American Chamber of Commerce FTC

This time, the US Chamber of Commerce directly pushed FTC to the defendant, which represented the American business community, especially the giants' dissatisfaction with the FTC and its dominant antitrust policies. Its symbolic significance is very obvious.

Author: Chen Yongwei

Figure: Tuwa Creative

After the Bayon government appointed Lina Khan, the FTC was marked deeply on the FEDERAL Trade Commission (FTC). In just more than a year, FTC can be described as attacked on all sides. Large companies such as Facebook, Amazon, Google, and Apple have shot frequently and launched antitrust investigations and lawsuits again and again. Essence Unexpectedly, when the FTC was killed in all directions, he accidentally became the defendant.

On July 15th local time, The American Chamber of Commerce filed a lawsuit against the court, accusing the FTC of rejecting information transparency, and its "dark box operation" brought uncertainty to the enterprise and affected the normal operation of the enterprise.

Friends who are familiar with the American business environment know that the US Chamber of Commerce's status in the United States is very important. It is a co -organizations of the American Local Chamber of Commerce, the Association and Professional Associations, the Commercial Bank, the company, and the individual of the United States, which represents the interests of the American industrial and commercial groups to a fairly extent. It was established in 1912. After 110 years of development, its member scale has reached more than 300,000, and directly or indirectly represents more than 3 million companies. In addition to the club as an entrepreneur, the more important role of the American Chamber of Commerce is actually a large -scale lobbying organization. If we pay attention to international news, we will see that whenever the United States wants to introduce major policies, the American Chamber of Commerce will lobby the US Congress and the government on behalf of the business community, and its effect is usually very significant.

Obviously, this time the US Chamber of Commerce pushed FTC to the defendant directly as the plaintiff, which represented the American business community, especially the giants' dissatisfaction with the FTC and its leading antitrust policies. Its symbolic significance is very obvious of.

So, in this lawsuit of the "Civil Prosecutor", what are the issues of the US Chamber of Commerce? What will happen to the entire lawsuit? What impact will it have?

FTC's "Three Crimes"

Judging from the current public complaint, the US Chamber of Commerce is mainly complaining about FTC's refusal to disclose information on three events: the "zombie" voting problem that has been left as a member, the handling of the Grail case of Illumina, and the work of Lina Kehan ​​work Resume issues.

(1) The "zombie" voting problem that has been left as a member

The first reason for the US Chamber of Commerce to sue FTC was to disclose information on the issue of "Zombies" voting.

According to the law, FTC members have five seats. When making decisions on major issues, the five members need to make collective votes to make the final decision in accordance with the principle of a few obedience.

On October 8, 2021, one of the members of the member Rohit Chopra, the director of the Consumer Financial Protection (CFPB), left from FTC. Due to the needs of work transfer, before the official resignation, Jopla actually left the FTC.

In this case, FTC should choose a new member as soon as possible, and try to ensure that the new members will make decisions on major issues after taking office. But Lina Khan's FTC did not do so, but adopted a very unexpected way -to count the "Zangzhu Tickets" left by Rodte Jopra to deal with similar situations. (At that time, Jopia had left the FTC, but there was a vote record in the voting results)

I don't know if it was intentional or negligent. FTC announced this "innovation" approach in a document at the end of October last year. Once the news came out, it was like a stone stirred up thousands of waves, which caused strong attention from the public. Politico, an influential political website, immediately reported on the incident and severely criticized the FTC approach. The report pointed out that this approach is not a measure of power during the transition period, but a trick that is a trick to promote its radical antitrust policy to promote its radical antitrust policy. The Federal Trade Commission Law. According to Politico reports, FTC had conducted more than 20 similar "zombies" voting before press time.

Because FTC's various decisions often involve enterprises, especially the interests of large enterprises, this "zombie ticket" incident naturally attracted the attention of the US Chamber of Commerce representing the interests of the company. On December 2, 2021, the U.S. Chamber of Commerce sent two letters to FTC, one of which required it to disclose it from the provisions of the Freedom of Information Act (FOIA) from September 30, 2021 to 2021 During October 8th, Jopla participated in the relevant decision -making records of the voting; the other required FTC to disclose other "zombies" voting before. However, these two requests were quickly rejected by FTC, because the request caused too heavy burden on FTC. The US Chamber of Commerce was not satisfied with this reply, so he appealed to the General Legal Consultant Office, but the Presidential Legal Consultant Office supported FTC opinions. The US Chamber of Commerce believes that the FTC and the Presidential Legal Consultant Office is completely guarded by officials and violates the requirements of the Law of Information Freedom. Therefore, the court requests the court to order FTC to publicize the corresponding documents.

