Magazine article Management Review

The FTC Lion Regains Its Roar

Magazine article Management Review

The FTC Lion Regains Its Roar

Article excerpt

The FTC Lion Regains Its Roar

During the late 1970s, the Federal Trade Commission (FTC) developed a reputation as a corporation-eating jungle cat, often more interested in creating new policies and laws - not to mention headlines - than enforcing rules already on the books. This changed abruptly when Ronald Reagan became Washington's ring master. According to many consumer advocates, the FTC was turned into a toothless house cat that would rather let the free market sort itself out - and let the bad guys get away unscathed - than take companies to court.

Today, Washington antitrust lawyers and policy watchers are saying the old FTC lion is starting to rouse again - and roar. In fact, according to a study done by Georgetown Law School, the FTC conducted three times as many investigations and brought twice the number of cases to court last year than it typically did annually during the Reagan White House years.

In recent months, the agency has stepped-up its price-fixing enforcement, taken aim at "900" telephone numbers directed at children, and accused television networks and the College Football Association of conspiring to limit the market for televised college football games.

Looking to expand its reach and put more emphasis on pro-consumer cases, the FTC has also created a special unit to study new areas that may be ripe for antitrust action. Already the FTC has let it be known it plans to investigate advertisers who claim that their products benefit the environment. It's also taking a closer look at curbing cigarette and liquor ads aimed at younger adults. Additionally, agency lawyers are examining a new policy of making companies give up any money they may have made from an illegal merger.

"The FTC certainly has renewed interest in areas of antitrust law that languished during the Reagan era," notes James Sneed, a lawyer with the firm of McDermott, Will & Emery. Says former FTC Chair Michael Pertschuk, who ran the agency during its heady activist Carter administration days: "I see more seriousness about the idea of law enforcement at the FTC. It seems to have more respect for, and willingness to do, the kind of corporate policing it is capable of doing."


Much of the credit for the added vigor and sense of mission at the FTC goes to its chair, Janet Steiger, who took over the agency just over two years ago. While certainly an active presence, Steiger is best known for bringing better lawyering to the FTC rather than trying to turn it into a hothouse for experimenting with political agendas, which has been the FTC's reputation for the last 15 years. Like her boss, George Bush, Steiger is more of a middle of the road pragmatist than political firebrand who prefers to stress the agency's "law enforcement" mission than whatever role it could play in changing society.

From her first day on the job at the FTC, Steiger made it clear she intended to run a different agency from the one she inherited. As she told a group of lawyers just before her confirmation: "While I am certainly aware of the assertions that federal consumer protection and antitrust enforcement went too far in the 1970s, I also feel the retreat in the 1980s was excessive."


Since Steiger has taken over, the agency has amassed an impressive track record prosecuting antitrust cases, which has garnered it praise from Capitol Hill politicians normally more inclined to criticize the Administration's policies. At the same time, there are counter-claims that the agency is stepping up its antimerger case load simply to appease congressional Democrats - an accusation FTC officials pointedly deny. …

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