Policy

GOP Senators Caution FTC about Expanding Section Five Authority

Letter Comes as FTC is Expected to Release Findings from Ongoing Investigation of Google's Search/Ad Practices 11/16/2012 7:22 AM Eastern
 
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.

Section Five of the FTC Act deals with unfair methods of competition -- the FTC's antitrust authority -- and unfair or deceptive acts or practices.

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 be forthcoming.

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