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New FTC Chair Moves Quickly to Implement Progressive Agenda

On July 9, 2021, the Biden administration issued an “Executive Order on Promoting Competition in the American Economy” (“EO”) that seeks to “promote the interests of American workers, businesses, and consumers.”1 That same day, the Federal Trade Commission (“FTC” or “the Commission”) published a statement officially withdrawing a bipartisan policy statement from the Obama era2 that the three Democratic members of the current Commission believed both unnecessarily tethered FTC enforcement under Section 5 of the Federal Trade Commission Act to the Sherman and Clayton Acts and effectively “doubled down on the Commission’s longstanding failure to investigate and pursue ‘unfair methods of competition.’”3 The FTC had previously voted to rescind the statement on July 1, along with adopting a series of other policy changes, when the agency held an open meeting for the first time in decades. At its July 21 open meeting, the Commission voted to rescind another longstanding bipartisan policy statement, with the likely result that FTC orders in merger cases will now include a “prior approval” requirement for future acquisitions.

Section 5’s “Unfair Methods of Competition” Unleashed

Section 5 of the FTC Act prohibits “unfair methods of competition,” an amorphous standard for which the FTC did not provide guidance for most of the statute’s history. In 2015, the FTC issued a policy statement providing a framework for this authority, in which the agency committed to apply the consumer welfare standard, while noting that it was “less likely” to challenge acts not otherwise captured under the Sherman and Clayton Acts.4 In its decision to withdraw this policy, the FTC criticized the policy’s contravention of the “text, structure, and history of section 5,” finding that it “largely writes the FTC’s standalone authority out of existence.”5 The Commission also remarked on the “hamstring[ing]” effect of overreliance on the rule of reason framework, “an approach that poses significant administrability concerns.”6 The 2015 policy statement, concluded the Commission, “turns standalone Section 5 into a dead letter,” effectively tying the enforcement hands of the FTC.7

Key Investigation Priorities

In addition to doing away with the 2015 policy statement, the FTC authorized seven resolutions at the July 1 meeting intended to set the agency’s investigatory agenda through 2031. The resolutions direct FTC staff to use compulsory process to carry out enforcement in the seven designated priority areas, including:

  • repeat offenders,
  • technology companies and digital platforms,
  • pharmaceuticals and hospitals, and
  • proposed and consummated mergers and acquisitions.8

These priorities are also reflected in the EO and the EO Fact Sheet, particularly with respect to mergers in the technology and healthcare spaces.9

The FTC has also taken steps in the merger control area. At its July 21 open meeting, the Commission voted on party lines to rescind a bipartisan 1995 policy statement that generally eliminated “prior approval” and “prior notice” requirements in Commissioner orders resolving illegal mergers.10 As a result of yesterday’s change, we can expect that future FTC merger consent orders will require the respondent to seek the Commission’s prior approval for any future acquisition over a de minimis threshold within markets affected by the transaction.

In rescinding the 1995 policy statement, the Commission cited the recent abandonment of Berkshire Hathaway Energy’s proposed acquisition of Dominion Energy’s Questar Pipeline as an example of the need for the policy change.  On July 13, the FTC’s Bureau of Competition issued a statement explaining that the FTC had blocked a very similar transaction: Questar Pipeline’s attempted purchase of a 50% share in Berkshire Hathaway’s Kern River Pipeline back in 1995. The Bureau’s Acting Director, Holly Vedova, chided the parties: “Given our prior action, and the even closer competition that developed between the pipelines since then, this is representative of the type of transaction that should not make it out of the boardroom.11 

In another notable development in the merger area, FTC Chair Lina Khan has continued the now five-month-long “temporary” suspension of early termination of premerger notifications under the HSR Act instituted by the agency’s prior acting chair.  V&E partner Darren Tucker spoke at yesterday’s open Commission meeting to encourage the agency to promptly reinstate the early termination program.

