On July 9, President Biden issued an executive order in which he described a comprehensive 72-part agenda to improve competition in the United States. Some of his proposals suggest that he supports the plans for radical changes in antitrust law that FTC Chair Khan proposed at her first FTC meeting on July 1. I have already expressed my skepticism about those proposals.
Many of President Biden’s proposals are continuations or logical extensions of efforts that the FTC and the DOJ Antitrust Division have long pursued, however. They are consistent with the maximization of consumer welfare standard that antitrust courts have attempted to further for fifty years, and they are supported by many scholarly studies. Agencies will encounter a lot of judicial resistance to their efforts to implement those elements of the president’s competition agenda, however. I will describe five proposals that fall in that category, along with my reasons for concern that they will be hard to sell to skeptical courts.
Increasing the availability of generic drugs. PresidentBidenurgedthe FTC to increase the availability of less expensive generic drugs by prohibiting manufacturers of brand name drugs from paying their potential competitors not to market generic equivalents. The FTC has been trying to do just that for many years with disappointing results in court. In 2013, the FTC urged the Supreme Court to adopt a test applicable to payments not to compete that would make it relatively easy for the FTC to prohibit the many payments to potential competitors that are intended to stifle competition from generic equivalents. The Justices unanimously rejected the FTC’s proposed test. The majority adopted an extremely demanding test that the FTC has not been able to satisfy in any case, while the dissenting Justices urged adoption of a test that would make it even more difficult for the FTC to prevail.
Stopping states from engaging in unnecessary and anticompetitive occupational regulation. The FTC has been aggressively pursuing President Biden’s goal of stopping states from engaging in unnecessary and anticompetitive occupational regulation for well over a decade, with mixed results in court. In 2015, a six-Justice majority upheld an FTC effort to block a state agency from implementing a blatantly protectionist rule. That victory came with warning signs, however. Three conservative Justices dissented. They argued that all of the FTC’s efforts to address this growing problem are unconstitutional. The changes in the composition of the Court since 2015 suggest the distinct possibility that a majority of Justices may now hold that view. Even the majority that upheld the FTC’s action in 2015 suggested two ways in which states can continue to engage in unnecessary and anticompetitive occupational regulation without running afoul of the majority’s interpretation of the Sherman Act.
Increased regulation of platform firms. Both Chair Khan and President Biden have emphasized the need to increase antitrust scrutiny of the practices of platform firms like Amazon, Google and Facebook. The Supreme Court’s reaction to the attempt of state attorney generals to move in that direction suggests that the FTC and DOJ will experience difficulty in implementing any effort to use antitrust law to change the practices of platform firms. In 2018, the Court held that an enforcement agency cannot succeed in any effort to prohibit a platform firm from engaging in an apparently anticompetitive practice by attempting to show that the practice has an adverse effect on the performance of the market in which the firm engages in the practice. The agency cannot prevail unless it undertakes the daunting task of analyzing in detail the complicated effects of the interactions between the firms’ practices in one market and the firms’ practices in another market in order to support a finding that the net effect of the practice in the two markets is to reduce consumer welfare.
Heightened scrutiny of proposed mergers. Many scholars support the president’s belief that antitrust agencies should increase the level of scrutiny that they apply to proposed mergers, but the judicial reaction to the Trump administration’s attempt to move in that direction is not encouraging. The Supreme Court has not addressed the merits of a proposed merger in forty years, but the D.C. Circuit rejected the Department of Justice’s attempt to block the merger of AT&T and Time-Warner in a 2019 opinion that creates formidable barriers to success in any future attempt to keep two large firms from merging.
Stop hospital mergers that create healthcare monopolies. President Biden wants the FTC to stop hospital mergers and acquisitions that increase healthcare costs by creating unduly concentrated markets.The FTC began a concerted effort to keep hospitals from engaging in mergers and acquisitions that create monopoly conditions many years ago. It was forced to halt that effort when it lost six out of seven hospital merger cases in court. FTC’s recent success in restarting that effort provides some encouraging news, however. FTC conducted a study of the hospital mergers that it unsuccessfully challenged and found that those mergers had dramatically increased the cost of hospital care. When courts were confronted with that solid empirical evidence of the high social cost of the mistakes that they had made in the past, they embraced the FTC’s proposed methods of correcting their past mistakes.
The bottom line is clear. DOJ and FTC will find it a challenge to persuade skeptical courts to react favorably to their efforts to implement President Biden’s ambitious antitrust agenda. The FTC’s success in persuading courts to accept its approach to hospital mergers illustrates one way in which agencies can improve their chances of overcoming that judicial skepticism. Courts respond well to empirical studies that demonstrate the adverse effects of firm practices and market structures on the performance of markets.
Richard J. Pierce, Jr. is the Lyle T. Alverson Professor of Law at George Washington University.
 Pierce, Questions for Proponents of Major Changes in Antitrust Law, Notice & Comment (July 3, 2021); Pierce, Fasten Your Seatbelts, The FTC Is About to Take Us on a Rollercoaster Ride, Notice & Comment (July 1, 2021).
 FTC v. Actavis, 570 U.S. 136 (2013).
 North Carolina State Board of Dental Examiners v. FTC, 594 U.S. 494 (2015).
 Ohio v. American Express Co., 138 S.Ct. 2274 (2018).
 U.S. v. AT&T, 916 F. 3d 1029 (D.C. Cir. 2019).
 See Joseph Farrell et al, Economics at the FTC: Retrospective Merger Analysis with a Focus on Hospitals, 35 Rev. Indus. Org. 369 (2009).
 See FTC v. Penn State Hershey Medical Center, 838 F. 3d 327 (3d Cir. 2016).