Trump missing chance to steer antitrust as key FTC slots go unfilled

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The Federal Trade Commission building is seen in Washington

By Diane Bartz

WASHINGTON (Reuters) – The White House is passing up a chance to steer policy on everything from mergers to advertising as it delays choosing from three front-runners to name a permanent chair for the Federal Trade Commission.

The FTC, which shares the work of antitrust enforcement with the Justice Department and pursues companies accused of deceptive advertising, is currently headed by acting Chairman Maureen Ohlhausen, who was named on Jan. 25.

Even without a permanent chair and missing key staff, in the past month, the FTC has forced Walgreens Boots Alliance Inc <WBA.O> to scrap a plan to buy Rite Aid Corp <RAD.N>, sued to stop daily fantasy sports companies DraftKings and FanDuel from merging and filed a complaint aimed at stopping a North Dakota hospital system from buying clinics.

The Trump administration has not named a permanent chair. For the past several weeks, Ohlhausen, a Republican, has been the leading candidate, according to a person familiar with her candidacy.

Also under consideration are Joe Simons of the law firm Paul, Weiss, Rifkind, Wharton and Garrison LLP, according to the trade publication MLEX; and Utah Attorney General Sean Reyes, according to a source close to the situation.

Both Ohlhausen and Simons would be traditional Republican enforcers, meaning that few enforcement decisions would change and the pro-business approach with a slant toward approving big mergers would likely continue.

That said, as a commissioner, Ohlhausen dissented on an FTC decision to sue Qualcomm Inc <QCOM.O> for allegedly using its market power to maintain a monopoly on key semiconductors. Depending on who is named to the agency, this lawsuit could potentially be dropped.

Google’s critics in Silicon Valley tend to support Reyes, who has little background in antitrust issues, since he and the District of Columbia attorney general wrote a letter in 2016 urging the FTC to consider re-opening a probe of Google <GOOGL.O> that the agency had closed in early 2013.

The wide-ranging probe had touched on everything from search bias to Google’s practice of scraping third-party content for its sites to the licensing of standard essential patents.

Because Ohlhausen is only acting as FTC head, she cannot hire a permanent head of the FTC’s Bureau of Competition or fill other key posts.

“The chair sets the priorities. It’s important to have that person in to set the direction and pursue initiatives,” said Deborah Garza, who served in the Bush administration and is at the law firm Covington and Burling LLP.

Nominations for the FTC will come sometime this summer because potential nominees are in the process of being cleared, according to a White House official, asked about the delay.

“The Trump administration has identified who the individuals will be for certain positions,” said the official, who asked not to be identified.

LOTS OF EMPTY OFFICES

Beyond lacking a permanent chair, the agency is thin at the top. Rather than four commissioners working with Ohlhausen, she has just one, Democrat Terrell McSweeny.

This means that Trump may name two Republicans but the third person must be a Democrat or independent since by law no more than three commissioners can be from the same political party.

Leading candidates for the two Republican seats are Bilal Sayyed of the law firm McDermott Will & Emery and Noah Phillips, an aide to Senator John Cornyn, according to the person familiar with the nomination process.

For the open Democratic commission seat, Senator Chuck Schumer has backed consumer advocate Rohit Chopra but the White House has also spoken with others, including agriculture expert Lillian Salerno.

The agency has plenty of work on its plate including the merger of Linde <LING.DE> and Praxair <PX.N>, which would create a $73 billion global industrial gases leader in a highly consolidated market. A second is Canada’s Potash Corp’s <POT.TO> purchase of Agrium Inc <AGU.TO> in the consolidated fertilizer sector.

“The president has his hands full with a lot of different issues. The FTC is a major fill for any administration, and he needs to get to that,” said Carl Hittinger, an antitrust expert with the law firm Baker and Hostetler LLP.

Once a commissioner is named to the independent FTC the president has no say in what decisions are made, so commissioners must be chosen carefully, added Hittinger.

(Reporting by Diane Bartz; Additional reporting by Svea Herbst; Editing by Chris Sanders and Frances Kerry)

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