On February 26, new Federal Trade Commission (FTC) Chair Andrew Ferguson announced the creation of the Joint Labor Task Force, continuing former Chair Lina Khan's departure from what is known as the consumer welfare standard.
Congress established the FTC in 1914 to prevent unfair competition and deceptive business practices. This has primarily meant "protecting Americans in their role as consumers," according to Ferguson. The FTC enforces the Clayton Antitrust Act, which outlawed price discrimination between customers, exclusive dealing, interlocking directorates, and mergers or acquisitions that "substantially reduce competition."
But Khan was more interested in Americans' role as producers than consumers. In 2022 she signed a memorandum of understanding (MOU) with the National Labor Relations Board to "protect workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices," such as restrictive contract provisions. In August 2023, Khan signed a similar MOU with the Department of Labor recognizing both agencies' shared commitment to protecting workers from deceptive earnings claims, restrictive noncompete and nondisclosure contracts, and the "impact of labor market concentration."
Alden Abbott, the FTC's general counsel from 2018–2021, opposed the MOUs. Abbott argued in September 2023 that labor market oversight is "far-removed from the FTC's statutory mandate to focus on combating impediments to competition and consumer protection [and] would reduce the funding available to attack fraudulent and clearly anticompetitive acts."
Khan's FTC went further, attempting to ban noncompete agreements in April 2024, describing them as an unfair method of competition in violation of the FTC Act. Ferguson dissented on legal grounds, arguing that the Commission does not possess the power "to declare categorically unlawful a species of contract that was lawful when the Federal Trade Commission Act was adopted."
Though Ferguson opposed banning noncompetes, he still identifies them as one of 12 anticompetitive labor practices under FTC jurisdiction. Ferguson has directed his new Joint Labor Task Force to "prioritize investigation and prosecution" of such practices and to advocate regulatory and legislative changes that would address them.
Ferguson's endorsement of the 2023 joint merger guidelines, along with his hostility to the tech industry and support for enforcing the anti–price discrimination Robinson-Patman Act, all suggest a continuation of Khan's activist antitrust ideology. The Joint Labor Task Force is yet more evidence.
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