A group of Republican senators led by James DeMint (S.C.)
and Orin Hatch (Utah) have asked Federal Trade Commission chairman Jon
Leibowitz to use a little more regulatory humility when it comes to exercising
the commission's Section Five regulatory authority.
Five of the FTC Act deals with unfair methods of competition and unfair or deceptive acts or practices. The FTC says on its Web site that it uses authority under both Section 5 and Section 2 of the Sherman Antitrust Act in antitrust cases .
In a letter to the chairman, they said they wanted the
commission to confine itself to its clear legal authority and said they were
concerned by what appeared to be the "eagerness" to expand that
Section Five authority "without a clear indication of authority or a
limiting principle." They argue that creates regulatory uncertainty that
deters entrepreneurs and innovation for fear of government action.
"The potential use of such uncertain authority against
businesses in the rapidly evolving technology industry -- one of the few bright
spots in an otherwise dismal economy -- highlights our concern."
While the senators go out of their way to say they are not
taking a position on any matter currently under investigation by the FTC, the
letter comes as the commission is expected any day to reveal the results of its
investigation into the competitive practices of a search/tech giant with an
entrepreneurial background: Google.
"We hope the commission considers the consequences of
hampering legitimate business model innovations and market activities of
companies under an aimless, expansive and possibly unauthorized use of the
commission's powers," they concluded. Signatories to the letter also
included Kay Bailey Hutchison, ranking member of the Senate Commerce Committee,
and John Cornwyn, both from Texas.
An FTC spokesperson confirmed they had received the letter,
but had no comment. They also had no comment on when the Google decision might