The White
House is passing up a chance to steer policy on everything from mergers to
advertising as it delays choosing from three front-runners to name a permanent
chair
for the Federal Trade Commission.
The FTC,
which shares the work of antitrust enforcement with the Justice Department and
pursues companies accused of deceptive advertising, is currently headed by
acting Chairman Maureen Ohlhausen, who was named on Jan. 25.
Even without
a permanent chair and missing key staff, in the past month, the FTC has forced
Walgreens Boots Alliance Inc (WBA.O)
to scrap a plan to buy Rite Aid Corp (RAD.N),
sued to stop daily fantasy sports companies DraftKings and FanDuel from merging
and filed a complaint aimed at stopping a North Dakota hospital system from
buying clinics.
The Trump
administration has not named a permanent chair. For the past several weeks,
Ohlhausen, a Republican, has been the leading candidate, according to a person
familiar with her candidacy.
Also under
consideration are Joe Simons of the law firm Paul, Weiss, Rifkind, Wharton and
Garrison LLP, according to the trade publication MLEX; and Utah Attorney
General Sean Reyes, according to a source close to the situation.
Both
Ohlhausen and Simons would be traditional Republican enforcers, meaning that
few enforcement decisions would change and the pro-business approach with a
slant toward approving big mergers would likely continue.
That said,
as a commissioner, Ohlhausen dissented on an FTC decision to sue Qualcomm Inc (QCOM.O)
for allegedly using its market power to maintain a monopoly on key
semiconductors. Depending on who is named to the agency, this lawsuit could
potentially be dropped.
Google's
critics in Silicon Valley tend to support Reyes, who has little background in
antitrust issues, since he and the District of Columbia attorney general wrote
a letter in 2016 urging the FTC to consider re-opening a probe of Google (GOOGL.O)
that the agency had closed in early 2013.
The wide-ranging
probe had touched on everything from search bias to Google's practice of
scraping third-party content for its sites to the licensing of standard
essential patents.
Because
Ohlhausen is only acting as FTC head, she cannot hire a permanent head of the FTC's
Bureau of Competition or fill other key posts.
"The
chair sets the priorities. It's important to have that person in to set the
direction and pursue initiatives," said Deborah Garza, who served in the
Bush administration and is at the law firm Covington and Burling LLP.
Nominations
for the FTC will come sometime this summer because potential nominees are in
the process of being cleared, according to a White House official, asked about
the delay.
"The
Trump administration has identified who the individuals will be for certain
positions," said the official, who asked not to be identified.
LOTS OF
EMPTY OFFICES
Beyond
lacking a permanent chair, the agency is thin at the top. Rather than four
commissioners working with Ohlhausen, she has just one, Democrat Terrell
McSweeny.
This means
that Trump may name two Republicans but the third person must be a Democrat or
independent since by law no more than three commissioners can be from the same
political party.
Leading
candidates for the two Republican seats are Bilal Sayyed of the law firm
McDermott Will & Emery and Noah Phillips, an aide to Senator John Cornyn,
according to the person familiar with the nomination process.
For the open
Democratic commission seat, Senator Chuck Schumer has backed consumer advocate
Rohit Chopra but the White House has also spoken with others, including
agriculture expert Lillian Salerno.
The agency
has plenty of work on its plate including the merger of Linde (LING.DE)
and Praxair (PX.N),
which would create a $73 billion global industrial gases leader in a highly
consolidated market. A second is Canada's Potash Corp's (POT.TO)
purchase of Agrium Inc (AGU.TO)
in the consolidated fertilizer sector.
"The
president has his hands full with a lot of different issues. The FTC is a major
fill for any administration, and he needs to get to that," said Carl
Hittinger, an antitrust expert with the law firm Baker and Hostetler LLP.
Once a
commissioner is named to the independent FTC the president has no say in what
decisions are made, so commissioners must be chosen carefully, added Hittinger.
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