Welcome to this hearing on the subcommittee on antitrust policy and consumer rights. Today we are pleased to have with us the chairman of the federal trade commission, joseph simons, and the assistant attorney general for the antitrust division at the department of justice, makan delrahim. Welcome to both of you. As an initial matter, as a matter of housekeeping, we have been informed we may have a block of more votes starting about an hour from now. The practical matter, we may be able to push it to an hour and a half from now, but before we hit the recess at some point we will likely have to go to recess to cast a few votes. We will have to play some of that by ear. I apologize in advance. Theres no way to predict these in advance. It does seem to be an uncanny event, with antitrust subcommittee hearings. It seems to be a good predictor, albeit an unintentional predictor of when votes are going to occur. As both of you know, ive been critical of the fact that we have two federal agencies responsible for civil antitrust enforcement. This of course is not your choice. This is a choice made by congress in years past, so the fact that the law is the way it is has a lot to do with this branch of government and not to do with your respective offices. I have to say your two agencies have done a remarkable job in recent months, of making the points that i have with regard to my concerns about having two agencies with overlapping civil antitrust enforcement authority. Its true that for many decades the ftc and the antitrust division of the department of justice of jointly handled civil antitrust enforcement, but in the past agencies have avoided too much mischief, because they generally played well together. Recently, this appears regrettably to have changed. From what i hear, what i can tell, disputes have become more frequent, more pronounced and more prolonged. It is bad enough that agencies sometimes determine who will investigate a matter, according to possession arrows and coin tosses. But these clearance disputes impose real costs by wasting resources, creating delays and creating a certain amount of institutional pettiness. Having two federal agencies handling civil antitrust enforcement is also creating confusion, both here and abroad, when they ftc and doj are not on the same page. This is clearly on display in the recent qualcomm matter, where your agencies are literally opposing each other in federal court. None of this makes for effective or efficient antitrust enforcement. Not one of us would design a system from the outset, if we were riding on a blank slate this way. Earlier this summer we learned that your agencies have begun investigating the large tech firms. Some large tech firms to see if they violated antitrust laws. Ive said before, im encouraged that the ftc and doj are bringing muchneeded antitrust scrutiny to these tech companies. But im also concerned about the way you have divvied up these investigations. I understand when it comes to specific investigations, your clearance process designates a Single Agency to investigate a single matter, but based on news reports, it sounds like your agencies may be pursuing monopolization investigations of the same companies at the same time, through two different agencies. Let me be clear. I dont think your agencies should be divvying up parts of a monopolization investigation of the same company. Tech company or otherwise. Former ftc chairman called this nuts. And i agree. No analytical basis for splitting a monopolization investigation between the ftc and the department of justice. Doing so simply looks like both agencies simply want to have not just a slice of the same pie, but the same slice of the same pie at the same time. This will have the agencies stumbling over each other and will inevitably undermine, rather than further the enforcement efforts of both agencies. Consumers of course deserve better for that. Consumers are harmed when you are tripping over each other and are unable to do your job effectively. On the topic of big tech, i would like to hear your views today of whether viewpoint bias should be the subject of antitrust enforcement. I share many of my colleagues concerns on what appears to be bias against certain political viewpoints, particularly conservative viewpoints by Companies Like google and facebook. What i dont necessarily share is the suggestion by some that antitrust is necessarily the proper tool to address this issue. But i welcome your thoughts on this topic as i certainly have more to learn. We often hear talk of antitrust policy. Needs to evolve to address competitive issues in these tech markets. Advocates of the socalled hipster antitrust theory claim this causes antitrust enforcers to ignore anticompetitive conduct in markets where consumers receive services for free. I would love to know your thoughts on that topic. Finally, i hope we will have time to discuss with the antitrust division is doing when it comes to music. This includes what the division is considering in its review of the music licensing Consent Decrees. Also, and i know this is something my democratic colleagues have raised with you. I would like to know more about what the department of justice is doing to police anticompetitive conduct in the ticketing department. Senator klobuchar will now give her opening statement. Thank you mister chairman. Good afternoon to chairman simons and assistant attorney general mr. Delrahim. We are pleased to have you both here to discuss this issue. These times are difficult for antitrust and competition policy. Many new issues have arisen since our last oversight hearing. The American People increasingly understand that competition is critical for their wellbeing. They know how important it is for consumers, the health of our market and the future of our economy. That is one thing that ive noticed as a change over the last year, that there are more and more discussions about the need to do