Wu says FTC has law on its side

05 June 2023 00:00 by Claude Marx, Kathleen Murphy


Timothy Wu, who was the intellectual architect of much of the Biden administration’s competition policy, says the US has moved to an antitrust era that connects to democratic roots. Congressional intent assures its longevity, he told FTCWatch in a telephone interview.

Wu, a law professor at Columbia University, joined the administration in 2021 as special assistant to the president for technology and competition policy. He returned to teaching in January.

Wu’s first book was the “The Master Switch: The Rise and Fall of Information Empires,” inspired by obsession with the AT&T breakup and how it jumpstarted the US telecom and Internet industries. He’s known for coining “net neutrality,” the concept that Internet service providers should treat content flowing through their systems equally.

Before working at the White House, Wu served as senior enforcement counsel to the New York attorney general, as an FTC senior adviser, and an adviser at the National Economic Council. He was a law clerk for Supreme Court Justice Stephen Breyer and Richard Posner of the Seventh Circuit Court of Appeals. He earned degrees at McGill University and Harvard Law School.

Edited excerpts of the interview follow.

FTCWatch: Looking back on your time in the White House, the executive order on competition is something you said was the most significant thing that you did. Is that how you feel?

Wu: I would put it in broader perspective. That was the sort of symbol of the most significant thing I think that I worked on, which was the effort to reorient antitrust policy, competition policy in the United States, and put us on a path that would lead to three things: lead the antitrust agencies back toward congressional mandates and intent; have the presidency be reengaged in antitrust policy; and third, to get the rest of the agencies, with competition mandates, active and coordinated. So, yeah, the executive order is sort of the clearest manifestation. I guess the next two years were spent trying to make the turning of the ship actually start to turn.

FTCWatch: Do you think you affected competition policy in a concrete way?

Wu: I’d say so. I think that around this country the question of what mergers you’re going to try to do has been affected significantly, you know, way before the plaintiff second requests or litigation or anything like that, that we have signaled a different kind of cop on the beat ... This sense that having free products was a free pass is over ... I think in quieter ways, there’s a lot of agencies that feel more confident using their authorities. … Just take a concrete example: the crackdown on the chicken, or the tournament chicken systems that the Justice Department and US Agriculture Department is doing … I think of lots of little areas like that: The Defense Department having the courage to block the missile merger ... So I think there’s a lot, actually. The tide has turned.

FTCWatch: Given Congress and the courts, how do you affect major change? For example, the courts have rejected some of the so-called novel theory that the DOJ put forward in the Booz Allen merger case.

Wu: Well, we’re playing a long game. … You can’t expect an overnight judicial transformation … The judiciary is not a specialized judiciary. They are general purpose, and the trend has definitely been toward a greater respect, textualist respect for laws as opposed to a sense that you have to interpret the laws as they were intended. That’s certainly been a big tenet of the Supreme Court. And I think courts, given a competition case with good facts, evident harm, and consistency with what statutes prevent the harm, I think we’re gonna win those cases. I also think we have started winning some of those cases and, when it happens, no one thinks it’s a big deal. … It’s hard to say after the NCAA case or Random House that we still live in a consumer welfare world. Those are both labor cases: one Supreme Court, one major merger case.

FTCWatch: Given that no-poach litigation and the noncompete rulemaking could be challenged in court, how do you think those are likely to hold up?

Wu: The main reason I’m confident in our success is we have the law on our side. First of all, in all these areas, the plain language of the statutes broadly favor a position that calls for aggressive antitrust enforcement, and I say that because they were written that way and clearly intended by Congress to be that way. So that’s the advantage. When Congress passed the antimerger act in 1950, they weren’t like tooling around the edges. They wanted to change the rising tide of concentration in the US economy. So we have the laws on our side.

When it comes to something like you mentioned, the noncompete agreements which the executive order called for, it is clear in both the statute and then the subsequent congressional amendments, reaffirming the DC Circuit’s interpretation of the FTC Act, that the FTC has that power. I think the strength of the argument is clearly on the side of the Federal Trade Commission. And I don’t think it’s a major questions doctrine issue because the major questions doctrine comes up when the agency decides to take on a major issue for itself. In the case of the rulemaking, the FTC is doing something the DC Circuit [in the 1973 case of National Petroleum Refiners Association v. FTC] says it gets to do. So it’s not itself making any new interpretation of its statute. It’s relying on an old interpretation from the DC Circuit. I think it’s totally different. Now, I’m not saying a Supreme Court can’t overrule the DC Circuit. It’s not like the FTC is out on some kind of new limb here. It’s relying on existing case law and statute.

