Trump eyes Simons for FTC chair, Wilson for commissioner spot

22 August 2017 3:27pm

By Kirk Victor , Claude R. Marx and Jenna Ebersole Originally published on FTC:Watch on August 18, 2017

President Donald Trump is likely to nominate Joseph Simons, co-chairman of the antitrust group at Paul Weiss, to be chairman of the Federal Trade Commission, FTC:WATCH has learned.

Simons, who twice before served at the commission — as director of the Bureau of Competition during the George W. Bush administration and as associate director for mergers as well as assistant director for evaluation in the 1980s — won high praise in interviews with more than a dozen lawyers who closely follow the FTC.

"Joe did a superb job as director," former FTC Chairman Timothy J. Muris said in an interview. "Our agenda was aggressive and required both skillful preparation and implementation. Joe excelled at both."

"He was my student at Georgetown," Steven Salop, a professor at Georgetown Law, recalled in an interview. "We often disagree on policy, but I have a lot of respect for him — he is smart, he is thoughtful, he is an aggressive litigator."

In addition to Simons, Trump also is expected to choose Christine Wilson, a senior vice president at Delta Air Lines who leads the airline's regulatory and international teams, to fill a vacant Republican seat.

Wilson, who had come to Delta from a partnership at Kirkland & Ellis and had earlier served at the FTC as chief of staff to Muris, also was widely praised for her work.

"Christine managed admirably to balance dozens of tasks, both substantive and procedural," Muris noted. "She was tireless, skillful, and extraordinarily efficient."

A former colleague described Wilson as "very sharp and strategic" with a "significant focus on international issues" and a "believer in considering merger efficiencies from a total welfare standpoint."

In choosing Simons, Trump would bypass Maureen Ohlhausen, who has served as acting chairman since January and would remain in that role until Simons is confirmed. Given the Senate's slow pace in moving nominees, it could take several months or more before confirmation votes are taken on Simons and Wilson.

Though FTC:WATCH has not learned the timing of the formal nominations, they would come amid criticism of the Trump administration for failing to act sooner to fill three vacant seats at the five-member FTC — two Republicans and one Democrat (or at least someone who is not a Republican.) The FTC Act states that "not more than three" of the commissioners shall be members of the same political party.

The administration's glacial pace has created an uncertain climate for business and caused consternation among antitrust, privacy and consumer protection practitioners.

Just before the Senate took its August recess, Republican Senator Orrin Hatch of Utah, went to the floor to express frustration not only at the FTC's vacancies but also at the fact that Makan Delrahim, nominated in March to head the Justice Department's antitrust division, has still not received a confirmation vote.

"As these vacancies linger, however, uncertainty lingers as well," Hatch declared in impassioned remarks. "Critical merger and acquisition activity remains sidelined, as innovation is chilled and expansions are put on hold. All of this comes at an unnecessary cost to our businesses and consumers."

That there are only two sitting commissioners — Ohlhausen, a Republican, and Democrat Terrell McSweeny — also has caused a standoff in some high-profile matters. For example, 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 FTC:WATCH, No. 922, Aug. 4, 2017).

"Maureen has a life and she has a commission to run, and leaving her in this sort of limbo of being an acting rather than full chairman has not done the agency any favors, hasn't done Maureen any favors, and I don't think it has done Terrell any favors," David Vladeck, former director of the Bureau of Consumer Protection, said. "It is not responsible government."

Simons didn't respond to a request for comment, but his likely nomination prompted one former colleague to recall that "when Joe was bureau director he was really well-known for being decisive and managing the bureau efficiently. If you know Joe, Joe knows his own mind. In terms of policy slant, he was Muris' bureau director so I think a fair amount of the Muris policy points would still register on Joe's radar."

That record as bureau director includes prevailing in all 64 merger enforcement actions by the commission, initiating more than 100 investigations in two years and taking more non-merger enforcement actions in one year than in any year in the prior two decades, according to the Paul Weiss website.