something about enforcement in this area. Despite this widespread recognition, how important competition is to our nations future, we still as a country have a major monopoly problem. Given the grave competition problems we are facing, while as much as i appreciate my colleagues focus on the two agencies and what he referred to as mischief, i am much more concerned about the bigger picture, which is how we are going to take on the monopoly issues of our time and how we are going to take on the competition issues, whether they are in tech or they are in the pharmaceutical area or so many others. I was thinking about the analogy of splitting the pie. I am more concerned that our consumers are going to get a big pie in their face if we dont do something about this. We are seeing higher levels of market concentration across our economy, partially driven by waves of corporate consolidation. Since 2008 american firms have engaged in more than 10 trillion in acquisitions and between 2012 and 2017 annual merger filings at the antitrust agencies have increased more than 50 . Those waiting for this trend to slow down will need to wait longer, because the report shows that merger filing increased again in 2000 18, the sixth consecutive annual increase. These more concentrated markets have led to decreased competition in Many Industries including pharmaceutical, social media, digital technology, telecom, ag, Online Ticket sales, transportation and more. Today i sent a letter to the ftc with a number of my colleagues raising concerns about to proposed pharmaceutical mega mergers. That would be the acquisition of allergan and bristolmyers acquisition of celgene and their potential effects on prices. There is one additional matter i will be raising at this hearing. Since the beginning of this administration, i have repeatedly had cause to raise concerns about reported white house attempts to interfere in antitrust enforcement efforts for political purposes. Ive sent numerous letters to the department and the white house, concerning potential interference in antitrust law, based on statements that the president and Administration Officials reportedly made regarding matters such as the Bayer Monsanto merger, the at t time warmer merger and the pending tmobile sprint merger. Not all of my letters were answered, but the responses i did get contained carefully worded assurances that the department followed procedures and it was, quote, not aware of any influence by the white house in any of the antitrust matters in question. The actual extent of any contact between white house officials and department enforcers concerning pending antitrust matters is still a mystery. Now we have reports of the antitrust division investigating for automakers for negotiating with california regulators to Lower California fuel emissions standards to a level that will be more stringent than the standards that the Trump Administration plans to impose. The automakers reported conduct seems to be little more than an effort by regulated companies to petition a state regulator for more favorable rules, something that happens all the time between state and federal regulators. Quite frankly the antitrust investigation into these automakers appears to have less to do with protecting competition than with intimidating parties that dont fall into line with the Trump Administrations plan to relax admission standards. A letter from the epa and the department of transportation California AirResources Board only bolsters the impression that this investigation is part of a broader effort by the administration to promote its preferred Emission Standard and bully those who get in the way. For years, both antitrust agencies have talked about applying the consumer welfare standard. This investigation looks more like enforcement guided by corporate welfare standards for Oil Companies and light truck manufacturers. I have questions about how this investigation regarding gas mileage standards was initiated and why the division decided to use limited resources to pursue it. As a matter of prosecutorial discretion i find it hard to believe that an investigation into automakers navigating a shifting regulatory landscape is the best way to protect competition and consumers when we are seeing consolidation and so Many Industries. Sometimes why you do something isnt as important as what you do. Also the antitrust issues that have received the most attention of course are those raised by the major tech company. We are living in a time of rapid technological change. These changes have led to the rise of powerful Technology Companies that have come to dominate markets and gather massive amounts of information from consumers, raising serious concerns about competition and privacy. At our last oversight hearing i questioned why european enforcers have been investigating big tech for years, while our agencies were doing nothing. Since then not only have we heard reports about tech antitrust investigations by the ftc and antitrust divisions, but also many state attorney generals. These enforcement efforts occur against a backdrop of a federal judiciary that is becoming an increasingly skeptical of antitrust enforcement, raising the bar for government and private enforcement and some of questioned whether the antitrust laws are up to task. I question that very much and that is why i have these bills that i think would be so helpful. I appreciate the work senator grassley did on me with the modernization act we introduced that would help with funding for both of your agencies. Also i have introduced the consolidation prevention and competition promotion act with my colleagues to upgrade the antitrust standard to get at some of these issues we will be hearing about today. Also the civil fines for monopolization bill, as well as the Prescription Drug pricing bill, one of which i have with senator grassley. In closing as a former prosecutor i know how important it is to have