7 FTC-friendly attorneys general to watch

30 Aug 2021 12:00 am by Kathleen Murphy

Federal Trade Commission

State attorneys general are decisive allies to the Federal Trade Commission and are on the vanguard of protecting American consumers on privacy and antitrust issues.

Some AGs are playing an increasingly leading role in litigation against Big Tech. Like their federal counterparts, states also have powerful tools for antitrust investigations yet sometimes are doing the work with limited budgets and staff.

“We see clear evidence of the leadership of state attorney generals in protecting their citizens from anticompetitive conduct by dominant online platforms,” House Judiciary Subcommittee Chairman David Cicilline said at a recent hearing. “States play a key role in enforcing the antitrust laws. In many cases, they are crucial allies to the Federal Trade Commission and the Department of Justice. In others, state attorneys general step in and protect their citizens where federal enforcers have not done their jobs.”

Here’s a closer look at some AG partners on FTC-related issues:

Herbert H. Slatery III, Tennessee

Herbert H. Slatery III, a Republican, is at the forefront of an antitrust lawsuit against Google, brought by 36 states and the District of Columbia. The states accuse the company of abusing its power over the Android operating system to illegally monopolize app distribution and in-app payments. He is steering the effort with Utah Attorney General Sean D. Reyes, New York Attorney General Letitia James and North Carolina Attorney General Josh Stein.

He serves on the executive committee of the Google search and Facebook antitrust suits, “providing extensive behind-the-scenes analysis to other states regarding antitrust issues in the tech context, and serving in a leadership role in an additional project that has not yet been made public,” his office said.

Slatery also led a coalition of 44 attorneys general urging Facebook to abandon its plans to launch a version of Instagram for children under the age of 13 in May. The following month, he joined with 46 other attorneys general in calling on the Senate to send a bill to the president to address scams targeting senior citizens. He spoke to the FTC about data privacy issues in June 2019, calling for regulatory intervention that will protect consumers and allow competitors to enter the market dominated by a handful of tech platforms. Slatery also coordinates with the FTC to crack down on robocalls.

Does being a Republican make any difference in his collaboration with the agency?

“Consumer protection and privacy and antitrust issues affect citizens in red and blue states alike,” said Slatery, who joined the suit challenging election processes in four states where Trump lost. “A handful of companies dominating this sector, a sector that serves as the primary avenue of communication and news, poses a threat not just to our markets but to our society. This is not a partisan issue, it is an American issue, and consumer protection enforcers who disagree about many things have nevertheless found common cause for concern and common opportunity for action.”

About the FTC, Slatery said, “We have a good working relationship. We may not always agree about specifics, but in general we tend to have the same objectives and employ similar means to achieve them. We have had a lot of success cooperating and coordinating with the FTC and we expect that will continue.”

Karl Racine, Washington, DC

DC Attorney General Karl Racine filed an antitrust case against Amazon in May, saying the online retailer imposes “an artificially high price floor across the online retail marketplace.” He also joined the multi-state Google and Facebook antitrust suits.

“The District of Columbia is at the forefront of holding big tech companies accountable when they harm consumers,” Racine said in an email. “We’re the only state to sue Facebook for exposing the data of millions of consumers — including hundreds of thousands of DC residents — in the Cambridge Analytica incident.”

In 2019, Racine sued Marriott for posting allegedly deceptive room rates, but without FTC collaboration. He explained to FTCWatch at the time that “the level of interaction and cooperation with the FTC slowed down” at the start of the Trump administration.

In the Biden administration, Racine got attention as a possible FTC nominee. A Haitian-American Democrat elected in 2014, Racine said his office has an excellent working relationship with the FTC and looks toward partnering in more gig economy cases going forward.

“My office has been a national leader in this space — we’ve sued DoorDash and Instacart for deceiving consumers and harming workers — and we know there is significant work to be done to ensure these companies are playing by the same rules as everyone else,” Racine said.

Leslie Carol Rutledge, Arkansas

Leslie Carol Rutledge is the first Republican to serve as Arkansas’ attorney general and sees a prominent role for herself in litigation against Big Tech.

“Arkansas continues to lead the way against the abuses of big tech companies like Google, Apple, and Facebook. Attorney General Rutledge is determined to fight back against the cancel culture activities enabled by Big Tech that have beset consumers and have set the office’s focus on the abuses that invade personal privacy and manipulate the content of what can be seen online,” her spokeswoman said.

Coordination with the FTC revolves around consumer protection matters, typically about enforcement actions and educational activities involving stopping scams and unwanted phone calls, her office said. Other collaborations with the agency included a 2016 settlement with Ruby Corp., which owns the AshleyMadison website.

With the FTC she is suing the operators of an alleged pyramid scheme known as “Blessings in No Time.” “‘Blessings in No Time’ (BINT) is an example of leveraging our office’s power to protect consumers and hold the bad actors accountable in coordination with the FTC authority,” Rutledge said through a spokeswoman.

