Technology

How FTC Commissioner Slaughter wants to make antitrust enforcement antiracist

Federal Trade Commissioner Rebecca Slaughter participates in a privacy roundtable at CES 2020 at the Las Vegas Convention Center on January 7, 2020 in Las Vegas, Nevada. (Photo by David Becker/Getty Images)
David Becker | Getty Images News | Getty Images

Like workers across America, Rebecca Kelly Slaughter has been thinking this summer about how to make her workplace antiracist. She was on maternity leave as the country erupted in unrest, demanding an end to racial injustice in protests spurred by the killing of George Floyd, a Black man who died after a Minneapolis police officer kept his knee on Floyd’s neck for nearly nine minutes. 

Unlike many workers, however, Slaughter’s decisions can have a substantial impact on consumers around the country as one of five commissioners on the Federal Trade Commission. In that role, Slaughter, a Democrat, votes on enforcement actions and policies involving consumer protection and competition.

During her tenure, the FTC has fined tech companies including Facebook and Google over allegations the companies misused users’ data. The agency is currently investigating Facebook on antitrust grounds and has reportedly interviewed Amazon sellers about the firm’s competition practices.

In an interview Thursday, Slaughter expanded on a series of tweets she sent earlier this month describing the ways she believed the FTC could take steps to ensure greater equity in its enforcement decisions.

Slaughter told CNBC she had long found it “bizarre” that antitrust enforcement in the U.S. has often striven to be “value-neutral.” She emphasized that whether the FTC chooses to bring an enforcement action or not, it will have consequences on consumers within existing structures, making it impossible for enforcement to be truly neutral. 

“I want to be working to promote equity, rather than reinforce inequity,” Slaughter said. “And I think doing that is consistent with the FTC’s mission and mandate.”

Here’s the full conversation:

(This interview has been lightly edited for length and clarity.)

Lauren Feiner, CNBC: I was hoping to start with hearing a bit more about how you began to contemplate the question of how the FTC could be antiracist and the role that this year’s events have played in shaping your perspective on that.

Rebecca Kelly Slaughter, FTC: Let me take a step back and say that one thing that I have always found really perplexing about the sort of current conventional wisdom around antitrust is that it is generally treated as a value-neutral endeavor. Like that it both can be and should be value-neutral. And then that’s sort of how the antitrust establishment thinks about it, and places a high priority on neutrality as a governing principle. And I’ve always found that really bizarre for two reasons.

First of all, in every other area of law enforcement, we are perfectly comfortable with law enforcers articulating policy priorities based on values. So, for example, a criminal prosecutor might say, “I’m going to prioritize enforcement against white collar criminals, or violent criminals.” Or a different prosecutor might say, “I’m going to prioritize enforcement against immigrants.” And we can agree or disagree with those priorities, but we don’t have a problem with the enforcers setting priorities.

Similarly, in consumer protection enforcement, civil enforcement, we say we want to protect vulnerable consumers. We spend a lot of time in our consumer protection [division] looking out for veterans or students or lower income families or non-English language speakers. And those priorities are all absolutely fine for people to articulate. And for some reason in antitrust, we have this sense that we shouldn’t and can’t think about the values behind our enforcement priorities or set enforcement priorities in a values-based way. That’s one thing that’s bizarre.

And the other thing that has struck me is bizarre, it goes sort of hand-in-hand with that, is the assumption that we could ever have values-neutral enforcement. Not only that we should, but that it is possible. Because from my perspective, any enforcement decision we make has consequences. So for example, if we pursue a hospital merger — sue to unwind the hospital merger, to block a hospital merger — it has consequences for patients, for quality of care, for workers, potentially for innovation, for all of those things that have economically, structurally significant effects. So enforcement isn’t neutral. And I’ve always thought we should be much more open-eyed about what values we are advancing or what priorities we are advancing with our enforcement decisions, rather than trying to make them somewhat blind.

