What the Federal Trade Commission (FTC) lacks in oversight, it makes up for in honesty. Last year, the FTC updated its mission statement, as outlined in the agency’s Strategic Plan for Fiscal Years 2022–2026. Most striking about the new mission statement is the complete omission of the Commission’s goal of not “unduly burdening legitimate business activity.” Along with removing its commitment to “preserve the free market,” as stated in the Rules of Practice, some are concerned about the new direction the agency seems to be moving in.
The previous 2014–2018 mission statement read;
“Protecting consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.”
The subject of this statement is clearly “consumers and competition,” with consumers serving as the agency’s top concern. The statement says that consumers are protected from “anticompetitive, deceptive and unfair business practices.” Yet, only one of these three involves antitrust, as the goal of the FTC is to also protect consumers from deception, including scams (which increased 30 percent in 2022). Finally, the statement ends by noting that these consumer-oriented protections will steer away from “unduly burdening legitimate business activity.”
This is in stark contrast to the 2022–2026 mission statement, approved by current FTC Chair Lina Khan;
“Protecting the public from deceptive or unfair business practices and unfair methods of competition through law enforcement, advocacy, research, and education.”
There are two changes to note about this updated statement. First, the word “consumer” has been completely removed and replaced with “the public.” As the new subject, “the public” reflects the FTC’s broader interpretation of who they believe they are responsible for protecting
Second, Khan has completely removed, “unduly burden legitimate business activity.” Such an omission is perhaps unsurprising, except for its honesty.
In the spirit of ignoring the legitimate interests of businesses, the FTC has also removed its obligation to preserve the free market from its Rules of Practice. As discussed in former commissioners Christine S. Wilson and Noah J. Phillips’ dissenting statements, the agency has removed the statement;
“The Bureau’s work aims to preserve the free market system and assure the unfettered operation of the forces of supply and demand. Its activities seek to ensure price competition, quality products and services and efficient operation of the national Economy.”
Wilson and Phillips surmise that this omission is the descriptive outcome of anti-free market policy changes the agency has already made. For years, the agency has unsuccessfully attempted to change how anticompetitive behavior is defined. Under the former system of using the Consumer Welfare Standard, antitrust complaints were issued if the actions of the business presented measurable consumer harm. In line with removing the term “consumer” from their mission statement, the FTC’s new model for discerning anticompetitive behavior focuses on harm toward the accused firm’s competitors. This new model, sometimes called “Neo-Brandesian,” is antithetical to an efficient free market focused on consumers.
In a recent Q&A with Chair Khan, Khan openly admitted to not being interested in efficiency when going after perceived antitrust violations. Furthermore, the agency’s years-long suspension of “early termination” on reviews for mergers that present no anticompetitive harms has perhaps, by definition, distorted the free market.
Though the agency’s omission of consumer-focused and free market-preserving phrases is concerning, what is far more concerning is the actions that accompany them. The agency should be honest about its real goals instead of continuing to leave observers in the dark as it has done regarding meetings with foreign regulators, and “temporary” program suspension. The agency should return to its previous phrasing of its official objectives, but more importantly, the agency should take steps to follow them once again.
Isaac Schick is a policy analyst at the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.