(2) Intervention of acquiring Grail for Illumina

The second reason for the US Chamber of Commerce to sue FTC is that it refuses to disclose the details of law enforcement in the acquisition of Grail in Illumina, especially the information communication with the external antitrust law enforcement agency in the process of refusing to disclose it.

Illumina was founded in April 1998. It is an excellent product, technology and service provider in the field of genetic mutation and biological function analysis. As an industry giant, Illumina has almost monopolized the entire gene sequencing market.

Grail is an early cancer screening company established in 2016. Its founder is Jeff Huber, a senior vice president of Google. In 2014, Hubble joined Illumina's board and helped Illumina to complete huge financing. While serving as a director of Illumina, Hubble saw the huge application prospects of gene sequencing technology in the health field. In addition, his wife died of cancer unfortunately, so he gave birth to the idea of ​​forming an early cancer screening company. Illumina supports this idea of ​​Hubble and provides it with a startup funds of $ 100 million. As a result, Grail was born, and Illumina certainly became the largest shareholder at the beginning of its founding.

Because Grail's early cancer screening business was highly respected by the industry, after the company was established, it was sought after by investors. With the continuous injection of huge amounts of funds, Grail has the capital of research and development. It can be said that among the numerous startups in the technology industry, Grail is the most willing to pay the capital, and its annual R & D expenses are close to 200 million US dollars. Of course, these inputs are not wasted. With the continuous breakthrough in technology, its valuation has also risen all the way, and soon entered the ranks of unicorn. By 2020, its valuation has reached $ 7.1 billion.

Originally, Illumina fully supported the founding of Grail, which was a step of chess to promote the application of gene sequencing technology. So when I saw Grail's thrive, Illumina was happy. In order to ensure that fat and water does not flow outsiders, Illumina decided to buy Grail back again when he could still afford it. After a short consultation with Grail, on September 21, 2020, Illumina announced that it will acquire Grail for $ 8 billion. The transaction is completed in the form of cash+stocks, of which 3.5 billion US dollars are cash, and the remaining $ 4.5 billion will be traded in the form of Illumina's ordinary shares. After the acquisition is completed, Illumina will have a 93%shares after merging, while other shareholders of Grail have the remaining 7%of the shares.

It should be said that for both parties to the transaction, this is a very cost -effective trading. From the perspective of Illumina, Grail itself was an attempt. Because the judgment of the market was still unclear at the time, it only invested 100 million US dollars. Now, Grail has proved the actual feasibility of the cancer early screening track with facts. While buying it back at this time, although the price is slightly more expensive, it is still much cost -effective compared to the trial and error of spending a lot of money on the end. From the perspective of Grail, the premium of the $ 900 million higher than the valuation is also quite attractive. In addition, after the acquisition is completed, Grail will also operate independently in the form of a subsidiary. So what are the reasons for Illumina, the early gold master's invitation?

As the saying goes, "the wishful thinking, not in the court", this transaction seemed to be done, but unexpectedly, due to the FTC intervening, this matter was still in the court.

According to the regulations, this type of mergers and acquisitions of up to billions of dollars need to be surveyed before the transaction, and the transaction can be completed after confirming the risk of no damage to competition. At first, neither Illumina nor Grail was worried about it. Because Illumina's main business is gene sequencing, and Grail's main business is early cancer sieve, and the two are a vertical relationship. Therefore, this merger should belong to the category of vertical mergers and acquisitions. Theoretically, the impact of vertical mergers and acquisitions on market competition is usually greater than disadvantages. Based on this, historically, FTCs have rarely opposed the longitudinal mergers and acquisitions applications. What made Illumina did not expect that FTC rarely stopped the acquisition because the acquisition might make Grail's competitors difficult to compete with them in the liquid biopsy market, so it may cause obstacles to market innovation, and and also hinders the innovation of the market, and also hinders the innovation of the market, and also hinders the innovation of the market, and also hinders the innovation of the market, and also hinders the innovation of the market. Eventually harm the interests of consumers. While conveying the above opinions to Illumina and Grail, FTC issued a lawsuit to the court, asking the court to issue a ban to prevent the transaction from conducting the transaction (Note: in the United States, FTC has no power to directly ban mergers. Apply for a ban.)

But it is confusing that FTC took the initiative to withdraw the complaint before the court made a verdict. FTC did not give the reason for this. The US Chamber of Commerce's explanation in this indictment is that this may be that the FTC has already realized that the court should be difficult to support its request under the legal framework of the United States. Essence

However, just when Illumina was relieved for FTC withdrawal, European antitrust law enforcement agencies were accidentally involved in and investigated the transaction. The first was France, then Belgium, Greece, Iceland, the Netherlands and Norway, and finally even added the European Commission (EC).

