FTC and DOJ Joint Task Force News

The Federal Trade Commission and the U.S. Department of Justice possess both overlapping and distinct authority to challenge anti-competitive practices under federal law.  The FTC enforces, without limitation, the FTC Act and the Clayton Act.  The DoJ enforces, without limitation, the Sherman Act and the Clayton Act.  The FTC also may refer evidence of criminal antitrust violations to the DoJ.  Only the DoJ can obtain criminal sanctions.

The FTC primarily focuses on policing deceptive or unfair business practices, and from unfair methods of competition.  The DoJ enforces a much wider range of legal regulations on behalf of the federal government.  Sometimes, the federal agencies cooperate on antitrust issues.  There is a clearance process to determine which federal agency will investigate and enforce a particular matter.

FTC and Department of Justice Announce Public Strike Force on Unfair and Illegal Pricing Meeting

            On July 26, 2024, the Federal Trade Commission and U.S. Justice Department announced the first public meeting of the Strike Force on Unfair and Illegal Pricing on Thursday, August 1, 2024, to discuss Strike Force enforcement actions taken to lower prices for Americans.

The meeting will include an open-press session with remarks by FTC attorney and Chair Lina M. Khan, Associate Attorney General Benjamin C. Mizer, Assistant Attorney General for the Antitrust Division Jonathan S. Kanter, and Principal Deputy Assistant Attorney General for the Civil Division Brian M. Boynton.  Senior officials from other agencies will then offer remarks as well.  The remainder of the meeting will include a closed-door, private discussion of enforcement-related matters.

The agenda for the public portion of the event will be posted on the FTC’s website prior to the event.  A link to view the open virtual meeting will be posted on the FTC’s website the day of the event.

In March 2024, at the sixth meeting of the White House Competition Council, President Biden announced the launch of the Strike Force to strengthen interagency efforts to “root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices.”

The Strike Force’s membership also includes the Department of Agriculture, Department of Health and Human Services, Department of Transportation, Securities and Exchange Commission, Federal Communications Commission, and the Consumer Financial Protection Bureau.

Federal and International Agencies Affirm Commitment to Protecting Competition Across AI Models and Products

On July 23, 2024, the Federal Trade Commission, U.S. Department of Justice and international antitrust enforcers announced a continuing commitment to protecting competition across the artificial intelligence landscape.  In a joint statement, the antitrust enforcers vowed to protect fair competition and prevent unfair or deceptive practices in generative AI foundation models and products.

“As competition authorities for the European Union, the United Kingdom and the United States of America, we share a commitment to the interests of our people and economies. Guided by our respective laws, we will work to ensure effective competition and the fair and honest treatment of consumers and businesses.  This is grounded in the knowledge that fair, open, and competitive markets will help unlock the opportunity, growth and innovation that these technologies could provide,” the joint statement reads.

The FTC further states that while agencies’ legal powers and jurisdictional contexts differ … our decisions will always remain sovereign and independent.  The agency commented that “if … risks … materialize, they will likely do so in a way that does not respect international boundaries.  As a result, we are working to share an understanding of the issues as appropriate and are committed to using our respective powers where appropriate.”

The joint statement recognizes the “transformational potential of artificial intelligence, including foundation models.”  It contains comments that such technologies “could materially benefit our citizens, boost innovation and drive economic growth.”  “Although there are many unknowns about the precise trajectory these tools will take, generative AI has rapidly evolved in recent years, potentially becoming one of the most significant technological developments of the past couple of decades.”  “Accordingly, we must work to ensure the public reaps the full benefits of these moments.  This requires being vigilant and safeguarding against tactics that could undermine fair competition.”

Examples include risks that firms may attempt to restrict key inputs for the development of AI technologies; that firms with existing market power in digital markets could entrench or extend that power in adjacent AI markets or across ecosystems, taking advantage of feedback and network effects to increase barriers to entry and harm competition; that lack of choice for content creators among buyers could enable the exercise of monopsony power; and that AI may be developed or wielded in ways that harm consumers, entrepreneurs, or other market participants.

“Given the speed and dynamism of AI developments, and learning from our experience with digital markets, we are committed to using our available powers to address any such risks before they become entrenched or irreversible harms,” the joint statement read.

The joint statement also discusses principles for protecting competition in the AI ecosystem.

“Our experience in related markets suggests that, while competition questions in AI will be fact-specific, several common principles will generally serve to enable competition and foster innovation.”  Principles include, without limitation, fair dealing, interoperability, choice and other competition risks.

The joint statement also recognizes that AI can “turbocharge” deceptive and unfair practices that harm consumers.  Consult with an FTC U.S. Origin (Made in USA) attorney to learn more about interagency AI policy, or if your company is the subject of a regulatory investigation or enforcement matter.

Richard B. Newman is an eCommerce lawyer at Hinch Newman LLP.  Follow FTC defense lawyer on National Law Review.

Informational purposes only. Not legal advice. This article is not intended to and should be construed as a complete summary or discussion of the Rule and all of its obligations and restrictions. May be considered attorney advertising.