by Ken MacVey
Since 1914, the Federal Trade Commission ‘s mission has been to enforce civil antitrust and unfair competition/consumer protection laws. The question is whether this mission has been supplanted—whether the FTC under Trump 2 .0 is becoming the Federal Political Truth Commission.
My Background: The FTC Investigates the Movie and Record Industries
Many years ago I started my legal career as a lawyer for the FTC. In that role, I proposed investigations into the motion picture and record industries which were opened by the FTC.
The publicly announced FTC investigation of the movie industry focused on possible collusion in the US between a handful of major motion picture companies that dominated the motion picture markets in the US and abroad. Not too long afterwards I recommended and got approval to investigate a proposed merger between two of the top six record companies in the US that would have resulted in the largest record company in the world.
While the motion picture investigation did not result in litigation, the record merger investigation did lead to litigation by a small team of FTC lawyers (including myself) that blocked the merger.
Antitrust and the Value of Media Diversity
In pursuing these investigations, I discussed traditional antitrust concerns about reduced competition and collusion. But I also pointed out that the products were unique—they just weren’t commodities like cement or steel. These were products of expression and culture. Antitrust focuses on how consumer choice is reduced by anticompetitive conduct. Here we did not face just a reduction in choice regarding widgets, but in ideas and expression.
But there never was any discussion on content—never was it suggested that certain kinds of movies or records were better than others, that some should be promoted, others not. Never were ideological slants or views considered or discussed. The point was always about protecting or expanding the range of consumer choice.
This idea of the antitrust value of diversity in media was not new. In fact, the Supreme Court in 1943 underscored the value of diversity and quantity in radio broadcasting when it held that the Federal Communications Commission could consider antitrust concerns in regulating radio broadcasting networks. Then NBC owned two radio networks, one called the “red network” and the other the “blue network.” Per the Supreme Court decision, the FCC ordered the divestiture of the blue network. This network became ABC, the American Broadcasting Company. Although the Supreme Court endorsed consideration of antitrust values to widen the scope of what was available to listeners, it drew the line on government going after the content of expression.
Today’s FTC Crosses the Line
In the past few months, under the leadership of the new chair of the FTC appointed by Trump, the FTC step by step is crossing this line.
FTC Chair Andrew Ferguson recently spoke at a forum on antitrust policy where he claimed to champion the marketplace of ideas while also condemning what he called “censorious” practices by tech platforms when they moderate what third parties post on their platforms. Ferguson bemoaned the fact that various tech platforms concurrently ejected the right wing social media site Parler from their platforms. He suggested this “conscious parallelism” might be “collusive.” But as pointed out by well-known antitrust experts Aaron Edlin and Carl Shapiro in a response titled “The FTC is Threatening Free Speech,” Ferguson failed to mention these ejections occurred after Parler had been used as a forum to help organize the January 6 attacks on the capitol.
It is easy to wonder if Ferguson would still be indignant if these same platforms were to eject third parties who used these platforms to organize violent resistance against ICE agents
Ferguson also pooh-poohed concerns about dangerous misinformation on tech platforms: “This is not only because I categorically dismiss elite and [D]emocrat hysteria over misinformation altogether, but also because I believe that a highly concentrated social media space generates far more opportunities for elite and left-wing manipulation than it does for populist so-called misinformation.”
Ferguson implied platform users want regulation of platforms: “If they wanted left-wing appratchiks to curate or inspect their ideas prior to public dissemination they would content themselves to sit in a think tank or in a university classroom. (Or they could read The Atlantic.)”
Ferguson talked about the “success of X after it was purchased by someone [i.e. Musk] had a relatively open commitment to free speech.” Yet when asked about Musk de-platforming others on X Ferguson weakly responded: “I don’t know, as an empirical matter, whether he’s de-platforming people. I simply don’t know.”
Ferguson’s views are not academic or a mere exercise of his own free speech rights. These views are in motion. While it does not appear the FTC is bothering to investigate “de-platforming” by X, it is investigating alleged group actions against X.
On June 23 Media Matters, a non-profit media watchdog, filed a lawsuit in federal court against the FTC asking the court to enjoin a civil investigation demand (like a subpoena) zeroing in on whether Media Matters coordinated with advertisers and others to pull advertisements from X. Similar state attorney general investigations in Texas and Missouri were blocked by the courts. All this fits within the backdrop of right wing memes that tech platforms “censor” conservative views, which in turn are accompanied by demands for government to police the platforms.