This is very unusual. Generally speaking, if companies involved in mergers and acquisitions are involved in multiple jurisdictions, they need to declare to regulatory agencies in various districts and accept their review. But it is impressive that Illumina and Grail do not have related businesses in Europe. The explanation given by the European side is that the legal basis they are based is Article 22 of the EU merger regulations. This article 1 stipulates that "allowing member states to propose review requirements for the merger of competition in members of member states that do not belong to the European Union, but affect the trade in a single market, and particularly affected." According to this, the European Union believes that although Illumina and Grail have not yet carried out business in Europe, in the context of globalization, once the mergers and acquisitions are reached, the monopoly effects on the industry may spread to Europe, which will affect Europe The interests of consumers.

This abnormal behavior has triggered various conjectures from the outside world. Among them, a conjecture is that FTC controls all this behind. Because FTC and EC often need to communicate on the antitrust issues of multinational countries, there is a very complete connection mechanism. In this context, many people think that the FTC will pass this contact mechanism to ask the European Union to investigate and use the EU's strict characteristics of the M & A review to obstruct the transaction. This guess looks very ridiculous, but if it is true, then FTC, as an American government agency, has the suspicion of Litong foreign countries and persecution of American companies.

As a result, the US Chamber of Commerce issued a letter to the FTC on February 4 this year, asking it to publish a communication record of the EC and other countries' law enforcement agencies on Illumina's mergers and acquisitions of Grail. On April 14, the FTC's information freedom law department gave a reply opinion, saying that the relevant records of 2582 pages were found, and the 1009 pages were public, and the remaining related records were based on the "Consultant Corollar Doctrine". ) It can be exempted from public obligation (Note: "Advisor's inference principle" is a statement in the Law of Information Freedom. According to this law, in some limited cases, non -institutions can be used as a government consultant. Their communication can be exempted from the information exchanges of "institutions" and is exempted.)

The US Chamber of Commerce is obviously not very satisfied with the above reply given by FTC. In its opinion, EC, as a foreign government agency, cannot be recognized as the "non -institutional" as referred to as the Law of Information Freedom. Therefore, the US Chamber of Commerce asked the court to order the FTC to disclose the relevant documents they requested.

(3) Lina Khan's previous position

The third reason for the US Chamber of Commerce to sue FTC is that FTC refuses to disclose his previous status of his chairman Lina Khan. If the first two claims of the US Chamber of Commerce are mainly "to the matter", then this appeal is completely "to people."

Compared to the previous chairman of FTC, Lina Khan's qualifications are quite thin. She was born in London in 1989. Her parents were Pakistani and immigrated to the United States with their parents at the age of 11. During college, he studied political theory at Westminster College. After graduating, he entered the Legal School of Law School and obtained a PhD in 2017. In the same year, his paper "Amazon’ s Antitrust Paradox "was published in Yale Law Journal. In the paper, she expresses a distinctive "New Blanidaist" view, demanding strict antitrust measures for the technology giants represented by Amazon. This paper makes it famous among the public. However, the "New Blancism" she claim is not the mainstream view in the antitrust school. Therefore, although her reputation in the public is very high, the academic community's evaluation of it is relatively average. It is said that when she went to a college job job, a professor who interviewed her even criticized her in person who did not understand the antitrust, and she did not get a faculty in college as expected. (Open Markets Institute) think tank. This think tank was founded by the flag bearer of "New Branseism" and the author of "New Monopoly Capitalism" Barry Lynch, which is committed to spreading the concept of "New Blancism". Because its views are very unsatisfactory, the sponsorship of this institution has always been very small, and the economic situation is not optimistic. Obviously, for a PhD in law schools like Ke Khan in the United States, it has a little bit of dark investment in such an institution. But just a year, Khan's fate changed. At that time, then President Trump approved the nomination of the Senate's minority party leader Chuck Schume to appoint Rogot Jopla as a member of the FTC. As a Democrat with a left -wing political tendency, Jopla has always advocated restricting the strength of large technology companies, especially to crack down on their behavior of collecting and abusing user data. He read Khan's papers and appreciated him very much, so he invited him as his Legal Fellow, and Ke Khan began to directly contact the core layer of American antitrust. It was from this time that Khan's career had "opened" all the way. Just three years later, he was appointed as the chairman of FTC by President Bayeng. At the age of 32, he became a "ministerial" cadre.

