Time To Consolidate Federal Antitrust Enforcement

President-Elect Trump’s new “Department of Government Efficiency” has been tasked with providing advice and guidance on reducing government waste and restructuring federal agencies. One restructuring that need not await DOGE’s expected 2026 report would involve consolidating all federal antitrust enforcement within the U.S. Department of Justice. In addition to reducing waste, this change would eliminate costly business uncertainty and enhance the global posture of the United States Government in promoting a strong and consistent competition policy.

Current Federal Antitrust Enforcement

At present federal antitrust enforcement responsibilities are shared by the DOJ and by the Federal Trade Commission (which also enforces consumer protection law). This dual jurisdiction is due to a historical quirk.

DOJ enforces the Sherman Antitrust Act of 1890 (which forbids monopolization and unreasonable restraints of trade) and the Clayton Antitrust Act of 1914 (which forbids certain contractual and pricing arrangements and prohibits mergers that threaten to substantially lessen competition). DOJ can impose criminal as well as civil penalties, including fines and jail time, under the Sherman Act. The Clayton Act is enforced civilly.

The Federal Trade Commission Act of 1914 created an independent five-member agency empowered to order that businesses cease and desist from engaging in “unfair methods of competition.”

· Congress subsequently extended the FTC’s cease and desist authority to consumer protection, authorizing it to combat “unfair or deceptive acts or practices.”

· Congress later authorized the FTC to enact consumer protection rules. The Commission may collect fines for violations of final consumer protection orders or rules.

· Furthermore, Congress directed that the FTC could also enforce the Clayton Act but not the Sherman Act.

· Courts have held that the FTC’s “unfair methods of competition” authority covers all behavior that violates the Sherman Act plus some additional competitive harms (which are not clearly defined).

· Significantly, Congress curtailed the president’s ability to oversee the FTC’s actions by providing that FTC commissioners can only be removed “for cause.” In contrast, the president can terminate core executive branch appointees for any reason.

· Congress also limited the president by providing staggered seven-year statutory terms for FTC commissioners and by requiring that no more than three commissioners may be of the same political party.

Problems Of Dual Antitrust Enforcement

The dual enforcement U.S. federal antitrust enforcement system raises multiple problems and no longer can be justified as sound public policy.

Deciding which agency will handle an antitrust enforcement matter causes wasteful delays, legal inconsistencies, uncertainty for business, and tension with the rule of law.

· The two agencies too often fight over who will handle a proposed merger, creating significant initial delays in merger review.

· The statutory language for obtaining a federal court injunction differs between the DOJ and the FTC, potentially requiring a lower burden of proof for the FTC than for the DOJ.

· The FTC and DOJ at times have adopted different approaches to clearing routine mergers and devising potential merger remedies, among other sources of divergence in merger enforcement practice.

· The FTC can bring cases in an internal administrative tribunal, with the defendant almost always losing (subject to review by a federal appeals court). The DOJ in contrast must litigate all cases in a federal trial court. This inconsistency treats defendant firms unequally and thus is in tension with the rule of law.

· A 2023 Supreme Court decision authorizing federal district court constitutional challenges to FTC administrative processes raises additional doubts about the value of FTC in-house antitrust trials.

· The FTC and DOJ have delayed the issuance of joint enforcement guidance, sometimes taking years to resolve differences, to the detriment of business planners (for example, this was the case of the 2007 DOJ-FTC report on Antitrust and Intellectual Property).

Major antitrust-related policy differences between the agencies undermine the consistency and predictability of federal antitrust enforcement.

· The FTC and the DOJ have sometimes pursued significantly different enforcement policies on key antitrust questions.

· Because of the FTC’s independence, the president has in key instances been unable to settle those differences.

· During the first Trump Administration, for example, the DOJ Antitrust Division enunciated a position promoting strong intellectual property rights that was at odds with a more critical FTC approach to IP.

· The FTC (due to commissioner recusals) continued to pursue an antitrust challenge to Qualcomm’s patent licensing practices, over the opposition of the DOJ (the FTC eventually lost before a federal appeals court).

· In November 2022, the FTC issued a policy statement suggesting that it could challenge as an “unfair method of competition” virtually “any business conduct it finds distasteful.” This arbitrary and unprecedented anti-business approach offends the rule of law.

· In April 2024 the FTC enacted a “competition rule” that would eliminate almost all noncompete contracts between employers and employees. This legally dubious claim of regulatory authority over a common business practice flies in the face of case-by-case antitrust litigation and ignores antitrust principles, creating an enormous chasm between FTC and DOJ antitrust enforcement practices.

· Such differences prevent the U.S. Government from speaking with one voice internationally and undermine the president’s constitutional authority over the conduct of foreign affairs.

· They also compound the uncertainty firms face when considering business plans that may be viewed differently by the two agencies.

Prior justifications for the dual enforcement system no longer pass muster.

· The claim that special FTC expertise justifies allowing it to develop “pioneering” antitrust cases through internal adjudication appears unconvincing, given recent judicial skepticism regarding this role.

· An academic analysis by University of Michigan Professor Daniel Crane concludes that the FTC is “not uniquely expert.” Moreover, far from having special quasi-legislative or quasi-judicial features, it is merely an enforcement agency that is independent from the president. This is at odds with our constitutional structure, which views law federal enforcement as a core presidential responsibility.

· Leading commentators, including three members of the bipartisan 2007 Antitrust Modernization Commission, have called for a transfer of antitrust functions from the FTC to the DOJ.

· Very recently, retired federal judge Susan Braden explained that transfer of those functions would enhance efficiency, stressing that “there is no rational justification for American taxpayers to continue to fund two separate federal entities and bureaucracies to enforce antitrust and competition laws.”

Moving Forward On Consolidation

Fortunately, a transfer of FTC antitrust authorities would be easy logistically. The FTC’s Bureau of Competition, which houses antitrust enforcers, could be shipped to DOJ’s Antitrust Division, along with those FTC economists who work on antitrust. Melding FTC lawyers and economists into the Antitrust Division should not create problems, given the similar training and experience of professionals in the two agencies.

The FTC could retain its lawyers and economists who work on consumer protection. Remaining FTC economists could also perhaps be assigned to carry out independent policy research on markets, which could profitably be considered by the executive branch.

A few needed statutory tweaks, such as elimination of the FTC’s “unfair methods of competition” power, would be straightforward. Fortunately, Senate and House versions of the “One Agency Act,” thoughtful draft bills to accomplish consolidation, are “in the can” and could quickly be “spruced up” for consideration by Congress. Republican House and Senate counsel recently indicated that the prospects for passage are favorable.

Congressional action early next year on antitrust consolidation would enhance government efficiency, benefit consumers and the private sector, and strengthen the international economic policy hand of President Trump.