FTCWatch: You’ve mentioned that you were able to develop alliances with labor and how they were, in some ways, unlikely allies, as well as farmers. How did that come to be?

Wu: Yes. Let me just add on to that last answer, if you don’t mind, which is I feel there’s an enormous amount of fear, uncertainty and doubt spread by interests within Washington and outside of Washington, who are disinterested in the original intent of the antitrust laws. But I guess to return to that point is the laws, text and precedent strongly are on the side of the FTC in these areas unless Congress starts repealing laws. That is kind of a hidden fact here, and that’s why Jonathan [Kanter] and Lina [Khan] have such confidence in what they’re doing is because they know if you’re a normal lawyer, as opposed to someone who’s been sitting inside the antitrust bubble for the last 20 years, that they have the law, we have the laws on our side.

On the question of labor and farmers: So one of the most important things we tried to do in the Biden White House was change the conversation around antitrust, so it wasn’t just a conversation about are you going to break up Google? Are you going to break up Facebook? Of course, we have cases that target Google and Facebook, so that’s part of the program. But there is a real risk of it being only understood as something specialized to the tech platforms, when in fact, we had felt and many people feel the problems of the lack of competition across the country, it manifests in fields like healthcare, agriculture, and so forth.

And it turned out when we went to talk to stakeholders in those areas, they agreed completely with that. … It’s one thing when you’re annoyed by Facebook, or you’re paying 10 cents more for, I don’t know, your Apple phone because of Qualcomm. It’s another thing when your livelihood is threatened, or you hadn’t seen wage increases for 40 years or so ... We found a lot more passion among organized labor, farmers, other small business. Those are the groups — right-to-repair advocates — that were at the school of the antitrust movement. So that was a great discovery.

The academy had been mostly exposed to mostly sort of abstract and academic sense of harms, and it was a great difference when I met the farmers and the other leaders. … Labor had been targeted by the antitrust laws at first, but they now feel very strongly and have come around and have seen the antitrust laws being on their side.

FTCWatch: When the president was on the Judiciary Committee, he was not super-involved in antitrust. When you were in meetings with him, was he receptive?

Wu: Joe Biden is not an antitrust specialist … Joe Biden, and you know, he said this a million times in speeches, fundamentally felt that things had gotten out of whack economically, and that we built an economy that had created a lot of wealth, but had become too concentrated, too perceived as unfair by large parts of the country in a way which turned many of them, frankly, against democracy and toward an embrace of more radical political theories.

And so he felt very strongly that we needed to rebalance power in the US economy and make people feel that their government is working for them. So that was the general thing. And the question is, well, what gets us there? And part of that was an industrial policy, but a big part was antitrust.

We said we need to return to FDR and Theodore Roosevelt and figures like that who made antitrust a major centerpiece of their project of trying to create a fairer economy. At the beginning, there was a real strong desire to emulate a lot of what FDR had done that succeeded, maybe to avoid the unsuccessful parts. … He really liked the idea of labor-related antitrust; frankly, the noncompetes. Joe Biden has a personal hatred for noncompete agreements. … It’s something he campaigned on frequently.

FTCWatch: You wrote “The Curse of Bigness: Antitrust in the New Gilded Age.” What’s the book you’re working on next?

Wu: I’m writing a book right now. It’s slightly bigger picture. Working title is: An Architecture of Equality. It’s a book that takes some of the ideas of antitrust and competition policy into a full national economic program. The basic idea is how do you want to run your economy if you want sustained prosperity and wealth without tipping into revolution’s anger over centralization of wealth and so forth. That’s the book. The subtitle of it is: How to beat China without losing our souls. It definitely is a response to my time in the White House and economic challenges we face there.

FTCWatch: What do you think we should be looking out for regarding the FTC in the future?

Wu: That’s a great question. Well, in a sense, the FTC has made its big move, and I think the question is execution. I’m sure you watch personnel moves, but getting staffed.

They have brought ambitious and challenging cases. They have the case against Facebook. They have, obviously, the rulemaking. They have other cases. So I think the FTC has passed down its gauntlet, and now it needs to execute well. So that’s what I’ll be watching.

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