U.S. Antitrust Enforcers Signal Discord Over Prober of Big Tech
WASHINGTON – Turf fight between the federal government's two antitrust enforcers proves that both claim authority to investigate whether major tech companies are engaging in competitive behavior.
The latest evidence of friction came in a letter late last week from the Federal Trade Commission to the Justice Department's antitrust division, in which the FTC complained about the department's behavior and raised concerns about recent interactions between the two agencies, according to people familiar with the case.
The previously unveiled letter from FTC chairman Joe Simons increases the prospect of violating the long-standing power-sharing agreement between the two agencies. There is also concern that the tensions may eventually hinder several current antitrust probes from major technology companies.
A FTC spokeswoman declined to comment. The Justice Department did not respond to a request for comment.
The chair of the Senate Anti-Trust Subcommittee, Utah Republican Mike Lee, said he plans to inquire about the letter and tensions it reflects during a hearing Tuesday. Both Mr. Simons and DOJ antitrust boss
Makan Delrahim
expected to testify.
"Sen. Lee is aware of the letter, and he intends to inquire at tomorrow's oversight hearing about the clearance process between agencies and, if not, whether the FTC and DOJ are conducting duplicate investigations, "a spokesman for Lee said Monday. This clearance process, a long-standing arrangement between the two agencies, helps determine which of them is investigating specific areas.
Mr. Lee has raised concerns about clashes between the two agencies on several recent occasions ̵[ads1]1; for example, when the Department of Justice took the unusual step of undermining the FTC's antitrust lawsuit against the chip maker
Qualcomm
Inc.
earlier this year. He has even suggested that having two federal law enforcement agencies can contribute to the problems.
"This type of malfunction and confusion illustrates why having two log-head agencies does not provide effective antitrust enforcement," Lee said in August.
The FTC and the Department of Justice share law enforcement in the United States While they have been rivals and engaged in turf battles at times, employees in both agencies acknowledge that their interaction has been abnormally strained lately.
Technical issues are an important contributing factor. Both the FTC and DOJ are under considerable pressure to investigate – and potentially challenge – a range of actions from a handful of companies that dominate online search, retail and social media.
One point of contention now between the agencies is whether the Justice Department will open its own antitrust investigation of Facebook, according to people familiar with the matter.
Messrs. Delrahim and Simons negotiated earlier this year on schemes that cleared the Justice Department to investigate
Alphabet
Inc.
Google for possible monopolistic tactics and also gave the department jurisdiction
apple
Inc.
for similar problems. The FTC secured itself the right to explore monopolization issues involving Facebook and
Amazon.com
Inc.
But the Justice Department took things a step further in July, announcing a broad review of whether dominant online platforms generally illegally stifle competition. This raised the rare opportunity for both agencies to investigate the same company, Facebook, at the same time.
The FTC's Facebook probe investigates, among other things, whether the social media giant pursued an acquisition pattern to eliminate potential future competitors. Meanwhile, the Ministry of Justice has also filed complaints on Facebook, including from people who are advocating breaking up the company.
Facebook did not respond to comments. During the summer, the company said the FTC was investigating "in the areas of social networking or social media services, digital advertising and / or mobile or web-based applications."
Google declined to comment. Amazon and Apple did not immediately respond to requests for comment.
Another sore point, which has been going on for months, is the Justice Department's decision this year to enter into the FTC's antitrust lawsuit against Qualcomm. The commission won a favorable ruling from a federal judge in California in May that forced major changes to Qualcomm's business practices, but a court of appeal last month remained the effect of that ruling for now.
The Justice Department supports Qualcomm, saying the trial judge's ruling was incorrect in several ways. It also argued in court documents that the ruling would reduce Qualcomm's competitiveness in 5G innovation and affect national security. The Appeal Court cited the Justice Department's position when it granted Qualcomm stay last month.
FTC officials believe the department fundamentally misunderstands the case and that the DOJ did not consult them properly before intervening, according to people familiar with the case.
Qualcomm has stated that their business practices were justified and legal.
The fighting between the two agencies is "a real drag on the effectiveness of the American [antitrust] system," said William Kovacic, a former FTC commissioner who is now a law professor at George Washington University. "It does not destroy individual efforts in any way, but it reduces the prospects of success. It makes it more difficult to achieve a good result."
Write to John D. McKinnon on John. mckinnon@wsj.com and Brent Kendall at brent.kendall@wsj.com
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