WASHINGTON (Dec. 5, 2017) – The Federal Trade Commission (“FTC” or “Commission”) has been the chief consumer protection and competition agency in the United States for over 100 years. During that time, however, this “uniquely compelling experiment in economic regulation” has had mixed results. In a new policy paper, R Street Institute’s Technology Policy Manager, Tom Struble, argues Congress should enact a handful of simple reforms to the FTC’s process that will substantially improve regulatory and enforcement outcomes for both consumers and competition.
“During its more than a century-long existence, the FTC has been reformed many times and it will continue to change and evolve,” notes Struble. “Many of the changes to the FTC in recent years have been positive, but some have also been decidedly negative. In particular, the reliance on informal adjudication and abuse of consent decrees has led to a dearth of legal precedent and formal guidance, generating substantial regulatory uncertainty. These problems are unlikely to resolve themselves, as they are the result of the current incentive structures within the agency itself. “
As Struble outlines, Congress should enact a handful of simple reforms to the FTC’s process that will substantially improve regulatory and enforcement outcomes for both consumers and competition. Specifically, the FTC’s abuse of consent decrees should be circumscribed. Such an action would generate significant benefits for the regulatory environment as a whole because litigation of cases drives evolution and development of the law over time, and thus provides increased certainty for both industry and consumers about how the FTC’s broad standards apply in different circumstances.
“We are long overdue for Congress to amend the FTC Act and implement changes to the agency’s processes directly,” notes Struble. “With these process reforms in place, the agency will finally be ready to tackle the vital competition and consumer protection issues of the 21st century.”