confirmed director reporting to the Justice Department’s leadership. It also recommended giving the FTC new powers to enforce rules designed to keep tech markets from favoring big players, including limiting the data that firms can acquire or use, as well as increasing the agency’s fining authority and making ethics reforms.

“The FTC isn’t working,” the Missouri freshman senator said in a statement accompanying the proposal. “It wastes time in turf wars with the DOJ, nobody is accountable for decisions, and it lacked the ‘teeth’ to get after Big Tech’s rampant abuses.”

Turf Wars

While the move could end squabbles between the agencies about enforcement, it may worry those who say the Justice Department has politicized antitrust, particularly under President Donald Trump. The FTC, established by Congress in 1914, is designed to be independent, with commissioners drawn from both political parties and legal limits on their removal by the president.

Hawley’s paper acknowledges the agency was designed to operate outside political considerations, but says it means a “lack of meaningful supervision from the political branches.” That has “complicated oversight, and slowed reform,” he wrote.

Some Republicans and the business community have long worried that diverging enforcement by the FTC and Justice Department creates uncertainty for businesses. Typically, whichever agency has expertise in a particular industry or company takes the lead, but turf wars have broken out, including recent disputes over who would probe large technology firms. Companies often prefer dealing with the Justice Department because they find the FTC process long and costly.

Frequent Filer

The paper represents Hawley’s latest foray into tech policy. He has previously proposed bills to make companies demonstrate they moderate content in a politically neutral manner if they want to keep a prized liability shield. He’s also proposed prohibiting unlimited scrolling on social media, expanding children’s online privacy and banning allegedly addictive features of video games.

Hawley has sometimes attracted Democratic partners on his legislation. Still, his bill on political neutrality in particular attracted scorn from tech experts, and to date, his initiatives haven’t gained significant momentum in Congress.

Hawley’s white paper also proposes empowering the FTC to enforce rules on issues such as moving data between services, which tech policy experts say could help upstart firms compete with established giants. The paper also proposes that the agency get “authority to limit the amount of data large firms can acquire or use” -- an attack on companies such as Google and Facebook that vacuum up data.

The plan outlined in Hawley’s paper suggests the FTC still enforce the consumer protection laws that are part of its mandate. The agency, which now can only fine companies for repeat offenses, would gain the ability to fine them for first violations. The proposal also discusses passing “ethics laws that ban senior officials from working for very large companies at all for a few years.”

To contact the reporter on this story: Ben Brody in Washington, D.C. at btenerellabr@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Ros Krasny, Linus Chua

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