Last month, I noted the Federal Trade Commission’s order against Realcomp II, Ltd. The central idea is that the FTC claims the authority to dictate what content a private organization must publish on its website. (The FTC already has the power to dictate what content you can’t publish on a private website.)
Under the Realcomp precedent the FTC could, hypothetically, force any public website to publish content that contradicts the website owner’s objectives or interests. For example, the FTC could order Mises.org to offer “non-discriminatory” access to opponents of Austrian economics — in the interest of providing “consumers” with greater choice. Granted, it’s an extreme hypothetical, but since the FTC recognize no limits on its own authority, it’s not a straw man.
That said, Realcomp isn’t going down without a fight. The Michigan-based Realtor group will ask the U.S. Sixth Circuit Court of Appeals to review and set aside the FTC order. Karen Kage, Realcomp’s chief executive officer, confirmed in an e-mail today that her board of governors “unanimously agreed to move forward with an appeal.”Realcomp already defeated the FTC once. The Commission’s then-chief administrative law judge, Stephen J. McGuire, dismissed the antitrust complaint against Realcomp in December 2007. But since the appeal was heard by the FTC commissioners — the same people who approved the complaint — McGuire’s initial decision was set aside and replaced by an opinion authored by Republican commissioner William E. Kovacic. (All four sitting FTC members were appointed by former president George W. Bush.)
This was not the first time McGuire and the commissioners clashed. In 2004, McGuire issued an initial decision dismissing the FTC’s antitrust complaint against Rambus Incorporated. As in Realcomp, the commissioners unanimously reversed McGuire; a federal appeals court in Washington ultimately vacated the FTC decision, and the commissioners dropped their complaint after more than seven years of litigation.
McGuire, who retired from the FTC and is now a vice president of the University of Louisville Hospital, said in an email he expected the courts to once again vindicate his judgment over the commissioners:
I was advised…of the Commission’s reversal of the RealComp [Initial Decision].The only surprise is that it took two years to reverse me. The Commission has affirmed the staff’s Complaint for something like the 15th time in a row, so we should not have expected a deviation from that pattern in the RealComp case.
I am struck by the similarity of the rationale regarding the [Administrative Law Judge's] conclusions being “inconsistent with governing law and antitrust policy”, as they mimic precisely what the Commission said in their reversal of the Rambus decision; a case where the Commission’s findings, if not their underlying motivations, have been thoroughly repudiated by the federal courts.
The RealComp Complaint, I believe, is an attempt to expand, inter alia, the Commission’s regulatory authority; particularly under Section 5 of the FTC Act. The facts in RealComp appear clear that the multiple listing service in question, did not unreasonably restrain trade as alleged. The Courts will again ultimately determine the propriety of the challenged conduct and I am confident that their review will substantiate the conclusions reached in the initial decision.
As with all FTC cases, there is really one question to be decided in the Realcomp appeal: Should the FTC have more power over individuals and businesses? Members of the antitrust community will no doubt answer “yes” and support the FTC in this appeal. It remains to be seen whether Realcomp will have any allies on the “no” side. No groups supported Realcomp during the FTC appeal, but perhaps recent criticism of the Commission’s extension of advertising rules to websites and blogs will prompt libertarians to pay special attention to this case.