DeMint pressed the economic argument for restraint. | JAY WESTCOTT/POLITICO DeMint: Stop FTC power grab

Sen. Jim DeMint has sent a letter to the Federal Trade Commission urging it to curb its “apparent eagerness” to expand its antitrust authority — particularly “against businesses in the rapidly evolving technology industry,” according to a copy obtained by POLITICO.

The letter, addressed to Chairman Jon Leibowitz, comes as the FTC is in the midst of two high-profile antitrust investigations of Google over its search business and use of standards patents against rivals.


“We take no position regarding the merits of any matter currently under investigation by the Commission,” the letter said.

It does not mention companies being investigated, but it suggests the FTC is overstepping its authority in pursuing some antitrust matters.

“When a federal regulatory agency uses creative theories to expand its activities, entrepreneurs may be deterred from innovating and growing lest they be targeted by government action,” the letter continues. “The potential use of such uncertain authority against businesses in the rapidly evolving technology industry — one of the few bright spots in an otherwise dismal economy — highlights our concerns.”

The lawmaker’s letter to Leibowitz says, “We are concerned about the apparent eagerness of the Commission under your leadership” to expand actions under Section 5 of the FTC Act. According to the commission, under the FTC Act, which Congress passed in 1914, Section 5 prohibits “unfair methods of competition,” and it was amended in 1938 to include “unfair or deceptive acts or practices.”

The FTC has declined to comment on the investigations of Google, including which antitrust laws the agency’s investigators believe have been violated.

Google has disclosed in financial filings that it is the subject of two antitrust investigations by the FTC, including one of its search and advertising business and a separate probe into the use of standards essential patents by its Motorola Mobility subsidiary against rival products.

Google officials did not immediately return requests for comment.

FTC officials declined to comment Thursday.

DeMint is largely believed to be in line to replace retiring Sen. Kay Bailey Hutchison (R-Texas) as ranking member on the Commerce, Science and Transportation Committee. Nine other Senate Republicans — Hutchison, Orrin Hatch of Utah, John Thune of South Dakota, John Cornyn of Texas, Johnny Isakson of Georgia, Roy Blunt of Missouri, John Boozman of Arkansas, Pat Toomey of Pennsylvania and Marco Rubio of Florida — signed on to the letter.

The FTC’s definition of its authority under Section 5 has long been a sore point at the agency — and sometimes in the courts, experts say. The Justice Department alone enforces the Sherman Antitrust Act, the nation’s first set of antitrust laws.

But if the FTC wants to bring an antitrust case under the same monopoly abuse theory as Section 2 of the Sherman Act, it must do so using Section 5 of the FTC Act. However, Section 5 includes provisions that are broader — “unfair methods of competition” and “unfair or deceptive acts or practices.”

“They have been very badly defined over time,” said former FTC Chairman Bill Kovacic, a professor at George Washington University. Courts — including the Supreme Court — have repeatedly upheld the definition of Section 5 cases as broader, but the FTC hasn’t always had the best results when it has pressed cases pushing the definition of Section 5.

“It’s been a long time since the FTC won one, and a major reason is that the FTC has had a difficult time defining what it means,” Kovacic said. “The FTC has no guidelines on what it means. The FTC is coming up on its 100th anniversary, and it’s never provided guidelines.”

DeMint chose to press the economic argument for restraint by the FTC.

“In the interest of providing more regulatory certainty for American consumers and job creators, we urge the Federal Trade Commission to act with humility and restrain itself to activities for which it has clear legal authority,” the letter says. “We hope the Commission considers the consequences of hampering legitimate business model innovations and market activities of companies under an aimless, expansive, and possibly unauthorized use of the Commission’s powers. We support innovation and believe economic expansion will follow if the government acts with humility rather than experimentation.”

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Jim DeMint