In spite of Barack Obama’s tepid vow to reduce the burden of government regulation, Federal Trade Commission Chairman Jon Leibowitz — who manages to remain in power even though his term expired four months ago — has vowed an aggressive expansion of his agency’s control over the US economy. Leibowitz told Bloomberg News that he is intentionally suing businesses so he can obtain precedential court rulings to affirm FTC aggression:
Leibowitz said yesterday he wants the courts to validate his view that a key part of the law that created the FTC gives it authority to go after companies that engage in a broad range of antitrust violations.
“We would like to see it tested by appellate courts because we think the legislation, the plain language of the legislation, makes it crystal clear that our jurisdiction goes beyond the antitrust laws,” he said in an interview with Bloomberg News.
The FTC set up a legal showdown when it sued Intel, claiming the world’s largest chipmaker used threats and retaliation to block customers from buying competitors’ products. While Intel and some business groups and antitrust lawyers said the FTC was overstepping its bounds, the settlement avoided a court-approved precedent.
[ ... ]
Santa Clara, California-based Intel settled the FTC case in August by agreeing not to use threats, retaliation or exclusive deals to block customers from buying competitors’ products.
The FTC in the case invoked what is known as Section 5 of the law that established the agency in 1914 to go beyond what is specifically banned by other federal antitrust statutes. U.S. courts since the mid-1970s generally have limited what is illegally anticompetitive under those laws.
[ ... ]
On health care, Leibowitz said the FTC is making controlling costs a higher priority. The agency is targeting deals in which brand-name drugmakers pay generic manufacturers to stay out of the market, resulting in higher prices, he said. It also is looking at the effect that hospital mergers have on health-care costs, he said.
Leibowitz said legislation opposed by the pharmaceutical industry to restrict agreement between generic and brand-name manufacturers has a “very good chance” of winning congressional approval. The Senate last year blocked the measure, which has been passed in the House.
All this means is that antitrust lawyers — Leibowitz’s real constituency — will continue to get richer as businesses struggle to survive and serve the market. We can look forward to new layers of FTC price controls, restrictions on technology R&D, and an increase in patent litigation (as Leibowitz wants to ban settlements).