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Phillips’ successor may be tougher on Big Tech

By Claude Marx and Kathleen Murphy

Published on August 29, 2022 in Issue 1033

When Noah Phillips departs the Federal Trade Commission in the fall, he will leave a legacy of defending Meta/Facebook against FTC action and create an open seat for a Republican to further shape the agency’s treatment of Big Tech.

Conservative advocacy groups are hoping for a nominee willing to take on Big Tech. In 2017, President Donald Trump considered appointing Utah Attorney General Sean Reyes, who was among several attorneys general who had urged the FTC to consider reopening an antitrust probe into Google.

President Joe Biden’s previous appointees reflected a philosophy that “personnel is policy,” and he assembled a diverse cabinet and leadership team. Reyes said at the Republican National Convention that he has Hawaiian, Filipino, Japanese, and Spanish ancestry. He began another four-year term in 2021.

Reyes received the “Black Hole Award” from the Utah Chapter of the Society of Professional Journalists for resistance to transparency and public information laws in 2016. He did not immediately reply to a request for comment.

Other Republicans mentioned as possible nominees include Mark Meador of Utah Senator Mike Lee’s staff; Rachel Bissex of the Senate Judiciary Committee staff; Josh Divine of Missouri Senator Josh Hawley’s staff; Senate Commerce Committee staffers Olivia Trusty and Crystal Tully; and Svetlana Gans of Gibson, Dunn & Crutcher, who serves as a committee officer for the American Bar Association’s Antitrust Law Section.

Gans was chief of staff to Acting Chair Maureen Ohlhausen at the FTC. Ohlhausen, a Republican, served as commissioner from 2012 to 2018. She leads the antitrust group at Baker Botts and declined to comment about the vacant seat.

Dual openings

With Rebecca Kelly Slaughter’s term up in September, two openings could be available. Until January, the Senate is split 50/50 between Republicans and Democrats, and Democratic Vice President Kamala Harris has cast tie-breaking votes.

Often, a president defers to the other party’s leaders when filling commission seats on their side of the aisle. It’s unknown whether Biden intends to renominate Slaughter or let her serve well past the expiration of her term, as Rohit Chopra did before leaving to lead the Consumer Financial Protection Bureau. Slaughter did not respond to emails requesting comment about whether she will ask to be renominated for another term.

Phillips’ notable dissents included votes against the monopoly suit against Facebook and against an FTC decision to seek to block Meta Platforms’ proposed acquisition of virtual reality software company Within Unlimited.

Senator Roger Wicker of Mississippi, the top Republican on the Commerce Committee, and Senator Ted Cruz of Texas, who is in line to succeed Wicker there next January, are expected to influence Minority Leader Mitch McConnell’s recommendation on the new FTC member. Cruz has a special interest in the agency, as he was head of its Office of Policy Planning under President George W. Bush.

Former Republican FTC Chair Joe Simons, nominated by Trump, showed a willingness to take on Big Tech, initiating the antitrust suit against Facebook. Simons served from May 2018 until January 2021.

Muris protégés

An unanswered question is whether the Republican nominee will be another protégé of former FTC Chair Tim Muris, who served in that role during President George W. Bush’s first term. Former staffers of his who have served in key posts at the FTC include Ohlhausen, FTC member Christine Wilson, Simons, former Competition Bureau Director Bruce Hoffman and former Consumer Protection Bureau Director Andrew Smith.

Wilson, the FTC’s other current Republican, declined to discuss her preferred qualities or qualifications for a successor to Phillips.

If Biden were to nominate a Wilson-style Republican, it might be veteran antitrust and consumer protection lawyer Bilal Sayyed. Sayyed, a senior adjunct fellow for tech policy at think tank TechFreedom, previously was an attorney adviser for Muris when Wilson was chief of staff.

Sayyed, who was a professor of antitrust at George Mason University, served as director of the FTC’s Office of Policy Planning after being appointed by Ohlhausen in April 2018.

But Sayyed wrote an op-ed in The Des Moines Register in December criticizing Republican Senator Chuck Grassley, potentially making it harder to get Grassley’s confirmation vote.

“Grassley has become a leader in the progressive left’s agenda to get the government in the business of your business,” Sayyed wrote. Sayyed blasted “unchecked authority [given] to the FTC and Department of Justice — the federal antitrust agencies — to review how Apple, Amazon, Facebook and Google (and maybe others) respond to your search inquiries.”

Conservative record

Phillips, a former staff member for Texas Republican Senator John Cornyn, has been a reliably conservative vote on the commission. And while he has criticized the views and leadership style of FTC Chair Lina Khan and her allies, he has done so in a more restrained manner than Wilson, who has branded her adversaries as Marxists.

In an interview this year with FTCWatch, Phillips shied away from comparisons with Marxists. “I studied political theory in college. But it’s been a long time since I picked up Das Capital. What I do see in … the way that certain kinds of business practices, whole industries sometimes, are described … is a very, it’s a very jaundiced view. It is a view that if you’re making money … you must be predatory. I don’t think that’s our historical experience. And I don’t think that’s true.” (See FTCWatch, No. 1029, June 17, 2022.)

Phillips told FTCWatch that “no matter the administration, my goal has been to be faithful to the law and mindful of the tradeoffs involved in the choices we make. I have supported vigorous and principled enforcement of our antitrust and consumer protection statutes, consistent with the boundaries of the Commission’s authority and public policy that protects Americans.”

In most of his speeches, Phillips comes across as an engaging legal wonk, albeit occasionally one with an acerbic sense of humor. When criticizing the agency’s efforts to embark on certain kinds of rulemaking, he’s harkened back to the Supreme Court’s attempts to curtail what conservatives saw as the excesses of the New Deal. (See FTCWatch, No. 1027, May 23, 2022.)

Phillips has proudly displayed his children’s artwork as a Zoom background, and in his Pennsylvania Avenue office, he posted a child-drawn picture of a toilet above his desk. The latter he said reminds him of the essence of the meaning of privacy.