By John D. McKinnon and Brent Kendall
WASHINGTON -- Turf battles between the federal government's two
antitrust enforcers are revving up as both assert authority to
investigate whether big technology companies are engaging in
One flashpoint is the authority to investigate Facebook Inc.
The latest evidence of friction came in a letter late last week
from the Federal Trade Commission to the Justice Department's
antitrust division, in which the FTC complained about the
department's behavior and raised concerns about recent interactions
between the two agencies, according to people familiar with the
The previously undisclosed letter, from FTC Chairman Joe Simons,
raises the prospect that the longstanding power-sharing agreement
between the two agencies is fraying. It is also raising concerns
that the tension could eventually hamstring several current
antitrust probes of big tech companies.
An FTC spokeswoman declined to comment. The Justice Department
didn't respond to a request for comment.
The chairman of the Senate subcommittee on antitrust matters,
Republican Mike Lee of Utah, said he plans to ask about the letter
and the tensions it reflects at a hearing Tuesday. Both Mr. Simons
and DOJ antitrust chief Makan Delrahim are expected to testify.
"Sen. Lee is aware of the letter and he intends to inquire at
tomorrow's oversight hearing about whether the clearance process
between the agencies is working and, if not, whether the FTC and
DOJ are engaging in duplicative investigations," a Lee spokesman
said on Monday. That clearance process, a longstanding arrangement
between the two agencies, helps determine which of them
investigates particular areas.
Mr. Lee has raised concerns about clashes between the two
agencies on several recent occasions -- for example, when the
Justice Department took the unusual step of undercutting the FTC's
antitrust lawsuit against chip maker Qualcomm Inc. earlier this
year. He has even suggested that having two federal enforcement
agencies could be contributing to the problems.
"This kind of dysfunction and confusion illustrates why having
two agencies at loggerheads does not make for effective antitrust
enforcement," Mr. Lee said in August.
The FTC and the Justice Department share antitrust-enforcement
authority in the U.S. While they have at times been rivals and
engaged in turf battles, employees in both agencies acknowledge
that their interactions lately have become abnormally strained.
Tech issues are a major contributing factor. Both the FTC and
DOJ are under considerable pressure to investigate -- and
potentially challenge -- a range of actions by a handful of
companies that dominate online search, retail and social media.
One point of contention now between the agencies is whether the
Justice Department will open its own antitrust investigation of
Facebook, according to people familiar with the matter.
Messrs. Delrahim and Simons earlier this year negotiated
arrangements that cleared the Justice Department to investigate
Alphabet Inc.'s Google for possible monopolistic tactics and also
gave the department jurisdiction over Apple Inc. for similar
issues. The FTC secured for itself the right to explore
monopolization questions involving Facebook and Amazon.com Inc.
But the Justice Department took things a step further in July,
announcing a broad review of whether dominant online platforms in
general are unlawfully stifling competition. That raised the rare
possibility that both agencies might probe the same company,
Facebook, at the same time.
The FTC's Facebook probe is investigating, among other things,
whether the social-media giant pursued a pattern of acquisitions
designed to eliminate potential future competitors. The Justice
Department, meanwhile, also has been fielding complaints about
Facebook, including from people who advocate breaking up the
Facebook didn't provide a comment in response. Over the summer,
the company said the FTC was investigating "in the areas of social
networking or social media services, digital advertising, and/or
mobile or online applications."
Google declined to comment. Amazon and Apple didn't immediately
respond to requests for comment.
Still another sore point, which has been going on for months, is
the Justice Department's decision this year to step into the FTC's
antitrust lawsuit against Qualcomm. The commission won a favorable
ruling from a California federal judge in May that forced major
changes to Qualcomm's business practices, but an appeals court last
month stayed the effect of that ruling for now.
The Justice Department is supporting Qualcomm, saying the trial
judge's ruling was incorrect in several respects. It also argued in
court papers that the ruling would diminish Qualcomm's
competitiveness in 5G innovation and impact national security. The
appeals court cited the Justice Department's position when it
granted Qualcomm a stay last month.
FTC officials believe the department fundamentally
misunderstands their case and that the DOJ didn't properly consult
them before intervening, according to people familiar with the
Qualcomm has said its business practices were justified and
The battles between the two agencies are "a real drag on the
effectiveness of the U.S. [antitrust] system," said William
Kovacic, a former FTC commissioner who is now a George Washington
University law professor. "It doesn't destine the individual
efforts to failure by any means, but it diminishes the prospects of
success. It makes it harder to achieve a good result."
Write to John D. McKinnon at firstname.lastname@example.org and Brent
Kendall at email@example.com
(END) Dow Jones Newswires
September 16, 2019 17:35 ET (21:35 GMT)
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