President Obama has appointed sitting FTC Commissioner Edith Ramirez to serve as the agency’s next Chairman. Ramirez took over her new post on March 4 and she is expected to remain as Chairman at least through the end of her current term, set to expire in September 2015. Ramirez takes over from former Chairman Jon Leibowitz, who left the agency on March 1. Her appointment as Chairman did not require Senate approval because she already had been confirmed by the Senate (in 2010) to serve as a Commissioner. Ramirez’s elevation, and the departure of Leibowitz, will undoubtedly alter the decisionmaking dynamics at the FTC, and we expect to see a somewhat more conservative approach to antitrust enforcement, particularly during the near term.
Ramirez brings to the chairmanship a wealth of practical experience as a litigator in complex matters involving intellectual property, antitrust, and unfair competition claims. Within the agency she is known as a practical enforcer who studies the facts closely before rendering an opinion. In a recent speech before the New York State Bar Association Antitrust Law Section, Ramirez perhaps foreshadowed her approach to her new role, lauding Commission decisions that are “rooted in bipartisan consensus reached through scientific and careful analysis of the record and facts at hand.” Indeed, given the makeup of the Commission going forward, a fact based, bipartisan approach likely will be required to achieve results.
Leibowitz’s departure leaves the agency one Commissioner short until a replacement can be named and confirmed. For at least the immediate future, the Commission will operate with only four Commissioners, evenly split between two Democrats (Ramirez and Commissioner Julie Brill) and two Republicans (Commissioners Joshua Wright and Maureen Ohlhausen). Under the Commission’s operating rules, a majority vote of the sitting Commissioners is required to undertake official actions. Accordingly, Ramirez will require at least one Republican vote to move forward with enforcement actions. Moreover, because political divisions in the Senate have slowed appointments, the even split between Republican and Democratic Commissioners may continue for the foreseeable future.
Reading the Tea Leaves
Given Ramirez’s IP background, she may be inclined to focus on cases related to what she described in the New York Bar speech as the “dense thicket of overlapping patents of vague scope and ambiguous quality” faced by firms developing new products. Commenting on the high-stakes patent litigation in the smart phone sector in a November 2012 address to the Washington State Bar Association’s Antitrust Section, Ramirez asserted that “an important part of the FTC’s mission is to advocate for sound competition policy,” including “applying our competition expertise to the patent system and speaking out for reform.” This focus on intellectual property may in turn mean an increasing focus on the patent-heavy tech sector, and a reduction in the focus on healthcare, which had largely characterized Leibowitz’s tenure.
Still, Ramirez does not appear particularly likely to go too far in any one direction with any sort of agenda-based approach to enforcement. For example, she recently noted that, “particularly in fast-paced technology markets, condemning legitimate product improvements risks harming innovation and consumers.” Ramirez endorsed as “a perfect example of [the Commission’s] evidence-based, consensus-driven approach to antitrust” the outcome of its Google investigation. The Commission conducted a 19-month investigation into allegations that Google harmed competition and consumers through “search bias,” described as “unfairly prefer[ring] its own content on the Google search results page and selectively demot[ing] its competitors’ content from those results.” The Commission unanimously concluded Google had legitimate business justifications for its search methods, which the Commission found to be product improvements that on balance benefited consumers, even if they harmed some competitors.
As noted, Ramirez will have to find ways to achieve bipartisan results, and that in turn may require regularly addressing issues or concerns raised by Ohlhausen and Wright. Fortunately, her apparent desire for “consensus reached through scientific and careful analysis of the record and facts at hand” and her reputation as decision-maker who carefully scrutinizes the facts would seem to fit nicely with Commissioner Wright’s desire for “evidence-based antitrust,” which he describes as “the common-sense dictum that antitrust agencies can and should make enforcement decisions based upon sound economic and empirical foundations.” In his first speech as a Commissioner, given last month at the Competition Law Center in Beijing, China, Wright elaborated on the approach:
This focus requires three methodological commitments from antitrust institutions. The first is the integration of economic analysis into all stages of enforcement decision-making. The second is the integration of empirical evidence into the decision-making process. The third is a commitment to competition policy applying basic insights from decision theory to minimize the costs of enforcement decisions and the design of legal rules.
Thus, for once in Washington, a Democrat and a Republican sound as though they may be able to work together. The result for businesses who find themselves before the FTC may well be a more tempered approach to enforcement.