The FTC’s newest commissioner speaks



Last month POLITICO sat down with Bedoya in his office to get an early sense of his experience at the FTC and priorities for the coming years.

Bedoya is known as primarily a tech thinker; he’s been a leading voice on the responsible use of facial recognition and artificial intelligence. And in our interview, Bedoya cited mobile phones and app stores as one of the first antitrust issues he encountered, in 2011 as a staffer for former Sen. Al Franken. But six months into his “dream job” as one of five FTC commissioners, Bedoya’s antitrust focus is decidedly analog.

“I expected that I would be really focused on this intersection of privacy and antitrust,” Bedoya said of his expectations for the job after he was confirmed in the Spring. “And yes, I still do think that’s interesting. But I find myself really getting pulled into the basics: your groceries, your prescriptions, your paychecks,” issues he said have a disproportionate impact on society’s most disadvantaged — and a phrase he used in our interview, and recent public talks, multiple times.

Investors and company leaders are closely tracking any hints of commissioners’ views on several big issues currently before the FTC, such as a merger review of the grocery store megadeal between Kroger and Albertsons and a sprawling investigation of sky-high insulin prices. In our conversation, Bedoya was careful not to mention any specific deals in front of the FTC, speaking largely about industries outside his remit. But it wasn’t hard to detect some overarching goals — one of which is to broaden the definition of the consumer beyond those with health insurance or a median income.

For decades, antitrust law has been hyper-focused on the consumer. If a merger or business practice was believed to lower prices, improve quality, and increase choice, it was largely left alone. A key goal of Bedoya’s is to look beyond specific metrics and restore a sense of fairness for both consumers and businesses large and small.

Here’s what Bedoya wants Washington to know.

The big story isn’t found in D.C.

For his first public speech, in August, Bedoya eschewed the normal D.C. lecture circuit and traveled to Des Moines, Iowa. In a morning keynote addressing several hundred lawyers from state attorneys general offices around the country, he warned of a variety of digital harms affecting marginalized groups, including internet scams targeting non-English speakers, the impact of social media on teen mental health and abusive collection of geolocation data.

He then went to meet with a group of nearby corn farmers and cattlemen to discuss conduct by large meat packers that negatively impact small farmers. Before that, he met with community pharmacists in West Virginia. Most recently, he traveled to South Dakota to meet with a rural grocer, who said he is struggling to stock his shelves because he can’t get the same prices for goods as larger stores.

“That’s what I want to do more of, listening in places that are not D.C., or coastal cities, to small business leaders and other kinds of market participants.”

The 1930s gave Washington a tool. He wants to dust it off.

In a Minneapolis speech the following month at an event sponsored by the Maine-based Institute for Local Self-Reliance, Bedoya laid down a marker on an obscure 1936 law, the Robinson-Patman Act. Designed to level the playing field between small retailers and large chain stores, the law prevents suppliers from offering different prices for the same goods. The FTC enforced the law regularly for decades, then pulled back more than 20 years ago.

Bedoya views that as a mistake, with the law being an essential tool to promote fairness in the economy. At an event earlier this month, he said that reinvigorating Robinson-Patman enforcement is one of his top priorities.

“The idea that low prices at the big box store help everybody isn’t true in Pine Ridge [South Dakota], where 90 percent of folks don’t have cars,” he said, of the 180-mile round trip journey to the nearest large grocery store. “I think there’s a line you can draw from that law lying fallow, to people in Pine Ridge not being able to buy fruit for their kids because the prices have gone through the roof.”

Privacy, data and antitrust

Bedoya was careful to shy away from matters that are likely to come before the commission, so he steered the conversation toward issues outside FTC jurisdiction. As with meatpacking, it’s the DOJ investigating Apple and Google rather than the FTC. Still, Apple’s privacy and security justifications for its allegedly anticompetitive conduct in blocking competing app stores and in-app payment providers from its phones are top of mind for antitrust regulators around the world.

“Increasingly, you hear companies say, ‘Oh, well, we have to do this because of privacy.’ That’s a fine argument to make. But if it comes before the commission, we’re going to look under the hood,” he said. “Companies need to know that if they come to the commission and seek to justify conduct that seems to limit competition, on privacy grounds, they’re going to face a lot of questions.”

For mergers in which large amounts of data are changing hands — and in 2022, that’s basically most mergers — Bedoya will also have his guard up. “Where you are dealing with sensitive data, I’m going to ask about it as a component of price [and] as a potential barrier to entry. I am going to be making sure that we don’t exclude data considerations from these mergers.”

On health care regulations, the FTC needs to shift its focus

Turning to sectors squarely in the FTC’s jurisdiction — hospitals and pharmaceutical companies — he said, “I am really interested in focusing our antitrust work more on the folks at the bottom of the ladder, people living paycheck to paycheck, or struggling to even do that.” He cited what he sees as the typical antitrust analysis in pharmaceutical markets, which focuses on insured consumers with some means.

A similar process plays out in the agency’s oversight of hospital mergers. The focus, he said, “is on what’s called general acute care services for insured patients… It’s a particular kind of service for a particular kind of patient. And what I want to explore is how we make sure that whether we’re talking about a merger or the pharma supply chain, we’re always asking what about the people who don’t have anything. What about the people who can’t pay rent? What about people who don’t have insurance.”

And by the way: Antitrust is everywhere

Once Bedoya started delving into these issues, he began noticing little things in his daily life that were difficult to avoid interpreting outside of an antitrust framework. He recalled one example after he was nominated, where he thought he got a good deal on some steaks. When they arrived, he found it was one ribeye, cut horizontally into multiple pieces. “That sent me down this rabbit hole of what the heck is going on here? And I learned about consolidation in meatpacking.”

Poor customer service in a concentrated mobile phone sector, another industry squarely in the DOJ’s purview, also came up. In our interview, Bedoya said he was flummoxed by the amount of time and effort it takes to switch carriers, an arduous process that could be alleviated with more competition.

Kroger and Albertsons tie it all together



Source link: https://www.politico.com/news/2022/12/30/ftc-commissioner-alvaro-bedoya-interview-00075146

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