"When he was at the FTC, he and Muris had a very aggressive approach to litigation," Salop observed.

"They were not very aggressive towards vertical mergers," he added. "I think they had a general skepticism and a high bar on raising rivals' cost theories."

"But they were not conservative in the sense of doing nothing," he continued. "Instead they were aggressive in ways consistent with their agenda, such as overreaching IPRs [intellectual property rights], and government barriers to competition."

Simons, with Barry Harris, a former deputy assistant attorney general for economics at the antitrust division, developed "critical loss analysis," a technique for defining markets that has been used by the government and the US Court of Appeals and was incorporated into the Department of Justice-Federal Trade Commission Merger Guidelines.

Antitrust lawyers interviewed for this story invariably describe Simons as a "solid Republican," but without a hard-edged ideological slant.

"Joe is notably not a zealot," a former colleague said. "When he chaired meetings as BC director, he would often ask people for their views before even hinting at his own position. A characteristic remark of his was, 'Let me ask you a question.' I heard that dozens of times. And he actually seemed to be open about the answer."

Wilson also didn't respond to a request for comment, but a former colleague sees her in a different light from Simons. "Christine is more ideological," this source said. "She can back a corporate line, even a palpably outrageous one, without a blush. She managed this several times when she came in to pitch a position to the FTC after she had moved to private practice. That's what advocates are trained to do, but she had a steely directness."

More than one source for this story took note of Simons' lack of consumer protection experience. "By failing to appoint someone with a track record of supporting consumer protection and taking on the special interest big business lobby, President Trump is turning the FTC into the 'Federally Terrified of Consumers' agency," Jeffrey Chester, executive director of the Center for Digital Democracy, said in an e-mailed comment, when advised of the likely nominees.

"These appointments will likely further weaken an agency that has struggled to remain effective despite tremendous pressure placed on it from business interests not to act," Chester added.

Chester also lamented that Ohlhausen was not picked. "Chairman Ohlhausen deeply cares for the mission of the FTC and has tried to walk what is a very difficult tightrope between doing what she knows is right and the political orientation of the Trump administration that is hostile to the public interest. She deserves praise for her work and also for her willingness to act as fairly as possible."

Vladeck counters that Simons' inexperience in practicing consumer protection law "does not strike me as any kind of black mark or some sort of negative aspect to taking over the chair. He has spent enough time at the Federal Trade Commission to know something about it. It is not like we are hermetically sealed off from one another. We are separate in many respects, but we talk about cases together. There is some cross-pollination."

Former FTC Chairman William Kovacic was even more dismissive of such criticism, saying, "there is a good chance that if you had Moses, Abraham and Jesus Christ offered as candidates, [the activists would say], 'Gosh, these guys are so old.'"

Meanwhile, given the strong likelihood that Simons will be nominated and eventually confirmed, Ohlhausen, whose term does not end until September of next year, will have to decide whether to complete her term as a commissioner or step down. (McSweeny's term ends next month.)

If Ohlhausen should leave the agency early, Noah Phillips, who has served since 2011 as chief counsel to Texas Republican Senator John Cornyn in his work on the Judiciary Committee, is expected to be nominated to complete that term. Phillips has advised Cornyn on a range of issues, including antitrust and intellectual property.

Before his work on Capitol Hill, Phillips was an associate at Steptoe & Johnson in Washington, and at Cravath, Swaine & Moore in New York, according to his bio on the Federalist Society website. He, too, didn't respond to a request for comment.

At the same time, Rohit Chopra remains the leading choice to fill the vacant Democratic seat. While at the Consumer Financial Protection Bureau from 2010 to 2015, Chopra aggressively oversaw the student lending business. A senior fellow at the Consumer Federation of America, Chopra would be a rare non-lawyer on the FTC. He didn't respond to a request for comment.

The White House also didn't respond to a request for comment.

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