Former FTC Chairman William Kovacic on the Future of the FTC and Antitrust

Episode Summary

Executive Summary: Bill Kovacic argued that U.S. antitrust and privacy enforcement is hampered by fragmented institutions, weak interagency coordination, political pressure to act against tech firms, and under-resourced agencies. He contrasted today’s tech disruption with earlier industrial upheavals, warned against ignoring regulatory history, criticized the FTC-Facebook settlement debate, and said future privacy standards will likely be set by California and the EU unless federal policymakers and agencies build stronger capacity and coordination.

Main Topics: Fragmented antitrust enforcement structure (Priority: 5/5): Kovacic criticized the U.S. system of FTC, DOJ, and state AGs as overly redundant and siloed, arguing that lack of coordination creates inefficiency and weaker policy outcomes. FTC-DOJ and state-federal tensions (Priority: 5/5): He described long-running hostility between the FTC and DOJ, and a sour relationship between the DOJ and many states, saying cooperation is limited and often reluctant. Political and academic momentum against big tech (Priority: 4/5): The discussion covered how political leaders and academics have created momentum for more aggressive antitrust enforcement and even new regulation targeting tech platforms. Are digital markets truly different? (Priority: 4/5): Kovacic argued that today’s tech disruption is serious but not unprecedented, comparing it to the rapid industrial and technological change from 1890 to 1930. The role of history and implementation in regulation (Priority: 5/5): He warned that policymakers ignore past regulatory failures and overestimate what enforcement or new regulatory bodies can accomplish without attention to implementation and institutional design. FTC privacy enforcement and the Facebook settlement (Priority: 5/5): Kovacic said the Facebook settlement’s effectiveness remains unknown, criticized dismissive commentary around it, and questioned the basis for the $5 billion figure and the internal partisan dissents. Agency capacity, pay, and convening power (Priority: 4/5): He argued that effective regulation requires better staffing, higher civil-service pay, more analytical capacity, and more convening across institutions, academia, and industry.

Key Arguments: Redundancy in enforcement can be useful, but the U.S. has too many overlapping actors and too little coordination, leaving agencies and states on separate learning curves. FTC-DOJ collaboration is historically fraught and currently “sour,” which weakens antitrust enforcement rather than improving it. State attorneys general have become major antitrust players due to federal retrenchment, federal funding, favorable court rulings, and state statutes, but their relationship with federal agencies varies by leadership. Political opposition to tech companies has made antitrust action feel costless, increasing pressure on agencies to bring cases. Academic opinion has split into four camps: do nothing, do more with existing law, create a new digital regulator, or “burn it down” and rebuild the system. Digital markets are dynamic and complex, but similar waves of technological upheaval existed in the late 19th and early 20th centuries; what is harder today is speed and complexity, not novelty alone. Policymakers ignore “big regulation data” from past regulatory experiments, which should inform current debates about antitrust and privacy institutions. Implementation matters as much as policy goals; agencies need realistic expectations about what institutions can actually deliver. The FTC’s privacy work is constrained by jurisdictional carve-outs, limited staff, and likely lack of congressional reform, making nationwide privacy leadership difficult. Future privacy standards are likely to be set de facto by California and the European Union unless federal agencies and Congress act. The quality and compensation of agency staff are central to effectiveness; Kovacic said major regulatory missions are mismatched with low public-sector pay and thin budgets. The FTC should focus on making the best use of current resources, improving monitoring, studying outcomes, and convening stakeholders rather than assuming rulemaking alone will solve privacy problems.

Data Points: Podcast date: September 11, 2019 - Opening introduction to the episode FTC budget: about $300 million per year - Used to illustrate how limited the agency’s resources are relative to its responsibilities Facebook settlement: $5 billion - Discussed as the largest civil result by a public agency, but criticized as perhaps headline-driven European Google fines: $9 billion - Referenced in comparing the significance of monetary sanctions in tech enforcement FTC privacy team size: 40 to 50 people - Kovacic cited this as too small for national privacy enforcement FTC Facebook privacy order duration: 20 years - Referenced as the original settlement framework before the later penalty FTC and DOJ coordination frequency: weekly, in Kovacic’s ideal model - He said a regular weekly working group would be needed for meaningful coordination Calendar-year appointment of FTC commissioners: all five appointed in one year - He said this unusual timing hindered collegiality and common norms U.S. antitrust regime anniversary: 130th anniversary - Mentioned in reference to the 1890 Sherman Act anniversary in 2020 Late-19th/early-20th-century comparison period: 1890 to 1930 - Used as a historical analogy for current technological upheaval FTC privacy jurisdiction carve-outs: 3 major areas named - Common carriers, not-for-profits, and parts of financial services were cited as exclusions

Pivotal Quotes: "we're closer to infinity in practical terms than we are to simply one" — Bill Kovacic: Describing the excessive number of overlapping antitrust enforcers "the relationship is a sour relationship and is not adding value to the enforcement process" — Bill Kovacic: On the current FTC-DOJ dynamic "Mercedes quality performance with Chevrolet prices" — Bill Kovacic: On the mismatch between agency expectations and public-sector compensation

Implications: The episode suggests U.S. antitrust and privacy policy will remain fragmented unless Congress, agencies, and states coordinate better and invest more in capability. Absent reform, California and the EU may set de facto privacy norms, while FTC enforcement will stay vulnerable to legitimacy and capacity problems.