Tucked inside the House Judiciary Committee’s draft legislation for the upcoming “big, beautiful” Republican reconciliation bill was language that would have stripped the Federal Trade Commission of its antitrust enforcement authority and handed it over to the Justice Department.
Committee Chair Jim Jordan has long supported such a shift, as have other, more populist Republicans like Sen. Mike Lee. Even the president’s self-described “first buddy” Elon Musk endorsed the idea.
Despite that support, the provision did not live very long in the reconciliation package. Jordan told reporters Wednesday that he dropped the language to avoid the measure derailing the reconciliation process, which relies on getting nearly every Republican in both the House and Senate to agree on the bill.
He said he would soon introduce the idea as its own standalone bill.
From an efficiency standpoint, the move makes sense on the surface. The U.S. currently has two antitrust enforcement agencies in the DOJ and the FTC. Why not merge their efforts and let one team lead the federal antitrust fight?
It turns out that the FTC and DOJ have distinct authorities that don’t quite overlap. Unlike the DOJ, the FTC does not have the authority to press criminal charges—so no, Sam Altman won’t be going to jail anytime soon, despite former FTC Chair Lina Khan’s concerns over his business practices. But to make up for that lack of strong enforcement, they were given broader authority to investigate and sanction companies that were harming consumers and the greater economy—even if they weren’t technically violating a criminal statute.
That authority lies within Section 5 of the FTC Act, which authorizes the commission to go after “unfair methods of competition.” The DOJ, by contrast, does not have that authority.
Moving FTC’s antitrust authority to the DOJ would cause chaos, possibly ending the commission’s antitrust lawsuit against Amazon, and possibly killing every consent decree the FTC reached under Section 5.
When it comes to new industries like generative AI, the transfer of authority would kill any form of government enforcement for business practices that hurt consumers and the greater economy. In 2023, the commission, then under Democratic control, used Section 5 to block Rite Aid from using facial recognition to identify shoplifters, once it became clear the company’s software often returned false positives, particularly among people of color.
But the use of the FTC to regulate AI companies didn’t stop when President Trump entered the White House.
As recently as Monday, the FTC used its Section 5 authority to stop Workado, a company that claims it can identify AI-generated content, from massively exaggerating its accuracy. The FTC that issued that order is made up entirely of Republicans, now that Trump illegally fired the two Democratic commissioners.
If Silicon Valley sees a weakened FTC, it may accelerate the use of techniques designed to skirt antitrust laws like acquihiring, where instead of outright buying out a competitor, a tech giant simply hires away all the best employees before cheaply buying a license to use the competitors IP. Or the absolute maze of AI investments that Google, Microsoft, and Amazon have poured into would-be competitors like OpenAI and Anthropic, ensuring that even if they lose the AI race with their own product, that they still win.
During the last days of the Democratic-led FTC in January, the commission released a report on those investments with some hints that at least the Democrats on the commission were willing to start implementing enforcement actions.
While a standalone bill to remove the FTC’s antitrust authority likely won’t pass anytime soon, if Jordan somehow gets enough votes for his future standalone bill, it will be a big win for tech giants who seek to find loopholes in the law to improve their bottom lines.
