Congress should hold FTC accountable for taxpayer-funded losing

On its face, the losing record of the FTC and DOJ may seem insane. But its consequences, intended or unintended, hurt American taxpayers and workers.

When professional sports teams have losing records season after season, owners and general managers of that franchise usually attempt a full team rebuild. They fire coaches. They release or trade players. They do everything they can within the constraints they are given to put together a winning team. Not so in our current federal government when it comes to antitrust cases.

Over the course of the current administration, the Department of Justice’s (DOJ) Antitrust Division and the Federal Trade Commission (FTC) have piled up several losses in lawsuits against mergers and acquisitions in both federal and administrative courts. These losses have involved companies across several industries: tech, agriculture, health care and telecommunications just to name a few.

With FTC Chair Lina Khan testifying to a House Appropriations subcommittee this week, members of Congress responsible for the stewardship of taxpayer dollars should ask a simple question: Why should taxpayers continue to fund a team with a losing record?

Not only are the FTC and DOJ losing case after case. Judges are admonishing them for the spuriousness of their arguments. In a recent case involving the tech industry, a federal district court judge said the accusations laid out by the government “rely not on evidence but almost entirely on the opinion and speculation of its expert.”

Ironically, in that same case, the DOJ asked the court to ban the company in question from offering evidence about its product development to show its pro-competitive effects. Knowing they were on the losing side, the DOJ attempted to rig due process by arguing that the constitutionally protected right to present exculpatory evidence should be tossed aside. Thankfully, the judge refused to buy into the government’s attempt to tip the scales and sided with the Constitution.

When asked about all of these losses, the DOJ and FTC have responded with petulance. Top officials from those agencies have said, “We’re not going to back down” and “We will not shrink.” Which begs the question: Is the government losing these cases on purpose?

One motivation may be to send a message to Congress that antitrust laws need to be changed to fit a partisan political agenda that turns their losing cases into winning ones. But there has been strong bipartisan consensus for enforcing the current consumer welfare standard vs. the current administration’s Neo-Brandeisian “standard” that divorces antitrust law from evidence and economic analysis, often at the cost of consumer choice.

However, the more dangerous motivation may be to send a message to American businesses and their employees that the benefits they provide to consumers are not welcome. There has long been overwhelming evidence that mergers and acquisitions benefit Americans by providing efficiencies that benefit consumers, scaling innovations demanded by consumers, and growing America’s economy and global competitiveness.

The FTC and DOJ’s losing lawsuits are undoubtedly disincentivizing business growth, hurting American innovators the most. The message the government is sending: Small businesses should stay small, and there is a built-in legal cost to growth.  

This chilling effect has not only affected livelihoods; it has potentially affected lives. Even though the government touted its success for having blocked a case involving a health care investment to scale new innovations in DNA sequencing for future groundbreaking treatments, the court criticized the FTC for not considering whether a remedy might alleviate anticompetitive concerns and directed the agency to consider a remedy that was openly offered. Mergers are time-sensitive and time unfortunately ran out as the decision was ultimately made to divest. A well-known medical professional called the antitrust actions "a tragedy because it is actually going to cost lives."

The definition of insanity is doing the same thing over and over again and expecting different results. On its face, the losing record of the FTC and DOJ may seem insane. But its consequences, intended or unintended, hurt American taxpayers and workers. Congress should hold the government accountable for this misuse and misappropriation of tax dollars.

Sean Heather is senior vice president of International Regulatory Affairs & Antitrust at the U.S. Chamber of Commerce.