Ohlhausen touts successes amid waiting game

8 August 2017 9:23am

By Kirk Victor and Claude R. Marx. Originally published on FTC:Watch on August 4, 2017

Let's call the last six months a mixed bag for Maureen Ohlhausen of the Federal Trade Commission.

Back in January, President Donald Trump named her acting chairman of the agency. Since then Ohlhausen has touted accomplishments that the agency has rolled up while downplaying her own frustrations.

Even as she launched some major initiatives, including an economic liberty task force to promote competition by targeting excessive state licensure, Ohlhausen, who has devoted much of her career to the agency, has failed to get the prize she clearly wants: a nomination to be the permanent chairman.

In public, Ohlhausen has been determinedly upbeat and insists she has not felt constrained by not being the permanent chairman.

"I have put the 'act' in acting," she quipped in an interview with FTC:WATCH.

Ohlhausen said that in addition to the agency's push for states to loosen occupational licensing requirements, she is especially proud of the move to streamline compliance requirements with the Bureau of Consumer Protection's civil investigative demands. That's a welcome development for businesses that have long complained about the expense and time that CIDs eat up.

During her six months as acting chairman, Ohlhausen, a Republican, has had to steer the FTC when there is only one other sitting commissioner, Terrell McSweeny, a Democrat. Three seats on the five-member commission are vacant, giving McSweeny a veto and increasing the chances for stalemate on controversial cases and policy initiatives.

Given that landscape, it's not surprising that among veteran antitrust, privacy and consumer protection practitioners, the first topic of conversations is often why the White House is taking so long not only to nominate her or someone else to be permanent chairman, but also to fill the other three seats on the five-member commission.

The fallout from the FTC's short-handedness played out recently when a 1-1 vote scuttled a proposed settlement of a case against DirecTV after McSweeny took the extraordinary step of writing the presiding judge that the proposal was insufficient to protect consumers harmed by the firm's alleged deceptive advertising. (See related story by Mike Swift: FTC, DirecTV gear up for long haul as deceptive ad trial nears.)

"Everybody likes to say that for the overwhelming majority of matters considered by the commission, there is agreement among the commissioners," noted Phyllis Marcus of Hunton & Williams. "That is probably still the case, but I would imagine that where it is not true, it is incredibly frustrating."

"Although Ohlhausen has been working vigorously to make the best of a bad situation, that work cannot conceal that it is a bad situation," Stephen Calkins, a Wayne State University law professor and former FTC general counsel, wrote in an e-mail. "The FTC is suffering from an unprecedented absence of top leadership…The word 'acting' appears eight times on the organization chart: chair, all three bureau directors, general counsel, [director of office of] policy planning, public affairs, and chief technologist."

"No agency can function especially well while it waits for permanent leadership," Calkins added.

Especially given these difficult circumstances, Ohlhausen gets high marks from practitioners and academics for steering the agency effectively.

"She has done an excellent job at acting as if she is not the acting chairman — establishing new policies and obviously continuing the day-to-day work of various merger investigations and the like," Steven Cernak, of counsel at Schiff Hardin, said in an interview. "Has she been hampered and has she been unable to do everything she would like to do? Yes, but even if those three seats were filled, I don't think she would have been able to do everything that she wanted to do either."

In pushing her agenda, Ohlhausen has been especially emphatic about economic liberty, having participated in three recent events highlighting the issue. While acknowledging in a speech at the Heritage Foundation that "some [occupational] licensing may be justified," she stressed that some requirements are excessive. Iowa, for example, requires 615 hours of cosmetology theory to obtain a license. She even showed a humorous side, titling her speech, "Death By A Thousand Haircuts."

"If you keep an eye on the commission's docket and the commission's enforcement cases and the policy work it is doing, it is quite clear that the commission is a cop on the beat," David Vladeck, former director of the Bureau of Consumer Protection, said. "The scope has been diminished a little given the fact that there are only two commissioners in place, but I think the commission is doing an admirable job short-staffed."

A former senior Democratic antitrust enforcer said that Ohlhausen has "managed the day-do-day work of the commission when she's under some degree of scrutiny by the White House."

Still, Cernak said that the word "acting" in Ohlhausen's title carries drawbacks. "It is mostly symbolically, but I don't think that is unimportant. For instance, I think her speeches would resonate a lot more with enforcers outside the United States if she did not have 'acting' in front of her title."

"Whether it is companies or antitrust practitioners here or certainly enforcers and practitioners outside the US, there is at least that seed of doubt that perhaps whatever it is that she is doing now will not be the policy of the FTC at some point in the near future," he added.

As if to underscore that such doubts are misplaced, the FTC, in an unusual move, published a list of "FTC Six-Month Accomplishments," a change from its customary practice of releasing such reviews on an annual basis.

"Ohlhausen is plainly campaigning for the appointment as permanent, but she is doing so by performance, so it is hard to fault her for that," Calkins noted. "I have no recollection of any such document or any such campaign by the two previous extended-service acting chairs, David Clanton (March 4, 1981 to Sept. 25, 1981) and Terry Calvani (Oct. 7, 1985 to April 20, 1986)," Calkins wrote in the e-mail.

"The decision on when and how to provide commission activity updates is something that is up to each individual chairman," an FTC spokesman said. "The last six months have been a very busy time at the FTC, and this was an opportune time to provide an update. The FTC issues official reports on an annual basis, but chairmen and commissioners also provide updates on agency matters through speeches and other avenues."

The release leads with the economic liberty task force and agency streamlining and regulatory reform and moves on to highlight outreach to help small businesses avoid scams. It then notes steps it has taken to help businesses protect data and describes its connected cars workshop in June. It segues to a review of consumer protection enforcement, including a special focus on military consumers, and ends with a review of its competition enforcement record.

The list, Calkins wrote, shows that "from day one, Ohlhausen has proven that she would not tread water but rather would move aggressively simultaneously to lead the agency and make the case that she deserves appointment as 'permanent' chair."

Calkins found it noteworthy that the top four accomplishments listed "seem targeted to appeal to the White House"— the economic liberty task force, agency streamlining and regulatory reform, small business and military consumers.

Maybe so, but Olhausen's relentless efforts for more than six months to persuade the president to nominate her as permanent chairman obviously have fallen short.

"I'm sure she wishes this were more settled," Marcus said. "People have put their lives on hold. She is threading the needle well — showing that she is doing as much as she can and the agency isn't just waiting for a final decision."

Calkins is more blunt. "Everyone who cares about the FTC wants this purgatory to end," he said.

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