�鶹��ý

�鶹��ý Trade Commission Chair Lina M. Khan testified today before the Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy and Consumer Rights. The FTC testimony presented to the Subcommittee describes the work the agency is doing to ensure robust antitrust enforcement that fully accounts for the harm that anticompetitive mergers and conduct cause to honest businesses, workers, and consumers.

“Vigorous antitrust enforcement is critical to the growth and dynamism of our economy, as well as to our shared prosperity and liberty. Recent decades have vividly illustrated how Americans lose out when markets become more consolidated and less competitive. Prices rise, wages fall, and our markets become more fragile and less resilient,” said Chair Khan. “These facts invite us to reassess how we can enforce the antitrust laws to ensure maximal efficacy. At the FTC, we are doing so by reactivating the full set of authorities that Congress granted us and by ensuring that we are being faithful to controlling law and precedent. We are also updating our tools to ensure they better correspond to new market realities.”

The FTC’s testimony details how the agency has taken many steps to vigorously enforce the law over the past year, including challenges to major transactions in semiconductor, defense, energy , healthcare, and digital markets. The testimony notes that many of these cases reflect the broader lens that FTC is taking to ensure that its enforcement fully captures the anticompetitive effects from mergers, including a focus on both non-horizontal and future-looking harm as well as the impact on workers. 

In a year full of enforcement successes, the testimony highlights a handful of cases, including the FTC’s successful challenges to stop U.S. chip supplier Nvidia Corp.’s proposed $40 billion acquisition of U.K. chip design provider Arm Ltd., which represented the largest semiconductor merger ever attempted when announced, and Lockheed’s proposed acquisition of Aerojet, a defense merger that would have eliminated the country’s only remaining independent supplier of key missile propulsion inputs and given Lockheed the ability to cut off its competitors’ access to these components critical to our national defense. The testimony also notes the FTC’s recent suit to block social media giant Meta’s proposed acquisition of independent virtual reality development studio Within Unlimited. The complaint contends that the merger prevents future competition between the merging parties, reducing consumer choice, innovation, and competition to attract the best employees.

The testimony also describes the measures the Commission has undertaken to update its enforcement tools consistent with the full set of authorities that Congress provided the agency. Examples include reinstating its longstanding practice of requiring parties that proposed unlawful mergers to receive prior approval and give prior notice for future transactions. The Commission also has begun including in its orders measures to curb roll-up strategies.

According to the testimony, the Commission and the Department of Justice began the process of revising the merger guidelines manual to better reflect modern market realities. The two agencies are also considering how to revise merger notification forms to obtain additional information that will streamline the merger review process by effectively and efficiently identifying transactions that warrant in-depth investigation.

In its anticompetitive practices work, the testimony explains how the Commission is orienting its limited enforcement efforts around targeting and rectifying root causes to avoid a whack-a-mole approach. The FTC successfully amended its complaint against Meta, the company formerly known as Facebook, in a lawsuit that, in addition to other forms of relief, seeks the divestment of Instagram and WhatsApp. In January of this year, the federal court denied Facebook’s motion to dismiss the FTC’s case and the lawsuit is ongoing.>

The testimony notes that the Commission is also prioritizing action against business practices that unlawfully restrict consumers’ ability to repair their products, costing them more over the long term. In July 2021, the FTC unanimously voted to issue a statement signaling its intent to ramp up law enforcement against unlawful repair restrictions that prevent small businesses, workers, consumers, and even government entities from fixing their own products. Since the statement was issued, several large tech firms have amended their repair policies and the FTC has pursued enforcement action against several major firms that had imposed restrictive repair policies. The Commission is also closely scrutinizing the growing use of non-compete clauses throughout the economy.

Despite these many successes, the testimony explains that the agency faces headwinds as well.  Significantly, despite a mandate covering a broad swath of the U.S. economy, the FTC continues to lack sufficient funding.  It notes that the number of full-time employees at the FTC is roughly two-thirds of what it was at the beginning of 1980, while the nation’s GDP has increased six-fold over that period along with the demands on our scarce agency resources.  The agency is committed to working  with Congress to ensure it has the resources and tools it needs to protect the American people from anticompetitive merger and conduct.   

The Commission vote to approve the testimony was 3-2, with Commissioners Wilson and Phillips dissenting and issuing a dissenting statement.