Interestingly, during the period when Khan was a legal adviser, what exactly did, but the outside world has always been reported, and Khan himself is also taboo. In fact, the position of "legal adviser" is not a post in the FTC system, but a temporary position specially set up for Khan Khan, and its salary can not be paid by FTC -in more popular language, it was Key at that time. Khan is a "temporary worker" hired by Jopla. In this case, in the process of work, she is likely to have violations of relevant regulations, such as illegal contact with some confidential information and illegal operations to perform certain operations. In addition, because Khan's salary does not come from FTC, but from sponsorship, behind the sponsorship, there may be entanglement of certain interest relationships.

In order to understand the work of Khan during the period of serving as the FTC legal consultant, the US Chamber of Commerce sent a letter to FTC on February 4 this year, requiring the identity and authorization information of the FTC legal consultant to openly open the record of the FTC legal consultant, and the record of approval of this. In addition, the Chamber of Commerce also requires the publicity of the creation, authorization and funding of the FTC members' office legal advisory projects. However, this information disclosure request was also rejected by FTC. The reason is that this request "requires a large number of separate and different records of searching, collecting and reviewing a large number of individual and different records", so in accordance with the relevant terms of the Law of Information of Information, you can "postpone disclosure" of this information.

The US Chamber of Commerce was dissatisfied with FTC's reply. From the perspective of the Chamber of Commerce, the documents that you ask for disclosure are very clear, and the extension of the FTC's extension is not based on it.

The game behind the litigation war

As a representative of American companies, the contradiction between the US Chamber of Commerce and FTC has a long history. Especially after advocating "New Blanci", Khan was in charge of FTC and began to implement a radical antitrust policy. The conflict between the two was gradually disclosed. For example, after FTC prosecuted Illumina and FTC insisted on re -prosecution Facebook, the US Chamber of Commerce has publicly expressed its accusations on FTCs on the media, and criticized it in "war in the business community in the United States." However, before the lawsuit, the conflict between the two sides was limited to the level of saliva war. This may be because the two parties do not want to turn over completely, and on the other hand, it may be because the US Chamber of Commerce has not mastered the real hammer that has enough to counterattack FTC.

It is true that as the current FTC chairman, Khan's attitude towards large enterprises is very unfriendly, and may even be hostile. Regarding this, when FTC had a survey of Amazon, Bezos asked, thinking that she would mix various prejudices during the investigation, which would affect the objective justice of the investigation. However, these questions do not have actual evidence as support. Some Democratic members who have the same political tendencies as Khan even blame those statements that question Khan's fairness as a thorough conspiracy theory. This is indeed a problem for the opponents of Khan and the FTC under its dominance. Because they cannot accurately grasp the detailed process of FTC internal decision -making, and the role of key figures such as Ke Khan, even if the current FTC is biased to a specific enterprise, it cannot be realized, so it is impossible Strike a strong counterattack. If the attack is over, it will let the FTC hold the handle.

From this perspective, this time the American Chamber of Commerce cut in from the Law of Information Freedom, and the use of judicial means to request FTC to disclose relevant information can indeed be called a step -by -step chess. Since the FTC is not allowed to master the details of the FTC decision -making, let the FTC itself make these things disclose. Under the political tradition of the United States, government departments disclose their own information and accept public supervision. It is an important obligation. At the beginning of the founding of the United States, Thomas Jefferson once said that "information is to democracy, like currency to the economy", emphasizing the importance of government information disclosure. As early as 1789, the US Congress formulated the "Manager Law", stipulating that administrative agencies must disclose government information on unified publications. By 1967, the US government issued the "Law of Freedom of Information" to complete the government information disclosure system. According to this law, except for national security, citizen privacy, and business secrets, other information can be exempted from public information, and other government information should be made public. Individuals and organizations can apply to government departments to disclose corresponding information. If the government departments decide not to disclose, the reason must be explained.

According to this provision, opponents can understand the decision -making details of FTC through continuous application of government affairs disclosure. If FTC actively cooperates with disclosure, you can formulate related countermeasures based on the information disclosed. And if FTC refuses to make some information, it can be explained in turn to show that there are some problems behind this information. At this time, on the one hand, the opponents can pressure FTC through news media reports, and on the other hand, they can force FTC to disclose information through judicial means and find some "real hammer".

As long as we search for reports on the US Chamber of Commerce's request for public information, we will find that the Chamber of Commerce has requested information disclosure on many issues. For example, according to the Politico website reported in early December last year, FTC suddenly rejected 35 of the 37 information disclosure applications in the US Chamber of Commerce. It can be seen that the chamber of commerce may be as high as dozens or even hundreds of information on FTC's information disclosure. The three contents involved in this lawsuit should be carefully selected from many applications. The most targeted and most likely to find out the problem.