Last year, Rutledge said she would be a candidate for governor of Arkansas in 2022 and invoked President Donald Trump in her announcement. She with several Republican counterparts in other states supported Trump’s efforts to throw out votes in key states and award the election to him.

Has her allegiance to Trump continued after he said falsely about the Jan. 6 Capitol riot, “these were peaceful people”? “Attorney General Rutledge has an allegiance to the United States of America and the State of Arkansas,” her spokeswoman said.

Phil Weiser, Colorado

Colorado Attorney General Phil Weiser, seeking a second term in 2022, is a former DOJ antitrust division official. Since becoming Colorado’s attorney general in early 2019, Weiser has led a bipartisan coalition of state attorneys general in filing a monopolization case against Google.

“The FTC is an important partner to states as they police anticompetitive, unfair and deceptive trade practices,” Weiser said in a June statement urging Congress to strengthen the agency’s ability to require companies that engage in wrongful conduct to reimburse the consumers they harm. This comes in wake of a Supreme Court ruling that changed the practice earlier this year.

Besides supporting the FTC’s enforcement authority and being a top leader in state antitrust litigation against Google, Weiser advocated for a special White House “Office of Competition Policy.” The proposed office would oversee efforts to overhaul antitrust rules and address specific industries such as airlines, agriculture and healthcare.

Letitia James, New York

New York Attorney General Letitia James, a Democrat elected in 2018, is the first African American and the first woman to serve as New York’s attorney general.

She is spearheading the coalition of 48 states in a landmark monopolization case against Facebook. On July 28, the states filed a notice of appeal concerning the June 28 dismissal of their lawsuit to the US Court of Appeals for the DC Circuit. The suit alleged the social networking giant continues to illegally stifle competition to protect its monopoly power. The coalition contends Facebook acquired competitors in a predatory manner and cut services to smaller threats, short-circuiting benefits of competition and reducing privacy protections and services. Facebook is specifically charged with violating Section 2 of the Sherman Act, in addition to multiple violations of Section 7 of the Clayton Act.

With the FTC, James also participated in a nationwide crackdown called “Operation Corrupt Collector” that brought more than 50 enforcement actions in 16 states. In 2019, James and the FTC announced court orders stopping a scheme involving “phantom debts,” fake debts that consumers did not owe. The settlement banned Buffalo-based defendants Hylan Asset Management, LLC, Andrew Shaevel, Jon Purizhansky, and their companies, from participating in debt collection activities.

Doug Peterson, Nebraska

In the effort to stop illegal robocalls claiming to support charities, Attorney General Doug Peterson is a trailblazer.

Peterson, with 38 states and the District of Columbia, joined the FTC in stopping a telefunding operation in early 2021. Associated Community Services, Central Processing Services, Community Services Appeal; Directele Inc., and the Dale Corp. agreed to a settlement. The government had alleged the operation collected millions of dollars by falsely claiming that funds would go to charities that support veterans, children and firefighters.

Peterson also joined a bipartisan coalition of 34 attorneys general, led by Minnesota AG Keith Ellison, in an amicus brief to the Eighth Circuit Court of Appeals in support of North Dakota laws that regulate abusive behavior of pharmacy benefit managers (PBMs). In early July, the FTC approved a package of resolutions authorizing investigations into major law enforcement priorities for the next decade with targets including PBMs and hospitals.

Peterson, a Republican, was elected in 2014. Last year, he joined the bipartisan coalition of 48 attorneys general in filing a lawsuit against Facebook.

Wayne Stenehjem, North Dakota

More than 20 years as a state attorney general means ample opportunity to coordinate with the FTC, from blocking a healthcare merger to reining in Big Tech.

In 2017, North Dakota Attorney General Wayne Stenehjem and the FTC brought an antitrust case to block the acquisition of Mid Dakota Clinic by Sanford Health. Stenehjem said he sought to pause the merger because of concerns it would eliminate competition in the Bismarck-Mandan area, resulting in a lack of choice for patients and higher prices.

In 2016, The Bismarck Tribune praised Stenehjem. “Wayne recognizes the serious burdens of federal overreach,” the paper said. “He has devoted years to ensuring that North Dakota controls our economic and regulatory destiny, to the greatest extent possible.”

More recently, Stenehjem, a Republican, joined the bipartisan coalition of states in antitrust lawsuits against Google. One suit alleges Google engaged in false, misleading and deceptive acts while selling, buying and auctioning online display ads. Another deals with Google’s control of search engines.

Stenehjem served in the North Dakota House of Representatives beginning in 1976 for two terms until his election to the state Senate in 1980. He was in the Senate for two decades until being elected attorney general. He’s become the longest-serving AG in North Dakota history.

North Dakota, a state Trump won in the 2020 election by more than 65 percent of the vote, saw its state legislature become the first to address concerns with the Apple and Google app stores. Stenehjem also joined the lawsuit challenging election processes in four states where Trump lost.

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