Evaluating the FTC as a Potential Information Platform Regulator

Four major Big Tech platforms—Google, Meta, Apple, and Amazon—are currently the subject of antitrust lawsuits brought by the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice. Google was found to have unlawfully monopolized both the digital advertising technology and online search engine markets—it was recently directed to share certain data with its competitors and terminate its exclusive distribution agreements in the search case. Meta was accused of ‘buying and burying’ its rivals—Instagram and WhatsApp—to monopolize the personal social networking space.

Academics and commentators have long theorized that lax antitrust enforcement by the FTC and the Justice Department in the 21st century has enabled large information services platforms to abuse their market power and engage in exclusionary conduct, thus allowing them to eliminate newer and smaller competitors and monopolize digital markets. The natural question that arises is whether the FTC—a leading antitrust enforcer—has the design and tools needed to credibly regulate large information services platforms.

In a recent article, William E. Kovacic, a professor of law at The George Washington University and a former FTC chair, contends that a potential regulator of information services platforms ought to fulfil certain benchmarks: an agile and scalable design capable of responding swiftly to rapidly-evolving digital markets, the ability to keep abreast of new market developments through sustained research, and subject-matter expertise in multiple disciplines as well as domains of law. Kovacic analyzes the FTC’s present institutional design against such standards.

First, Kovacic notes that in 1914, the U.S. Congress endowed the FTC with a broad mandate to proscribe “unfair methods of competition” under Section 5 of the FTC Act. He asserts that this led to the FTC condemning misleading advertisements as an “unfair method of competition” and thus pursuing a consumer protection agenda. Congress later amended Section 5 to include prohibiting “unfair or deceptive acts or practices”—which, Kovacic argues, demonstrates that the FTC’s mandate is scalable and adaptable.

At the same time, Kovacic contends that the FTC’s Section 5 authority—the creation of norms to address new competition-related concerns through its internal adjudication system—was confronted repeatedly with resistance from Congress and the courts. For instance, in the 1920 case FTC v. Gratz, the U.S. Supreme Court held that the FTC’s Section 5 authority could not reach conduct not already deemed to be anticompetitive under common practice—a pattern that has persisted in recent decades, states Kovacic. He also observes that the FTC has at times been compelled to abandon cases prosecuting Section 5 infringements—such as in the breakfast cereal and petroleum industries—amidst severe political pushback.

In addition, Kovacic asserts that Congress did not originally grant the FTC the authority to create substantive competition rules but that such power was later recognized in National Petroleum Refiners’ Association v. FTC. He notes, however, that one of the most recent exercises of the FTC’s rulemaking authority—its 2024 rule banning non-compete agreements—was immediately challenged in court on the grounds that the FTC lacked such authority. Similarly, although the Congress expressly enabled the FTC to issue rules prohibiting unfair or deceptive acts or practices in 1975, Kovacic points out that the FTC’s momentum to exercise its rulemaking powers for consumer protection in the 1970s was routinely cut short by Congress’s threats to downsize its budget.

Kovacic theorizes that although a broad, scalable mandate—such as that of the FTC—may appear to be beneficial for a potential information platform regulator, clear limiting principles should be built into the statute establishing such a regulator’s authority. He maintains that such constraints would help shield the regulator from political interference by actors seeking to undermine its work.

Second, Kovacic touches upon the FTC’s adjudicative power to establish competition norms internally on a case-by-case basis. He observes that the FTC was not empowered to impose monetary penalties or pass divestiture orders—potential tools to address Section 5 violations—and could instead only issue cease-and-desist orders.

Kovacic highlights that in its pursuit to become an effective consumer protection agency, the FTC started relying less on administrative remedies such as cease-and-desist orders—especially after 1973, when it was granted the authority to obtain injunctions in federal court directly. He explains that the FTC then used this authority to also secure monetary relief in consumer fraud and antitrust matters, until the Supreme Court curtailed this practice in 2021 by ruling that the FTC was authorized to seek injunctive relief only. Kovacic cautions that this decision should serve as a reminder for the FTC and other regulatory bodies that courts may resist expansive interpretations of the law, even when aimed at advancing important policy goals.

He suggests that if the FTC is to serve as an efficient information platform regulator, Congress would need to explicitly grant the agency substantive competition rulemaking power and permit it to pursue equitable relief beyond injunctions before federal courts.

Third, Kovacic acknowledges that information services platforms are susceptible to rapid change and technological advancement and that a regulator ought to continually enhance its expertise to address emerging challenges effectively. In this vein, he praises the measures taken by the FTC to routinely supplement its knowledge through research, the conducting of market studies, and the preparation of reports, which have helped Congress understand and respond to emerging forms of anticompetitive conduct.

Finally, Kovacic urges that an effective regulator for information platform services should be able to draw upon expertise in diverse legal fields. He reasons that this may be accomplished either by empowering a single institution to oversee multiple domains or by requiring it to collaborate with other specialist regulatory bodies. Although the FTC was initially instituted with a single-function mandate—to address unfair methods of competition—its role has since expanded to regulate consumer protection and privacy issues as well. Kovacic asserts that if the FTC is to serve an expanded role as an information platform regulator, it may need to further strengthen the integration of its policy functions within these three domains.

Kovacic concludes by reiterating that the FTC has the potential to be an efficient information platform regulator, as long as the agency’s design and operation are revamped through existing tools and legislative enhancements to keep pace with an expanded oversight role.