In fact, whether it is voting, the communication status of foreign institutions such as EC, or the resume status of Lina Khan, it is difficult to say that it will involve national security or other unwilling content. From an intuitive point of view, the disclosure of this information should not have any obstacles. Especially the problem like Lina Khan's resume should not only be public, but also has no technical difficulty in technology. But FTC refused to disclose this information, which is basically "there is no silver here."

From this issue, we can see that, as the chief antitrust general of the Biden government, Khan really has a lot of deficiencies in political experience. For a young man who is new to politics, sometimes in order to complete the goal, it is likely to take some gray approach -especially the firm "New Blanciist" like Khan, because he has identified himself in his heart The cause of engaging in is justice and noble, so in order to achieve the goal, an unsatisfactory method may be adopted. Under the guidance of this concept, it is similar to using "zombie tickets" to pass some important resolutions, or to contact an external law enforcement agency to prevent some mergers and acquisitions that you think should be stopped. It is likely to be regarded by them as a shortcut to achieve their noble purpose. As everyone knows, when they approach their goals step by step, they are likely to win the trap of others.

Although so far, the FTC has not made a formal response to the US Chamber of Commerce. However, it can be seen that comprehensive information in various aspects can be seen that the probability of FTC lost this lawsuit should still be not small. If the FTC has to disclose those information under the court's request, and these information does contain some sensitive information, then the offensive and defensive trend between FTC and its large companies may have fundamental reversal.

Icaros flying to the sun

Remember that when Lina Khan was just appointed FTC Chairman, many media at home and abroad made relevant reports. Most of the reports believe that she is likely to completely change the status quo of American antitrust and truly "tame" those big companies.

For this judgment, I have always expressed doubts: On the one hand, from the perspective of the process, the US antitrust law enforcement is first launched by the FTC, and then sued the court after grasping the evidence. In the end, whether to intervene in antitrust behavior is still the judge. Although the idea of ​​"New Branseism" has now controlled the FTC, at the court level, its influence is very small. A large number of judges in the United States now read the textbooks of "Chicago School" scholars such as Berke and Posner, and learned the logic of Chicago -style case analysis logic. "It would be difficult to win on the judicial battlefield. This can be seen clearly since FTC's Facebook was rejected last year. At that time, FTC said in the complaint of a new theory of "New Blancism", but the judge quoted classic cases such as the Aspen case in the verdict, which can be described as "you said you, I judge me".

On the other hand, in the FTC, Elina Khan's qualifications are difficult to integrate all power. As mentioned earlier, from the perspective of the FTC architecture, it is responsible for decision -making several members of the committee, and all major events require members to vote for decision. After making decisions, various specific implementation needs to rely on technical officials. Therefore, if you want to completely integrate the power of FTC, the chairman must be able to coordinate properly in the decision -making session, effectively convince other members, and effectively lead the subordinates in the implementation link. To satisfy all this, the chairman must be a highly respected person, and Khan is obviously not such a candidate.

Some media made me describe Khan, and I didn't expect a suitable metaphor for a while. Until a few days ago, I saw a report from foreign media, one of which had an metaphor, and I felt quite appropriate. This report said that Lina Chan Khan is like Icaros in Greek mythology. The labels of ethnic minorities, young women, and the banner of a high -ranking opposition to the monopoly enterprise make her see a pair of pairs Golden wings. However, in mythology, Icarus's wings are actually made of wax. When he flew to the sun, the pair of wings would be baked, and he would fall from the sky. I think Khan's career will be such a trajectory.

Speaking of this, some people may sigh for Biden, and worry that Khan might have misunderstood his overall plan to clean up the monopoly enterprise. In my personal opinion, this is probably more worrying. In fact, from the 2020 election, it can be seen that large enterprises, especially technology giants, allowed Biden to defeat Trump and seize the presidential throne decisive power. For such companies that have a huge economic and political resources and have the achievements of "supporting", do Bayeng really want to reverse them? Especially when the midterm election is approaching, my support rate is worrying. However, due to the dissatisfaction of the majority of voters on the giants and the pressure of the number of radicals in the Democratic Party, Biden had to fight against the giants. It is also necessary to antitrust, but the antitrust cannot be really achieved. The thunder must be loud, but the rain must be small, and the heat must be cleared. How can I do this? The person like Lina Khan was the chairman of the FTC, perhaps the optimal solution of Biden.

In this sense, what is really old -fashioned is Biden.

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