U.S. FTC sharpens weapons to tackle Big Tech by dropping 'consumer welfare' guidance

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Signage is seen at the Federal Trade Commission headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly

WASHINGTON, July 1 (Reuters) - The U.S. Federal Trade Commission lowered the bar on when it decides to file antitrust lawsuits on Thursday by scrapping a 2015 statement that said it would be guided by the "promotion of consumer welfare" when looking at new investigations.

In an open meeting conducted online, the commission voted 3-2 to withdraw the statement, with Democrats voting for the withdrawal and Republican commissioners against.

"Withdrawing the 2015 statement is only the start of our efforts to clarify the meaning of Section 5 and apply it to today's market," Chair Lina Khan, a progressive, said at the meeting. Section 5 of the FTC Act says unfair methods of competition, which it does not describe in detail, are unlawful.

The commission also voted along party lines to approve a rule tightening who can claim that goods are "Made in USA" and to approve a measure that would streamline FTC rule-making.

The commission voted 3-2 to streamline investigations by FTC staff, with Khan mentioning in particular probes related to the Big Tech platforms, health care markets, the COVID-19 public health emergency, among others.

Khan, who took the position in June, took the unusual step of scheduling the votes to be held in public.

The meeting occurs at a time of major change at the FTC, which has prided itself on reaching agreements by consensus.

In this meeting, the two Republican commissioners, Christine Wilson and Noah Phillips, said that the steps that the agency took on Thursday fell short of true transparency because they learned of the meeting just days ago.

They also repeatedly warned the steps could put the FTC at risk of Congress stepping in, as it did four decades ago, to rein in an agency that they thought were overreaching.

Public Knowledge, which has been critical of Big Tech, said that rescinding the 2015 policy statement was positive. Competition Policy Director Charlotte Slaiman said it was "one of the first signs that the FTC is ready for bold and decisive action with Chair Khan at the helm."

Reporting by Diane Bartz; Editing by Dan Grebler, Kirsten Donovan

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