So that’s all background to this summer, as our nation became embroiled in an extremely important, extremely necessary and, frankly, grossly overdue conversation, not just about specific acts of violence targeting Black and Brown bodies, but the structural and systemic racism that sort of underlies and facilitates those acts of violence.

I was on maternity leave mostly, so I was doing a lot of thinking and looking and listening, and learning. And part of what I was thinking and looking and listening and learning about is, how can I be part of a solution instead of reinforcing the problems? Because I think, from my perspective, it isn’t possible to really be actually neutral, nor should we be neutral in the face of systemic racism and structural racism. So I want to be working to promote equity, rather than reinforce inequity. And I think doing that is consistent with the FTC’s mission and mandate. And doing it in a more clear-eyed way is an important step that we can take.

It’s interesting how you tied that to this sense of antitrust enforcement having this kind of neutral valence. Some of your colleagues and other federal enforcers would still maybe have that feeling. At the [International Competition Network Conference, Justice Department antitrust chief] Makan Delrahim said on a panel that, of course, addressing racial injustice is commendable, but competition law is just not the way to do it. So could you make the case for me of why you believe those issues are actually connected?

I think it starts with a recognition [that] structural racism isn’t just about laws or policies that are facially racist or facially racialized. We can have facially neutral policies that, in fact, have really disparate outcomes and disparate impact and racist consequences. You see that in housing.

One area I think about in antitrust all the time is health care. We focus a lot on health care, and I think that is good and important. We focus on it because access to health care is important to people. But when you drill down even further, it’s not just that all people need access to health care. It is more difficult for lower income people to bear increased marginal costs in health care, or to overcome lack of access for the challenges faced by lack of competition, and because we also know that lower-income people are disproportionately people of color or, more accurately, people of color are disproportionately lower income, you can see that those health care disparities have a racial effect as well as an economic effect. And you can see the evidence of a lot of that in the really tragic and shocking statistics about racial disparities in health outcomes.

One thing that I think about all the time as someone who just had a baby to summer is Black maternal mortality, which is staggeringly higher than White maternal mortality in this country. And so that is based not on facially racist health care policies, but on the sort of structural and systemic racism that’s sown through our healthcare system, including in where hospitals are placed, and how much health care costs and how people can access it.

… Antitrust law is clearly about economic structure, and economic structure in this country has a pretty profoundly racialized effect… There is a direct connection between antitrust law and the enforcement of antitrust law and the economic structures that tend to systemically and systematically under-privilege people of color.

Why do you think that antitrust law in particular, in the U.S. at least, has taken on this very neutral, narrow lane, as opposed to other areas of law that you mentioned that seem to have a little bit more leeway to focus on particular areas or issue?

I have a difficult time explaining why it is that way since I have never understood why it is that way. Here is maybe the most generous interpretation I have, is that being value-neutral, can be an aspirational goal in that it can allow you to think, “Oh, I’m just putting my head down doing what the law requires, and I’m not picking favorites or picking winners and losers.” And I understand the appeal of that sentiment, but I don’t think that that’s how it works in practice, because you are necessarily picking winners and losers when you do any enforcement or fail to do any enforcement. And I’d rather that we be aware of who those winners and losers are and what effect our enforcement decisions have on them on sort of greater economic structure.

The tech sector, in particular, has caught the attention of antitrust enforcers around the world, including the FTC. And that’s an industry where diversity has been a big issue for a long time. You see a lack of diversity, particularly in the upper ranks of companies. I was wondering if you think that concentration in that sector or other sectors could have to do with the ability of Black workers and workers of color to achieve equity and go up the ranks in these industries, or if that is a separate matter?

I want to make clear that I don’t want to be talking about any particular company or any particular theories or cases. I want to stay pretty high-level about that.

I think the short answer is, I don’t know. I think there is good reason to be concerned about the lack of diversity in the upper ranks of tech companies, but candidly, it’s not just tech companies. I mean this is true across the economy. I’m very much in in favor of conscious efforts to diversify leadership across the board. I don’t have an immediate reaction to, as a general matter, whether that could be linked to a theory of competition. But, again, I think we can’t even figure out if that’s the case, if we’re not asking the question and getting information about demographics, or about markets, about consumer bases, that would allow us to analyze those issues.

