A pair of Democratic House members who represent Silicon
Valley are concerned that the Federal Trade Commission is trying to stretch its
antitrust powers in a way that is "unwarranted, unwise and likely to have
negative implications for our nation's economy." They "strongly
urged" the FTC to reconsider using Section 5 Authority.
Reps. Anna Eshoo, ranking member of the House Communications
Subcommittee, and Zoe Lofgren, a member of the Judiciary Committee, are
concerned that the FTC, in investigating Google over antitrust concerns, will
use its Section 5 authority over unfair methods of competition if it cannot justify
action under its enforcement of Section 2 of the Sherman Antitrust Act.
They were reacting to reports
the FTC might take that route in a decision on Google's search and
advertising businesses that is widely expected to be announced soon, with some
reports that Google has already been put on notice by the FTC that it needs to
make some changes or face an antitrust suit.
The legislators suggested that if the FTC were basing that
on Section 5 authority it would be a massive expansion of FTC jurisdiction.
"Expanding the FTC's Section 5 power to include
antitrust matters could lead to overbroad authority that amplifies uncertainty
and stifles growth," they wrote. "These effects may be most acutely
felt among online services, a crucial engine of job creation, where technological
advancement and small business innovation are rapid."
But the FTC on its website advertises that it uses both
sections in antitrust cases.
"In executing its antitrust law enforcement
responsibilities, the Commission relies upon both Section 5 of the FTC Act --
which prohibits unfair methods of competition -- and a number of other
antitrust statutes...[A]lthough the Commission cannot directly enforce the
Sherman Act, it can prohibit -- as unfair methods of competition -- practices
that violate Section 2 of the Sherman Act because they constitute
monopolization of, an attempt to monopolize, or a conspiracy to monopolize a
The Dems' letter followed one last week from Republican
House members also cautioning regulatory humility when
it came to expanding Section 5. Those legislators did not mention Google by
name, but it was clear they were responding to the same concerns.