At a time when the U.S. economy is in an uncertain state and everyday Americans are being squeezed by record inflation, the Federal Trade Commission (FTC) released its Strategic Plan for fiscal years 2022-2026 in early September 2022, which signals the agency charged with protecting consumers is actually poised to make things worse.
Notably, the agency’s Strategic Plan augurs an abrupt departure from the Consumer Welfare Standard, the guiding principle that has ensured antitrust enforcement prioritizes the well-being of consumers in the modern era. Likewise, it removed a clause that requires the agency to monitor business practices “without unduly burdening legitimate business activity.” The omission signals its progressive leadership – namely FTC Chair Lina Khan – is prepared to go after more businesses in an excessive antitrust stance that will only stifle innovation and drive up prices for consumers.
In the past, business dealings weren’t considered an antitrust violation unless they could be proven to violate the Consumer Welfare Standard. This legal criteria is meant to deter the government from targeting businesses based on political leanings, yet the FTC’s quiet changes reveal it’s moving away from these guidelines. Under Khan’s leadership, the agency is becoming aggressive with suits fueled by arbitrary social “equity” objectives.
This new agenda has implications across business sectors, especially in the retail industry. Seventy percent of the economy is based on consumer spending, and retail sales play a major role. There are an estimated 4.2 million retail establishments in the U.S. – from online marketplaces to brick-and-mortar shops – providing jobs for 32 million people and contributing to 7.7 percent of the U.S. economy’s GDP. The health of retail is therefore intrinsically linked to the health of the economy.
This pattern not only poses a threat to large companies across sectors but also to small and medium-sized businesses. In retail, online marketplaces like eBay, Etsy, Walmart and Amazon allow entrepreneurs to market their products to a larger audience and meet customers’ desires for a mix of online and in-person shopping options. The FTC’s targeting could limit opportunities in an industry that helps invigorate our economy.
FTC Commissioner Christine Wilson even released a public dissent to the new plan, noting that the “choice to pivot from a consumer welfare standard is ill-advised, particularly during a period of record inflation.” Wilson added that this will result in “higher prices, suppressed production, fewer choices, and dampened innovation.”
Indeed, contrary to its commitment “to promote competition, and protect and educate consumers,” the FTC’s measures are drastically out-of-touch with the needs of Americans. In our recent poll conducted by Echelon Insights, 60 percent of respondents said the economy and inflation were their biggest concerns. Instead of making it easier for consumers and helping the U.S. economy bounce back, the FTC is throwing its weight around with excessive regulation.
Companies across sectors and of all sizes simply want the freedom to grow by offering competitive products, services and prices. And Americans just want to get more for their money, with the power to choose the outlets, providers and items of their preference. Rather than thwarting this, the FTC needs to rein in its antitrust agenda and let businesses thrive and compete. That’s truly in the interest of our economy and consumers.