Within the FTC, how would you like to see the Bureau of Competition or other bureaus start looking at how structural racism is impacting your work in the competition sector?

I think it’s a starting point, we need more information. So I’d like to see us asking more questions about demographics of customers, or consumers or businesses or workers. We collect lots and lots of information from companies that we investigate from third parties who deal with those companies. And I think it would be good to have a clearer-eyed sense of how some of that information breaks down on demographic lines. So starting with information and data is always a really good starting point.

And then I think I’m also interested in gathering ideas and thoughts about areas that should be a particular focus because they’re economic sectors that are especially affected by structural racism, or where market power is abused to the to the detriment of communities of color, in particular. I think that information would be really helpful.

One person in response to the Twitter thread I wrote said we should be thinking about franchising and franchisees, because franchises are small businesses that are disproportionately owned by people of color, compared to other small businesses. And franchise law is extremely one-sided in a way that can be very punitive to those franchise owners. I thought that was an interesting idea that I’d like to learn more about.

What I really intended to do with the Twitter thread was start a conversation and a conversation that will invite not only pushback and debate, which I think is valuable, but also ideas and inspiration from other folks who’ve been thinking about these issues, either similarly, for longer or differently, or have perspectives that I don’t have. And I’m the first to acknowledge that the perspective from which I come is a that of a privileged White woman and I’m aware of that. So I think it’s important to bring other voices into the conversation and make sure to be hearing from lots of different people about their ideas.

When you talk about this need for data collection, where do you imagine that being collected? Do you see that as something that should be a 6(b) study by the FTC? Should it be something that’s baked into [Hart-Scott-Rodino pre-merger] filings?

In some ways, it can be a case-by-case analysis. In any particular case, whether there are specific questions that we should be asking about demographics of customers, or consumers or patients or whatever, we already asked lots of questions about those populations. And I think it’d be useful to add some of those demographic questions. Maybe in a second request [in a pre-merger investigation], for example. A 6(b) could be interesting. I’ve been interested in exploring rulemaking on the competition side.

I am a big proponent, as a general matter of us really putting to use all the tools in our toolbox, some of which I think have gotten quite rusty over time. And I think we should brush them off and figure out how we can put them to better use.

What would rulemaking in this area look like?

One area of competition rulemaking that’s already gotten a lot of attention is the idea of non-competes. I think doing a rulemaking on non-competes, which I’ve supported in the past, could be an important tool to help address some of the structural racism issues because non-competes can disproportionately hinder labor mobility among lower-income workers, and therefore, depress wages, depress opportunity. Again, we know, statistically, that those workers tend to be disproportionately people of color. So I think that doing a non-compete rulemaking, for example, could be a really effective tool.

Part of what I think is important to understand that might be misunderstood is I’m not suggesting that we invent out of whole cloth new laws or new tools or new standards than what the law gives us and what we have. All I’m saying is that we have tools and we have laws and we already use them. And we can either be using them in ways that help inject some equity into a historically unequal and inequitable … economic structure, or we could be using them in ways that reinforce the inequities in our economic structure. And I don’t think that there’s really a middle ground. So what I would like us to be doing is thinking about whether and how the decisions we make are moving in the direction of reinforcing structural inequity, or deconstructing it.

Congress right now is thinking about potentially reforming the antitrust laws in light of their own investigation into digital markets. And you had pointed in your tweets to South Africa as an example of a place that does consider equity in its antitrust enforcement. So as Congress does consider these new proposals, to what extent should they be thinking about these principles for U.S. antitrust law and how explicitly should they be stated, if at all?

I think anytime Congress is thinking about new laws, they should be thinking about whether those laws will help combat or help reinforce structural inequality. And I think they should be thinking about the effect that whatever policy they’re discussing has on institutional and structural racism as well as on explicit and facial racism.

