The FTC's Threat to Web Consumers

[Commentary] The Federal Trade Commission made a giant move toward heavy-handed antitrust regulation by changing the rules on when it would seek disgorgement of profits as a remedy for alleged violations.

It rescinded a unanimous, bipartisan 2003 decision that the agency would rarely if ever seek disgorgement. One reason for the earlier rule was that commissioners realized that their test for seeking disgorgement was overly vague. Last month's change could be timed to the agency's high-profile investigation of Google for potential anticompetitive practices. FTC Commissioner Maureen Ohlhausen dissented from the FTC's change in the rules, saying, “"In essence, we are moving from clear guidance on disgorgement to virtually no guidance on this important policy issue." If the FTC accuses Google of violating antitrust in its approach to search and then seeks disgorgement of profits, the damages could be huge. This FTC change got little attention (other than from Washington law firms that rushed out the news), which will further encourage companies to lobby regulators to go after competitors by raising the stakes. As government becomes more intrusive, crony capitalism follows. For the technology companies that are supposed to be the drivers of our economy, this kind of regulatory uncertainty is a growing burden. The response to innovation by one company should be more innovation by others, not competitors calling in lawyers and lobbyists.