FTC staff recently opened a “Request for Public Comments Regarding Technology Platform Censorship.” The comment period is now closed. It remains to be seen what will come of this call for comment.
The FTC Prohibits Politically Motivated Boycotts
The signs are not good.
The FTC in late June approved by consent order ad agency Omnicom Group’s acquisition of one of its competitors on the express condition that Omnicom agree not to work with others to steer away advertising dollars from advertisers because of their political or ideological positions. As FTC chair, Ferguson issued an official statement on June 23 posted on the FTC’s website to justify this unprecedented prohibition.
Ferguson cited in footnotes examples of the type of “collusion” he was concerned about in general but not having to do with Omnicom. He cited examples of advertiser dollars being steered away from Tucker Carlson, alleged anonymous coordinated Twitter attacks on Breitbart, and an article entitled “Advertisers continue to flee Twitter as civil rights groups call for a boycott.” He further noted Texas Attorney General Paxton was investigating politically motivated boycotts by advertising companies of certain social media platforms but neglected to mention that a federal district court in the District of Columbia issued a preliminary injunction on First Amendment grounds against Paxton. Nor did Ferguson mention this court’s ruling was upheld by the District of Columbia Court of Appeals in a decision that noted retaliatory action against protected speech violates the First Amendment and that Paxton did not deny his investigation was retaliatory.
At the same time, Ferguson and the FTC failed to identify specific or quantifiable economic antitrust injury in a relevant market the FTC prohibition on Omnicom was to prevent. The FTC claims that this prohibition does not interfere with free speech. The prohibition on its face demonstrates otherwise. The FTC’s order prohibits Omnicom from declining to deal with an advertiser “based on political or ideological viewpoints of that Advertiser.” So if Omnicom does not want to deal with an advertiser who promotes Hitler or racist tropes Omnicom is compelled to do so. The FTC in essence put a gun to Omnicom’s head. If Omnicom wanted to proceed with its multi-billion dollar acquisition, it had to surrender its First Amendment rights.
The FTC’s right wing crusade against tech “censorship” and political boycotts appears to reflect a fundamental disregard of what the First Amendment and antitrust laws are about.
The First Amendment restricts government, not private parties. Last year the Supreme Court addressed Florida and Texas state legislation that regulated internet media (such as Facebook and YouTube) regarding their content moderation standards. In Moody v. NetChoice the Court in a a 9 to zero decision observed that the exercise of content moderation by a platform in itself is an exercise of First Amendment rights.
The Court said Texas’ law “prevents exactly the kind of editorial judgments this Court has previously held to receive First Amendment protection.” The Court rejected Texas’ rationale that the legislation was designed to bring balance to the mix of speech especially when the evidence revealed the legislation was intended to remedy supposed bias against “conservative voices.” The Supreme Court went on: “[T]his Court has many times held, in many contexts, that it is no job for government to decide what counts as the right balance of private expression—to ‘un-bias’ what it thinks biased, rather than to leave such judgments to speakers and their audiences. That principle works for social-media platforms as it does for others.”
Ferguson and the FTC’s recent focus on political expression also distorts what antitrust is about. Antitrust is not about some generalized notion of “collusion,” a term loosely thrown about by Ferguson. Although boycotts among competitors designed to raise prices or exclude business competitors can violate the antitrust laws, the Supreme Court long ago held boycotts of businesses for political reasons may be constitutionally protected and not violate the antitrust laws. Such boycotts can be a form of expression—just as the Boston Tea Party was about expressing political dissent and was not about a “collusive” grab for market power. This new FTC focus on political expression does not seem to be about protecting competition in commercial markets but about policing content in the marketplace of ideas under the pretext of antitrust enforcement.
The FTC Boycotts the American Bar Association for Political Reasons
The FTC is not just going after businesses and non-profit public interest organizations for their political expression. It is also targeting professional lawyer groups for not towing the politically correct line. The American Bar Association recently took stances against Trump administration actions the ABA considered to be unlawful, stances which in many cases have turned out to be consistent with how courts have ruled.
