National Taxpayers Union (NTU) has previously expressed concern about the Federal Trade Commission (FTC) “going rogue” and pursuing antitrust policies that threaten U.S. innovation. NTU has repeatedly warned against FTC activities running roughshod over American innovators.
The latest proposed regulatory attack is directed at the U.S. oil and gas industry. Earlier this year, 50 Members of Congress asked the FTC to extend investigations into proposed energy-company mergers, alleging they would lead to high energy prices.
This concern about high energy prices is refreshing, coming from many of the same legislators who have backed efforts to increase energy prices through policies like carbon adjustment tariffs at the border and domestic carbon taxes to fight climate change. Indeed, it is difficult to square these legislators’ long-term goal of reducing carbon emissions with their newfound desire to reduce energy prices.
The letter blames “Big Oil’s greed” for high gas prices. Demonizing greedy businesses for high prices is nothing new for populist politicians. In recent years they have blamed corporations for everything from the price of eggs to increased housing costs.
A more appropriate target would be government measures that contribute to increased energy prices, including the Biden administration’s rejection of the Keystone pipeline, steel tariffs that increase the cost of energy exploration and transportation, and protectionist shipping restrictions that increase the cost of gas by 63 cents per gallon on the East Coast.
In the Senate, 22 Democrats and Sen. Bernie Sanders (I-VT) released a letter calling on the FTC to investigate whether to break up “Big Oil” conglomerates. In response, 35 Republican Senators sent a letter of their own urging a more fact-based approach. They wrote: “As is the case with any merger review, including those in the industrial sector, mergers must be assessed under a fair and unbiased standard grounded in sound economics and law that protects American consumers, and does not impose policy preferences to further political ends.”
Requesting “a fair and unbiased review of these mergers that is rooted in the facts and economic realities that actually exist on the ground” is not unreasonable. The call for the FTC “to exercise its authorities with adherence to the rule of law and respect for due process, not partisan pressures and policy preferences” provides a good general starting point for future FTC antitrust activities. At a time when the agency's credibility is increasingly being questioned, the FTC leadership would be well-advised to follow the rule of law and not be overly partisan in imposing its own vision of competition on sectors ranging from technology to the energy sector.