Trade commission makeover should begin with dumping Obama's failed agenda

Trade commission makeover should begin with dumping Obama's failed agenda
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Tomorrow, the Senate Commerce Committee will review President Trump's four nominees to the Federal Trade Commission (FTC), presenting an important opportunity to reset what had become a highly politicized agency during the Obama years.

The first act of the newly reshaped FTC should be to clean house and abandon irresponsible legal action taken by their predecessors, as part of the broader effort to roll back the harmful and often unconstitutional policies that defined the administrative state under President Obama.

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Throughout the first year of the new administration, Obama FTC regulatory actions and lawsuits have been able to live on like a zombie, as decisions were stalled with just two sitting commissioners.

 

There are few better examples of Obama-era crony capitalism than the FTC’s decision to side with Apple — which had close ties to the administration — over its rival Qualcomm in a complaint against the chip maker.

With just days left in the Obama administration in January 2017, his appointed FTC chair filed a last-minute lawsuit against Qualcomm over their licensing practices, accusing the company of maintaining a monopoly over its chips used in smart phones. The FTC’s lawsuit specifically called out Qualcomm for allegedly forcing Apple to exclusively use its chips if it wanted to get a better deal on Qualcomm’s patent licenses.

 

Outgoing Acting FTC Chairwoman Maureen Ohlhausen, who strongly disagreed with the FTC’s complaint, said the lawsuit was “an enforcement action based on a flawed legal theory ... that lacks economic and evidentiary support, that was brought on the eve of a new presidential administration, and that, by its mere issuance, will undermine U.S. intellectual property rights in Asia and worldwide.”

While Ohlhausen has continued to speak out against over-enforcement of antitrust laws, President Trump’s new head of the Justice Department’s Antitrust Division, Makan Delrahim, has also signaled a change of course on licensing negotiations and standard essential patents (SEPs). During a recent speech, Delrahim indicated that he favors a more market-oriented approach to antitrust enforcement. This would fall in-line with Ohlhausen’s view, but the FTC was deadlocked with just two commissioners — handcuffing it to Obama-era policies until more commissioners were appointed.

The precedent for these Obama-era lawsuits paves the way for frivolous litigation to take patents away from companies, harming American innovation for years to come. America’s regulatory environment must reward new technologies and ideas. Creating an innovation-friendly technology environment will give the U.S. an economic advantage over the rest of the world as foreign companies strive to get a step ahead of us technologically.

Allowing the FTC to liberally exert its authority in picking winners and losers, rather than allowing the free market to work, hurts competition and reeks of crony capitalism. By contrast, a reset FTC provides the Trump administration with another opportunity to “drain the swamp” and advance its aggressive pro-growth, pro-innovation agenda for the benefit of the American people.

Brian Rogers is executive director of America Rising Squared, a 501(c)(4) nonprofit dedicated to advancing conservative principles.