Ohlhausen has edgier tone as she takes FTC reins

24 March 2017 10:18am

By Kirk Victor. Originally published on FTC:Watch February 3, 2017

Maureen Ohlhausen, known for her affability, collegiality and intellectual acuity during nearly five years as a member of the Federal Trade Commission, has changed her tone in the last few weeks.

Ohlhausen, a Republican, who on Jan. 25 was picked by President Donald Trump to be acting FTC chairman, has been making waves by bluntly stressing what she sees as the Democratic-led commission's missteps — and highlighting her dissents over the years.

The day before she was named acting chairman, Ohlhausen delivered comments at the Heritage Foundation, a conservative think tank that is close to Trump, and seemed to take an edgier tone than one is accustomed to hearing from her.

"Although well-intentioned, the majority Commission under President Barack Obama at times pursued an antitrust agenda that disregarded sound economics," she said. "It imposed unnecessary costs on businesses, and substituted rigorous analysis of competitive effects for conclusory assertions of 'unfair competition.' It also undermined U.S. inventors' IP [intellectual property] rights."

Ohlhausen added that despite her "best efforts," she could not always reach a compromise and noted that "better competition policy" is needed. "I worry that the FTC imposes unnecessary and disproportionate costs on business," she said, and cited as the "most obvious examples" those times "when the Commission wrongly sues a firm to potentially devastating effect."

Several veteran antitrust practitioners, who declined to speak for attribution, said that Ohlhausen's tough rhetoric reflects her campaign to get the chairman's perch on a permanent basis. Still, her efforts may be for naught, because as an insider who has spent much of her career at the FTC, she may be fighting an uphill battle, given Trump's oft-proclaimed desire to drain the swamp.

"Her comments [at Heritage] may certainly have had a political gloss to them, but I think they reflect a real substantive difference that she has [with Democratic commissioners, especially] on the consumer protection side," a former high-ranking FTC official, said.

"She is such a nice, decent, reasonable person that she might have thought it helpful to emphasize to the world at large the number of ways that she has calmly, but consistently and firmly disagreed with the majority on the commission," Stephen Calkins, a law professor at Wayne State University and former general counsel at the FTC, said in an interview.

"She was about to become either chair or chair-elect and anybody who had carefully followed her dissents would know that that would mean a changed approach, and she obviously wanted to highlight the extent of that change," Calkins added.

Despite Ohlhausen's tough judgments that the FTC had at times acted without a sound economic basis, her former Democratic colleague on the commission, Julie Brill, wasn't especially surprised at her critique.

"I don't feel that I have been stung by her statements," Brill, now at Hogan Lovells, said in an interview. "She is articulating things that she has said before. She has stated before that she thinks that the commission was not, in particular matters, looking at economics in a sound way."

"Look, everybody at the FTC thinks about economics all the time and is constantly looking for economic evidence and embracing any economic evidence that is available to determine what is the right path with respect to both policy issues as well as enforcement actions," Brill noted.

"But economic evidence isn't always clear, and sometimes you have data that is weak or data that points in a certain direction or data that doesn't point in any direction," Brill added. "I think there's lots of room for interpretation over economic analysis."

But Ohlhausen's emphasis of her differences with the Democratic-led commission didn't start with her remarks at Heritage. The day before Trump's inauguration, she let loose with what she called "Throwback Thursday dissent tweetstorm," featuring some 14 tweets with her dissents and disagreements with the majority.

Her unhappiness with some of the agency's decisions also bubbled over in the final days of the Edith Ramirez-led commission. She filed a scathing dissent in the commission's decision on Jan. 17 to sue Qualcomm for allegedly abusing its patents essential to industry standards. She blasted the action as based on a "flawed legal theory (including a standalone Section 5 count) that lacks economic and evidentiary support."

Ohlhausen also took a shot at the timing of the Qualcomm ruling — "on the eve of a new presidential administration." She has made clear that once the commission has a majority of Republican members, she would like to reverse that decision. (After Feb. 10, when Ramirez steps down, the commission will have just two of its five members — Ohlhausen and Democrat Terrell McSweeny. Trump will be able to replace those three vacancies, two of them with Republicans.)

Then on Jan. 19, she dissented in a case against Uber Technologies in which the commission charged that the ride-hailing company misled prospective drivers with exaggerated earnings claims and misleading claims about its financing program and hit it with a $20 million judgment to be used for refunds to affected drivers.

Her dissent found that the $20 million judgment "far exceeds the best estimate of actual consumer harm."

Of her recent moves, Calkins said, "Commissioner Ohlhausen was issuing that tweet storm and giving that [Heritage] speech when it was still unknown whether she would be 'acting' as opposed to real chair. The decision would be made by a president who had been emphasizing his desire for dramatic change from the previous administration."

"She wanted to get the message out that this is a new day and she is a different person than had been in charge before," Calkins added.

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