Noah Phillips, commissioner of the Federal Trade Commission, testified during the Senate Trade, Science and Transport Committee hearing, entitled The Invalidation of the EU-US Privacy Shield and the Future of Transatlantic Data Flows, at the Russell Building on Wednesday December 9, 2020.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
Noah Phillips, a Republican commissioner of the Federal Trade Commission, explained why he voted against the agency’s antitrust case against Facebook during a hearing before the House Judiciary’s antitrust subcommittee on Thursday.
Phillips said he believes the time that has elapsed since Instagram’s acquisition of Facebook in 2012 and WhatsApp in 2014 represents an obstacle for executors. The FTC analyzed both merger proposals at the time and decided not to block them, allowing Facebook to go ahead with business and make apps an integral part of its own business.
“A lot of that goes to the integrity of the process,” said Phillips, adding that he agrees that the law allows the agency to reevaluate mergers after they are consummated. “But in general, in terms of mergers, the longer you wait, the more investments the company makes[s]. And I think that represents a real problem. “
The FTC voted 3-2 to open the case in December, with then Republican President Joe Simons voting with the two Democratic commissioners.
The merger law allows executive agencies to reevaluate negotiations. The decision not to block a deal has no influence on future application. But, Phillips testified, the fact that Facebook subsequently invested in Instagram and WhatsApp, around which the process focuses, poses a practical problem.
Phillips was not a commissioner at the time when the FTC assessed mergers.
Phillips said he also has some concerns about the merits, including market definition and the effects of Section 2 of Sherman’s Antitrust Act, although he did not elaborate.
Still, Phillips said he believes today’s executors are more willing to bring a skeptical lens to merger cases than before, especially when they involve nascent competitors.
“We are a little less concerned about the risks of overapplication and a little more concerned about the risks of underapplication,” said Phillips of merger cases with nascent competitors. “We are listening to the message and we are concerned with that dynamic.”
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