The FTC’s Innovation Obstructionism
The following op-ed by Committee for Justice policy fellow Rachel Chiu was published in National Review:
The Federal Trade Commission (FTC) is using its administrative tribunal to block mergers with dubious justification. For years, the agency has been pushing the limits of its enforcement powers and exerting undue authority over private businesses.
One of the most potent and controversial tools at the agency’s disposal is its in-house court, a forum in which the FTC plays the role of judge, jury, and prosecutor. The commission has been using these administrative-review proceedings as a strategic tool to invalidate legitimate business transactions and effectuate a more invasive enforcement regime. Take the case of Illumina and its acquisition of Grail in September 2020, wherein the FTC’s aggressive use of its tribunal effectively silenced opposing viewpoints, stifled innovation, and undermined due process.
After biotechnology company Illumina announced its acquisition of cancer-screening startup Grail for approximately $8 billion, the FTC moved to block the deal based on its theory that the merger would “diminish innovation in the U.S. market for multi-cancer early detection tests,” even though this market does not yet exist. The new blood-testing technology that was enabled by the deal between the two companies was the first of its kind and had not been brought to market because it was still being researched. The commission further reasoned that Illumina might keep a tight hold on its patented technology or raise prices for competitors. Never mind that Illumina offered its customers twelve-year commitments for supply contracts that guaranteed price decreases, binding arbitration to resolve disputes, and access to Illumina’s products on the same terms as Grail receives...