One analogy I’ll give you is data privacy was a conversation that didn’t start about racism. But as you can see, in more and more of the proposals that are coming out on the data privacy front, a broad recognition that privacy issues have civil rights and racial equity implications. And so there’s an enormous amount of attention being paid now in the privacy debate to questions about, for example, algorithmic bias, and digital divide, technological access issues. So I think that should very much be part of the conversation in antitrust too.

A related issue is artificial intelligence and facial recognition. You touched on this in your thread but I wanted to ask more about, what do you think the FTC can do to prevent biases from being baked into these technologies, or just make sure that they’re not used in ways that will be really harmful to consumers?

I gave a big speech in January of [this] year, which was like a full lifetime ago, about algorithmic economic justice and artificial intelligence. That was a very long and extensive walk-through of the ideas that I talked about as needing to focus on, but there are there are a few particular things that I think we can do on that side, including, think about doing a rulemaking with our much more burdensome, but still-available Magnuson-Moss rulemaking authority, in which we look at data abuses, and we can particularly look at questions of transparency, accountability, and remedies for faulty data based on aritificial intelligence.

I also think that we can look at Section 5 claims under unfairness where we can and then we have authority under [the Equal Credit Opportunity Act] ECOA, which has to do with credit discrimination and also under [Fair Credit Reporting Act] FCRA to look explicitly at issues of discrimination. So I think that we have some tools, and we should try to use them as much as possible. It would not be the first time we had to apply old language to new technologies and that’s something we do pretty routinely. So I think this is another area where we have to be doing that.

Beyond the privacy legislation that’s being considered in Congress, do you think there’s other tools you would like Congress to give you to use in the consumer protection area that would speak to these concerns?

Any time we have more explicit authority, it’s easier to get things done. Our authority right now, in Section 5, our biggest sort of general authority, is great because it gives us a lot of flexibility. It’s an old statute that’s broad and vague and intended to adapt to changing economic practices. And that has a lot of appeal in a lot of ways. But I also think that it invites a lot of pushback where it doesn’t explicitly prescribe particular behavior or direct us to address particular behavior. So to the extent that Congress wants to, at a minimum, rebut arguments that we shouldn’t be thinking about them these issues, the more specific [they] make our authority, the better. But I don’t think that that’s necessary for us to do some of this work, and at least to begin some of this important work.

Let me be clear, begin isn’t the right word, because I think we do some of this already in really important ways, on both the consumer protection side and on the competition side. Health care was one example that I gave on the competition side. I just don’t think we do it on the antitrust side particularly explicitly and I think that we should and I think we should be thinking carefully about who benefits and who’s harmed from all the decisions.

Long before we started this conversation about antiracism, one of the first questions I would always ask my staff and the agency staff working on any competition case would be, who’s harmed by this merger or this conduct? Who are the victims and what is the harm? And what would our action change? And so applying an antiracist lens to that is just sort of an extension of what I had thought we should be doing generally.

What are, personally, your next steps to advance these principles within the FTC? Whether it’s talking to your colleagues further about it or trying to implement a plan to execute this more.

I guess, all of the above. I think I am in a multi-step process… including idea-gathering,and idea-generation and soliciting input and thoughts and feedback from other people, both, as I said before, in terms of hearing pushback and counterpoints and thinking through those arguments. I really value the opportunity to discuss and debate ideas with people who don’t necessarily agree with me, because either it changes my thinking, or it helps me refine my viewpoint, so I think some of that is important. And people who do agree may come in with different and better ideas than the ones I start with. So I’m interested in hearing from my colleagues, the other commissioners, but also the staff at the agency, outside thinkers, practitioners, academics, advocates about particular implementation. And I think if I had a practical goal, it would be information gathering in the context of particular cases.

…One point I would leave you with is that I understand that what I’m suggesting is a departure from how we have been generally, at least from an establishment perspective talking about antitrust and therefore it is possible you’re going to ruffle some feathers. And that’s an important part of helping the status quo, rather than just reinforcing it. So I really do welcome discussion and debate. The issue is extremely important. And it’s one where I’m learning to and trying to be a better enforcer and a better public servant.

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