Ohlhausen leaves FTC after 'unprecedented' chairmanship

27 September 2018 8:55pm

26 September 2018. By Leah Nylen.

When Commissioner Maureen Ohlhausen was sworn in to the Federal Trade Commission in April 2012, she became one of two Republicans in the minority. Even when President Donald Trump was elected and Ohlhausen took over as acting FTC chairman, she still remained outnumbered or deadlocked with Democratic colleagues for her entire 15-month tenure as the agency’s head.

Her position in the minority, along with her preference for incremental progress and consensus-building, were key hallmarks of her term, Ohlhausen said in an interview days before the end of her term on Sept. 25.

“I feel that I was able to move the needle by having that clear focus on what we should be doing and why we should be doing it and building consensus,” Ohlhausen said. “What I would like to best be remembered for, both as a commissioner and as acting chairman, is moving the commission towards a greater focus on consumer harm, really using our enforcement resources in a way that did the most good for consumers with the least burden on legitimate business and doing that in a bipartisan way.”

When Ohlhausen was appointed acting chairman on Jan. 20, there were few precedents for her to follow, particularly as it became clear her tenure as the agency’s leader would be a lengthy one.

“The toughest decision that I had to make in my time was just to jump in and embrace the role as acting chairman fully, not to be hesitant and to make the most of it with enormous uncertainty surrounding me,” Ohlhausen said. “I think that was the hardest decision that I had to make because it put me out there the most. I wasn’t safely part of a majority or any other group of commissioners. Those decisions were all mine and they were unprecedented in a lot of ways.”

William Kovacic, who served as FTC chairman during the Bush administration and previously worked with Ohlhausen in the commission’s Office of General Counsel, called Ohlhausen’s 15-month chairmanship “her finest hour.”

“The agency could have faulted badly. There could have been horrible discord. That didn’t happen in part because of Maureen’s leadership,” he said. “It’s hard enough to do the job on a quiet day. To do the job in a hurricane without getting blown away is extraordinary.”

Initially, Ohlhausen appointed Tad Lipsky, a former partner Latham & Watkins, as acting head the agency’s Bureau of Competition and Thomas Pahl, a partner at Arnall Golden Gregory, as temporary head of the Bureau of Consumer Protection. Lipsky, however, could only remain in the post for six months, a time limit that Ohlhausen soon realized wouldn’t be long enough. She persuaded Bruce Hoffman, then a partner at Shearman & Sterling, to take over acting director of competition, despite having no assurances how long his tenure might last.

“My proudest moment during my term was my ability to successfully run this agency for 15 months not having the tools that a normal chairman would have,” Ohlhausen said.

Complicating matters even further, during most of Ohlhausen’s chairmanship, the FTC had only two members — Ohlhausen herself and her Democratic colleague Commissioner Terrell McSweeny. In its 100-year history, the FTC had experienced two-member commissions before, but only for very short periods. Outsiders speculated that the 1-1 split could hamper enforcement at the agency: in cases where the commissioners deadlock, the commission takes no action.

Ohlhausen said she was determined to keep the agency on track, which she did by focusing on areas where there was common ground between herself and McSweeny.

“That is what I intensely focused on as the chair,” Ohlhausen said. “Commissioner McSweeny was a very good colleague. We disagreed on some things, but I think we both agreed on what the goals of antitrust were and what we were supposed to be doing on consumer protection and being able to drive towards that common ground.”

During that 15-month period, the FTC filed seven merger challenges. Three of the deals were abandoned after the agency said it would file suit. In three others, the agency was able to win preliminary injunctions in federal court to block the merger of North Dakota hospitals Sanford Health and Mid-Dakota Clinic, Wilhelmsen Maritime Services' proposed buy of Drew Marine Group, and the tie-up of Tronox and Cristal.

Wilhemlsen and Drew ended their merger after the preliminary injunction was granted; Sanford-Mid-Dakota, Tronox-Cristal and the seventh challenge, between Otto Bock Healthcare and Freedom Innovations, are pending in the FTC’s administrative court.

Ohlhausen and McSweeny's most high-profile split came last September in the proposed deal between Walgreens Boots Alliance and Rite Aid. In that case, Ohlhausen said she believed that a revised deal didn’t pose competitive problems; McSweeny disagreed and said she thought more investigation was necessary. Because the commissioners split, the revised merger moved forward.