Streamlining Rulemaking Procedures

Finally, the Commissioners voted on July 1 to approve changes to the FTC’s Rules of Practice in order to “modernize” the agency’s rulemaking authority under Section 18 of the FTC Act.12 Section 18 permits the Commission to issue trade regulation rules that address commonly occurring unfair or deceptive practices.13 The amendments are intended to streamline rulemaking by, for example, making it easier for stakeholders to participate in informal hearing procedures or eliminating rules not required under the FTC Act.14 “These changes,” commented Commissioner Rebecca Slaughter, “show the FTC is turning the page on decades of self-imposed red-tape and returning to the participatory and dynamic process for issuing Section 18 rules that Congress envisioned.”15

What This Means for You

With Chair Lina Kahn at the helm, the FTC is leading the charge on the Biden Administration’s antitrust reform efforts. The FTC has historically brought few cases under its standalone Section 5 authority so the practical effect of withdrawing its 2015 policy statement may be limited. Still, this policy change likely foreshadows efforts to lower enforcement standards in other areas. For example, the EO encourages the FTC to review its merger guidelines for both horizontal and vertical mergers in addition to reaffirming the FTC’s authority to challenge deals that closed without challenge from prior administrations.16

More immediate changes are coming to the agency’s merger review process.  The repeal of the 1995 policy statement may increase the costs and reduce the attractiveness of FTC consent orders for merging parties, which may lead parties to pursue more “fix-it-first” remedies.  In addition, we are seeing greater involvement by the Chair’s office in routine merger clearance decisions, and the agency has provided no timeline as to when early terminations will resume.

1 Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (July 14, 2021) [hereinafter “EO”]; see also White House Briefing Room, Fact Sheet: Executive Order on Promoting Competition in the American Economy (July 9, 2021), [hereinafter “Fact Sheet”].

2 See Federal Trade Comm’m, Statement of the Commission on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 the FTC Act (2021), [hereinafter “FTC Withdrawal Statement”]. Commissioners Lina Khan, Rohit Chopra, and Rebecca Slaughter had previously issued a joint statement on July 1 nearly identical to the agency’s statement published on July 9. See Federal Trade Comm’m, Statement of Chair Lina M. Khan Joined by Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the FTC Act (2021),

3 See FTC Withdrawal Statement at 2, 5.

4 See Federal Trade Comm’m, Statement of Enforcement Principles Regarding Unfair Methods of Competition Under Section 5 of the FTC Act, (2015),

5 See FTC Withdrawal Statement at 1.

6 See id. at 5.  The courts have used the rule of reason to evaluate most conduct under the antitrust laws for more than a century.

7 See id. at 7.

8 Id.

9 See EO §1 (“It is also the policy of my Administration to enforce the antitrust laws to meet the challenges posed by new industries and technologies, including the rise of the dominant Internet platforms, especially as they stem from serial mergers, the acquisition of nascent competitors, the aggregation of data, unfair competition in attention markets, the surveillance of users, and the presence of network effects.”); see also Fact Sheet at 6 (“In the Order, the President underscores that hospital mergers can be harmful to patients and encourages the Justice Department and FTC to review and revise their merger guidelines to ensure patients are not harmed by such mergers.”).

10 60 Fed. Reg. 39, 745, 39, 746 (Aug. 3, 1995).

11 See Press Release, Federal Trade Comm’m, Statement Regarding Berkshire Hathaway Energy’s Termination of Acquisition of Dominion Energy, Inc.’s Questar Pipeline in Central Utah (July 13, 2021),

12 Press Release, Federal Trade Comm’n, FTC Votes to Update Rulemaking Procedures, Sets Stage for Stronger Deterrence of Corporate Misconduct (July 1, 2021), [hereinafter FTC Press Release: Section 18 of FTC Act].

13 Federal Trade Comm’m, A Brief Overview of the Federal Trade Commission’s Investigative, Law Enforcement, and Rulemaking Authority (last updated May 2021),

14 FTC Press Release: Section 18 of FTC Act.

15 Id.

16 See EO §§ 1,5(c); see also Fact Sheet at 3, 6.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.