As a result, Ferguson as chair of the FTC announced he forbade FTC political appointees from participating in ABA events or renewing their ABA memberships. (Disclosure: I am a member of the ABA and its Antitrust Law Section and have been for several years.) Ferguson also terminated the FTC practice of covering FTC employees to be ABA members or to participate in ABA activities.
This is unprecedented. The ABA has provided leadership and legal resources to lawyers and the public for decades. Its Antitrust Law Section, with 12,000 members that include lawyers and economists, over the years have provided authoritative and valuable educational programs and publications on antitrust economics and law. Ironically, even Ferguson in his June 23rd statement on the Omnicom acquisition cites an ABA antitrust treatise as legal authority.
By his decree, Ferguson has surrounded the FTC with a moat isolating itself from the antitrust and legal community. By this decree, the FTC has taken on the mantle of censor, doing what it accuses others are doing.
Chair Ferguson Instructs FTC Staff
Concurrent with Ferguson’s announcement of the ABA banishment, the FTC posted on its website a link to Ferguson’s Valentine Day’s February 14th letter to FTC staff.
It begins: “Dear Federal Trade Commission Staff –For many years, federal antitrust enforcers and the private antitrust bar have enjoyed a cozy relationship facilitated by the Antitrust Law Section of the American Bar Association. The ABA’s long history of leftist advocacy and its recent attacks on the Trump-Vance Administration’s governing agenda, however, have made this relationship untenable.”
The lengthy letter goes on: “The President of the ABA recently issued a statement accusing the Trump-Vance Administration of ‘wide -scale affronts to the rule of law.’ What followed was a breathless screed leveled against President Donald J. Trump’s swift and tireless delivery on his promises . . .”
It continues: “The nation’s debt has ballooned to a terrifying $36 trillion.” (Maybe now in retrospect less terrifying in light of Trump’s budget that will increase the debt by trillions more.) The letter then gushes over DOGE, which at the time of the letter, was controlled by Musk and was sending layoff notices to staff at various federal agencies.
The letter asserts the “ABA’s partisan advocacy on behalf of Democrats is not new.” It drones on: “But there is more. The Antitrust Law Section is dominated by defense lawyers at large law firms who represent large business interests—the very sort of businesses who often have business before the FTC.” Toward the end, the letter says the ABA “advances radical left-wing causes and promotes the business interests of Big Tech.”
So, according to FTC Chair Ferguson, the ABA is both pro-radical left and pro-big business.
It is ironic that the FTC is going after politically motivated boycotts but is itself boycotting the ABA for political reasons. The irony, however, does nothing to soften what the FTC is communicating.
The letter’s message to FTC staff: fall in line. The FTC’s message to the rest of us: the Federal Political Truth Commission is now in session.
What’s Next?
Will it get better? Unlikely, at least for a while. Statute requires that no more than three of the five FTC commissioners can be members of the same party. Historically that has meant the chair of the FTC will be appointed by the president and that FTC commissioners will serve a fixed term with no more than three Democrats or three Republicans acting as commissioners. But Trump has fired the two Democratic commissioners with three Republican commissioners (including Ferguson) left standing. This issue whether a president can unilaterally fire commissioners of independent regulatory agencies contrary to statute is up for review in the courts. In the meantime, Ferguson endorsed Trump’s right to fire the two Democratic commissioners that resulted in a Republican monopoly on FTC commissioners. So much for being anti-monopoly and pro-marketplace of ideas.
What is even more troubling, federal agencies under Trump are engaging in a kind of “conscious parallelism” themselves. Todd Blanche, the lawyer who defended Trump in the New York state trial resulting in Trump’s 34 felony convictions, as a deputy Attorney General similarly banned the ABA from the Department of Justice.
Where all this ends up remains to be seen. If the Supreme Court, as many constitutional experts predict, upholds the power of the president to unilaterally fire commissioners appointed to independent federal agencies, maybe a different president someday will fire the current slate of FTC commissioners. But having wild partisan swings in commissioners each time a new president takes office does not bode well either for the First Amendment or anything else.
In the meantime, we must rely on courts, public scrutiny, elections, facts, and commitment to truth and values enshrined in the First Amendment and the rule of law, as our bulwarks. We might also have to rely on time. Sometimes extreme political agendas contain their own seeds of self-destruction that require time to sprout, as the saga of Joe McCarthy, and maybe even the bitter breakup of the Musk/Trump bromance, illustrate.