“We had concerns with the deal that had been proposed,” Ohlhausen said, reflecting on the Rite-Aid-Walgreens tie-up. “Then when they submitted the revised deal, ultimately we got to a point where I didn’t think there was really any more to investigate. Commissioner McSweeny would have liked to move forward with the investigation. But we both had our say and the merger was allowed to close. I think we did it in a way that was open and transparent and showed that you can still function even if you don’t always agree.”

McSweeny also credited Ohlhausen’s leadership with ensuring the FTC stayed on course.

"Thanks to Chairman Ohlhausen's wisdom, integrity, and leadership the FTC emerged from an unprecedented period in its history vigorous and strong,” McSweeny said. “It was a tremendous privilege to work with her to ensure the Commission did not become a house divided against itself."

Over the past year, the FTC has become involved in several high-profile privacy and data security probes after credit-rating agency Equifax disclosed a data breach that compromised the personal information of about 143 million US consumers, and Facebook — already under a consent order with the FTC — acknowledged that Cambridge Analytica, a British voter-profiling firm, had harvested data from up to 87 million Facebook users. Normally, the FTC is tight-lipped about whether it has opened an investigation, but in both those cases, Ohlhausen said she made the call to publicly disclose the agency’s probes.

“I believed in both of those, just the intensity of concerns that we were facing by the public, by other parts of government and internationally, I felt, counseled disclosure of the fact,” Ohlhausen said. “My concern was if people thought there was no one looking at this, as though we didn’t have the capabilities within the US government to do that, I was concerned that we would lose the confidence of the public, we would lose confidence of our international partners. ... Given the fact that we have Privacy Shield, and it's still fairly new, our partners in Europe need to know that we take these things seriously, that we take privacy seriously [and] data security seriously.”

Kovacic, who now serves as a non-executive director on the UK’s Competition and Markets Authority, said the decision to announce the Facebook-Cambridge Analytica and Equifax probes was “crucial to provide assurances internationally that in these policy domains, the agency is not only on the job but doing new and interesting things that are worthy of respect."

On the policy front, Ohlhausen focused heavily on a few areas, including the advantages of the FTC’s administrative court — the so-called Part III process — and occupational licensing — what she called the “economic liberty” initiative. On those matters, Ohlhausen wrote and spoke extensively in public forums and academic journals. On the Part III process, Ohlhausen undertook an extensive study of 145 previous cases from 1977 to 2016.

“It became clear to me to have a long-lasting impact you have to have done the deep work,” Ohlhausen said of her approach to policy issues. “But to get people to focus on that part of the debate, you have to make your message simple and you have to repeat it. [You have] this deep base of knowledge and research, but if you just plop that deep base in front of people, it’s hard for them to digest. So then you need to refine that or condense that down into something that I think is more simple and direct.”

Ohlhausen also said she focused on gradual progress in areas like the state-action doctrine or sham petitioning, rather than pushing for major changes.

“I’m an incrementalist. As you are trying to move legal analysis and case law and political acceptance of things, you can’t move on every front at the same time and you have to lay a foundation,” she said. “You need to, each time, lay the foundation and take the next step. Lay the foundation and take the next step. That’s how you make progress over time.”

Ohlhausen said she plans to continue to speak publicly and write about antitrust issues while awaiting her confirmation to the US Court of Federal Claims, to which she was nominated in January. Judges on the Court of Federal Claims serve for 15-year terms that can be renewed.

The Senate panel overseeing her confirmation voted, 11-10, to approve her nomination in June. She is now awaiting a final Senate confirmation vote, which has been delayed as the chamber considers the nomination of US Circuit Judge Brett Kavanaugh to the US Supreme Court.

If the Senate doesn’t vote on her nomination before the end of the year, Trump would need to renominate her to the post in January.

On Wednesday, Ohlhausen’s successor — Christine Wilson — was sworn in to her post. For her part, Ohlhausen said she has no doubt Wilson and her four other colleagues are up to the challenges facing the agency and urged them to continue its tradition of bipartisanship.

“We’re stronger when we can all agree on something. Our outcomes have a greater chance of success. They have a greater chance of acceptance. I think that’s an important thing for any leader to keep in mind,” she said. “You can’t get consensus at any cost because then you are letting yourself be driven by one viewpoint. But if you can get consensus and everyone feels that its within their principles and what they support, the outcome is more likely to succeed.”

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