enforcers ready and able to enforce the law without fear. You both have a responsibility to ensure that your agencies act as vigorous, yet impartial law enforcers. Millions of americans and the health of our free markets depend on your effort and your judgment to ensure the economy remains fair and competitive. Thank you and i look forward to your testimony. Thank you senator klobuchar. We will now be pleased to hear from each of our witnesses for opening statements. Joseph simons was sworn in as the chairman of the federal trade commission on may 1, 2018. Earlier in his career he had served as the director of the ftc bureau of competition. Makan delrahim was confirmed in 2017 as assistant attorney general for the antitrust division in the department of justice. He also worked at the antitrust division earlier in his career, having previously served as Deputy Assistant attorney general. No stranger to the senate, mr. Delrahim knows his way around this institution having previously served as chief counsel to the committee. Esther simons, we will hear first from you. Thank you so much, mr. Lee, Ranking Member klobuchar and members of the subcommittee. Thank you for the opportunity to appear before you today. Im pleased to testify on behalf of the ftc regarding our current activities and priorities and of course to also be alongside my esteemed colleague, makan delrahim. The ftcs Mission Works to ensure that our nations markets are competitive and working for american consumers. We do this through targeted yet vigorous enforcement of antitrust Consumer Protection laws and also by using unique research and policy tools. Today i will focus my remarks on the antitrust side of our mission. We promote competition through a rigorous, fact intensive approach to law enforcement. We have jurisdiction over a wide swath of the economy and focus our enforcement efforts on sectors that most directly affect consumers and their wallets, such as healthcare, pharmaceuticals, Consumer Products and services, technology, manufacturing and energy. In fiscal year 2019, the agency has challenged 20 mergers so far. In june, the eighth circuit upheld their request for an injunction blocking an anticompetitive merger among Healthcare Providers in north dakota. This case is our fifth straight appellate victory in annulling healthcare consolidations, following successful appeals of healthcare mergers in the third, sixth, seventh and ninth circuits. This string of victories across multiple circuits has solidified our analytical approach to these mergers. The current state of the law relating to hospital mergers is no accident. It reflects the culmination of efforts to use the agencys enforcement, research, and policy tools to protect healthcare consumers. In the 1990s, the antitrust agencies lost a significant number of consecutive Court Challenges through hospital mergers. In response, the ftc launched a merger retrospective study that questions the prevailing economic methodology courts have relied on ruling in these cases. Those results, in turn, influence our subsequent enforcement work. You are unique Research Capabilities we successfully move courts to embrace a modern approach to analyzing competitive affects in these transactions. On the conduct side, in 2019, we filed a complaint against sure scripts for using vertical restraints to monopolize two markets associated with electronically transmitted prescription information and we have two other cases on appeal. The agency has been consistently active in this area, bringing 24 cases since the year 2000, including several while i was the bureau director. In 2013 the Commission Won a critical victory in ftc versus activists when the Supreme Court clarified the pay to delay arrangements can violate antitrust laws. The longrunning case concluded this year on the eve of trial, when defendants agreed to settle. In march, the Commission Held an administrative proceeding that impacts laboratories and Endo Pharmaceuticals and entered into worse payment arrangements that delay generic entry of an extendedrelease opioid used for pain relief. The agency continues to monitor the use of anticompetitive reverse payment settlements. I would also like to highlight our work in the technology sector. Our bureau of competition recently shifted resources to establish a dedicated Technology Task force. This task force is actively investigating competitive activity in the u. S. Technology markets. For example we are pursuing an investigation of facebook. Robu research and policy function. We are in the process of concluding our hearing on competition and Consumer Protection in the 21st century. We convened 14 sessions over 23 days with thousands of people attending in person or watching via live webcast. We are distilling a large volume of stakeholder information and generating output which likely will include reports, statements, guidance and speeches. The fcc remains committed to marshaling its resources efficiently to protect consumers and promote competition, to participate and respond to changes in the marketplace and meet the current and future challenges. We look forward to continuing to work with the subcommittee and congress and i look forward to your questions. Thank you. Thank you. Mr. Delrahim. Thank you, chairman lee. Thank you Ranking Member klobuchar, former chairman of the Committee Grassley and i see former chairman leahy and distinguished members of this committee. Thank you for having me before you today and i also appreciate being next to my colleague, chairman simons. Chairman simons and i go back over 20 years. We were both on the same side i think on the consumers in the past investigations of microsoft representing different parties, but our work has continued and im pleased to work with him now across the street. The importance of antitrust enforcement continues to occupy the front pages these days in large part to the efforts of many on this subcommittee. I want to t