FTC Testifies before House Subcommittee on Regulatory Reform, Commercial and Antitrust Law on Competition Enforcement Activities and Policy Priorities

In testimony before the U.S. House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, the Federal Trade Commission described its current competition enforcement activities and policy priorities.

Testifying on behalf of the FTC, Chairman Joseph J. Simons outlined recent FTC initiatives to preserve and promote competition for the benefit of American consumers. These include notable victories stopping anticompetitive mergers and conduct, public hearings on a variety of competition and consumer protection issues, and advocacy both domestically and abroad.

Since the beginning of FY 2017, the Commission has challenged 48 mergers, according to the testimony. Although many were resolved through settlements, in the last year alone, the Commission sued to block five mergers, requiring a significant commitment of resources to prepare for litigation. Two of those challenges ended successfully when the parties abandoned the transactions after the Commission initiated litigation. The testimony notes that hiring economic experts for litigation poses an increasing strain on the agency’s resources.

The Commission continues to resolve most horizontal merger challenges through negotiated settlements requiring divestitures sufficient to restore lost competition, the testimony states. In the past year, for example, the FTC reviewed mergers involving retail gas stations, convenience stores, agricultural chemicals, cement, industrial gases, medical instruments, pharmaceuticals, ambulance services, casino services, and specialty veterinary services.

The FTC also reviews vertical mergers and, when appropriate, acts to prevent harm to competition, the testimony explains. Working closely with the Department of Defense, the FTC investigated and crafted a remedy to address competitive concerns arising from the acquisition of Orbital ATK, a key supplier of solid rocket motors, by Northrop Grumman, a leading provider of missile systems.

The Commission also has a robust program for identifying and stopping anticompetitive conduct—particularly in critical health care markets.

• The Commission continues to scrutinize anticompetitive reverse payment agreements in the pharmaceutical industry that involve a brand-name drug firm paying its potential generic rival to give up a patent challenge and agree not to launch a lower cost generic product.
• In another health care-related victory, a federal court ruled that AbbVie Inc. used sham litigation to illegally maintain its monopoly over the testosterone replacement drug Androgel, according to the testimony. The court ordered $493.7 million in monetary relief to those who were overcharged for Androgel as a result of AbbVie’s conduct. This case represents the first time any court has held that sham litigation violated Section 2 of the Sherman Act since the U.S. Supreme Court first recognized this legal theory.
• The Commission is also attentive to situations where health care firms engage in conduct that restrains competition for employees. In July of this year, the FTC charged three parties—a Texas company that provides therapists to home health agencies, the company’s owner, and the former owner of a competing staffing company—with violating the antitrust laws by agreeing to reduce rates paid to therapists, and by inviting other competitors to join their collusive scheme.

The testimony also notes that the Commission continues to monitor anticompetitive transactions and conduct by technology firms and will take action when appropriate.

As a central part of its competition policy work, the FTC has launched a new set of public hearings, Hearings on Competition and Consumer Protection in the 21st Century, to consider whether broad-based changes in the economy, evolving business practices, new technologies, and international developments warrant adjustments to competition and consumer protection law, enforcement priorities, and policy hearings and advocacy, according to the testimony.

With respect to international cooperation, the FTC and the Department of Justice increasingly engage with foreign antitrust agencies to ensure close collaboration on cross-border cases and convergence toward sound competition policies and procedures, the testimony says. For example, in the recent merger of industrial gas suppliers Praxair, Inc. and Linde AG, Commission staff worked cooperatively with the staff of antitrust agencies in Argentina, Brazil, Canada, Chile, China, Colombia, the European Union, India, Korea, and Mexico to analyze the proposed transaction and potential remedies.

The Commission voted 5-0 to approve the testimony and include it in the formal record.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.